Chicken farmers sue Tyson after the company closed a Missouri plant and
ended their contracts
Harvest Public Media | By Frank Morris
Published September 17, 2024 at 4:00 AM CDT
Shawn Hinkle stands inside of one of his empty chicken houses. Hinkle had a
contract with Tyson, until August of last year, when the company announced it
was closing its processing plant in nearby Dexter, Missouri.
Frank Morris/Harvest Public Media
Shawn Hinkle stands inside of one of his empty chicken houses. Hinkle had a
contract with Tyson, until August of last year, when the company announced it
was closing its processing plant in nearby Dexter, Missouri.
Commercial chicken farmers literally bet the farm, spending millions of
dollars on land and enormous chicken houses to raise birds they never own —
putting their livelihoods in the hands of a single company that is both their
supplier and sole buyer. When Tyson closed a processing plant in southeast
Missouri, some farmers facing bankruptcy decided to sue.
Imagine an idyllic painting of a farm, a big red barn down a windy road on
green fields hemmed in by forested hills, a couple of horses trotting around.
That’s where Shawn Hinkle and his dad Ken Hinkle farm – for now.
Four red chicken houses, each stretching precisely 500 feet long, stand
lined up like barracks on a military base. The elder Hinkle built this farm up
with years of very early mornings, long hours tending livestock and a deputy
sheriff’s salary.
My whole life is right here,” said Ken Hinkle looking out over the chicken
houses. “This is life! This is blood running through that vein.”
But the Hinkles’ farm is bleeding out. Their enormous chicken houses are
empty, save a few stray feathers, dusty machinery and sharp-smelling mulch.
“The single worst decision that I ever made was building those chicken
houses,” laments Shawn Hinkle. “Because it’s put everything behind me and in
front of me in jeopardy. And that’s a weight that will crush any man.”
Shawn Hinkle and his wife, Kiley Hinkle, stand outside one of four chicken
houses on their farm in southeast Missouri. The barns now stand empty after
Tyson closed its facility in Dexter, Missouri, and ended its contracts with
Hinkle and other nearby farmers.
Frank Morris/Harvest Public Media
Shawn Hinkle and his wife, Kiley Hinkle, stand outside one of four chicken
houses on their farm in southeast Missouri. The barns now stand empty after
Tyson closed its facility in Dexter, Missouri, and ended its contracts with
Hinkle and other nearby farmers.
The Deal
A decade ago, Shawn Hinkle signed a contract with Tyson Foods to supply fertile
eggs to Tyson’s hatchery in Dexter, Missouri.
Tyson promised game-changing income, on a simple proposition: Hinkle was
responsible for the land, labor, buildings, and machinery, while Tyson would
provide tens of thousands of hens and roosters to Hinkle’s farm, ample feed and
it would pick up the eggs and truck them back to Dexter.
Hinkle borrowed more than $2.5 million to build the chicken houses and equip
them with Tyson-specified generators, fans and egg-gathering equipment. He
committed to feeding all the birds twice a day, seven days a week, at times
dictated by Tyson Foods, hiring staff and enlisting family to collect and hand
pack tens of thousands of eggs a week.
“There’s been many a time where we’d spend 14, 16, 18 hours a day making
sure things were going as best as they possibly can,” said Hinkle.
Over time, Hinkle said Tyson began to skimp on the number and quality of
birds it delivered to his farm and the quality of the feed began to slip.
Problems like these cut into his earnings, but he said there was nothing he
could do about it.
“It was always our fault. Always. And that's just the relationship that you
have,” said Hinkle. “You do the best you can with what you've been given. And a
lot of the times what you've been given is not up to par.”
Tyson pioneered the system of “vertical integration” in the chicken
business. It’s been a runaway success in terms of production efficiency and has
been widely adopted across the industry, transforming the nation’s poultry
farming. U.S. chicken meat production has climbed by almost 600% in half a
century, with a lot fewer farmers involved. But, Kansas City lawyer Brandon
Boulware says the vertical integration is a hardship for the farmers involved.
“These farmers essentially become sharecroppers on their own land,” Boulware
said. “Tyson controls every aspect of the grow process. And there’s only one
company that’s going to pay him for the chickens, and that’s Tyson.”
That was especially true in southeast Missouri. Tyson’s Dexter, Missouri,
complex was the only chicken processing plant in the region, and Tyson was the
only company farmers like Hinkle had to do business with.
And then, suddenly, last August, Tyson closed the Dexter plant.
“Monday morning at 7 o’clock, we get a phone call from our tech. And the
tech says we’re shutting everything down,” recalled Hinkle. “Ok, what do we do
now?”
The dilemma
Hinkle didn’t have any good options. Tyson sold the Dexter complex to Cal-Maine
Foods, a company that produces table eggs. Tyson didn’t grant an interview for
this story but did provide a written statement, which said the sale was part of
an efficiency push.
"Closing plants is always a difficult decision,” the statement said.
“In the case of the Dexter facility, the size and age of the plant made it
inefficient to operate and prohibitively costly to improve.”
Cal-Maine, the nation's largest egg producer, bought the Tyson plant in
Dexter. KFVS-TV in Cape Girardeau, Missouri, reported on the then potential
sale in December 2023.
KFVS-TV
Cal-Maine, the nation's largest egg producer, bought the Tyson plant in
Dexter. KFVS-TV in Cape Girardeau, Missouri, reported on the then potential
sale in December 2023.
That explanation makes sense to Jada Thompson, an agricultural economist at
the University of Arkansas. Old plants like the one Tyson had in Dexter are far
more expensive to operate than new, larger, and much more automated facilities,
she said. New plants need far fewer employees and they can also attract
millions of dollars in tax incentives from local governments.
The margins in the chicken business are razor thin, Thompson said, and in
order for companies like Tyson to stay profitable, they must continually
sharpen efficiencies.
“This is just a matter of competition in the marketplace,” Thompson said.
Farmers such as Hinkle were vulnerable all along, according to Thompson,
because Tyson was the only chicken company in the region.
It’s not feasible to transport live chickens for more than an hour or so
between the hatchery and the farm and the processing plant. Most chicken
farming is done within range of at least two processors, so that if any one
plant closes the farmers supplying it may be able to go to work for one of the
other processing companies in the area.
Thompson said bankers are increasingly hesitant to loan money to chicken
farmers that aren’t in range of at least two processors or haven’t locked in
lengthy contracts with processing companies.
“I think that there's an industry shift that's happening. And I think
specifically because a lot of these plants have been closing, I think lenders
are asking now for longer-term contracts, said Thompson.
Meanwhile, Tyson said it has worked to support employees and growers
following the closure. The company that bought the operation in Dexter sells
table eggs — something Tyson points to as a positive.
“Fortunately, we were able to reach an agreement to sell the Dexter facility
to another food company, Cal-Maine,” Tyson’s statement said. “This sale
supports the Dexter community by providing new employment opportunities for
former Tyson team members and new growing opportunities for local farmers who
previously worked with us.''
So Hinkle could, in theory, negotiate a contract with Cal-Maine.
Yet remodeling his chicken houses to meet Cal-Maine’s specifications, which
HInkle said are very different than Tyson’s, would drive him deeper into debt.
The lawsuits
Tyson quickly reached agreements with most of the farmers that supplied the
company’s Dexter complex, paying them undisclosed amounts in return for not
suing the company.
Hinkle says he never got an offer. He decided to sue, basically for breach
of contract, along with two other farmers.
“But what we've seen is it's morphed into something larger,” said Boulware,
the attorney who’s representing the farmers.
In researching the initial lawsuit Boulware discovered that Tyson took pains
to make sure that if it wasn’t processing chickens in at its plant in Dexter,
nobody would.
“When they sold the plant to a non-competitor, a company that doesn’t
process chickens, that sale came with a restrictive use on the property for 25
years,” he said.
That precondition, contained in the sale agreements, underpins a
second-class action lawsuit.
“Our allegation is that Tyson closed these plants, simply to reduce supply
with the goal of increasing the price of chicken,” said Boulware.
Attorney Brandon Boulware stands in the lobby of his office building, the
historic Livestock Exchange Building in Kansas City. Boulware represents three
chicken farmers who are suing Tyson alleging breach of contract.
Harvest Public Media
Attorney Brandon Boulware stands in the lobby of his office building, the
historic Livestock Exchange Building in Kansas City. Boulware represents three
chicken farmers who are suing Tyson alleging breach of contract.
It’s an allegation that has caught the attention of some powerful people.
U.S. Sen. Josh Hawley, a Missouri Republican, sent an open letter to Tyson
demanding that the company disclose terms of the real estate agreement that has
been shielded from public disclosure.
Missouri Attorney General Andrew Bailey, also a Republican, said he’ll
support Boulware’s lawsuit.
Back at the Hinkles’ farm, Ken Hinkle has more time on his hands. He enjoys
feeding his two pigs, Ham and Biscuit, the only two farm animals on the grounds
of the vast chicken houses that once held tens of thousands of birds. The pigs
seem to like him, and he clearly enjoys working with them. But Hinkle sees the
big empty buildings, and what he considers broken promises as unfinished
business with Tyson Foods.
“Hey, what’s right’s right and what’s wrong’s wrong,” he said. “My family
has always been fighters. Like in this situation here, we may or may not win,
but by the same token, we gonna fight.”
This story was produced in partnership with Harvest Public Media, a
collaboration of public media newsrooms in the Midwest. It reports on food
systems, agriculture and rural issues.
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Frank Morris
I’ve been at KCUR almost 30 years, working partly for NPR and splitting my time
between local and national reporting. I work to bring extra attention to people
in the Midwest, my home state of Kansas and of course Kansas City. What I love
about this job is having a license to talk to interesting people and then
crafting radio stories around their voices. It’s a big responsibility to uphold
the truth of those stories while condensing them for lots of other people
listening to the radio, and I take it seriously. Email me at frank@kcur.org or find me on Twitter
@FrankNewsman.
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About KCUR
https://www.kcur.org/news/2024-09-17/tyson-lawsuit-chicken-farmers-closed-missouri-plant
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Founder/Director
Latino Farmers & Ranchers International, Inc.
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Email: latinofarmers@gmail.com
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