AgFeed Industries and the Iowa Attorney General’s office have asked a federal judge to sign off on a deal to end the hog producer’s attempt to get a state law declared unconstitutional.
An 11-page proposed consent decree, scheduled to be discussed in a Thursday-morning conference with U.S. District Judge Robert Pratt, would drop AgFeed’s legal challenge in exchange for the company’s guarantee to let its swine producers collectively bargain and for the company’s two-year pledge to purchase pork for a new slaughter facility from growers outside AgFeed’s current stable of contracted farms.
According to AgFeed’s website, the Colorado-based company produces “approximately 1.3 million market hogs annually through our system of breeding facilities in Colorado, Oklahoma and North Carolina and contract finishing facilities in Iowa.” The company, through a subsidiary, also owns Ames-based Pork Technologies L.C.
Court papers say AgFeed also plans to purchase Pine Ridge Farms, which operates a slaughter facility in Des Moines. The problem is that an Iowa law that currently prohibits a pork “processor” from directly or indirectly being involved in the growing of hogs.
The company’s lawsuit contends that Iowa Code Chapter 202B violates the Commerce Clause of the U.S. Constitution “because the burden it imposes upon interstate commerce are clearly excessive in relation to any putative local benefits.” According to the company, Iowa law also stops AgFeed and similar businesses “from aligning various aspects of swine production, nutrition and management services and swine processing in order to facilitate the development of consistent, high quality and traceable products to meet the demands of consumers and retailers, both national and international.”
Under the proposed consent degree, Iowa would agree not to enforce the state law until at least Sept. 16, 2015. Contract growers would be given certain rights under the decree, and AgFeed would agree that for the next two years, at least 25 percent “of the swine slaughtered at the Pine Ridge Plant in Des Moines, Iowa (determined collectively on a rolling 30-day basis) will be purchased from sellers other than AgFeed-owned affiliates.”
Any violation of the agreement would be enforceable by future court proceedings, according to the agreement.
If the state wins, AgFeed would be required to pay as much as $1,000 per day as a “civil penalty.”