In June 2004, U.S. District Court Judge Charles Kornmann certified the case as a class action on behalf of all cattle producers who sold fed cattle on the cash market, during the misreporting period to any of the four packer defendants:

Tyson Fresh Meats Inc., formerly IBP Inc.; Cargill Meat Solutions, d/b/a Excel Corporation; Swift & Co., formerly known as ConAgra Beef Co.; and National Beef Packing Co., formerly known as Farmland National Beef Packing Co.

The defendants control about 80 percent of the market for beef products in this country. The trial, expected to last two weeks, follows motions by the defendants to have the case dismissed, which Judge Kornmann denied in January.

The misreporting of boxed beef prices occurred at the start of mandatory reporting of boxed beef prices, which took effect April 2, 2001. Under the mandatory reporting law, the packers must report twice daily to USDA certain cattle-price information, including prices being received by the packers for boxed beef cuts. USDA duty was to then release the price information to the public so cattle producers and other market players have accurate, up-to-date information on cattle prices to inform their business operations.

During the misreporting period, the prices the packers reported contained substantial errors that actually underreported the price the packers were receiving for boxed beef, which had the effect of depressing the prices cattle producers received for fed cattle sold to the packers during the same time period.

"These packing companies were trading on inside information to reap a windfall profit at the expense of cattle producers," said plaintiff Mike Callicrate. "The packers knew both the real prices they were getting for their beef products, and the falsely lower prices being reported by USDA. Fed cattle sellers only had access to the false price information, and so were short-changed by the packers who had the true price information from their own records."

Callicrate and the other plaintiffs intend to prove at trial that the four packer-defendants caused total damages to cattle-producer class members exceeding $40 million.

The reporting errors occurred in Choice and Select USDA boxed beef prices, with Choice prices underreported by between $1 per hundredweight (cwt) to more than $6 cwt during the period, and Select prices generally were underreported by about $1 cwt for most of the period. The lawsuit alleges the packer defendants violated the federal Packers and Stockyard Act (PSA), which prohibits unfair and deceptive practices by packers and stockyards. The suit claims that the packers' conduct was unlawful because they knew from their internal records what prices they were receiving for boxed beef, while the sellers of fed cattle accepted lower prices for their cattle because of the inaccurately reported USDA boxed beef prices.