Copyright 2023. In 2006, Tyson shuttered its packing plant in Boise, Idaho, leaving only one Tyson packing plant in the Pacific Northwest located in Pasco, Washington. And because no one can know what the market price of beef will be in some months, he never knew whether he would break even. It follows the bankruptcy of the Easterday family empire after its multi-million-dollar cattle swindle. I commend the agents with the Federal Deposit Insurance Company Office of the Inspector General and the U.S. Because they were based on false or misleading information, the hedge exemptions were invalid. They could never find the missing calves offered for sale. Easterday alleges in a lawsuit filed this week in the U.S. District Court for the District of Eastern Washington, that Tyson took advantage of Easterday Ranches' limitations as to where the company could sell its cattle. They were donors and boosters for Republican candidates and campaigns, gifted livestock to fairs in three counties, and sponsored one of the region's biggest rodeos, the Pendleton Round-Up. The family transferred control of the partnership to a group of "independent directors,". On Sept. 15 the U.S. Bankruptcy Court was notified that Agri Beef-affiliate Blue Tag Farms had bid $14 million for more than 600 pieces of equipment at Easterday farms and ranches. The 7,228-acre dairy is not part of the bankruptcy. An official website of the United States government. Cody Easterday, 51, pleaded guilty last year in a so-called "ghost cattle" scam that federal prosecutors called "one of the largest thefts in Washington history." The head of a massive Central . "Rather, Tyson required cattle feeders to carry all the financial risk in feeding and caring for cattle until they reached market weight under their 'pioneer model' contracting arrangement. According to court documents, Cody Allen Easterday, 49, of Mesa, used his company, Easterday Ranches Inc., to enter into a series of agreements with Tyson and Company 1 under which Easterday Ranches agreed to purchase and feed cattle on behalf of Tyson and Company 1. PASCO, WA (December 15, 2020) A Kennewick man died Thursday in a wrong-way collision on the 182 Freeway near North 4th Avenue. This is the territory that Cody Easterday found himself in: on a first-name basis with at least one stockbroker. As a result, federal officials say Easterday Ranches violated exchange-set position limit violations on at least two occasions. In an era of downsizing farms and ranches, they are the chief beneficiaries of farm economies that increasingly revolve around commodities of scale and investment. According to court documents in U.S. Bankruptcy Court for the District of Eastern Washington, Farmland Reserve was awarded the winning bid of $209 million for the Easterday assets. In 2016, he lost another $6 million. Never fast. By the first week of February, while the Easterdays were likely still mourning the death of Gale Easterday, both the farm and the ranch had filed for bankruptcy, their fates left to a federal court. He's always on the run.". And a recent $225 million alleged cattle heist involving Easterday Ranches and Tyson Fresh Meats in Washington is one of the largest cases in U.S. history. Cody Allen Easterday is serving an 11-year prison sentence in Los Angeles on wire fraud, after pleading guilty to conducting a $233 million ghost-cattle scheme that included allegedly raising cattle for Tyson and billing the company for cattle that did not exist. "You've always got Tyson and all those big plants saying, 'You guys have got to get your costs down.' Those camps have dormitory housing and limited or no perimeter fencing. Workers travel between six and 10 miles in this position every day, paid by how much they pick. The longtime family patriarch, Gale Easterday, died in a Dec. 10 head-on crash on Interstate 182 in Pasco. According to court documents, Cody Easterday used Easterday Ranches to enter into a series of agreements with Tyson and another company to purchase and feed cattle. These relationships always involved an unbalanced power dynamic. . According to the Land Report, Gates is the top farmland owner in the United States. The criminal case and connected Chapter 11 bankruptcy of Easterday Ranches Inc. and Easterday Farms could lead to the liquidation of an extensive family farm operation in eastern Washington involved in cattle feeding, as well as having 22,500 acres of potatoes, onions, corn and wheat in the Columbia Basin. "If Tyson owned the cattle during their time spent in the Easterday feedlot, this implies that Tyson was indirectly paying Mr. Easterday an anticompetitive suppressed price for feeding cattle for Tyson, and that price was anticompetitive due to Tyson's exertion of monopsony market power," the lawsuit said. As of Dec. 25, 2020, Tyson's net worth was $23.59 billion, so it comes as no surprise that the company reported that the loss caused by Easterday Farms' misrepresentations will have no material impact on the company's financial results from 2017 through 2020. After that, anyone curious to see the old Easterday farm would need an airplane and a bit of time. Others think theyre going to pay it all back. "This bottleneck, created by defendant, provides Tyson with significant market power, which it wielded in negotiation of pricing and other terms with feedlot operators. All of that might be true. He is scheduled to be sentenced on August 4 and faces a maximum penalty of 20 years in prison. In a separate filing, Easterday Farms . He was already selling to both, including Tyson. The scandal came to light as Easterday expects to receive a draft permit any day from the Oregon Department of Agriculture for a nearly 30,000 cow mega-dairy on the former site of Lost Valley, a mega-dairy shut down by Oregon authorities after more than 200 environmental violations. But Easterday quickly lost another $18 million. But for Easterday, spectacular failure is what happened next. Tractors, trucks, trailers, a bulldozer, a couple of golf carts, next about to be auctioned. That year, with losses piled high and cash undoubtedly short, Easterday told employees to submit fake invoices to Tyson, a criminal investigation found, billing for cattle he never bought and feed for those imaginary animals. Farm Progress is part of the Informa Markets Division of Informa PLC. Gale Easterday passed away in December of 2020, the countless hours he spent mentoring his grandsons Cole, Clay, and Cutter to understand the farming operations has prepared them to be our next generation of farmers. All other trademarks are the properties of their respective owners. Tyson officials say their margins are also slim, slimmer than ranchers' margins once you factor in all the costs. Easterday, however, was dead; his Ram decimated. Onion and potato storages, other buildings, too. Farmland Reserve Inc., a Utah-based nonprofit related to the Church of Jesus Christ of Latter-day Saints, was the winning bidder at a June 17 bankruptcy auction for the 22,500-acre collection of Benton County farms owned by Easterday Ranches Inc. and Easterday Farms. This is how a guy in Greenwich, Connecticut, can come to be placing bets on tens of thousands of pounds of cattle without ever setting foot in a feedlot. The move by Easterday Farms comes amid a meatpacker's allegations the related Easterday Ranches defrauded it of $225 million in the purchase and feeding of 200,000 missing cattle. The cowboy, Cody Easterday, had received several deferments of his sentence because of a complicated bankruptcy case embroiled in federal court. Registered in England and Wales. They also say that Easterday may have had a gambling problem. On Nov. 30, 2020, Easterday informed the company about the cattle scheme he had been conducting since 2016. The original print version of this article was headlined "Betting the Ranch". It worked. Wa.). This case highlights the collaborative investigative work undertaken by the U.S. The two Franklin County-based family-owned businesses Easterday Ranches and Easterday Farms filed separately in February for Chapter 11 bankruptcy protection. And that case, like others nowadays, happened on paper, not on the range. One major cattle-feeding facility is called the "North Lot" located in Franklin County. These false and fraudulent invoices sought and obtained reimbursement from the victim companies for the purported costs of purchasing and growing hundreds of thousands of cattle that neither Easterday nor Easterday Ranches ever purchased, and that did not actually exist. These kinds of losses also hit the corrugated metal shops. Feeding America requires scale, its officials say. In charging papers, Easterday was also accused, not only of bilking Tyson out of $233,008,042, but of replicating the scam with an unnamed company and defrauding that one of another $11,023,084. That Western grit and independence? Easterday obtained a $6.3 million loan from Rabo Agrifinance to pay for a feedlot expansion. "They operate paycheck to paycheck. Eastern Washington rancher sentenced for 'ghost cattle' fraud Cody Easterday was sentenced to 11 years in prison for what U.S. District Court Judge Stanley Bastian called "the biggest theft or. After four generations of success, his credit Cody's credit, too it was their name. And while it has made corporations the beneficiaries of declining rural wealth, it has also wrought awful wreckage for ranching communities and rural families. The old adage is if it doesnt sound right or feel right, its probably not right.. According to the civil complaint, Easterday accumulated more than $200 million in losses over a 10-year period from speculative trading in the cattle futures markets. The groups want Oregon to deny Easterday's permit and restrict what it calls "mega-dairies. of making false statements to an exchange, and violating exchange-set position limits. But little ranches can't play this game. In 2009, Tyson and Easterday discussed the possibility of increasing capacity at his feedlots. Several Easterday farms in the Columbia Basin have been sold through bankruptcy court for $209 million to Farmland Reserve Inc., owned by The Church of Jesus Christ of Latter-day Saints. An accurate count of cattle is essential to cracking the case of Easterday Ranches and Easterday Farms two arms of the large Easterday family empire, which Tyson Fresh Meats has accused. 2023 DTN, all rights reserved. All rights reserved. Easterday allegedly made the false statements to the exchange in 2017 and 2018 to avoid disciplinary actions and scrutiny when Easterday Ranches exceeded exchange-based position limits in the live cattle and feeder cattle futures markets, according to the CFTC. With that being said, Tyson does expect this mistake to impact their financial . And ranchers need two things: One is an awful lot of cattle, and the other is a stockbroker. They know its wrong and what theyre doing is wrong, Williamson says. A place to trade bets with investors who are wagering on the future price of beef. "It is time for Oregon legislators to enact a mega-dairy moratorium to protect our state from irresponsible mega-dairy operators and prevent harms from massive industrial dairies until regulations are in place to protect Oregonians., 7 ag stories you cant miss March 3, 2023, Jill Reiter, Virginia State FFA Vice President, Soymeal rally sends soybeans higher on the week. Easterday Ranches filed with the court last week seeking approval to sell 22,500 acres of land. You load em up on a semi truck into a van.. All other trademarks are the properties of their respective owners. (c) Copyright 2023 DTN, LLC. To meet margin calls, Easterday devised a scheme to defraud one of his biggest business partners, a South Dakota-based beef producer, federal officials say. He also was ordered to pay the full restitution of $244. But now, some old-West-style rustling has evolved into even larger-scale rustling on paper. Gale was the heart of the family business at Easterday Farms, known for his signature cowboy hat and keen sense of humor. Please correct the following errors and try again: We've detected that you are using an unsupported browser. He even put radio frequency trackers under the skin of the bait cows. When Mr. Easterday attempted to seek a change to the terms of this arrangement and renegotiate their contracts, Tyson exercised its market power and threatened to shut down the Pasco packing plant.". But within two weeks of his death, everyone would know what Gale Easterday likely knew that day: Tyson Fresh Meats one of the nation's largest meat distributors was investigating Easterday Ranches and slowly discovering that Gale's son, Cody, had sold them hundreds of thousands of cattle that never existed. "He is on the go all the time, trying to see what he can come up with or buy," said Johnny Gamino, who worked as a mechanic on Easterday's many tractors, trailers, trucks and machines for 15 years. The Commission will vigorously prosecute fraud committed in connection with derivatives trading, including making false statements to exchanges to exceed the applicable limits on their positions,Acting Director of Enforcement Vincent McGonagle said in a statement. One was Cottonwood Ag Management, a subsidiary of Cascade Investment, owned by Bill Gates. But before long, white papers began to point to formula contracts as a key driver of the falling rates of pay. There are no paper titles tracking cattle. Repaying all of them seemed an outsized task. Not all features of DTN / The Progressive Farmer may function as expected. He ascended the exit ramp, past signs that warned "wrong way," and rounded the bend onto the interstate, colliding with a vehicle driven by his own delivery man. Tyson points out the upsides: steady income, reliable markets and easier access to bank loans. Ranchers have long complained about lowball prices from these companies. Debate over the lower Snake River dams' removal has gone on for decades. Then, in January, Tyson filed suit against Easterday Ranches to reclaim the money. Easterday Farms contracted hundreds of workers annually. Easterday carried out one of the largest cattle swindles in U.S. history, from near Pasco, in Washington state. This is how it works: Ranchers with more than 50,000 pounds of living, breathing, snorting mammal can go to the Chicago Mercantile Exchange the agrarian equivalent of the New York Stock Exchange and buy what's called a futures contract. Tyson Foods claims the Pasco, Wash., ranch billed for fictitious cattle and feed. Cody Easterday pleaded guilty to one count of wire fraud in March and has agreed to repay $244,031,132 in restitution. Easterday Farms -- started in 1958 by Cody Easterday's grandparents -- also filed for Chapter 11 bankruptcy protection that same week. The family had launched Easterday Ranches along the way, a "finishing operation" that raised cattle from weaning to the slaughterhouse after four or five months of fattening. Then he bet again, losing $58 million in 2018. Easterday pleaded guilty to one count of wire fraud on March 31 after bilking Tyson Foods out of $233 million. The ranch was mammoth by Northwest standards. Easterday Farms has now grown to more than 18,000 acres of potatoes, onions, corn and wheat. They talked of his community leadership. Maybe this was good news for Cody Easterday, who could finally gain something from the consolidation and higher prices. The bankruptcy court opted not to split the four generations of sprawling business. He also was ordered to pay the full restitution of $244. Over the following year and a half, Easterday's companies and their assets, including large amounts of real . The filing was made after a meatpacker sued Easterday Ranches for defrauding it of $225 million for . Federal data shows that the largest percentage of ranchers raise 10 or fewer cattle for themselves, maybe a few friends. Whether those ranchers can borrow their way back into business in another year is unknown. He supervises investigations of everything from cattle theft to stolen saddles. In recent months Easterday also sued Tyson for alleged breach of contract for money the company owed to him. The Federal Deposit Insurance Corporation Office of Inspector General and the U.S. But todays operations have grown much larger and more corporate. That rancher might buy a futures contract for $1.34, looking to make a profit of 4 cents. Easterday now is set to be sentenced Jan. 24 in Richland's Federal Building. They've made enormous gains by pulling profits from both sides of the business: pushing pay for ranchers down while also benefiting from the rising price of beef for consumers. Spokespeople for both companies declined to be interviewed, but Erik Nicholson, the former vice president of United Farm Workers, who is now a consultant, said the outstanding sums would be painful blows for both. In recent testimony to Congress about Western drought, which was so severe in 2021 that irrigation water was scarce, several ranchers described selling off herds at significant losses, unable to buy hay while grass wouldn't grow and profits were too slim to afford it. LINCOLN, Neb. The Commodity Futures Trading Commission's action, filed March 31 in the U.S. District Court for the Eastern District of Washington. What impact would a recession have on farming? He said he was shopping a settlement agreement to avoid the years of litigation that could erupt in a fight for what was left. That industry parlance feedlots is shorthand for saying the cattle are raised in pen after pen after pen on dirt squares that look from the sky like enormous bingo cards. He pled guilty to a count . "You don't get paid, you move on," said Brad Curtis, whose farm was owed $112,000 for feed. In the daily hum of this meat-making venture and on the farm, Cody was described by one worker as the embodiment of its bustle. Several of the company's contractors were based in the corrugated metal shops nearby. But it is risky when contracting with a company like Tyson, because Tyson's market heft can drive the price of cattle down by eliminating cash competition. As part of the guilty plea in April, Easterday also agreed to repay $244 million in restitution, according to the U.S. Department of Justice. LOTS OF CATTLEMEN WILL TELL YOU that Cody Easterday is an outlier. The Church of Jesus Christ of Latter-day Saints, commonly referred to as the Mormon Church, responded Tuesday to a whistleblower complaint that accuses the church of stockpiling $100 billion in .