Concerns surrounding potential price-fixing of the Georgia dock price index have continued to gain momentum, prompting the Georgia Department of Agriculture (GDA) to implement at least one change while the issue is being investigated.
Julie McPeake, a spokeswoman for GDA, confirmed to the Wall Street Journal Nov. 22 that beginning next week the agency is requiring the reporting companies to submit a signed affidavit and attestation. The attestation will be required for each individual employee submitting information to the Georgia Poultry Market News and the affidavit will be required of each company.
"This effort is being done to solidify the Poultry Market News Reports while ensuring that proprietary information is protected," she said.
According to the WSJ, this marks the first time in more than four decades that there’s been a major change to the Georgia Dock.
McPeake confirmed that both the U.S. Department of Agriculture and the Florida attorney general’s office have been pressing GDA for information about it compiles the index.
Tom Hayes, president of Tyson Foods, addressed Nov. 21 the topic during the company’s quarterly results conference call after questions arose about Tyson’s part in the price index since it is one of the largest companies to contribute prices to the index.
Hayes said approximately 3.5-4% of its total chicken sales are negotiated off the Georgia Dock. However, he added that customers can negotiate using whatever index they choose.
“We have talked several times that we used a lot of different pricing mechanisms, and we are diversified; we don’t feel like it has significant impact to us. But the Georgia Dock has had very little influence on our price and strategy,” he said.
Hayes said the company has found that the Georgia dock price index is not a good proxy for cost. He said the company has some very sophisticated buyers that tend to look more at grain inputs than they do the Georgia Dock. “Certainly it's got a lot of history and it's something that's been around for a while, but we find increasingly our customers are looking to have discussions about where do they think grain is.”
When asked, Dennis Leatherby, executive vice president and chief financial officer, said the company would feel no impact if the Georgia dock “went away.”