Oklahoma Depends on Cherokee For Poultry Pollution Suit

The Oklahoma Attorney General has sued Arkansas poultry companies for damages to the Illinois River. But a federal judge says he can't proceed without the Cherokee Nation as a plaintiff.

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Rural companies — measured by the Yonder 40 stock index — continued to soar this past week. The 40 stocks picked to represent the rural economy are up nearly 21 percent since the beginning of the year. 

The 40 companies chosen to represent the rural economy have seen their stock prices rise far above both the Dow Industrials and the Standard and Poor’s 500. The Dow has risen 3.6% in 2009 and the S&P 500 is up 8.4%. (See chart on the next page.)

The Yonder 40 has risen nearly 21%, including a 4% gain just this week.

The most interesting business story of the week, however, wasn’t the rising stock market (which, we should note, is still far below where it stood two years ago). A story out of Oklahoma involving Tyson Foods (a Yonder 40 stock) captured our attention, as a federal district court judge dealt the state a setback in its efforts to collect damages from a baker’s dozen of Arkansas poultry companies. Oklahoma’s attorney general claimed the way the companies disposed of poultry waste had damaged the Illinois River watershed.

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This map shows the number of CAFOs (confined animal feeding operations) located in Arkansas in the Illinois River basin. Click on he map for a much larger version of the map. It helps explains why the Oklahoma AG is filing suit against the Arkansas companies.
This story begins in 2005, when Oklahoma AG Drew Edmondson filed suit against 13 poultry companies, claiming they had polluted the Illinois River. There are scores of huge chicken feeding operations centered largely in Arkansas. Over 55,000 people in the two states work in the poultry industry. Oklahoma argued that 345,000 tons of poultry waste produced each year had damaged the Illinois watershed, home to the country’s iconic bird, the bald eagle. The Arkansas attorney general entered the case on behalf of the companies.

As Curtis Killman of the Tulsa newspaper describes the action, the Illinois River valley lies in land set aside by the federal government for the Cherokee Nation in northeast Oklahoma. The poultry companies argued that Oklahoma does not have the right to seek $611 million in damages to a river and valley that belong to the Cherokee.

The Cherokee Nation and the state had signed an agreement in the spring that assigned the state the right to seek damages on behalf of the tribe. http://www.illinoisriver.org/336768.aspx That wasn’t good enough for Federal District Judge Gregory Frizzell, who ruled the state could not proceed without the Cherokee as a full-fledged plaintiff in the case  Frizzell said the state could continue to seek an injunction against poultry company waste disposal practices, but Oklahoma couldn’t ask for damages on behalf of the tribe.

Environmental attorney Harlan Hentges writes that the judge’s ruling makes it impossible for the State of Oklahoma to protect what it considers its interests “unless a Tribal Nation agrees. This will have impacts far beyond the poultry lawsuit.”

Hentges wrote that the poultry suit will “set a precedent regarding whether or not industrialized agriculture can push its waste, and therefore its costs, onto landowners….Judge Frizzell’s ruling now gives the Cherokee Nation the power to stop this lawsuit or cause it to go forward….I cannot think of a prior instance in which a decision by the Cherokee Nation or any tribal nation had this much impact on our state our country.”

People in Oklahoma and Arkansas now wait to see what the Cherokee will do.

The Daily Yonder
The Yonder 40 is in green, besting both the Dow and the S&P 500 in 2009.
Tyson is one of only eight companies in the Yonder 40 to have a declining stock price during July, losing 6% of its value during a month when the entire rural stock index gained nearly 10 percent. 

The Yonder 40 was led by its coal mining firms. Walter Industries is up over 34% in July and both Peabody and Cimarex have seen double digit increases. (A listing of all the Yonder 40 stocks and their results for July can be found below.)

The laggard among the 40 rural-based industries is Bassett Furniture, which lost nearly 13% of its value.

Surprisingly, Astec Industries lost 11%. Astec produces roadbuilding equipment — it is known as the “Amazon of Asphalt” — and shares fell after an analyst wrote that the Obama Administration’s interest in highway construction had waned as it tackled health care reform and an energy bill. Moreover, state and local roadbuilding budgets are shrinking as state budgets tighten. So Astec share have dropped.

The railroads signal that the recession is still a ways off. Burlington Northern Santa Fe Corp., a Yonder 40 member, reported sagging earnings and reported that it sees no clear signs of a rebound in business.

The recession is being felt everywhere. Retail stores are cutting down on the choices offered to shoppers, according to the Wall Street Journal. Walgreen is cutting the different kinds of superglue it stocks from 25 to 11. Yonder 40 member Wal-Mart says it will eliminate 20 of the 24 kinds of tape measures it carries. We offer a Daily Yonder bandana to any shopper who feels slighted by the declines in choice among soft drinks, bathroom tissue and jarred salsa.

What shoppers are looking for is value, especially in rural communities. That’s why Family Dollar reported record third quarter earnings. Same store sales at Family Dollar were up over 6% compared to a year ago.

Meanwhile, International Speedway Corp., reported a loss in the latest quarter, as sales of its NASCAR-related merchandise slumped.

And it appears that the run on gun and ammo sales has finally slowed. Earnings had quadrupled in earlier quarters at Yonder 40 member Sturm, Ruger, as gun owners, fearing a crackdown by the Obama Administration, had stocked up on weaponry. In November, FBI background checks were running 42% above normal. In May, background checks were up just 15%.

Finally, a new report from Harvard University on “clean coal” finds that the first generation new power plants will produce electricity at a cost more than double current rates. 

Below is a chart showing how the Yonder 40 fared during July 2009:

[img:40July23.jpg]

 

Topics: EnvironmentFood
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