I suppose it is possible that large agribusinesses where you live do this... it is also possible that the small farmers near you have an axe to grind with their larger competition, and/or are open to accepting and spreading gossip and rumors without much basis in reality.

But you don't think it's possible that all the incentives are geared towards this kind of behavior?

That is certainly a possibility! I didn't mean to imply it wasn't. I did a some quick looking and if your in the US, the USDA guarantees livestock insurance, this likely results in a distortion of the risk and perhaps shifts the incentives towards this sort of behavior.

But I would caution against taking rumor and gossip as strong supporting evidence.