Ag News

USDA proposes rule to address issues for animal ag producers

On June 25, the USDA announced new action to support what it called a “fairer, more competitive, and more resilient meat and poultry supply chain.”

USDA’s Fair and Competitive Livestock and Poultry Markets proposed rule would tackle longstanding challenges around interpretations of unfairness and competitive injury for the livestock, meat, and poultry sectors.

American Farm Bureau Federation (AFBF) President Zippy Duvall said the organization will analyze the proposed rule and provide comments according to AFBF policy.

“We appreciate USDA’s ongoing work to bring fairness to the marketplace for America’s farmers and ranchers,” Duvall said. “The proposed rule may impact growers differently depending on their business structure, location and animal species. Our focus is to ensure USDA understands the positive and potential negative aspects of this complex proposed rule.”

The National Cattlemen's Beef Association (NCBA) warned that the rule would prompt numerous lawsuits. The National Chicken Council (NCC) said the rule ignores legal precedent.

“USDA’s newly proposed rule is a direct attack on cattle producer profitability,” NCBA Vice President for Government Affairs Ethan Lane said. “By creating criteria that effectively deems any innovation or differentiation in the marketplace improper, USDA is sending a clear message that cattle producers should not derive any benefit from the free market but instead be paid one low price regardless of quality, all in the name of so-called fairness.”

The NCC said the rule retreads a failed proposal from more than a decade ago and asserted that the rule ignores legal precedent.

“Eight different federal circuit courts of appeal have addressed the key issue underpinning the proposed rule—the need to establish injury to competition to demonstrate a violation—and they have uniformly and resoundingly rejected the position advanced by USDA in this proposed rule,” NCC Interim President Gary Kushner said.

The USDA said the proposed rule will better protect farmers, ranchers, and other covered market participants by making clearer how prohibitions on unfair practices will be enforced under the Packers and Stockyards Act. Specifically, the rule provides clearer tests and frameworks around unfair practices that harm market participants individually and unfair practices that harm markets overall. If finalized, this rule would better enable USDA’s Agricultural Marketing Service to carry out its legal obligation to ensure fair and competitive national livestock, meat, and poultry markets and ensure livestock producers and poultry growers can secure the full value for their products and services.

The USDA said the proposal is based on its extensive administrative case law and builds off of precedent established under other unfair practices laws. The proposal follows well-understood approaches to unfair practices and unfair methods of competition.

The proposed rule was published in the Federal Register on June 28 and is open for public comment until Aug. 27. To submit a comment, visit https://www.regulations.gov/document/AMS-FTPP-21-0046-0001 and click the “comment” button below the headline. All comments submitted will be considered as USDA develops a final rule. The final rule will be published in the Federal Register.

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