USDA Proposes Next Steps to Promote Fairer Poultry Markets, Protect Producers, and Enhance Transparency

The U.S. Department of Agriculture (USDA) today announced next steps it is proposing to address the many, complex competition issues in agricultural markets and create a fairer playing field for poultry growers and farmers. USDA is proposing the rule Poultry Grower Payment Systems and Capital Improvement Systems, to address a range of abuses that have occurred in relation to grower ranking (commonly known as “tournament”) payment systems and additional capital investment requirements that poultry companies commonly ask of their contract growers for broiler chicken. This rule is the third in a suite of Packers and Stockyards Act rules that USDA has undertaken to create fairer markets, which ultimately can lead to lower grocery prices for hardworking families. USDA is also announcing new publicly available cattle market transparency tools. These and previous actions are intended to enhance transparency, stop retaliation and discrimination, reduce costs, and support market fairness in a range of circumstances, furthering the Department’s efforts as part of President Biden’s historic Executive Order on Promoting Competition in the American Economy.

“Under the direction of President Biden, USDA has sought to utilize every tool at its disposal to uphold fair competition, protect producers, lower costs for consumers, and combat unfair, deceptive, and discriminatory practices,” said Agriculture Secretary Tom Vilsack. “As part of this effort, USDA committed to issuing new, stronger rules under the Packers and Stockyards Act, to provide greater clarity and strengthen enforcement under the Act. And, by continuing to provide more market transparency tools, we are also continuing to pull back the curtain to ensure every producer has access to the market information they need. With these actions, USDA is holding steadfast to this commitment, and is building ever more momentum towards delivering the fairer markets that those who raise America’s livestock and poultry deserve.”

“Poultry growers deserve a fair shake and consumers deserve fair prices,” said USDA Senior Advisor for Fair and Competitive Markets Andy Green. “This proposed rule is intended to provide growers with a clear base price in contracts, a contracting partner that designs and operates any comparisons fairly, and access to the information that growers—and USDA—need to identify and halt coercive investment demands before growers take on large debts. We look forward to taking comment from all interested parties.”

The proposed rule Poultry Grower Payment Systems and Capital Improvement Systems would, if finalized, prohibit deductions from the base price in contracts for broiler chicken growers, permitting only bonuses for performance. It would also provide critical tools to enable growers to better identify risks that may arise on capital improvement practices and enhance the ability for USDA to enforce existing prohibitions on unfair capital improvement practices. The rule would also establish a duty of fair comparison to ensure grower comparisons (tournaments) are conducted in a reasonable and equitable way that does not disadvantage specific growers.

The proposed rule is posted on the AMS website in advance of formal publication in the Federal Register when it will be available for public comment. Stakeholders and other interested parties have 60 days from the date of publication in the Federal Register to submit comments via the Regulations.gov web portal. All comments submitted will be considered as USDA develops a final rule. The final rule will be published in the Federal Register.

USDA is finalizing a series of rules under the Packers and Stockyards Act as part of President Biden’s historic Executive Order on Promoting Competition in America’s Economy, a key pillar of Bidenomics. These rules complement a series of other all-encompassing actions by USDA to increase competition in agricultural markets, create a fairer playing field for farmers, lower grocery costs for consumers, and strengthen local and regional food systems. Actions include enhancing independent meat and poultry and other diversified food processing capacity, expanding domestic, innovative fertilizer production, creating a fairer market for seeds and other agriculture inputs, investing in State Attorney General enforcement capacity and supporting more robust and resilient supply chains. These investments will create better economic opportunities, which will result in more affordable prices and choices for consumers at the grocery store, in addition to more opportunities and revenue for producers. These rules complement a series of other all-encompassing actions by USDA to increase competition in agricultural markets, create a fairer playing field for farmers, lower grocery costs for consumers, and strengthen local and regional food systems. Actions include enhancing independent meat and poultry and other diversified food processing capacity, expanding domestic, innovative fertilizer production, creating a fairer market for seeds and other agriculture inputs, investing in State Attorney General enforcement capacity to crack down on practices including unfair pricing, and supporting more robust and resilient supply chains. These investments will create better economic opportunities, which will result in more affordable prices and choices for consumers at the grocery store, in addition to more opportunities and revenue for producers.

Livestock Mandatory Reporting (LMR) Live Cattle Data Dashboard

To complement these regulatory actions, USDA is launching a new data visualization tool, the Livestock Mandatory Reporting (LMR) Live Cattle Data Dashboard, providing users the ability to view and access LMR live cattle market information in a manner that is easy to use and understand. AMS also will begin publishing additional information on the actual net premiums and discounts paid to cattle producers by packers under formula marketing arrangements and detailed quality grade price distribution information. In the last several years, AMS has offered this data in new and modern ways to ensure all stakeholders have access to the information they need to efficiently market their agricultural products. The enhanced insight gained from these powerful tools places producers on a more equal footing with large volume data users and fosters a fairer and more competitive marketplace. This dashboard is another new tool offered by USDA that aims to make access to AMS Market News information more user-friendly. AMS is conducting demos and testing with interested stakeholders. Public access to this dashboard will be available this summer.

USDA touches the lives of all Americans each day in so many positive ways. In the Biden-Harris Administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America.