June 10, 2024 - The US Department of Agriculture (USDA) announced the 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. These and previous actions are intended to enhance transparency, stop retaliation and discrimination, reduce costs and support market fairness in a range of circumstances.
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"Under the direction of President Biden, USDA has sought to utilise 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 is 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 finalised, 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 web portal.
USDA is finalising 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. 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 fertiliser 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.
Livestock Mandatory Reporting (LMR) Live Cattle Data Dashboard
To complement these regulatory actions, USDA is launching a new data visualisation 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. Public access to this dashboard will be available this summer.
For more information, visit HERE.
The Global MillerThis blog is maintained by The Global Miller staff and is supported by the magazine Milling and Grain
which is published by Perendale Publishers Limited.
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