USDA is proposing additional regulations for poultry tournament systems

WASHINGTON — The U.S. Department of Agriculture (USDA) proposed a new rule on June 3 to address competition concerns for poultry farmers and farmers. The poultry farmer payment and capital improvement schemes rule is the third in a suite of rules created under the Packers and Stockyards Act to support fairer markets.

“Poultry farmers deserve a fair shake, and consumers deserve fair prices,” said Andy Green, USDA senior adviser for fair and competitive markets. “This proposed rule aims to ensure that growers have a clear base price in contracts, a contracting partner that honestly designs and conducts any comparisons, and access to the information that growers – and USDA – need to identify and stop coercive investment demands before growers they will make a decision with large debts.”

The proposed rule seeks to address abuses associated with grower rating payment systems and the additional capital investment requirements that poultry companies often require of their contract growers for broiler chickens.

If finalized, the rule would prohibit deductions from the base price in contracts with broiler chicken farmers, allowing only performance bonuses. This would provide growers with the tools to identify risks that may arise from capital improvement practices and also enhance USDA’s ability to enforce prohibitions against unfair capital improvement practices. Additionally, this rule would establish a duty of fair comparison to ensure that breeder tournaments are conducted in a reasonable and fair manner so as not to disadvantage specific breeders.

An unofficial version of the rule can be found on the USDA Agricultural Marketing Service website. The official proposed rule will be published in Federal Register at a later time. After publishing in Federal Registerthe public will have 60 days to respond to the provision.

In response to the initial announcement of this rule, the National Chicken Council (NCC) issued a statement.

“These are solutions in search of problems that don’t exist,” said NCC President Mike Brown. “This is the latest example of the Biden administration’s race to impose its anti-business regulatory agenda ahead of the November election. This rule – which Congress never asked for – would create rigid, one-size-fits-all chicken contract requirements that would stifle innovation, lead to higher costs for consumers, reduce competition and cost jobs while incentivizing the best chicken farmers. The administration likes to blame our nation’s food producers for high grocery prices, rather than looking in the mirror at their failed policies and increased regulation. We look forward to reviewing this rule in its entirety and expressing our strong opposition in the comments.”

In addition to announcing rules for poultry farmer payment systems and capital improvement systems, USDA plans to launch a new data visualization tool, the Livestock Mandatory Reporting (LMR) Livestock Data Dashboard. The tool has been designed to provide easy access to information about the LMR live cattle market. According to the USDA, public access to the dashboard will be available in the summer.