DOJ to Step Up Antitrust Enforcement in Agriculture

On June 21, 2024, Deputy Assistant Attorney General Michael Kades announced a plan by the Department of Justice (DOJ) Antitrust Division to increase both civil and criminal antitrust enforcement in the agriculture sector. As part of the plan, DOJ will create an enforcement team focused on the agriculture industry that will be headquartered in Chicago.

The announcement follows several major agriculture antitrust enforcement actions taken by the Department of Justice in recent years, including: United States v. Agri Stats, Inc.., United States v. Cargilland high-profile criminal trials in the broiler chicken industry. Agricultural Statistics the actions focus on alleged violations of the Sherman Act, while Cargill was one of the first Packers and Stockyards Act (PSA) cases brought by the Department of Justice. The PSA is intended to “ensure fair competition and fair trade practices, protect farmers and ranchers… protect consumers… and protect members of the livestock, meat, and poultry industries from unfair, deceptive, unfairly discriminatory, and monopolistic practices.” Specifically, CargillThe DOJ alleged that the poultry producers violated the PSA by engaging in deceptive practices through the use of a “tournament system” among chicken farmers that forced farmers to compete with each other to determine compensation. The lawsuit led to a settlement that included, among other things, a provision that prevented some defendants from reducing a farmer’s compensation “as a result of the farmer’s performance relative to that of other farmers.”

As DAAG Kades’ announcement highlighted, DOJ plays a role in enforcing the PSA, along with the United States Department of Agriculture (USDA). While USDA must generally refer poultry PSA cases to DOJ, USDA has discretion to decide whether to refer non-poultry cases to DOJ. The resurgence of PSA enforcement and the recent cooperation between USDA and DOJ are examples of the Biden administration’s “whole of government” approach to promoting competition in the U.S. economy.

In its comments, DAAG Kades emphasized that as part of its renewed efforts to enforce the PSA, the DOJ deliberately avoids using terms such as “competitive harm” or “competitive injury” because, the DOJ contends, these terms unnecessarily limit the scope of the PSA. In addition, DAAG Kades indicated that the DOJ is actively seeking guidance regarding anticompetitive conduct occurring in the auction context—an area in which the DOJ has had a number of successes in recent years.