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USDA Boosts Farm Competition, Evens the Field for Farmers!

USDA Boosts Farm Competition, Evens the Field for Farmers!

Agriculture Secretary Tom Vilsack today announced progress on the U.S. Department of Agriculture’s (USDA) comprehensive approach to address the many, complex competition issues in agricultural markets and create a fairer playing field for small- and mid-size farmers. In support of these efforts, USDA has finalized the first in a series of rules under the Packers and Stockyards Act, which is aimed at helping contract poultry growers compete more effectively and better understand the terms of their agreements with major processing companies.

USDA also announced updates on several other efforts the department has undertaken as part of President Biden’s historic Executive Order on Promoting Competition in America’s Economy, a key pillar of Bidenomics. These include a notice to seed companies clarifying expectations that they share clear and meaningful information to farmers about the seed varietals they are purchasing; clarifying the domestic origin requirements a farmer must fulfill to sell meat products to meet USDA’s food purchases for nutrition assistance programs; and creating a new, senior- level career position to formalize and enhance implementation of key competition policy priorities across the Department.

“From day one, President Biden has been committed to a robust and effective set of Packers and Stockyards regulations that will bring better transparency and more fairness to America’s producers and growers,” said Agriculture Secretary Tom Vilsack. “This rule and the other actions we are announcing today bring transparency and accountability to transactional relationships across the poultry industry, seed industry and federal procurement, and they are critical steps in USDA’s competition and farmer fairness agenda. They are also a powerful complement to the many other steps USDA is taking, from investing $1 billion in our supply chains to enhancing our labeling regulations — to create a fairer marketplace so more producers have the tools for success.”

Secretary Vilsack is making this announcement as officials from the Administration are traveling the country as part of the Investing in Rural America Event Series to highlight how the Biden-Harris Administration’s investments are bringing new revenue to farms, increased economic development in rural towns and communities, and more opportunity throughout the country.

Transparency in Poultry Grower Contracting and Tournaments Final Rule

The rule, requires Live Poultry Dealers —typically large processing companies -- to give critical information about terms of their agreements to the poultry growers with whom they contract to raise birds. The final rule requires a “Live Poultry Dealer Disclosure Document” that provides growers with information they need to have a better understanding of realistic outcomes they can expect before making important financial decisions, such as capital-intensive facility improvements or taking out loans. In particular, the rule requires that dealers disclose earnings for growers by quintile, establish minimum flock placements, and explain variable costs growers may incur and how companies handle certain important circumstances such as sick flocks and natural disasters. It also establishes an accountability and governance framework that must be certified by the poultry company’s CEO.

“It's high time that poultry growers get the benefit of robust transparency—upfront and ongoing—to clean up the broiler chicken market of deceptive practices,” said USDA Senior Advisor for Fair and Competitive Markets Andy Green. “This Poultry Transparency Rule in particular lays down a powerful marker that USDA stands on the side of market integrity and fairness for farmers and is a vital example of the more than 72 actions kickstarted by the historic Biden-Harris Executive Order on Promoting Competition in America’s Economy.”

The rule separately requires dealers provide tournament-specific disclosures of inputs to poultry growers who are paid using a poultry grower ranking system and requires that companies also show the distribution of inputs, housing specifications, and any feed disruptions for all the growers in the tournament, at the time of payment. The names of the growers will not be disclosed to protect their privacy. Under the final rule, Live Poultry Dealers that slaughter fewer than 2 million live pounds of broilers weekly or 104 million pounds annually are exempt from these requirements, provided they do not require additional capital investments.



Photo Credit: USDA

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