Source: USDA, 5/26/22

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack today announced more support, resources, and new rules that will strengthen the American food supply chain, promote fair and competitive agricultural markets, prevent abuse of farmers by poultry processors and make prices fairer for farmers and American consumers. These actions build on President Biden’s historic whole-of-government effort to promote competition in the American economy and fulfill key pillars of the Meat and Poultry Supply Chain Action Plan launched in January by President Biden, Secretary Vilsack, and Attorney General Garland. These actions combat market dominance by a small number of major meat and poultry processors in key markets, where excessive concentration and control has led to lower prices paid to producers and higher prices paid by consumers.

“For too long, farmers and ranchers have seen the value and the opportunities they work so hard to create move away from the rural communities where they live and operate,” Vilsack said. “Under the leadership of President Biden and Vice President Harris, USDA is committed to making investments that promote competition—helping support economic systems where the wealth created in rural areas stays in rural areas—and strengthening rules and enforcement against anticompetitive practices. The funding and new rule we’re announcing today ultimately will help us give farmers and ranchers a fair shake, strengthen supply chains, and make food prices fairer.”

Fighting for Fairness for Poultry Farmers
USDA today announced a proposed rule under the Packers and Stockyards Act to protect poultry growers from abuse. Today’s action is the first of three rulemakings that USDA will issue under the Packers and Stockyards Act under the President’s Executive Order on Promoting Competition in the American Economy in order to stop unfair, deceptive, discriminatory, and anticompetitive practices in the meat and poultry industry.

Currently, poultry processors exert control over much of the process of raising chickens through take-it-or-leave-it contracts with growers. Under these contracts, processors provide inputs like chickens and feed to poultry growers. Poultry growers, who often take on debt to build poultry growhouses, have limited visibility into the real range of outcomes and risks they face under these contracts. Moreover, once in the contracts, the processors then determine the payments that poultry growers receive for their services by weighing the chickens and ranking farmers based on how much the chickens grew. Pay is generally determined based on how a farmer compares to other farmers, but farmers currently have little insight into this comparison. For far too long, growers have complained that the “tournament” system is ripe for abuse.

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