USDA Proposes Next Steps to Promote Fairer Poultry Markets

The agency aims to create more competitive, affordable and transparent meat and poultry sectors.

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The U.S. Department of Agriculture (USDA) today announced next steps it is proposing to address the 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 abuses that have occurred in relation to grower ranking 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. USDA is also announcing new publicly available cattle market transparency tools. These and previous actions are intended to enhance transparency, stop retaliation and discrimination, reduce costs, and support market fairness in a range of circumstances, furthering the Department’s efforts.

The proposed rule Poultry Grower Payment Systems and Capital Improvement Systems would, if finalized, prohibit deductions from the base price in contracts for broiler chicken growers, permitting only bonuses for performance. It would also 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 fair comparison to ensure grower comparisons 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. All comments submitted will be considered as USDA develops a final rule. The final rule will be published in the Federal Register.

USDA is finalizing a series of rules under the Packers and Stockyards Act. These rules complement a series of other 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 fertilizer production, creating a fairer market for seeds and other agriculture inputs, investing in State Attorney General enforcement capacity and supporting supply chains. These investments will create economic opportunities, which will result in more affordable prices and choices for consumers at the grocery store, in addition to more opportunities and revenue for producers.

Livestock Mandatory Reporting (LMR)

To complement these actions, USDA is launching a new data visualization tool, the Livestock Mandatory Reporting (LMR) Live Cattle Data Dashboard, providing users the ability to view and access LMR live cattle market information. AMS will also 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. This dashboard is offered by USDA that aims to make access to AMS Market News information more user-friendly. AMS is conducting demos and testing with interested stakeholders. Public access to this dashboard will be available this summer.

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