Broiler chicken growers would be guaranteed a base price for their birds under a rule USDA is proposing to reform the poultry tournament system.
The proposal, released Monday ahead of publication in the Federal Register, is the latest action taken by USDA to address competition in the meat and poultry sector.
The department issued a rule in November requiring poultry integrators to share more information with prospective and future growers before they enter into contracts. The department also issued its “inclusive competition” rule in March to establish “more effective standards under the Packers and Stockyards Act for prohibited practices relating to discrimination, retaliation and deception in contracting,” the department said.
The latest proposal “would also provide critical tools to 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 department said in a news release. “The rule would also establish a duty of fair comparison to ensure grower comparisons (tournaments) are conducted in a reasonable and equitable way that does not disadvantage specific growers.”
In a call with reporters Monday, Agriculture Secretary Tom Vilsack said he’s not sure when the proposal, which will include a 60-day comment period, would be finalized.
If it does become final, the rule “would address a range of abuses” in the tournament system and the “additional capital investment requirements that poultry companies commonly ask of their contract growers for broiler chickens,” Vilsack said.
The proposal would require companies to disclose “the nature, purpose and financial opportunities and risks for growers around additional capital investments,” he said.
The National Chicken Council's president, Mike Brown, called the proposal “the latest example of the Biden administration racing to impose its anti-business regulatory agenda ahead of November’s election.
“This rule – which Congress never asked for – will lead to rigid, one-size-fits-all requirements on chicken growing contracts that would stifle innovation, lead to higher costs for consumers, decrease competition, and cost jobs by driving some of the best farmers out of the chicken business," Brown said.
“The administration likes to deflect the blame at our country’s food producers as the reason for high grocery prices, instead of looking in the mirror at their failed policies and increased regulation," Brown said. “We look forward to reviewing the rule in its entirety and expressing our strong opposition in comments.”
The Alabama Contract Poultry Growers Association, Organization for Competitive Markets, and Competitive Markets Action supported the proposal.
"We applaud the USDA for finally stepping up to prevent exploitation of contract poultry growers across America and hope to see these regulations swiftly finalized," said Marty Irby, president at Competitive Markets Action and secretary at the Organization for Competitive Markets who also represents the Alabama Contract Poultry Growers Association as their lobbyist. "American family farmers are in peril and this encouraging news gives our producers hope amidst the fallout of House Agriculture Committee Chairman Glenn Thompson's farm bill that would decimate small and medium-sized producers."
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USDA also said it’s “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 in a manner that is easy to use and understand.”
The Agricultural Marketing Service “will 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,” USDA said.
Asked whether USDA would reinstate a July cattle inventory report that the National Agricultural Statistics Service said in April it would no longer produce, Vilsack said, “We would certainly like to be able to provide all of the information that folks have, which is why it's important for Congress to get its job done on a timely basis.
"When Congress basically provides a budget five months late, and … reduces the amount of money provided to NASS, which is responsible for producing those reports, it limits the capacity of NASS to be able to respond appropriately within the budget that's been approved by Congress.”
He said he hoped that “those who are concerned about [the loss of the inventory report] encourage members of Congress to get their work done with reference to a budget, on a timely basis. If they do that. It'll be the first time we've had a budget on time since 1995.”
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This article has been updated to include reaction from poultry growers.
