The Agriculture Department on Tuesday proposed new definitions for practices that can be deemed "unfair" under the Packers and Stockyards Act, allowing the livestock antitrust law to prohibit conduct that “harms market participants” and “harms the market."
Determining what constitutes an unfair practice has been determined by the agency’s judicial officer, and courts have “inconsistently applied” these decisions, according to the proposed new rule.
The proposed rule signed by Agricultural Marketing Service Associate Deputy Administrator Erin Morris said it would present a “clear interpretation and promote consistency and predictability in its application of the law.”
Under the proposal, practices would be deemed unfair if they would cause or are likely to cause “substantial injury to one or more market participants” that those participants “cannot reasonably avoid” and that those overseeing those practices "cannot justify by establishing countervailing benefits to the market participant or participants or to competition in the market that outweighs the substantial injury or likelihood of substantial injury."
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The proposal is USDA's second attempt at addressing these definitions. During the Obama-era, the agency proposed a broader rule that would have barred 'any unfair, unjustly discriminatory, or deceptive practice,’ and stated that in some cases, these violations could be proven “without proof of predatory intent, competitive injury, or likelihood of injury.” That rule was never finalized due to a series of annual appropriations provisions that halted the agency’s work on it.
Agriculture Secretary Tom Vilsack acknowledged at an event hosted by the Center for American Progress Tuesday that crafting the rule has not been easy.
“With what we proposed today, we clearly now delineate there is an opportunity for unfairness to be couched in terms of individual harm,” Vilsack said, noting that now individual producers might be able to "establish under the elements of the new rule that the harm was specific to their operation and constituted a violation of Packers and Stockyards."
The Meat Institute, which represents meat processors, said in a press release that the rule was intended "to circumvent Congress and the courts to reverse the longstanding legal standard that parties must demonstrate harm to competition to sue and win" under the Packers and Stockyards Act. The report noted that cattle prices have been at record levels since 2023.
“Unfortunately for the Biden administration, Secretary Vilsack has tried these changes before,” said Julie Anna Potts, the group's president and CEO. “They have failed before the courts, conflict with congressional intent and are a blatant attempt to pick winners and losers in the marketplace. Under these proposed rules, everyone loses, the livestock producer, the packer and ultimately the consumer.”
