- DTN Headline News
Livestock Market Rule Released
Tuesday, January 14, 2020 12:48PM CST
By Jerry Hagstrom
DTN Political Correspondent

WASHINGTON (DTN) -- Groups that have campaigned for strong rules to protect farmers and ranchers from anticompetitive business practices in meatpacking and processing said Friday that the rule proposed by the Trump administration to make changes to the Packers and Stockyards Act scheduled to be published in the Federal Register on Monday is at best only a small step.

The Agriculture Department's Agricultural Marketing Service said the proposed regulation specifies four criteria the secretary of agriculture would consider when determining whether an undue or unreasonable preference or advantage has occurred in violation of the Packers and Stockyards Act. The proposal has a 60-day comment period that will end March 13.

The rule was driven by a directive in the 2008 farm bill. The Obama administration proposed rules multiple times, but they were withdrawn, and the Trump administration canceled a rule proposed late in the Obama administration.

Under the proposed rule, the secretary of agriculture could consider whether a preference or advantage given to a seller can or cannot be justified based on cost savings or whether the preference can or cannot be justified as a reasonable business decision. Some preferences or advantages could be considered undue or unreasonable if they are so unfair they tend to restrain trade and create excessively unfair conditions for a certain group of people. The secretary would also consider whether a preference or advantage can or cannot be considered a reasonable business practice in the industry. The secretary could consider other factors beyond the four criteria on a case-by-case basis.

Julie Anna Potts, president and CEO of the North American Meat Institute, said the group that represents meatpackers will review the rule to ensure livestock producers have a variety of options to market their livestock and that meat and poultry markets remain competitive. Potts also said the packer group would seek to protect the standard that requires plaintiffs to show a packer's actions showed likely harm to competition in any litigation.

"Any rule must protect marketing agreements between packer/processors and livestock producers, which provide stability to the industry and benefits consumers with lower prices and better quality meat and poultry," Potts said. "Eight federal appellate courts have concluded that the Packers and Stockyards Act requires a plaintiff to show actual or likely harm to competition.

"Without such a requirement, frivolous lawsuits could flood the courts and hurt the producer-processor relationship, ultimately harming those the law is intended to protect."

National Farmers Union President Roger Johnson said, "After so many years of inaction, it is encouraging to see this administration take some small steps to level the playing field."

"However, this rule does not go far enough to safeguard farmers from unfair treatment, nor does it address many of the other difficulties farmers have been suffering at the hands of powerful corporations. In order to provide farmers with the protections they need and deserve, we strongly urge USDA to strengthen its definition of 'undue or unreasonable preference' as well as introduce additional rules to ensure fair treatment and competition in the livestock sector."

National Sustainable Agriculture Coalition Policy Specialist Candace Spencer said, "After much delay, we are very pleased to see AMS finally moving forward on the undue preference rule."

"Their proposed criteria focus solely on business justifications, which could be very helpful depending on how they are interpreted and whether or not they are actively enforced. One major concern we have about the criteria, however, is that they include language that would judge undue preference by whether or not such behavior can be considered customary for the industry.

"Unfair competition and undue preference has unfortunately become customary for the industry -- that does not mean it should be endorsed. In order to ensure this rule is fair and effective for contract farmers, this criterion must be either deleted or heavily revised.

"We will be working closely with our membership to analyze these criteria and put forward a more detailed analysis next week."

NSAC added, "The undue preference rules represent only a small part of a larger package of reforms advanced under the Obama administration at the end of 2016, known as the 'Farmer Fair Practices Rules.' These rules were strongly supported by contract producers and advocates like NSAC."

The Organization for Competitive Markets said, "USDA fails to own up to its longstanding position that the Packers and Stockyards Act is both an antitrust law and a producer protection law."

"Unlike the previous iteration of this rule, it fails to set out which actions are unfair, unjustly discriminatory, or deceptive by meat packers and processors. USDA leaves farmers, ranchers, and poultry contract growers under the threat of retaliation for speaking out against any wrong doing of the packer or processor. A particularly gross omission in this proposed rule is restoration of the right of an individual producer to bring a claim without proving competitive harm to the entire sector."

USDA Agricultural Marketing Service: Undue and Unreasonable Preferences and Advantages Under the Packers and Stockyards Act proposed rule: https://www.federalregister.gov/…

Comments for the rule can be filed at www.regulations.gov

Jerry Hagstrom can be reached at jhagstrom@njdc.com

Follow him on Twitter @hagstromreport


blog iconDTN Blogs & Forums
DTN Market Matters Blog
Editorial Staff
Monday, January 13, 2020 11:32AM CST
Friday, January 10, 2020 11:31AM CST
Monday, January 6, 2020 1:31PM CST
Technically Speaking
Editorial Staff
Monday, January 13, 2020 8:56AM CST
Monday, January 6, 2020 10:53AM CST
Monday, December 30, 2019 8:28AM CST
Fundamentally Speaking
Joel Karlin
DTN Contributing Analyst
Thursday, January 16, 2020 9:31AM CST
Wednesday, January 15, 2020 10:27AM CST
Friday, January 10, 2020 8:23AM CST
DTN Ag Policy Blog
Chris Clayton
DTN Ag Policy Editor
Thursday, January 16, 2020 7:44AM CST
Wednesday, January 15, 2020 6:46AM CST
Monday, January 13, 2020 7:45PM CST
Minding Ag's Business
Katie Behlinger
Farm Business Editor
Wednesday, November 6, 2019 12:01PM CST
Friday, October 11, 2019 10:19AM CST
Monday, September 30, 2019 4:22PM CST
DTN Ag Weather Forum
Bryce Anderson
DTN Ag Meteorologist and DTN Analyst
Wednesday, January 15, 2020 4:20PM CST
Tuesday, January 14, 2020 4:12PM CST
Thursday, January 9, 2020 2:11PM CST
DTN Production Blog
Pam Smith
Crops Technology Editor
Thursday, January 9, 2020 10:48AM CST
Friday, December 6, 2019 4:16PM CST
Wednesday, November 27, 2019 2:19PM CST
Harrington's Sort & Cull
John Harrington
DTN Livestock Analyst
Monday, January 6, 2020 1:09PM CST
Monday, December 30, 2019 3:13PM CST
Monday, December 23, 2019 12:27PM CST
An Urban’s Rural View
Urban Lehner
Editor Emeritus
Thursday, January 9, 2020 2:44PM CST
Wednesday, January 1, 2020 11:25AM CST
Sunday, December 15, 2019 6:00PM CST
Machinery Chatter
Dan Miller
Progressive Farmer Senior Editor
Wednesday, January 15, 2020 4:47PM CST
Monday, January 6, 2020 3:08PM CST
Tuesday, November 12, 2019 11:26AM CST
Canadian Markets
Cliff Jamieson
Canadian Grains Analyst
Thursday, January 16, 2020 4:44PM CST
Wednesday, January 15, 2020 3:44PM CST
Tuesday, January 14, 2020 4:00PM CST
Editor’s Notebook
Greg D. Horstmeier
DTN Editor-in-Chief
Tuesday, December 31, 2019 10:39AM CST
Friday, November 22, 2019 5:37PM CST
Monday, November 11, 2019 2:26PM CST
Copyright DTN. All rights reserved. Disclaimer.
Powered By DTN