Final rule issues for the Packers and Stockers Act

By: Sydney Sheffield 

The United States Department of Agriculture (USDA) has announced the finalization of the Inclusive Competition and Market Integrity Under the Packers and Stockyards Act. The final rule will be effective for 60 days following publishing in the Federal Register and is designed to establish clearer, more effective standards under the Packers and Stockyards (P&S) Act for prohibited practices relating to discrimination, retaliation, and deception in contracting. The USDA states that the goal of the act is to help producers and growers who have suffered from increasingly consolidated markets over the last 30 years by enhancing market integrity and ensuring fair access to economic opportunities.

“Discrimination, retaliation, and deception against producers and growers has no place in modern livestock and poultry markets,” said USDA Secretary of Agriculture Tom Vilsack. “The Biden-Harris Administration is making significant progress in tackling the abuses that have left producers and growers excluded from economic opportunities and fair and equal access to the marketplace. This rule establishes clearer, more effective standards to govern the modern marketplace, and they are another example of how USDA is focused on building new, fairer, more resilient, and more competitive markets for our farmers, ranchers, and producers.”

The finalized final rule will:

• Prohibits the adverse treatment of livestock producers and poultry growers based on race, color, religion, national origin, sex (including pregnancy, sexual orientation, and gender identity), disability, marital status, or age. It also prohibits discrimination against a livestock and poultry producer cooperative.
• Prohibits retaliation against producers and growers for their engaging in certain protected activities: lawful communications or refusals to communicate, the assertion of contractual and Packers & Stockyards Act rights, participation in associations and cooperatives, exploring or entering a business relationship with a competing packer/swine contractor/live poultry dealer, and certain other protected activities.
• Prohibits employing false or misleading statements or omissions of material information in contract formation, performance, and termination; and prohibits regulated entities from providing false or misleading representations regarding refusal to contract.
• Supports USDA monitoring, evaluation, and enforcement of compliance with aspects of this rule through certain recordkeeping requirements.

It is important to note that many in the animal agriculture and meat industry strongly oppose the act. “The Biden Administration says these changes to the PSA’s regulations are about increasing competition, but they have nothing to do with competition,” said Julie Anna Potts, President and CEO of the Meat Institute. “These changes are simply an attempt to assert even more federal authority to regulate the equities of industry business practices, clogging the federal courts with every contract dispute. Congress never intended to give the agency such broad-ranging authority over meat industry contracts and practices, regardless of their effect on competition – and the courts have agreed.”

Similarly, Mike Brown, President of the National Chicken Council (NCC) said, “The Biden administration and USDA are sprinting to complete their anti-business regulatory agenda ahead of Election Day, an agenda being driven by far-left activists, anecdotes from a handful of disgruntled growers, and trial attorneys who are seeking to shape the regulatory environment to line their own pockets.” 

This rule is part of a suite of Packers and Stockyards Act rules proposed by USDA. The final rule will be published in the Federal Register and go into effect on May 6, 2024. 

Read the final rule here.