(DECEMBER 10) – The U.S. Department of Agriculture’s Agricultural Marketing Service (AMS) issued a final rule to ensure fair trade and competitive marketing of livestock and poultry.
The rule clarifies the types of conduct prohibited by the Packers and Stockyards (P&S) Act and sets forth several criteria the Secretary of Agriculture will consider when determining whether conduct by packers, swine contractors or live poultry dealers represents an undue or unreasonable preference or advantage.
The four criteria include whether the preference or advantage:
- cannot be justified on the basis of a cost savings related to dealing with different producers, sellers, or growers;
- cannot be justified on the basis of meeting a competitor’s prices;
- cannot be justified on the basis of meeting other terms offered by a competitor; and
- cannot be justified as a reasonable business decision.
The final rule provides the Secretary will consider these criteria and allows for additional criteria to be considered in determining if an undue or unreasonable preference or advantage has occurred and enforcement action should be taken.
The rule will be published in the Federal Register and is effective as of January 11, 2021.
United States Cattlemen’s Association (USCA) Senior Policy Advisor Jess Peterson commented on the final rule:
“USCA believes there is a need to properly define anti-competitive buying practices, and this final rule falls short. However, it does leave the door open for future rulemaking in this area. Progress needs to be made in addressing anti-competitive practices both within corporate feedyards and the meatpacking sector.
“This past summer, USDA issued a set of recommendations that have been incorporated into the Cattle Market Transparency Act of 2020. That effort, along with the 50-14 proposal introduced by Senators Jon Tester and Chuck Grassley, are much needed to level the playing field for U.S. cattle producers and independent cattle feeders.”