Ag Policy Blog

USDA on Tuesday opted to extend the comment period for its proposed rule on competition and market integrity under the Packers & Stockyards Act.

USDA has spent multiple presidential administrations writing and rewriting rules under the Packers & Stockyards Act.

Comments were originally expected to be due Dec. 2, but USDA added 45 days for comment through Jan. 17, 2023.

The proposed rule, dubbed "Inclusive Competition and Market Integrity," would prohibit certain "prejudices against market-vulnerable individuals" that tend to be excluded in livestock markets.

"The proposal would identify retaliatory practices that interfere with lawful communications, assertion of rights, and associational participation, among other protected activities, as unjust discrimination prohibited by the law. The proposal would also identify unlawfully deceptive practices that violate the Packers and Stockyards Act with respect to contract formation, contract performance, contract termination, and contract refusal. The purpose of the rule is to promote inclusive competition and market integrity in the livestock, meats, poultry, and live poultry markets."

The proposed rule, which is an extensive read, points to the consolidation that has occurred in the livestock industry. Since 1980, the four largest cattle processors have gone from 36% of market share to more than 80% of fed cattle processing now. For hogs, the concentration over the time has gone from 34% to 64% for the four largest packers. In poultry, since 1977, the four-firm concentration ratio has gone from 22% to 53%.

Meanwhile, the major packers have moved nearly every livestock and poultry industry away from negotiated cash trade to vertical integration or marketing contracts. The share of broiler vertical integration is nearly universal.

In cattle markets, Alternative Marketing Arrangements (AMAs) has gone from about 35% in 2005 to more than 73% now. As a result, since 2005, negotiated cash trade nationally for cattle has fallen from 65% to 27% over the same period.

USDA noted, "Limited options for producers heightens the risks of prejudicial exclusion and retaliation. Over the years, these concerns have been reported to USDA, but the Department has not been able to effectively address complaints, in part owing to insufficient clarity around P&S Act rules and standards and related questions around the ability for individuals to bring cases based on specific instances of harm."

NCBA Welcomes Extension

The National Cattlemen's Beef Association welcomed the extension for the comment period while calling on USDA to proceed slowly moving forward.

"While we appreciate the additional time to submit thorough comments, overall USDA should tap the brakes on this rulemaking effort," said NCBA Senior Director of Government Affairs Tanner Beymer. "This is a significant undertaking rooted in decades of legislative, regulatory, and judicial history. Stakeholders must be afforded the opportunity to holistically evaluate the effects of both this rule and those which the Department has suggested are forthcoming."

NCBA noted the proposed rule is 180 pages long and poses 55 specific questions "and covers over 14 years of regulatory history," reflecting how long USDA has faced with P&S proposed rules.

As of Tuesday, the proposed rule had received 342 comments from producers and other stakeholders. Comments on the proposed rule can be submitted to the website www.regulations.gov

The full rule can be read at https://www.regulations.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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