Ag Policy Blog

USDA P&S Act Reforms Face Longer Odds After Supreme Court Ruling

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
Connect with Chris:
USDA this year has proposed or finalized several new rules related to the Packers and Stockyards Act. Those rules are now at greater risk of being thrown out by courts following the U.S. Supreme Court ruling that curtails the authority of agencies when it comes to writing regulations. (DTN file photo)

USDA likely now faces a higher legal standard and more hurdles as the Biden administration attempts to modernize Packers and Stockyards Act rules following the Supreme Court reining in the authority of federal agencies to draft regulations.

As DTN reported, the Supreme Court in a 6-3 ruling overturned a 40-year-old legal precedent known as the Chevron doctrine that had granted agencies authority to write regulations when federal laws seem ambiguous. Agencies have leaned on the Chevron doctrine in recent decades when drafting regulations, but the ruling gives more authority to overturn those regulations.

Chief Justice John Roberts said in the case Loper v. Raimondo that Chevron had allowed agencies to "change course" even when Congress has not given the specific authority to do so.

USDA under the Biden administration has pushed to tighten enforcement of the 103-year-old Packers and Stockyards Act through a series of rules tied to fairness and market competition. USDA has pushed the rules as a way deal with the "imbalance" between packers and producers. "That's basically what Packers & Stockyards was designed to do was to create a balance in the relationship," Agriculture Secretary Tom Vilsack said when announcing a new competition rule this past week.

In just the past month, USDA has proposed:

-the Poultry Grower Payment Systems and Capital Improvements Systems rule. The rule specifically addresses how contract poultry growers are paid as well as demands by processors for growers to make expensive upgrades to their facilities as well. The rule would end poultry integrators' ability to use the tournament payment system to dock a producer's pay using comparisons to the performance of other producers.

-the Fair and Competitive Livestock and Poultry Markets proposed rule would clarify the interpretation of "unfair" under the P&S Act and spell out in more detail conduct prohibited under the law. USDA stated the rule would help ensure livestock and poultry producers receive the full value for their products and services. The issue of defining competitive injury has thwarted producers in lawsuits against packers over how they are treated.

Both proposals drew criticism from the Meat Institute and the National Chicken Council. On the tournament system rule, the National Chicken Council noted, "Congress never asked for" it.

In Marsh USDA finalized the Inclusive Competition and Market Integrity rule, which tightens the rules over practices considered discriminatory or retaliation, or deception in contracts. Among the provisions, packers can discriminate against some for their participation in associations or cooperatives, for instance.

At a summer-feeding program event Friday in Omaha, Vilsack said he had not had time to either read the Supreme Court decision or discuss it with USDA's general counsel. Still, the secretary also defended the proposed and final rules, including the Fair and Competitive Livestock and Poultry Markets rule, which redefines what the courts have considered as "competitive injury."

"I know that we took a good deal of time, and made a great, great deal of effort to ensure that the rules that we're proposing on the Packers and stockyards side, are defensive, and can withstand legal challenge, which often occurs in the circumstances as the Packers and stockyards in the past," Vilsack said.

He added, "I think it's important for us to make sure that we do the legal research. We worked very closely with the Department of Justice on the formulation of these rules, I would say probably more so than we did in the in the past. We worked very hard with our own lawyers. So, they tell me that they're very, very strong. And so I would say that the farm community, for the most part recognizes the need for these rules."

Vilsack pointed to statements from groups such as the National Farmers Union and the American Farm Bureau Federation backing the Packers and Stockyards rules.

"We got to make sure that the marketplace is fair, frankly, when it's fair, farmers benefiting so do consumers," Vilsack said.

He added, "And that's where part of the strategy to try to lower costs for folks is to make sure that the markets are transparent, that there's not consumption consolidation, that we expand, productive processing, so that we're not at the mercy of just a couple of major producers and major processors. So, all of this is designed to respond to the concerns we've heard here today about rising costs."

The American Farm Bureau Federation issued a news release Friday stating farmers would benefit from the Supreme Court striking down the Chevron deference. AFBF had joined other farm groups in filing an amicus brief to overturn Chevron, including the Agricultural Retailers Association, National Cattlemen's Beef Association, National Pork Producers Council and the Meat Institute.

"Farm Bureau applauds the U.S. Supreme Court for recognizing the damage Chevron deference has caused to the federal government's balance of power," said Zippy Duvall, president of AFBF and a Georgia farmer. "For decades, Congress has passed vague laws and left it to federal agencies and the courts to figure out how to implement them. AFBF has been a leading voice on this issue and has argued on behalf of farmers who are caught in a regulatory back and forth when administrations change the rules based on political priorities instead of relying on the legislative process. We are pleased the Court heard those concerns."

Duvall added, "The Constitution built a system of checks and balances among three branches of government, to prevent any one branch from becoming too powerful. The legislative branch creates the laws, the executive branch enforces the laws, and the judicial branch interprets the laws. Chevron deference created a super-branch of government. The Supreme Court restored balance with today's decision."

See, "Supreme Court Overturns Legal Doctrine; Decision Could Benefit Farmers,"…

Also see, " USDA, Vilsack Take Another Shot at Redefining 'Competitive Injury' in P&S Act,"…

Chris Clayton can be reached at

Follow him on social platform X @ChrisClaytonDTN


To comment, please Log In or Join our Community .