The U.S. Department of Agriculture has proposed a new rule aimed at promoting fairness and competition in the livestock and poultry markets. The rule, titled Fair and Competitive Livestock and Poultry Markets, seeks to address the stringent “proof of harm to competition” standard that currently requires farmers and ranchers to prove that anti-competitive practices have harmed the entire industry, not just themselves, to take legal action against meat packers.
The USDA’s proposed rule aims to provide greater clarity for courts nationwide and ensure fair treatment for independent cattle producers impacted by meatpacking corporations’ practices.
Reaction to the proposed rule has been mixed across the industry.
Support from the American Farm Bureau Federation
Zippy Duvall, President of the American Farm Bureau Federation, acknowledged USDA’s ongoing efforts to bring fairness to the marketplace. “We appreciate USDA’s ongoing work to bring fairness to the marketplace for America’s farmers and ranchers,” Duvall said. He noted that the rule could have varying impacts depending on growers’ business structures, locations, and animal species. “Our focus is to ensure USDA understands the positive and potential negative aspects of this complex proposed rule. Farm Bureau will review the rule carefully and provide comments consistent with our member-developed policy.”
Criticism from the Meat Institute
The Meat Institute expressed strong opposition to the proposed rule, arguing it could set meat production back decades. Julie Anna Potts, President and CEO of the Meat Institute, criticized the USDA for attempting to bypass Congress and the courts. “Removing the need to show harm to competition will encourage frivolous lawsuits,” Potts said. She warned that meat packers might reduce the use of Alternative Marketing Agreements (AMAs) to minimize litigation risks, potentially harming livestock producers, packers, and consumers alike.
Potts also contended that the proposed changes conflict with congressional intent and could introduce market uncertainty. “What is the Biden Administration trying to fix?” she asked, pointing out that cattle prices were at record highs for much of 2023 and remain high in 2024. She argued that the rule could disrupt market demand signals and the value producers earn from sustained beef demand.
The Meat Institute also suggested the rule might violate the “major questions doctrine” as articulated by the Supreme Court, asserting that the USDA is acting without congressional approval. Potts concluded that the administration’s policies could increase costs for consumers, citing other regulatory actions that she believes will prove costly to American households.
The USDA will review feedback from stakeholders before finalizing the rule.
