TL;DR:
- The USDA’s new rule under the Packers and Stockyards Act aims to ensure fair access and competition, addressing consolidation concerns over the past 30 years.
- Meat industry trade organisations, including the North American Meat Institute and the National Chicken Council, express strong opposition, citing concerns over increased federal regulation and potential impacts on meat prices for consumers.
- The rule, part of President Biden’s executive order to promote competition, faces criticism for potentially imposing significant costs on the industry and complicating standard business practices.
The United States Department of Agriculture (USDA) announced its intention to finalise the “Inclusive Competition and Market Integrity Under the Packers and Stockyards Act” on March 5. This new rule is designed to provide more effective standards to ensure fair access to economic opportunities, addressing the issue of market consolidation observed over the last three decades.
Agriculture Secretary Tom Vilsack highlighted the administration’s efforts to tackle abuses in the livestock and poultry markets, aiming to establish clearer standards for a modern, fair, and competitive marketplace.
However, this announcement has met with significant resistance from various meat industry trade organisations. Julie Anna Potts, President and CEO of the North American Meat Institute, criticised the changes as an overreach of federal authority, potentially leading to increased litigation and having no direct relation to enhancing competition.
Potts also warned that these policies could contribute to rising meat prices for American consumers, affecting the affordability of meat for the majority of households.
The National Chicken Council (NCC) echoed these sentiments, describing the USDA’s regulatory agenda as anti-business and influenced by a minority of stakeholders. Mike Brown, President of the NCC, attributed the potential for increased costs and legal risks to unnecessary regulations, predicting compliance costs significantly higher than the USDA’s estimates.
The National Cattlemen’s Beef Association (NCBA) expressed concerns about the rule’s unintended consequences on standard business practices, although it acknowledged USDA’s efforts to address some of their significant concerns from the proposal to the final rule. The NCBA emphasised the importance of focusing the rule on its intended objectives without diverging into unrelated matters.
The USDA’s actions aim to enhance competition and market integrity, supporting more resilient supply chains and fairer markets for seeds and other agricultural inputs. Despite the industry’s opposition, the USDA believes that competitive markets with integrity are essential for delivering quality products at competitive prices.
The final rule is set to be effective 60 days after its publication in the Federal Register, marking a significant step in the administration’s efforts to promote competition and fairness in the agricultural sector.
