Meat & Livestock News

USDA Advances New Rules for Poultry Farm Contracts to Enhance Transparency

Indoors chicken farm, chicken feeding

The United States Department of Agriculture (USDA) has taken a significant step forward in promoting transparency in the poultry industry. On November 28, the USDA published detailed information in the Federal Register about updated rules under the Packers and Stockyards Act. These rules are designed to provide clearer disclosures and information that live poultry dealers, predominantly large processing companies, must offer to poultry growers.

Key Elements of the New Rules:

  1. Enhanced Disclosure Requirements: The final rules necessitate additional disclosures for live poultry dealers involved in broiler production. These dealers use poultry grower ranking systems to determine settlement payments for broiler growers.

The Agricultural Marketing Service (AMS) stated that these requirements aim to add targeted transparency to the market for grower services, thereby inhibiting deceptive practices related to broiler contracting and performance.

  1. Live Poultry Dealer Disclosure Document: A crucial part of the rule is the introduction of a “Live Poultry Dealer Disclosure Document.” This document will provide poultry growers with essential information to understand the outcomes they can expect before making significant financial decisions, such as investing in facility improvements or taking out loans.
  1. Disclosure of Earnings and Operational Details: The rule mandates dealers to disclose earnings for growers by quintile, establish minimum flock placements, and explain variable costs that growers might incur. It also requires companies to clarify how they handle situations like sick flocks and natural disasters.

Implementation and Industry Response:

The USDA has announced that the final rule will come into effect on February 12, 2024. Further details about the rule were provided on November 8, including the USDA’s intention to establish the position of a chief competition officer within AMS.

The National Chicken Council (NCC) has acknowledged the new regulations, stating that they are still reviewing the details of how these regulations will impact their members.