Dive Brief:
- The U.S. Department of Agriculture withdrew a rule that would have positioned the department to ramp up enforcement against anticompetitive practices in the meatpacking industry.
- The withdrawn rule, first proposed in June 2024, defined what is considered “unfair practices” in livestock markets through a series of tests and frameworks designed to measure potential harm to individual farmers or consumer markets.
- The move comes as the USDA announces a new rule to provide chicken farmers who participate in tournament payment systems with more transparency. The rule, effective July 1, 2026, also limits excessive compensation discrepancies between growers.
Dive Insight:
The withdrawn rule would have made it easier for livestock farmers to take on meatpackers over pricing and allegations of anti-competitive practices, though it was vulnerable to be challenged under president-elect Donald Trump.
During his first term, Trump withdrew a similar rule under the Obama administration that defined unfair practices in livestock markets. Trump proposed a replacement rule that would determine when a meatpacker violated competition rules under the Packers and Stockyards Act. Critics, however, said the rule did not go far enough to protect farmers from industry abuse.
The USDA’s Agricultural Marketing Service said it dropped the latest rule following “considerable feedback,” including questions about potential economic impacts of the proposal.
“AMS believes that withdrawing the rule both preserves its ability to re-examine these important issues in the future and enables the Agency to explore with stakeholders regarding how best to implement the requirements of the P&S Act,” the agency said in its withdrawal notice.
The agency stressed it did not withdraw the rule based on a change in interpretation of its authority to administer the Packers and Stockyards Act, which was established more than 100 years ago to prevent meatpackers from taking anti-competitive actions that could hurt consumers. USDA enforcement of the landmark competition law has come under scrutiny following a Supreme Court ruling that limits agencies’ ability to advance rulemaking without explicit direction from Congress.
The Biden administration has looked to break up consolidation in the meatpacking industry as a main pillar in a plan to bring down consumer food prices. The USDA finalized two rules over the past four years, including a regulation that gives poultry growers more information about the costs they can expect to incur before taking on a contract with a processor.
The USDA’s latest rule on poultry tournament systems would be the third regulation to tackle fairness in livestock markets, homing in on a complicated pay system that ultimately rewards farmers who provide the heaviest chickens at the lowest possible cost. The rule gives growers who participate in tournament systems better insight into companies’ payment rates for birds, and provides them with leverage when processors break the rules.
“It is USDA’s job to advocate for farmers, and these regulatory improvements give us the strongest tools we’ve ever had to meet our obligations under the Packers & Stockyards Act,” Agriculture Secretary Tom Vilsack said in a statement. “While there is still work to be done, I am immensely proud that the Biden-Harris Administration has taken historic action to level the playing field for farmers.”