USDA Looks to Strengthen Packers and Stockyards Act

Brian German Dairy & Livestock, Industry

Packers and Stockyards

Changes have been proposed for the process of buying and selling livestock and poultry. The U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) is proposing some changes to enhance the enforcement of the Packers and Stockyards (P&S) Act. The new rule, Undue and Unreasonable Preferences and Advantages Under the Packers and Stockyards Act, is being offered as a means of ensuring fair and competitive markets for the livestock, meat and poultry industries.

The proposed rule, published in the Federal Register, emphasizes four criteria that would be considered when evaluating whether there has been a violation of the P&S Act.  The P&S Act makes it illegal for a packer, contractor or dealer to give any unreasonable preference or advantage to a seller or grower of livestock or poultry.  Unreasonable preferences are considered to be creating substantially favorable conditions for one competitor or another, having a negative impact on optimal pricing.

Under the proposed rule, USDA would consider whether a preference or advantage meets one or more of the following criteria. A practice that cannot be justified on the basis of cost savings related to dealing with different producers, sellers, or growers, or justified on the basis of meeting a competitor’s prices. Other criteria include practices that cannot be justified on the basis of meeting other terms offered by a competitor or justified as a reasonable business decision that would be customary in the industry.

The public is being invited to provide comments on the proposed rule until Friday, March 13.

Listen to the report below.

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Brian German

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Ag News Director, AgNet West