The CEO’s of all the major meat packers have just collectively set their hair on fire and are likely calling internal company meetings RIGHT NOW about how to handle the industry’s greatest threat in, like, forever. That’s because the United States Department of Agriculture announced this month that it will attempt to significantly strengthen enforcement of the 100-year-old Packers and Stockyards Act that was originally written to stop meat packers from stealing from poultry,hog farmers and cattle ranchers with a bag of tricks that manipulated live stock prices through unfair, deceptive and anti-competitive practices.
As written back in 1921:
Section 202 of the PSA (7 U.S.C. §§ 192 (a) and (e)) makes it unlawful for any packer who inspects livestock, meat products or livestock products to engage in or use any unfair, unjustly discriminatory or deceptive practice or device, or engage in any course of business or do any act for the purpose or with the effect of manipulating or controlling prices or creating a monopoly in the buying, selling or dealing any article in restraint of commerce.
But meat packers have had a century to go to the courts in order to chip away at straightforward protections. And chip away they did, finally hitting the mother load in 2004 in the landmark case Pickett v. Tyson Fresh Meats Inc.
U.S. District Court for the Middle District of Alabama ruled that to win Section 202 PSA case a meat producer or rancher had to prove a singular meat packer’s buying practices reduced marketplace competition by arbitrarily lowering prices paid to sellers with the likely effect of increasing retail prices. To make matters worse for individual farmers, the ruling was upheld on appeal.
If all that sounds complicated … well it is. The court ruling in Pickett set the bar so high that individual ranchers, poultry and hog farmers had virtually no chance to make a PSA Section 202 case.
But USDA under the Biden Administration must be paying attention. Earlier this month USDA announced it intends to review the PSA:
“USDA proposes to supplement a recent revision to regulations issued under the Packers and Stockyards Act (Act) (7 U.S.C.181 229c) that provided criteria for the Secretary to consider when determining whether certain conduct or action by packers, swine contractors, or live poultry dealers is unduly or unreasonably preferential or advantageous. The proposed supplemental amendments would clarify the conduct the Department considers unfair, unjustly discriminatory, or deceptive and a violation of sections 202(a) and (b) of the Act. USDA would also clarify the criteria and types of conduct that would be considered unduly or unreasonably preferential, advantageous, prejudicial, or disadvantageous and violations of the Act.”
Specifically, USDA says it intends to work on three — count them — THREE new specific rules that, if they become law, will most assuredly ruin Big Meat’s day.
First, USDA plans to put some teeth back into individual farmer protections by re-defining what constitutes Big-Meat unfair and deceptive practices, undue preferences and unjust prejudices.
Secondly, USDA will propose a new poultry grower tournament rule system to make sales to meat packers more equitable. Many poultry farmers are paid by Big Meat based on a tournament of how they perform against OTHER poultry farmers. But here is the kicker — the processors own the birds, the feed and other inputs, and they can unfairly give preference to one grower over another in order to keep them in line and prevent dissent. USDA has tried for years to make the system more equitable with little success.
And last but certainly not least, USDA will re-propose a rule that would, for all practical purposes, make Pickett mute by clarifying poultry, hog farmers and cattle ranchers are NOT required to demonstrate harm to competition to bring a case under Section 202 of the PSA.
In announcing intent to rewrite sections of the PSA, USDA Agriculture Secretary Tom Vilsack acknowledged there may be come bad apples among the Big-Meat tribe:
“…the law is 100 years old and needs to take into account modern market dynamics. It should not be used as a safe harbor for bad actors. The process we’re beginning today will seek to strengthen the fairness and resiliency of livestock markets on behalf of farmers, ranchers and growers.”
It’s a long way from intent to final rule — the process often takes years — but for far too long Big Meat has had its way with farmers. Here’s to hoping for success where other administrations have failed.
About Dave Dickey
Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for Investigate Midwest covers agriculture and related issues including politics, government, environment and labor. His opinions are his own and do not reflect Investigate Midwest. Email him at dave.dickey@investigatemidwest.org.
