The Packers and Stockyards Act, which is designed to protect fair trade, financial integrity, and competitive marketing for livestock, meat, and poultry. It states that it is unlawful for any packer, swine contractor, or live poultry dealer to either make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect.
The proposed regulation would specify criteria that the US Secretary of Agriculture would consider when determining whether an undue or unreasonable preference or advantage has occurred in violation of that Act and help establish an appropriate framework for analysis.
These proposed criteria are:
- Whether the preference or advantage under consideration cannot be justified on the basis of a cost savings related to dealing with different producers, sellers, or growers
- Whether the preference or advantage in question cannot be justified on the basis of meeting a competitor's prices.
- Whether the preference or advantage in question cannot be justified on the basis of meeting other terms offered by a competitor
- Whether the preference or advantage in question cannot be justified as a reasonable business decision that would be customary in the industry
In the past, each determination has been analyzed using general principles in a case-by-case basis, exercising the regulatory flexibility that Congress provided when it passed the Act.
Interested parties have been invited to submit comments on the proposed rule by 13 March 2020 that can be made here.
Commenting on the proposed regulations, North America Meat Institute president and CEO Julie Anna Potts said: “We will review the proposed rule and work to ensure livestock producers have a variety of tools available to market their animals and to ensure meat and poultry markets remain competitive.
“Any rule must protect marketing agreements between packer/processors and livestock producers, which provide stability to the industry and benefits consumers with lower prices and better quality meat and poultry. Eight federal appellate courts have concluded that the Packers and Stockyards Act requires a plaintiff to show actual or likely harm to competition. Without such a requirement, frivolous lawsuits could flood the courts and hurt the producer-processor relationship, ultimately harming those the law is intended to protect.”
