USDA issues new rules
On Nov. 8, Agriculture Secretary Tom Vilsack announced a series of actions under President Joe Biden’s Executive Order on Promoting Competition in America’s Economy, including new rules on red meat purchases, poultry contracts and seed sales.
Red meat purchases
According to Vilsack, effective immediately, all red meat including beef, pork, lamb and bison products purchased by the U.S. Department of Agriculture’s (USDA) Agricultural Market Service (AMS) must come from animals born, raised and slaughtered in the U.S. in order to “meet the domestic origin requirements for purposes of USDA purchasing.”
In a Nov. 8 press release, the department notes AMS uses food products of domestic origin in nutrition assistance programs and to evaluate the effectiveness of their food purchase programs. In 2022, these purchases totaled $800 million.
“Upon review, the guidelines for procuring beef, pork, lamb and bison products were not as clear as other commodities,” reads the release.
“This clarification to the domestic origin requirement will ensure U.S. producers reap the full benefit of USDA purchase programs and recipients of nutrition assistance programs benefit from domestically-produced meat products,” it continues.
Poultry contracts
Additionally, Vilsack announced a finalized rule under the Packers and Stockyards Act, which is aimed at helping poultry growers under contract “compete more effectively and better understand the terms of their agreements with major processing companies.”
This rule, entitled “Live Poultry Dealer Disclosure Document,” will require live poultry dealers to provide growers with the critical information they need regarding the terms of their contractual agreements.
According to USDA, this rule will help growers have a better understanding of the realistic outcomes they can expect before making important financial decisions, such as capital-intensive facility improvements or taking out loans.
“In particular, the rule requires dealers disclose earnings for growers by quintile, establish minimum flock placements and explain variable costs growers may incur and how companies handle certain important circumstances such as sick flocks and natural disasters,” the department explains. “It also establishes an accountability and governance framework which must be certified by the poultry company’s chief executive officer.”
The rule will also separately require dealers to provide “tournament-specific disclosures of inputs to poultry growers who are paid using a poultry grower ranking system and that companies also show their distribution of inputs, housing specification and any feed disruptions at the time of payments.”
“Under the final rule, live poultry dealers who slaughter fewer than two million live pounds of broilers weekly or 104 million pounds annually are exempt from these requirements, provided they do not require additional capital investments,” notes USDA.
A preview of the rule is available on the AMS website and the final rule will be published in the Federal Register.
Seed sales
Lastly, Vilsack announced AMS has sent letters to seed companies reminding them to comply with the labeling requirements outlined in the Federal Seed Act, which requires them to provide variety transparency to farmers at the point of sale.
“As part of this effort, AMS is holding seed companies accountable to the best interests of their farmer stakeholders by requesting they examine how they are complying with the Federal Seed Act and USDA’s Notice to Trade in providing variety transparency to farmers at the point of sale, disclosing the variety to growers usually at the time of purchase and no later than the commencement of shipment,” the USDA press release reads.
Industry reaction
Vilsackʼs recent announcements have stirred mixed reactions from the U.S. agriculture industry.
According to a Nov. 11 article written by Jerry Hagstrom and published in Progressive Farmer, the National Chicken Council (NCC) spoke out against the Live Poultry Dealer Disclosure Document, stating it “would have a devastating financial impact on the U.S. chicken industry by raising costs and administrative burdens, opening the floodgates for frivolous litigation and ultimately destabilizing a successful compensation system for our farmers.”
“Make no mistake, this isn’t about transparency,” says NCC President Mike Brown. “This rule was specifically designed to chum the water for lawsuits. It is just the first salvo in the administration’s attempts to resurrect failed policies which would dismantle a successful industry structure that has benefited farmers, chicken companies and ultimately consumers all around the world.”
“This is the latest example of Bidenomics pushing increased regulations, red tape and costs onto businesses causing record inflation and input costs, threatening food security and potentially raising grocery bills even further for Americans,” he adds.
Other groups, such as the National Sustainable Agriculture Coalition and the Campaign for Contract Agriculture Reform, applauded the rule.
“By requiring poultry companies to be more honest and business-like with prospective and existing poultry growers, this rule helps to deter deception and give farmers the information they need to make wise investment decisions,” states CCAR. “Without a doubt, a full-scale reform of the poultry payment system is needed, but this rule is a very important and welcomed step toward this goal.”
Likewise, regarding the department’s push for seed industry transparency, the American Seed Trade Association (ASTA) offered their appreciation and support.
“We appreciate USDA’s continued efforts to promote the Federal Seed Act’s varietal labeling requirements for seed and for highlighting the importance of establishing best practices under the March 6 Notice to Trade,” ASTA says. “Each year, farmers rely on transparent and clear information to make crucial seed choices to support successful harvests and provide for an increasing world population in a sustainable fashion while protecting the environment.”
Hannah Bugas is the managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
