The proposed rule change to the Packers and Stockyards Act announced June 25 by the Biden Administration is attempting to set meat production back decades by encouraging litigation and limiting how livestock producers can market their animals to packers, the Meat Institute says.
USDA claims the proposed rule will better protect farmers, ranchers and other covered market participants by making clearer how prohibitions on unfair practices will be enforced under the Packers and Stockyards Act. Specifically, USDA says the rule provides clearer tests and frameworks around unfair practices that harm market participants individually and unfair practices that harm markets overall.
However, the Meat Institute says USDA is attempting to circumvent Congress and the courts to reverse the longstanding legal standard that parties must demonstrate harm to competition to sue and win under the Packers and Stockyards Act Section 202(a) or (b).
Removing the need to show harm to competition will encourage frivolous lawsuits, the Meat Institute points out. To protect themselves, meat packers may be forced to curtail the use of Alternative Marketing Agreements (AMAs) to minimize these costly litigation risks.
“Unfortunately for the Biden Administration, Secretary Vilsack has tried these changes before,” Julie Anna Potts, president and CEO of the Meat Institute, says in a release. “They have failed before the courts, conflict with Congressional intent and are a blatant attempt to pick winners and losers in the marketplace. Under these proposed rules, everyone loses, the livestock producer, the packer and ultimately the consumer.”
The Meat Institute believes these changes would introduce uncertainty into the market and de-couple the demand signals producers receive from beef consumers, including consumers’ willingness to pay for value-added attributes.
“At low points in the cattle cycle, like this year’s historically small cattle herd, it puts at risk the value producers earn from sustained beef demand, and as the expansion phase of the cattle cycle begins it would undermine the benefits earned from growing beef demand,” the Meat Institute says.
In addition, the Meat Institute believes the proposed change violates the “major questions doctrine,” as articulated in the Supreme Court’s ruling in West Virginia vs. Environmental Protection Agency, because the USDA is acting without the permission of Congress and proposing administrative rules that will have a dramatic effect on all stakeholders in the meat and poultry markets.
“The President and his Administration continue to pursue policies that will increase costs for consumers. From Secretary Vilsack’s proposed changes to the Packers and Stockyards Act’s rules to USDA’s delayed modernization of pork inspection to EPA’s proposed wastewater guidelines, these policies will prove costly to the 98% of American households who purchase meat to feed their families,” Potts says.
To learn more, visit MeatInstitute.org.
