Today, USDA released a proposed rule governing competition in the livestock and poultry industries.  This was the latest iteration of the rule, which originally stemmed from language in the 2008 Farm Bill ordering the Secretary of Agriculture to establish criteria to be used in determining “whether an undue or unreasonable preference or advantage has occurred” in violation of the Packers and Stockyards Act.

Today’s proposal outlines those criteria.  An undue or unreasonable preference or advantage includes, but is not limited to, those that

“(a) Cannot be justified on the basis of a cost savings related to dealing with different producers, sellers, or growers;

(b) Cannot be justified on the basis of meeting a competitor’s prices;

(c) Cannot be justified on the basis of meeting other terms offered by a

competitor; and

(d) Cannot be justified as a reasonable business decision that would be customary

in the industry.”

In 2010, USDA released a set of proposed rules that would have addressed this issue, but sections addressing undue and unreasonable preferences and advantages were never finalized.  A second version was released in 2016 as an interim final rule and proposed regulations, but withdrawn in 2018.  The 2018 withdrawal was challenged in court, however, earlier this month, the 8th Circuit Court of Appeals ruled that USDA was permitted to do so.

For the current proposal, comments will be accepted until March 13, 2020.  Comments are read and considered when the final rules are being written, and are often incorporated into the final rule.  If you’d like to make comments on the proposed rule, you may be submit them through the Federal e-rulemaking portal at http://www.regulations.gov.   You should reference document number AMS 2020-00152.  You may also submit them at the top right of the federal register page here, where it invites you to “submit a formal comment”.