USDA Proposes Criteria to Strengthen Enforcement of the Packers and Stockyards Act

Friday, January 10, 2020 - 11:00am

Release No.: 003-20

WASHINGTON, Jan. 10, 2020 – As part of the U.S. Department of Agriculture’s (USDA) commitment to ensuring fair and competitive markets for the livestock, meat and poultry industries, today the USDA Agricultural Marketing Service (AMS) published in the Federal Register a new proposed rule specifying four criteria the Agency would consider when determining whether an undue or unreasonable preference or advantage has occurred in violation of the Packers and Stockyards (P&S) Act. We invite public comment on the proposed criteria until March 13, 2020.

The P&S Act states that it is unlawful for a packer, swine contractor or live poultry dealer to make or give any undue or unreasonable preference or advantage to a seller or grower of livestock or poultry. An undue or unreasonable preference or advantage is an action that creates excessively favorable conditions for one or more persons, reducing opportunities for optimal pricing and business success for competitors.

The proposed criteria will serve as a basis to determine whether these differences are a reasonable and fair preference or advantage. Under the proposed rule, USDA would consider whether a preference or advantage meets one or more of the criteria below:

  • cannot be justified on the basis of a cost savings related to dealing with different producers, sellers, or growers.
  • cannot be justified on the basis of meeting a competitor’s prices.
  • cannot be justified on the basis of meeting other terms offered by a competitor and,
  • cannot be justified as a reasonable business decision that would be customary in the industry.

USDA would not be limited to considering only these four criteria, but could also take other factors into consideration as appropriate on a case-by-case basis. The proposed rule retains necessary flexibility while providing greater clarity around what may constitute a violation.

These criteria are being provided for public comment for 60 days. Comments will be taken into consideration as we work to finalize these guidelines. Comments must be submitted through and should reference the document number on the top of the first page of the proposed rule, along with the Federal Register date and page number where the published proposed rule is located. AMS will make all submitted comments available to the public, including the identity of the commenter and any personal information provided.

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