On January 3, U.S. Department of Agriculture (USDA) Secretary Tom Vilsack and Attorney General Merrick Garland announced a set of joint principles intended to drive antitrust enforcement in the meat and poultry supply chains. The announcement comes as part of a broader and prolonged effort by the Biden Administration to focus on competition in the meatpacking sector specifically and in the national economy more broadly. For example, the Administration has cited meat and poultry prices as driving food inflation and has identified market concentration in the meatpacking industry as an area of focus. For example, the Administration has characterized the top 4 beef, pork, and chicken processors as controlling over 50% and as much as 85% of their respective markets.1 At the forefront of these discussions are commitments to strengthening the Packers and Stockyards Act (PSA), the 100-year-old law that designed to protect against unfair, deceptive, and anti-competitive practices in the meat markets.
In their announcement, USDA and DOJ announced a list of joint principles that underscore their departments’ continuing efforts to protect farmers, ranchers, and other agricultural producers and growers from unfair and anticompetitive practices by enforcing federal competition laws like the PSA. As stated in a USDA press release,2 the principles are as follows:
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Farmers, ranchers, and other producers and growers deserve the benefits of free and fair competition. The Justice Department and USDA therefore are prioritizing matters impacting competition in agriculture.
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The agencies will jointly develop within 30 days a centralized, accessible process for farmers, ranchers, and other producers and growers to submit complaints about potential violations of the antitrust laws and the Packers and Stockyards Act. The agencies will protect the confidentiality of the complainants if they so request to the fullest extent possible under the law and also commit to supporting relevant whistleblower protections, including newly-applicable protections for criminal antitrust complainants against unlawful retaliation.
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The agencies will work together to promote effective information sharing and case cooperation, including processes the agencies will follow to efficiently address a complaint.
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Both agencies commit to vigorously enforce the laws that protect farmers, ranchers, and other producers and growers from unfair, deceptive, discriminatory, and anticompetitive practices. As appropriate, USDA will make reports or refer potential violations of the Packers and Stockyards Act to the Justice Department to better enable its Antitrust Division to pursue meritorious competition-related cases and to allow the agencies to collaborate on issues of mutual interest. Additionally, the Justice Department and USDA will work together to identify and highlight areas where they believe Congress can help modernize statutory frameworks.
On the same day, the White House hosted a roundtable event with farmers, ranchers, an independent poultry processor, and Cabinet members to reemphasize its commitment to boosting competition and reducing prices in the meat-processing industry.3 At the event, Secretary Vilsack tied into this effort several rulemakings that USDA has earlier announced as being in the works, although proposed rules have not yet been issued:
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USDA is in the process of developing three proposed rules under the Packers and Stockyards Act (PSA) to better protect poultry and hog farmers and cattle ranchers from unfair and anti-competitive practices in meat markets. The proposed rules revive rulemakings initiated during the Obama Administration to identify actions that USDA views as violating the PSA, regulate poultry grower contracting (often referred to as tournament systems), and codifying the department’s view that parties need not demonstrate competitive harm to bring an action under the PSA.4
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USDA plans to issue new regulations governing “Product of USA” claims for meat and poultry products.
To complement these efforts, the Biden Administration announced it seeks to improve resiliency in meat and poultry supply chains with a $1 billion investment to expand independent processing capacity and support workers and the independent processor industry.5
Next steps
Companies that may be affected should closely monitor USDA and DOJ activities regarding competition law and antitrust enforcement, as well as USDA’s planned rulemakings. If you have any questions, please do not hesitate to contact us.
References
1 Fact Sheet: The Biden-Harris Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain, White House (Jan. 3, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/01/03/fact-sheet-the-biden-harris-action-plan-for-a-fairer-more-competitive-and-more-resilient-meat-and-poultry-supply-chain/.
2 Press Release, Agriculture Department and Justice Department Issue Shared Principles and Commitments to Protect Against Unfair and Anticompetitive Practices, USDA (Jan. 3, 2022), https://www.usda.gov/media/press-releases/2022/01/03/agriculture-department-and-justice-department-issue-shared.
3 Press Release, Readout of President Joe Biden’s Event with Farmers, Ranchers on his Action Plan for a More Competitive Meat and Poultry Supply Chain, White House (Jan. 3, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/01/03/readout-of-president-joe-bidens-event-with-farmers-ranchers-on-his-action-plan-for-a-more-competitive-meat-and-poultry-supply-chain/.
4 Press Release, USDA to Begin Work to Strengthen Enforcement of the Packers and Stockyards Act, USDA (June 11, 2021), https://www.usda.gov/media/press-releases/2021/06/11/usda-begin-work-strengthen-enforcement-packers-and-stockyards-act.
5 Fact Sheet, supra note 1.
