U.S. Agriculture Secretary Tom Vilsack announced the Fair and Competitive Livestock and Poultry Markets proposed rule last week. The proposal is part of a series of rulemakings USDA is pursuing under the Packers and Stockyards (P&S) Act of 1921. The 60-day public comment period on the proposed rule opened June 26 and will close August 26.
NCBA and KLA will be submitting comments in opposition to the proposed rule as it effectively would nullify the harm to competition standard. In so doing, regulated entities would be open to legal risk, which would result in fewer marketing opportunities for cattle producers. It also would open the door for the agriculture secretary to set a minimum cash trade in the cattle markets.
“USDA’s newly proposed rule is a direct attack on cattle producer profitability,” said NCBA Vice President of Government Affairs Ethan Lane. “By creating criteria that effectively deem any innovation or differentiation in the marketplace improper, USDA is sending a clear message that cattle producers should not derive any benefit from the free market, but instead be paid one low price regardless of quality, all in the name of so-called fairness.”
A common component of all antitrust law, the harm to competition standard requires complainants alleging a violation of the P&S Act to demonstrate the action in question is harmful to overall competition in the marketplace — not just an individual, isolated incident. This, in turn, provides a uniform framework against which USDA and federal judges can evaluate individual cases.
USDA attempted to roll back the standard in 2010 and 2016, but neither attempt was successful. Additionally, the requirement for persons alleging violations of the P&S Act to demonstrate harm, or likelihood of harm, to competition has been affirmed by eight federal courts of appeals, with no dissenting circuit court opinions, and the U.S. Supreme Court routinely has denied review of the issue.