Ag Today October 18, 2017

Trump Administration Drops Tighter Rules on Meatpackers

USDA reversal is blow to some farmers, advocacy groups; companies say rules would have made meat pricier

Wall Street Journal

The Trump administration Tuesday reversed efforts to make it easier for livestock farmers to challenge meatpackers over pricing and allegations of uncompetitive practices.

Some farmers complained for years that big meat companies enjoyed excessive control over farmers’ livelihoods by leveraging their broad influence over pricing and supplies needed to raise poultry and livestock. The U.S. Department of Agriculture in December outlined the new rules that would have made it easier for farmers to contest their big customers.

Meatpackers had argued the rules would have mired processors and farmers in costly litigation and made U.S. meat more expensive.

Nearly all domestic chickens are owned by companies like Tyson Foods Inc. and Pilgrim’s Pride Corp. , and raised by farmers under contract. A large portion of hogs are raised under similar deals.

The planned rules would have established new grievance procedures to handle disputes between farmers and meatpackers and detailed unfair practices. The system was never implemented, and the agency said Tuesday that it was dropping the rules because of “serious legal and policy concerns.”

Some poultry farmers who had pushed for the rules said they felt abandoned by the new administration and USDA Secretary Sonny Perdue, previously governor of Georgia, one of the largest chicken-producing states.

“I am extremely disappointed in the Trump administration and I’d like to know how this applies to making America great again,” said Mike Weaver, a West Virginia chicken farmer who said he posted Trump campaign signs in his front yard last year. “All this does is support the big corporations, not the farmers.”

Mike Brown, president of the National Chicken Council, a Washington-based group representing the U.S. poultry industry, said the decision showed the Trump administration had taken into account thousands of comments it received “and recognized these rules would have come with deep economic consequences for American poultry and livestock producers.”

USDA officials said they worried about conflicting federal court precedents, and that these would “inevitably lead to more litigation in the livestock and poultry industries,” according to Randall Jones, acting administrator of the agency’s division overseeing meatpackers.

Write to Jacob Bunge at jacob.bunge@wsj.com and Heidi Vogt at heidi.vogt@wsj.com

Appeared in the October 18, 2017, print edition as ‘USDA Pulls Rule, A Big Blow To Farmers.’