November 14, 2023

New USDA regulations to increase transparency for poultry growers

United States federal agriculture officials are set to introduce new disclosure requirements for the poultry industry, designed to provide chicken growers, often contracted by large companies for meat production, with greater insight into their potential profits, Virginia Mercury reported.

Typically, US meat processors contract farmers to grow chickens, providing chicks, feed, and medicines, while farmers contribute facilities and labour until the birds are ready for slaughter. Compensation for farmers is often tied to the efficiency of meat production compared to other farmers under similar contracts. However, many farmers have raised complaints over the years, citing an imbalance in leverage and insufficient accountability by the contracting companies.

Responding to these concerns, the US Department of Agriculture (USDA) announced the first in a series of new requirements, a result of US President Joe Biden's executive order in 2021 to enhance competition in the country's economy. The new regulations mandate large live poultry dealers to disclose the earnings of contracted growers, describe how they handle flock losses, address shortages of food, and manage farmer complaints about food quality.

Under the regulations, dealers must guarantee a minimum number of flock placements with farmers per year, specifying the sizes of those flocks. However, exemptions apply to dealers slaughtering less than 2 million pounds of live broilers weekly or 104 million pounds annually.

Andy Green, a USDA senior advisor for fair and competitive markets, said there is a need for transparency in the broiler chicken market to eliminate deceptive practices. The regulations, set to go into effect in late January, aim to provide poultry growers with upfront and ongoing transparency.

US Secretary of Agriculture Tom Vilsack noted that concerns about the fairness and transparency of the contracting and tournament system for poultry growers have been voiced for many years. The new regulations, enforced under the Packers and Stockyards Act of 1921, seek to protect farmers from unfair and monopolistic practices.

Consolidation in the meatpacking industry, which gained renewed attention during the COVID-19 pandemic, is a focal point of these regulations. Federal officials estimate that a small number of large companies control a significant portion of the beef, pork, and chicken markets.

-      Virginia Mercury