The meat processing sector has been in the crosshairs of the federal government over that last several years due to increased consumer prices for meat products and complaints from farmers and ranchers. These complaints have rallied the Biden Administration to review and consider addressing these issues which are perceived to be caused by consolidation among meatpackers. Specifically, the Department of Justice (DOJ) and the U.S. Department of Agriculture (USDA) announced on January 3, 2022 their shared principles and commitments to use the Packers and Stockyards Act (P&S Act) and federal competition laws to address complaints regarding alleged anti-competitive behavior within the meatpacking industry. This announcement is in response to President Biden’s July 9, 2021 Executive Order on Promoting Competition in the American Economy, particularly in the meat and poultry processing sector, as well as USDA’s announcement in July 2021 to begin work to strengthen enforcement of the Packers and Stockyards Act (P&S Act).
While USDA and DOJ have enforced the P&S Act since its passage in 1921, this marks the first time in decades that DOJ and USDA have announced a joint focus on enforcing the Act against meatpackers. DOJ and USDA issued the following principles and commitments regarding the livestock industry and enforcement of the P&S Act:
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.
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 the strongest possible whistleblower protections.
The agencies will work together to promote effective information sharing and case cooperation, including processes the agencies will follow to efficiently address a complaint.
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 Congress can help modernize these toolkits.
These principles and commitments followed a Roundtable on Promoting Competition and Reducing Prices in the Meatpacking Industry hosted by the White House. The White House outlined the following objectives: increased independent processing capacity, increased support for workers in the independent processor industry, and increased transparency. At the event, Secretary of Agriculture Tom Vilsack tied this effort to several rulemakings that USDA has previously previewed, but has not issued regulatory text to date:
- 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.
- USDA plans to issue new regulations governing “Product of USA” claims for meat and poultry products.
These developments highlight the Executive Branch’s increased attention to the meat and poultry processing sector. Industry members are encouraged to reach out to their Husch Blackwell attorney or a member of the Food & Agribusiness team, to ensure they are in compliance with federal competition laws and the P&S Act in order to be prepared for ramped-up federal enforcement in the sector.