USDA Is Delivering on its Commitment to Fair, Competitive, and Transparent Markets

WASHINGTON, June 25, 2024 – The pandemic revealed how bottlenecks in the food and agriculture supply chain threatened consumers with higher costs and reduced access to key products, while producers faced collapsed markets and unfair prices. Meanwhile, marketplace abuses in concentrated markets have been longstanding concerns in key sectors such as meat and poultry.

Under President Biden’s historic Executive Order on Promoting Competition in America’s Economy and as set out in our competition report, USDA has led a whole-of-USDA and partaken in a whole-of-government initiative to improve the competitive landscape in food and agricultural markets. With landmark investments, new rules and enforcement, and a wide-ranging realignment of policies, the Biden-Harris USDA has brought meaningful, lasting change and delivered on its commitment to fair and competitive markets that serve the interests of working family consumers and the American farmer alike.

Highlights of USDA’s efforts include:

Delivering on unprecedented multibillion dollar investment plan to sustainably lower costs for consumers and boost choice for producers, by directly incentivizing competition in food processing and fertilizer.

USDA is delivering on its commitment to invest $1 billion to expand independent meat and poultry processing capacity across the country as part of the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain.

To enable sustained success, USDA has supported a range of critical needs:

1. Direct processing capacity expansion. USDA is expanding processing capacity for farmers in 26 states by investing $208 million in 35 small and mid-sized businesses, through the Meat and Poultry Processing Expansion Program (MPPEP).

   • Local processing options. $9.5 million to 42 projects through the Local Meat Capacity Grant program is building resilience in the meat and poultry supply chain by modernizing, increasing, diversifying, and decentralizing meat and poultry processing capacity. This initial set of awards covers 27 states and Puerto Rico. An additional round of awards will be announced soon.
   • Enhanced financing options. The USDA RD Rural Business and Cooperative Service (RBCS) has awarded $275 million in grants to 29 eligible lenders in the Meat and Poultry Intermediary Lending Program (MPILP) to date. Awards established revolving loan funds to increase access to capital for processors who want to start or expand processing capacity for meat and poultry.
   • Workforce Training. USDA’s National Institute of Food and Agriculture (NIFA) is awarding specified universities grants of up to $15 million to support agricultural workforce training for historically underserved communities. Work in these programs supports development of meat and poultry processing training and educational materials for place-based needs, particularly relevant to small or mid-sized farms and ranches.
   • Food safety compliance, especially at smaller facilities. AMS awarded $53 million through 237 grants in 45 states through the Meat and Poultry Inspection Readiness Grant Program (MPIRG) to help currently operational meat and poultry slaughter and processing facilities obtain a Federal Grant of Inspection or operate as a State-inspected facility under a Cooperative Interstate Shipment (CIS) program.

2. Management Technical Assistant. USDA is investing up to $25 million through the Meat and Poultry Processing Capacity - Technical Assistance Program (MPPTA) to ensure that participants in USDA’s Meat and Poultry Supply Chain initiatives have access full-range technical assistance to support their project development and success. Six organizations are serving as technical assistance providers, and since its launch in 2022, the program has helped over 1,000 businesses and organizations across the United States.

3. Tribal Capacity. USDA has invested nearly $50 million in the Indigenous Animals Harvesting and Meat Processing Grant Program that will improve tribal nations’ food and agricultural supply chain resiliency by developing and expanding value-added infrastructure related to meat from indigenous animals like bison, reindeer or salmon.

4. Research and Innovation. In March 2023, the University of Arkansas was awarded a $5 million grant from the AFRI Center of Excellence for Meat and Poultry Processing and Food Safety Research and Innovation (MPPFSRI). In addition, $13.9 million in grants from the Meat and Poultry Processing Research and Innovation – Small Business Innovation Research Phase III – program were awarded to 14 small and mid-sized meat and poultry processors who will trial food safety and quality assurance technologies. These grants are administered by USDA’s National Institute of Food and Agriculture.

Making innovative investments in fertilizer production that will deliver independent, made-in-America, innovative, sustainable and farmer-focused new capacity.

USDA has also stood up and dedicated $900 million for the Fertilizer Production Expansion Program. USDA has announced 57 projects in 29 states for a total amount of $251 million under the program. Examples of recipients include a business in Washington state that uses patented technology to manufacture and process raw manure and fish waste into fertilizer, and another in Alabama that uses slow-release technology to improve nutrient efficiency.

Reinvigorating USDA’s century-old fair and competitive market laws with new rules and enforcement to counter unfair, deceptive, and anti-competitive practices and empower producers and growers.

USDA has put forth a suite of critical new rules under the Packers and Stockyards Act of 1921 (P&S Act) to promote transparency in poultry contracting and tournaments, address unfairness and deception in broiler grower payments, poultry grower ranking systems, and capital improvement systems, prohibit discrimination, retaliation, and deception in a range of circumstances, and provide better clarity around unfair practices and competitive injury. With two final rules and two more proposed rules, USDA is delivering on its commitment to make lasting change that works.

The “Transparency in Poultry Contracting and Tournaments” final rule gives broiler chicken growers better insight into the opportunities and risks before making key financial decisions, such as entering a poultry growing arrangement or making an additional capital investment. And to help growers be better growers and to protect growers against potential deceptive practices, the rule requires integrators to give growers key information about the inputs they receive under tournament-specific input disclosures.

The “Inclusive Competition and Market Integrity” final rule prohibits discrimination on the basis of race, sex, sexual orientation, religious affiliation and certain other basic characteristics; bans retaliatory practices to protect activities such as communicating with government agencies, joining producer or grower associations, being a witness in a proceeding against a packer or live poultry dealer, and asserting legal and contractual rights; and offers protection against deceptive contracting that are false, misleading, and result in harm to producers.

The “Poultry Grower Payment Systems and Capital Improvement Systems” proposed rule would prohibit deductions from the base price in contracts for broiler chicken growers, permitting only bonuses for performance. The rule would also establish a duty of fair comparison to ensure grower comparisons (tournaments) are conducted in a reasonable and equitable way that does not disadvantage specific growers. It would also provide critical information to enable growers to better identify risks that may arise on capital improvement practices and enhance the ability for USDA to enforce existing prohibitions on unfair capital improvement practices.

The “Fair and Competitive Livestock and Poultry Markets” proposed rule provides clarity regarding the prohibition on unfair practices under the Packers Stockyards Act and the relationship to competitive injury, including harms to market participants and harms to markets. This proposed rule seeks to provide a workable guideline on how the prohibitions on unfair practices will operate and be enforced.

AMS will also be releasing later this summer a report on access to retail markets and is working on a rule to improve transparency and price discovery in cattle markets.

In addition, AMS has enhanced its enforcement partnership with the U.S. Department of Justice, including establishing a new joint tips and complaints portal at farmerfairness.gov. Further examples of this robust enforcement partnership include a case against a poultry company to halt their use of termination fees to penalize broiler chicken growers from switching processors and a landmark case against the third largest poultry processor addressing deception in tournaments.

USDA has established an innovative partnership with the State Attorneys General to share resources and enhance enforcement of unfair and anticompetitive practices in food and agriculture.

Supporting transparency.

In February 2024, USDA finalized a new rule that only permits the voluntary “Product of USA” or “Made in the USA” claim to be applied to those FSIS-regulated meat and poultry products that are derived from animals born, raised, slaughtered and processed in the United States, which better aligns with consumer understanding of what the label means.

FSIS is also engaged in a review of animal-raising claims for labels of FSIS-regulated products, such as “no antibiotics ever” and “pasture-raised.” High quality standards and verification on labels are important to prevent consumer confusion and ensure that the market reflects those choices with the consumer’s hard-earned dollar.

Launched in 2023, USDA’s pilot Cattle Contracts Library, provides new disclosure to the industry and public regarding the key terms, conditions, and volumes under which cattle are contracted, bringing sunshine to practices in what is now the largest part of the cattle market. USDA continues to work with Congress to enable this pilot program to deliver meaningful and lasting value to producers.

USDA is also launching a new data visualization tool, the Livestock Mandatory Reporting (LMR) Live Cattle Data Dashboard, providing users the ability to view and access LMR live cattle market information in a manner that is easy to use and understand. AMS also will begin publishing additional information on the actual net premiums and discounts paid to cattle producers by packers under formula marketing arrangements and detailed quality grade price distribution information. The enhanced insight gained from these powerful tools places producers on a more equal footing with large volume data users and fosters a fairer and more competitive marketplace. Public access to this dashboard will be available this summer.

Creating a fairer market for seeds, other agricultural inputs.

In March 2023, USDA released a report, titled “More and Better Choices for Farmers: Promoting Fair Competition and Innovation in Seeds and Other Agricultural Inputs,” that includes recommendations for improving market fairness. USDA took immediate action on three of these recommendations:

1. USDA’s Agricultural Marketing Service (AMS) stood up a new Farmer Seed Liaison that is working to boost transparency and reduce confusion in a complex seed system by helping facilitate communication between farmers and plant breeders and the patent system. Ensuring the patent system gets the best information regarding seed science and practices enables patents to serve their appropriate function in rewarding genuine innovation, and prevent the inappropriate use of patents as government-granted monopolies.

2. AMS released a Notice to Trade regarding compliance with disclosing the kind and variety of seeds under the Federal Seed Act. USDA has also made it easier for farmers and seed businesses to report tips and complaints related to competition and consumer protection in the seed markets through enhanced links at its FarmerFairness.gov portal.

3. USDA and the U.S. Patent and Trademark Office (USPTO) formed a Working Group on IP & Competition in Seeds and Other Agricultural Inputs, where USDA and USPTO, together with DOJ and Federal Trade Commission (FTC), will work to promote fair competition in the seed market.

Enhancing value-added market access.

As part of its work to transform the nation’s food system, USDA is investing in more and better markets across the food system. These efforts are designed to strengthen our local and regional food systems, create new market opportunities, add value for agricultural producers and consumers, and spur economic activity locally — helping communities that have been left behind by the current agricultural models and supporting good-paying jobs throughout the supply chain. Programs through which USDA is accomplishing these goals include the Organic Transition Initiative, Healthy Meals Incentives, Regional Food Business Centers, Resilient Food Systems Infrastructure Program, Local Agricultural Marketing Program (LAMP), Dairy Business Innovation (DBI) Initiatives, and Specialty Crop Block Grant Program (SCBGP).

Increasing transportation network resilience.

As part of Secretary Vilsack’s work as co-chair of both the Biden-Harris Administration’s Supply Chain Disruptions Task Force and Council on Supply Chain Resilience, USDA has supported whole-of-government efforts to build enduring supply chain resilience. In May 2023, Secretary Vilsack sent a letter to the Surface Transportation Board (STB) requesting urgent action to improve rail service for agricultural commodities by moving forward on open proceedings, such as a shipper petition on private railcar use, emergency service orders, and reciprocal switching. In addition, Secretary Vilsack urged STB to provide clarity on the railroads’ common carrier obligation and collect additional first-mile/last-mile service data.

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