USDA to Strengthen Antitrust Laws for Meatpacking

For decades, the meat industry has enjoyed what the National Farmers Union calls “lax antitrust enforcement.”

This has produced an intensely centralized, powerful meat industry, largely made up of only a few consolidated corporations and laws designed to keep prices low and retributions for fraud even lower. Last week, USDA chief Tom Vilsack announced his agency’s intention to strengthen the Packers and Stockyards Act, which regulates the meatpacking industry.

With incredibly powerful lobbying and a great deal of money, the meatpacking industry has managed to allow megamergers and engaged in alleged price manipulation and fraud. A major complaint of groups like the National Farmers Union is that the Packers and Stockyards Act lacks the regulatory clarity and muscle to properly ensure that farmers are treated properly by the few gigantic corporations that control the meat industry. 

Many have called for significant antitrust work in the agribusiness industry, ranging from meatpacking to inputs to chemicals. The USDA has not announced too many specifics in terms of how the Packers and Stockyards Act will be updated, but did mention three targets. 

First, the USDA plans to clarify the rules regarding deceptive practices and discrimination, which is something that advocates have been calling for over the past few years. Second, it will scrap the ongoing proposal for a poultry tournament system and replace it with a different tournament system; the tournament system currently allows for the rate a corporation pays for poultry to vary after the poultry is already grown, with opaque reasoning. (For more on that, read this.)

Perhaps most importantly, the USDA plans to clarify that farmers do not have to demonstrate competitive harm in order to sue one of these mega-corporations for improper practices. Currently, farmers trying to sue a meatpacking company for unfair market practices have to show they adversely affected the entire industry, which has proven to be an exceedingly high bar to clear. 

In a statement, the National Farmers Union called this update “a strong step in the right direction.” The meat industry generally does not agree. Julie Anna Potts, the president of the North American Meat Institute told National Hog Farmer that the idea of strengthened regulations was “burdensome” and that they will lead to “specious lawsuits.”