{"id":64543,"date":"2025-05-19T01:00:47","date_gmt":"2025-05-19T08:00:47","guid":{"rendered":"https:\/\/civileats.com\/?p=64543"},"modified":"2025-05-19T06:09:41","modified_gmt":"2025-05-19T13:09:41","slug":"livestock-producers-seek-to-defend-packers-and-stockyards-rules-from-industry-attack","status":"publish","type":"post","link":"https:\/\/civileats.com\/2025\/05\/19\/livestock-producers-seek-to-defend-packers-and-stockyards-rules-from-industry-attack\/","title":{"rendered":"Livestock Producers Seek to Defend Packers and Stockyards Rules from Industry&nbsp;Attack"},"content":{"rendered":"<\/div><div class=\"post-simple post-capital-letter\"><p>Back in the 1990s, when Craig Watts was still raising chickens for Perdue, the fourth largest poultry company in the U.S., his contract included a provision that prohibited him from sharing the document with any third party. If he encountered a problem with the company, for example, he couldn\u2019t solicit legal help to understand what options the contract provided to him.<\/p><\/div><div class=\"post-simple\">\n<p>It\u2019s one small example of the many ways that the country\u2019s powerful meat companies have exerted control over the farmers that raise the animals they sell. In the chicken industry, farmers looking for economic opportunities have <a href=\"https:\/\/civileats.com\/2022\/08\/16\/op-ed-justice-department-poultry-industry-tournament-payment-chicken-farmers-contracts-usda\/\">long been locked into contracts<\/a> that require them to pay for expensive facilities, <a href=\"https:\/\/civileats.com\/2022\/08\/16\/op-ed-justice-department-poultry-industry-tournament-payment-chicken-farmers-contracts-usda\/\">compete with other farmers for pay<\/a> even though the quality of chicks and feed is dependent on the companies, and <a href=\"https:\/\/civileats.com\/2017\/03\/10\/the-continuing-woes-of-contract-chicken-farmers\/\">make costly upgrades<\/a> whenever companies say so. And as the meat industry <a href=\"https:\/\/civileats.com\/2021\/07\/14\/just-a-few-companies-control-the-meat-industry-can-a-new-approach-to-monopolies-level-the-playing-field\/\">has become more consolidated<\/a> over the last few decades, the companies have <a href=\"https:\/\/civileats.com\/2022\/05\/02\/op-ed-chicken-farmers-raw-deal-monopoly-consolidation-meat-industry-beef-pork-prices-inflation\/\">continued to gain power<\/a> over farmers.<\/p>\n<div class=\"post-quote\"><p>In February 2024, after decades of advocacy, the USDA finalized the first of three rules related to the Packers and Stockyards Act, a century-old law that was intended to protect farmers from abuse by meat companies.<\/p>\n<\/div>\n<p>However, that contract privacy provision is also an example of something that has recently changed in favor of farmers.<\/p>\n<p>\u201cWe had to get that done away with so I could show [the contract] to my accountant, so I could show it to a lawyer, so I could show it to my wife,\u201d Watts, who became a <a href=\"https:\/\/civileats.com\/2017\/06\/26\/transparency-north-carolina-factory-farms\/\">famous poultry industry whistleblower<\/a> after leaving the business, said. \u201cTechnically, I couldn\u2019t even show it to her.\u201d<\/p>\n<p>In February 2024, after <a href=\"https:\/\/civileats.com\/2019\/07\/19\/farmers-and-ranchers-head-to-dc-to-level-the-playing-field\/\">decades of advocacy<\/a> that Watts played a key role in, the U.S. Department of Agriculture (USDA) <a href=\"https:\/\/civileats.com\/2025\/01\/15\/how-four-years-of-biden-reshaped-food-and-farming\/\">under President Biden<\/a> finalized the first of three rules related to the <a href=\"https:\/\/www.usda.gov\/about-usda\/news\/press-releases\/2021\/06\/11\/usda-begin-work-strengthen-enforcement-packers-and-stockyards-act\">Packers and Stockyards Act<\/a>, a century-old law that was intended to protect farmers from abuse by meat companies. In addition to requiring that chicken companies disclose much more information with farmers in terms of the income they can expect, the first rule <a href=\"https:\/\/www.ams.usda.gov\/rules-regulations\/transparency-poultry-grower-contracting-and-tournaments\">protected the farmer\u2019s right<\/a> to discuss the terms of the contract with family members and legal and financial advisors.<\/p>\n<p>The other two rules, now also finalized, <a href=\"https:\/\/www.ams.usda.gov\/rules-regulations\/unfair-practices-violation-packers-and-stockyards-act\">created enforceable definitions<\/a> of discrimination, retaliation, and deception and <a href=\"https:\/\/www.ams.usda.gov\/rules-regulations\/poultry-grower-payment-systems-and-capital-improvement-systems\">put limits<\/a> on how much of a farmer\u2019s pay could be based on the competitive ranking system that companies use.<\/p>\n<p>All three rules were historic, because the Packers and Stockyards Act had no enforceable regulations until the Biden administration. Watts, who now works with <a href=\"https:\/\/sraproject.org\/\">the Socially Responsible Agriculture Project<\/a> to help struggling chicken farmers, was \u201celated\u201d by the progress, but said it\u2019s too early to tell <a href=\"https:\/\/civileats.com\/2024\/10\/08\/for-contract-farmers-the-election-could-change-everything-or-nothing-at-all\/\">whether the rules will make a big difference<\/a>; some provisions haven\u2019t even gone into effect yet.<\/p>\n<p>Even so, meat industry trade groups are already working to stop or overturn these rules.<\/p>\n<p>In October, several groups\u2014including the <a href=\"https:\/\/www.nationalchickencouncil.org\/\">National Chicken Council<\/a> and the <a href=\"https:\/\/www.meatinstitute.org\/\">North American Meat Institute<\/a>, which represents the country\u2019s largest meat companies\u2014sued the USDA to overturn the second rule, called <a href=\"https:\/\/www.ams.usda.gov\/rules-regulations\/unfair-practices-violation-packers-and-stockyards-act\">\u201cInclusive Competition and Market Integrity.\u201d<\/a> In the initial complaint, the groups claim the rule is unlawful and that it will harm meatpackers by forcing expensive \u201ccompliance and recordkeeping obligations\u201d on them and that companies \u201cmay be forced to modify contracting practices merely to avoid the possibility of litigation.\u201d<\/p>\n<p>Now, a critical moment in the legal fight has arrived.<\/p>\n<p>Four groups that represent farmer interests\u2014the <a href=\"https:\/\/alabamapoultry.org\/\">Alabama Poultry Growers Association<\/a>, <a href=\"https:\/\/www.r-calfusa.com\/\">R-CALF<\/a>, <a href=\"https:\/\/lfrint.org\/\">Latino Farmers and Ranchers International<\/a>, and the <a href=\"https:\/\/www.worc.org\/\">Western Organization of Resource Councils<\/a>\u2014have asked the court to allow them to intervene in the case to defend the rule. They\u2019re doing so at a time when they\u2019re unsure if the USDA itself will choose to fight back, since during Trump\u2019s first administration the USDA <a href=\"https:\/\/civileats.com\/2020\/11\/02\/how-four-years-of-trump-reshaped-food-and-farming\/\">worked to weaken and eliminate<\/a> Packers and Stockyards protections. To date, there has been no indication from the current leadership as to how they\u2019ll approach the issue.<\/p>\n<p>\u201cSome of these groups have been working on improving these rules since the 1990s. It\u2019s literally been decades, and finally, actual rules were finalized that have meaningful protections, and it\u2019s just too precious a fight,\u201d said Tyler Lobdell, an attorney with <a href=\"https:\/\/www.foodandwaterwatch.org\/\">Food &amp; Water Watch<\/a> who is representing the farmer groups in their effort to intervene. \u201cIt simply makes sense that they\u2019re at the table.\u201d<\/p>\n<p>Adding to the weight of the case is the fact that the industry\u2019s argument challenges a fundamental piece of Packers and Stockyards enforcement across the board\u2014whether every farmer that brings a case against a company should have to prove that not only were they harmed, but that the company\u2019s actions caused broader \u201charm to competition.\u201d In other words, while the lawsuit only targets one of the rules, the outcome of the case could impact the others as well.<\/p>\n<p>In response to questions from Civil Eats about the lawsuit but also the agency\u2019s broader approach to the rules, a USDA spokesperson said, \u201cWe will not comment on matters relating to litigation.\u201d<\/p>\n<p>A Meat Institute spokesperson declined Civil Eats\u2019 request for interviews on behalf of both the Meat Institute and the National Chicken Council, saying \u201cthe lawsuit [to overturn the second rule] speaks for itself.\u201d<\/p>\n<h4><strong>What\u2019s at Stake\u2014In Court, and On Farms<\/strong><\/h4>\n<\/div><div class=\"post-simple post-capital-letter\"><p>R-CALF, which represents independent cattle producers, is one of the groups that has spent decades pushing for rules that would enable the USDA to properly enforce the Packers and Stockyards Act. Bill Bullard, R-CALF\u2019s CEO, told Civil Eats they want to intervene in the case to defend the Inclusive Competition Rule because of its particular importance in the <a href=\"https:\/\/civileats.com\/2021\/07\/14\/just-a-few-companies-control-the-meat-industry-can-a-new-approach-to-monopolies-level-the-playing-field\/\">highly concentrated beef industry<\/a>, where <a href=\"https:\/\/www.ers.usda.gov\/amber-waves\/2024\/january\/concentration-in-u-s-meatpacking-industry-and-how-it-affects-competition-and-cattle-prices\">four companies now control 85 percent<\/a> of the market.<\/p><\/div><div class=\"post-simple\">\n\n<p>\u201cWe think that it is essential in order to reduce the abuse of market power,\u201d he said. \u201cThere\u2019s a huge disparity in bargaining power between the producers and the meatpackers.\u201d Producers\u2014the farmers and ranchers who are responsible for raising the animals that meatpackers slaughter and bring to market\u2014are also often susceptible to unfair practices, he said.<\/p>\n<p>The rule in question explicitly defines the kind of unfair practices the Packers and Stockyards Act prohibits on three fronts: discrimination, retaliation, and deception. For example, it states that the prohibition on discrimination means a company cannot treat a grower differently based on race, religion, or sex. It says companies cannot retaliate against farmers for participating in associations or for speaking up about their rights under the law. Under \u201cdeception,\u201d it prohibits companies from \u201cemploying false or misleading statements or omissions of material information\u201d when entering into contracts, ending contracts, or refusing to contract with a farmer.<\/p>\n<p>Among ranchers selling cattle, Bullard said, fear of retaliation is real. Because if a producer complains about a packer and that packer decides to retaliate, alternative buyers are few and far between.<\/p>\n<p>\u201cPushing back on this rule sounds so ridiculous, because what they&#8217;re saying is, \u2018We don&#8217;t want this rule because for our model to work and our industry to survive, we must be allowed to discriminate. We must be allowed to retaliate,\u201d Watts said. \u201cYou know it\u2019s bad when you have to prohibit retaliatory practices in a regulation, but here we are.\u201d<\/p>\n<p>In the lawsuit, which the Meat Institute spokesperson asked Civil Eats to quote from in lieu of interviews, the lawyers write that meat companies \u201cmaintain robust controls to prevent such discriminatory practices, root out such discrimination where it exists, and ensure that it finds no home in their industries.\u201d<\/p>\n<h4><strong>Why the Rules Matter to Chicken Farmers<\/strong><\/h4>\n<\/div><div class=\"post-simple post-capital-letter\"><p>The provisions related to deception are of interest to Thong Nguyen, a mild-mannered farmer who goes by Jak. In 2015, his wife spotted a farm with 10 chicken houses for sale on YouTube, where <a href=\"https:\/\/www.youtube.com\/watch?v=r1kB-D8TUxc\">slick videos commonly attract farmers<\/a> with promises like \u201cA true money-maker for years to come!\u201d \u00a0Nguyen went into debt to buy the approximately $2 million property in Summers, Arkansas, and soon after began raising chickens for Simmons Foods, a major chicken processor in the region.<\/p><\/div><div class=\"post-simple\">\n<div class=\"post-quote\"><p>\u201cThe contract poultry system will never work for the farmer until contracts are done in a way that there is good-faith bargaining, and even then the companies will always still have the upper hand.\u201d<\/p>\n<\/div>\n<p>Nguyen realized quickly how little control he had over the entire endeavor, he said. If he didn\u2019t immediately do something a Simmons field tech requested, his next flock of birds might be delayed. \u201cEvery time when we thought we have some savings, they would come in to tell us to make updates,\u201d he said. \u201cEither we do it, or we lose the contract.\u201d<\/p>\n<p>Nguyen ran into worse trouble in 2022 when his brother lost his contract raising chickens for a different regional company and went bankrupt. Because Nguyen had put his farm up as collateral for his brother\u2019s property, he took on his brother\u2019s debt as well. In the meantime, his wife\u2019s chronic kidney disease was getting worse.<\/p>\n<p>\u201cI told the manager [at Simmons] in hopes that they would help me out. I told them about my wife&#8217;s condition,\u201d he said. \u201cThe only way for me to get out is to sell the farm so I can pay off my farm debt and my brother\u2019s as well and hopefully start somewhere new.\u201d<\/p>\n<p>To sell the farm, Nguyen needed Simmons\u2019 cooperation if he wanted to get a fair price for the property. Even though Nguyen financed and built the chicken houses, about three-quarters of an industrial chicken farm\u2019s property value is tied to having an active chicken contract, according to an industry insider who has been working with and for both chicken companies and growers for more than 20 years and has intimate knowledge of farm real estate. (Civil Eats granted the source anonymity because talking to the press could significantly damage their business interests.)<\/p>\n<\/div><div class=\"post-image-caption align-center\"><a href=\"https:\/\/civileats.com\/wp-content\/uploads\/2025\/05\/Jak-family-farm.jpg\" rel=\"lightbox\"><img decoding=\"async\" src=\"https:\/\/civileats.com\/wp-content\/uploads\/2025\/05\/Jak-family-farm.jpg\" alt=\"four kids hold hands walking away from view on a farm during sunset\"><\/a><div class=\"post-caption\"><p>Nguyen&#8217;s family members at home on the farm. (Photo courtesy of Jak Nguyen)<\/p>\n<\/div><\/div><div class=\"post-simple\">\n<p>So, if a grower like Nguyen wants to sell a farm, he needs the company to provide a letter of intent confirming they will contract with the new owner to grow chickens. In Nguyen\u2019s case, Simmons was also requiring upgrades that any buyer would have to agree to make in order to secure that contract.<\/p>\n<p>Throughout process, Nguyen felt Simmons was putting up roadblocks and delaying the sale. He believes the company was dragging it out until his contract ended.<\/p>\n<p>\u201cThey\u2019ve been giving us false promises. After everything happened, from the start to the end, it seemed like they don\u2019t want me to sell my farm,\u201d he said. \u201cThe last time I called and talked with the manager, he told me that he would not let anybody buy my farm or let me renew my farm. They don&#8217;t want anything to do with my farm anymore.\u201d<\/p>\n<p>Simmons did not respond to Civil Eats\u2019 request for comment on these claims.<\/p>\n<p>When Simmons decided it wouldn\u2019t provide a new contract to a buyer, the value of Nguyen\u2019s property dropped from close to $2 million to less than $500,000, so selling the property won\u2019t come close to covering his debt.<\/p>\n<div class=\"post-quote\"><p>\u201cThere\u2019s a huge disparity in bargaining power between the producers and the meatpackers.\u201d <\/p>\n<\/div>\n<p>It\u2019s impossible to know whether having stronger rules against discrimination, deception, and retaliation could change Nguyen\u2019s situation or others like his. But the industry insider said a big reason many situations play out this way is that in the end, companies like Simmons have \u201clittle to lose.\u201d If rules on the books made them liable to USDA investigation or lawsuits, that could change.<\/p>\n<p>As Bullard put it, \u201cThis rule protects the producer\u2019s ability to address some problems they may have with a\u00a0packer. Without it, they would have no recourse.\u201d<\/p>\n<p>Nguyen is incensed that the industry is trying to get the rule thrown out. \u201cThat\u2019s just going to make things worse for the farmer,\u201d he said. \u201cThe farmer should have more protection than the integrator because they are the one that&#8217;s putting their all into it . . . sweat, tears, money. They&#8217;ve been out in the cold, the heat, the rain. It&#8217;s hard work. It&#8217;s no joke. And we&#8217;re doing this to support our families.\u201d<\/p>\n<h4><strong>Why the Meat Industry Opposes Packers and Stockyards Regulations<\/strong><\/h4>\n<\/div><div class=\"post-simple post-capital-letter\"><p>In the lawsuit, industry lawyers write that the rule would create \u201ca wide-ranging antidiscrimination enforcement power\u201d at the USDA.<\/p><\/div><div class=\"post-simple\">\n<p>That\u2019s illegal, according to their argument, which boils down to this: Because the Packers and Stockyards Act\u2019s primary purpose is \u201cto assure fair competition and fair trade practices in livestock marketing and in the meatpacking industry,\u201d any violation of the act has to threaten not just an individual producer\u2019s livelihood, but competition in the industry.<\/p>\n<p>In other words, the USDA can\u2019t regulate discrimination under the law unless that discrimination somehow makes the whole system less competitive for all growers.<\/p>\n<p>Some courts have upheld that interpretation over the years. However, the USDA, under both Republicans and Democrats, has always maintained the opposite: Individual harm is enough to activate Packers and Stockyards protections. As the farmer groups seeking to intervene in the case wait to see how the agency\u2019s new leadership will handle the lawsuit, a big question is whether that will still be the case.<\/p>\n<div class=\"post-quote\"><p>\u201cIf Secretary Rollins changes the agency\u2019s position on harm to competition, it will be a shocking move.\u201d<\/p>\n<\/div>\n<p>\u201cIf Secretary Rollins changes the agency\u2019s position on harm to competition, it will be a shocking move,\u201d Lobdell, the attorney for the farmer groups, said. \u201cWhat it would amount to is a massive handout to the largest corporate interests in our agriculture and food system, directly in opposition to the interests of farmers and ranchers.\u201d<\/p>\n<p>For now, everyone\u2019s waiting to find out how the USDA will proceed, and whether the court will grant the farmer groups\u2019 motion to intervene.<\/p>\n<p>In the original complaint, the meatpackers say they will suffer \u201cconcrete and imminent harm\u201d if the law remains in place. \u201cThe Final Rule . . . requires a wholesale reevaluation of contractual relationships and communications between regulated entities and producers,\u201d they write.<\/p>\n<p>That kind of wholesale reevaluation is exactly what many farmers want. \u201cThe contract poultry system will never\u00a0work for the farmer . . . never, until contracts are done in a way that there is good-faith bargaining, and even then the companies will always still have the upper hand,\u201d Watts said. The most they can hope for, he said, is that the new rules will \u201cbe a deterrent\u00a0to curb some of the most onerous practices companies use against\u00a0the farmers they contract with\u00a0and make income at least a little more predictable.\u201d<\/p>\n<p>For Nguyen\u2014and <a href=\"https:\/\/civileats.com\/2024\/10\/08\/for-contract-farmers-the-election-could-change-everything-or-nothing-at-all\/\">so many others<\/a> with <a href=\"https:\/\/civileats.com\/2022\/05\/02\/op-ed-chicken-farmers-raw-deal-monopoly-consolidation-meat-industry-beef-pork-prices-inflation\/\">strikingly similar experiences<\/a>\u2014it\u2019s too late for that. He\u2019s working through bankruptcy paperwork and driving for Uber to pay his bills while he figures out his next steps. At one point, he had family around to help care for his wife, but they\u2019ve all moved to find work. Looking out at the 10 empty chicken houses with no way to pay off the debt or sell them for what they\u2019re worth, he cries a lot. Thankfully, his wife and his two daughters, especially a \u201cvery cheerful\u201d eight-year-old, he said, keep him going.<\/p>\n<p>He thinks maybe, if he tells his story, it will help make the case that more regulation of the industry is needed. That farmers need more protection, not less. \u201cIf we give up, no one\u2019s going to be standing up,\u201d he said. \u201cWe want to pave the way for other farmers to fight back.\u201d<\/p>\n<div class='ctx-module-container ctx_default_placement ctx-clearfix'><\/div><span class=\"ctx-article-root\"><!-- --><\/span>","protected":false},"excerpt":{"rendered":"<p>It\u2019s one small example of the many ways that the country\u2019s powerful meat companies have exerted control over the farmers that raise the animals they sell. In the chicken industry, farmers looking for economic opportunities have long been locked into contracts that require them to pay for expensive facilities, compete with other farmers for pay [&hellip;]<\/p>\n","protected":false},"author":740,"featured_media":64547,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3256,4343,4640],"tags":[],"coauthors":[4440],"class_list":["post-64543","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-animal-welfare","category-food-policy","category-rural-america"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.6 (Yoast SEO v25.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Livestock Producers Seek to Defend Packers and Stockyards Act | Civil Eats<\/title>\n<meta name=\"description\" content=\"The meat industry is attempting to roll back protections 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