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Attorney General Ellison leads fight to increase transparency in poultry industry

Leads bipartisan coalition to support proposed USDA rule for increased transparency in the poultry processing; rule would make it easier for small farmers to compete for fair pricing terms from large processors

 

August 9, 2022



August 8, 2022 (SAINT PAUL) — Minnesota Attorney General Keith Ellison today led a bipartisan coalition of 10 attorneys general in fighting for increased transparency in the poultry industry. Attorney General Ellison and the bipartisan coalition submitted a comment in support of the USDA's proposed rule, Transparency in Poultry Grower Contracting and Tournaments, to increase transparency and reduce the information imbalance between farmers and processors in the poultry industry, which would make it easier for small poultry farmers to compete for fair pricing terms from large poultry processors.

The USDA is proposing the rule under its authority in the Packers and Stockyards Act of 1921, which was enacted a century ago to address unfair, deceptive, and anti-competitive practices in meat markets. Today’s bipartisan, multi-state effort in support of the proposed rule represents another step by Attorney General Ellison toward putting a stop to anticompetitive behavior in the poultry and meatpacking industry and supporting poultry and meatpacking farmers in Minnesota and throughout the United States by increasing transparency.

“One of the many reasons it’s tough for small poultry farmers — and small farmers of all kinds — to afford their lives is because of imbalances of power, money, and information between farmers and processors. These imbalances lead to unfair competition and bad outcomes not only for these farmers, but for their communities and way of life, and ultimately for all Minnesotans,” Attorney General Ellison said. “Our economy is supposed to be based in fair competition: that’s a principle we can agree on across party lines. I pulled together this bipartisan coalition of attorneys general to support the USDA’s proposed rule because we all agree that more transparency is a good thing that will lead to better outcomes for the farmers that feed us all.”

The current poultry system is dominated by contract growing arrangements and a tournament system. Contract growing arrangements are created between growers (i.e., poultry farmers) and processors, guaranteeing the processor will provide and accept poultry from the grower. However, contracts do not stipulate how many birds or what price growers will receive for them, leaving growers unsure of how much money they will make or if they are being treated fairly in comparison to other growers.

The current USDA proposed rule will require poultry processors to certify how many birds a grower will receive, what other growers are receiving, and what the market has looked like previously for growers in each tournament. Providing growers with additional information about the tournament system and the contract they are entering into will allow growers to make more informed choices and increase processor accountability in the chicken industry.

Minnesota ranks 12th nationally in production of chicken and turkey, with 6,200 poultry farms generating thousands of jobs for Minnesotans. Minnesota broiler chicken farmers raise almost 60 million chickens annually at a value of nearly $125 million. Minnesota turkey farmers raise approximately 40 million turkeys, generating $775 million in cash receipts annually.

Attorney General Ellison’s past support of increased competition under Packers & Stockyards Act

Attorney General Ellison has previously supported other efforts to increase competition in the meatpacking industry. In December 2021, he co-led a bipartisan letter of 16 attorneys general to USDA Secretary Tom Vilsack to make recommendations to improve competition in the meat processing industry under the Packers & Stockyards Act, in order to help farmers, ranchers, and consumers in Minnesota and across the country. In January 2022, the Biden Administration adopted a number of those recommendations.

In addition to the rule that Attorney General Ellison supported today, USDA is expected to issue two more proposed rules that are anticipated to 1) provide greater clarity to and strengthen enforcement of unfair and deceptive practices, undue preferences, and unjust prejudices, as well as 2) clarify that parties do not need to demonstrate harm to competition in order to bring legal action under of the P&S Act.

Joining Attorney General in filing the comment are the attorneys general of California, Delaware, Idaho, Illinois, Iowa, Maryland, Nevada, North Carolina, and Pennsylvania.

 

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