USDA poultry rule delay draws backlash from farm advocates
The U.S. Department of Agriculture’s (USDA) decision to delay a new poultry transparency rule has ag leaders questioning the Trump administration’s commitment to farmers.
On March 18, USDA announced the proposed Poultry Grower Payment Systems and Capital Improvement Systems final rule will not go into effect on July 1 as originally scheduled. Instead, the rule will be delayed until Dec. 31, 2027.
According to a release from USDA’s Agricultural Marketing Service, the delay is intended to allow more consideration of cost, policy and legal issues associated with the rule.
Poultry Grower Payment System final rule
The new rule addresses what many farmers consider to be unfair requirements large poultry companies impose on poultry growers.
Chicken farmers who enter into contracts with poultry processors are typically required to build chicken houses to company specifications. Farmers are responsible for this expense, which often requires loans.
If a processor decides to change specifications, farmers are required to make those changes on their own dime.
Poultry companies provide contracted farmers day-old chicks and feed. When they mature, the chickens are shipped back to the processors.
According to many farmers, this is where things get murky. Their payments are based on a “tournament” or “ranking” system. A formula developed by the processor pays farmers using calculations which take feed conversion into account.
Critics contend this is unfair because farmers can’t control their inputs.
For example, old and young chickens tend to produce lower-quality offspring than those in the middle. While processors say the birds farmers get are chosen randomly, some data suggests certain preferred farmers consistently get better-quality birds than others.
To address these concerns, USDA’s new rule includes key provisions intended to help poultry farmers.
The provisions are that farmers are guaranteed a baseline price for their birds and poultry processors are prohibited from reducing compensation based on a grower’s ranking on the processor’s system and bonuses provided by processors are allowed but limited to a certain percentage of annual grower compensations.
Processors are also required to establish a system to better document the differences of inputs they supply and to provide more information on capital investments they require of farmers.
“For years, our nation’s poultry growers asked USDA to provide fair and basic business guardrails around the deceptive payment system used by large poultry companies to compensate contract growers for growing chickens on their own farms for those companies,” said Steve Etka, policy director of the Campaign for Contract Agriculture Reform.
“The Poultry Grower Payment Systems and Capital Improvements Systems rule finally took meaningful steps to right the wrongs of the payment system,” he added. “Just when it was scheduled to provide some relief and income predictability for U.S. poultry farmers, USDA has proposed to pull the rug out from under them to feather the beds of multi-billion-dollar meat conglomerates.”
Processors support delay
The National Chicken Council (NCC), which represents poultry processors, applauded the delay of the rule they say is “un-American.”
In a March 17 press release, NCC President Harrison Kircher called for the “full rescission” of the rule. He said the rule could cause farmers to produce broilers less efficiently and increase production costs, resulting in higher grocery prices.
As he sees it, the law risks dismantling an “efficient and successful” industry model he argues has worked well for decades and keeps chickens affordable.
“The Poultry Grower Payment Systems and Capital Improvement Systems rule would effectively ban bonuses for the best chicken farmers,” Kircher said. “Eliminating this performance-based compensation system would pay all farmers the same, regardless of hard work, investments, housing conditions or bird welfare practices. It would drive experienced farmers out of the industry and reduce efficiency and competition in rural markets.”
Farm advocates
not buying it
American Farm Bureau Federation (AFBF) President Zippy Duvall said the rule would have addressed long-standing issues poultry growers see with tournament pay and requirements. He called the administration’s decision to make farmers “take a back seat” and delay the rule by 18 months disappointing.
“Growers have spoken on the need to level the playing field with more transparency surrounding how they are compensated, and they believed progress was being made,” Duvall said in a March 18 statement. “AFBF looks forward to reminding the administration during the public comment period farmers come first and poultry companies should not be prioritized over the men and women who work to put food on the table for all of America’s families.”
National Farmers Union (NFU) President Rob Larew noted poultry growers have long raised concerns about the unfairness of tournament pricing and the amount and quality of information provided to them by poultry companies.
He argued the rule establishes guardrails on the tournament system, giving producers more certainty and transparency so they can operate their farm businesses successfully.
“NFU is eager to see implementation of this long-overdue rule,” Larew added. “Delaying it is a disservice to family farmers who deserve a fairer system.”
National Family Farmers Council (NFFC) concurred with those sentiments, calling the delay a setback which will greatly harm contract poultry growers.
“For decades, NFFC, our farmer members and family farmers across the U.S. have been demanding strengthened and enforced antitrust laws to address extreme corporate and multinational control of poultry and livestock markets,” said Tim Gibbons, NFFC executive director.
“A critical role of our government is to ensure fairness in markets by facilitating and balancing power in the economic relationships among farmers, ranchers, consumers and food companies. The proposed delay of this important rule is a step in the wrong direction,” Gibbons added.
USDA accepted additional comments on the rule through April 17.
Joshua Baethge is the policy editor for Farm Progress. This article was originally published by Farm Progress on March 20.
