Billings, Mont. R-CALF USA President/Region VI Director Max Thornsberry, D.V.M., called the proposed rule issued today by the U.S. Department of Agriculture (USDA) "a bold and absolutely essential step in ridding the U.S. cattle market of anticompetitive practices."
USDA's proposed rule was issued pursuant to provisions in the 2008 Farm Bill that required the agency to promulgate rules to define what actions would constitute undue or unreasonable preference or advantage under the Packers and Stockyards Act of 1921 (PSA), as well as protect poultry and swine contract growers from unfair and deceptive practices committed by meatpackers.
The proposed rule not only establishes standards for identifying when meatpackers have unlawfully engaged in granting unreasonable preference or advantage to a select group of cattle sellers, but also, it clarifies that a violation of the PSA can be proven without the need to also provide proof of predatory intent, competitive injury, or likelihood of competitive injury.
In recent high-profile class action lawsuits, U.S. cattle producers proved to juries that they were materially injured by unfair and deceptive practices committed by meatpackers in violation of the PSA, resulting in significant jury awards to class members. The jury in the Pickett v Tyson Fresh Meats case awarded $1.28 billion to class members within the cattle industry and the jury award in the Herman Schumacher et al. v. Tyson Fresh Meats, Inc. et al. was $9.25 million.