WASHINGTON, D.C. – Divided sides of the cattle and beef industry are taking very different views of USDA’s decision this week to withdraw a rule that depending on who you talk to, would have, “reversed decades of innovation in the cattle industry,” or “severely reduced the volume of cattle sold in the competitive cash market.”
USDA first introduced its proposed “Fair and Competitive Livestock and Poultry Markets” rule in 2024.
This was after multiple attempts to pass legislation failed in Congress during the 2022 and 2023 sessions.
The proposed rule forwarded by USDA aimed to specify practices that violate Section 202(a) of the Packers and Stockyards Act of 1921 (P&S Act) by defining unfair conduct that harms both market participants and the broader market.
Outgoing Ag Secretary Tom Vilsack said, “This rule would have provided greater protections and more clarity for producers.”
But getting the rule to the finish line fell victim to politics and opposing factions within the industry.
The National Cattlemen’s Beef Association (NCBA) says the proposed regulation would have dismantled current cattle marketing agreements, reversed decades of innovation in the cattle industry, and threatened producer profitability.
“USDA pushed regulations like this one which would have undermined the free market, harmed hardworking cattle producers, and far exceeded the agency’s authority granted by Congress,” said NCBA Executive Director of Government Affairs Tanner Beymer. “We are pleased that USDA recognized their failed approach and withdrew this rule.”
Meanwhile, while the rule was still in play, Bill Bullard, CEO of R-CALF USA said addressing the issues identified in the rule was essential for the long-term viability of America’s cattle producers.
“Formula contracts have severely reduced the volume of cattle sold in the competitive cash market leading to diminished price transparency and allowing beef packers to disproportionately benefit from a price discovery process they minimally contribute to,” he said.
The organization also pointed to a direct correlation between the shrinking fed cattle cash market and the decline in the number of cattle operations, cattle, and feedlots, noting the trend threatens U.S. food security and makes it vulnerable to market disruption.
Ag Secretary Vilsack says by withdrawing the rule ahead of the incoming Trump administration it will preserve the department’s ability to re-examine the issue in the future. “In addition to finalizing the rule, the incoming administration could also change the rule,” he says.
During the Biden administration, the USDA finalized rules to strengthen enforcement of the Packers & Stockyards Act; the Inclusive Competition and Marketing Integrity under the Packers and Stockyards Act, finalized in 2024 and the Transparency in Poultry Grower Contracting and Tournaments rule, finalized in November 2024.
It also recently finalized another regulatory reform under the Packers and Stockyards Act that, in combination with other updates finalized under the Biden-Harris Administration, is intended to level the playing field for ranchers and farmers raising cattle, hogs, sheep, chicken and turkeys under contract or for sale to meat and poultry processing companies. Specifically, the rule announced this week will give ranchers and farmers stronger leverage when packing companies do not adhere to the rules.
