WASHINGTON — The National Pork Producers Council (NPPC) recently submitted its comments on the Transparency in Poultry Grower Contracting Tournaments but has still not taken a position on the new regulation.
The rule by the US Department of Agriculture was designed to bolster the application of the Packers and Stockyards Act of 1921 and require poultry companies and live poultry dealers to provide the necessary documentation for contract producers.
NPPC noted in its comments that those types of disclosures could lead to exchanges of “specific and competitively sensitive information between a wide range of actual and potential competitors.” The trade association noted that without safeguards, there could be anticompetitive effects. NPPC pointed out that courts recognized carve-outs for information exchanges that contain aggregated data or anonymous information exchanges.
“This is not to say that information exchanges are inherently dangerous; indeed, they can be procompetitive,” NPPC said in its comments. “In fact, the pork industry relies on a government-mandated information exchange as its basis for price discovery. This is, however, to highlight that large, aggregated data publishing such as that found in Livestock Mandatory Reporting (LMR) may already be the best framework for some livestock categories for information sharing that balances the need for information symmetry with confidentiality-driven protections from price signaling.”
However, the group also cautioned about too much transparency, such as mandatory information exchanges, as it could have a chilling effect on current livestock marketing schemes.
“If dealers are required to disclose certain performance metrics, inputs, and terms across all growers and then face increased legal liability — [from, for example, offering some growers premiums] — this may lead to uniform terms.”
The USDA is expected to issue two additional PSA regulations related to livestock transactions by the end of 2022. One of the proposed rules was submitted on Aug. 16 to the White House Office of Management and Budget for review, but the text of it is not yet available.
The National Chicken Council submitted its comments to withdraw the rules on Aug. 23.
In early August, a coalition of 10 attorneys general submitted a comment supporting the initiative. The coalition believes that, with the rule, smaller poultry farmers can compete more fairly with larger processors.