USDA moves to change livestock competition rules

Legislative Watch: Provisions would disincentivize Alternative Marketing Agreements; another Prop 12 challenge blocked by appeals court; New push to include MCOOL in next farm bill.

Eric Bohl

June 28, 2024

3 Min Read
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Speaking to a meeting of the left-wing Center for American Progress on Tuesday, USDA Secretary Tom Vilsack announced a proposed rule to make it easier to sue meatpackers. According to USDA, the Fair and Competitive Livestock and Poultry Markets proposed rule “provides clearer tests and frameworks around unfair practices that harm market participants individually and unfair practices that harm markets overall.” This marks the second time USDA has attempted a change of this nature, following a similar effort in the Obama administration that was blocked by Republicans using a series of appropriations amendments.

“Entrenched market power and the abuses that flow from it remain an obstacle to achieving lower prices for consumers and fairer practices for producers,” said Vilsack. “Today’s proposed rule stands for clear, transparent standards so that markets function fairly and competitively for consumers and producers alike.”

Industry groups such as the National Cattlemen’s Beef Association and the Meat Institute expressed strong disagreement with the proposed rule. Under their view, the provisions would enable a flood of frivolous lawsuits and drive down meat quality to the lowest common denominator by disincentivizing Alternative Marketing Agreements.

“Unfortunately for the Biden Administration, Secretary Vilsack has tried these changes before,” said Julie Anna Potts, President and CEO of the Meat Institute. “They have failed before the courts, conflict with Congressional intent and are a blatant attempt to pick winners and losers in the marketplace. Under these proposed rules, everyone loses, the livestock producer, the packer and ultimately the consumer.”

Once the rule is formally published, the public will have 60 days in which to submit comments.

Another Prop. 12 challenge blocked by appeals court

Thirteen months after the Supreme Court upheld California’s Proposition 12, another court has brushed back a successive challenge. On Tuesday, a panel of Ninth Circuit Court of Appeals judges voted 2-1 to dismiss an appeal by the Iowa Pork Producers Association that sought to invalidate the law. IPPA had argued that Prop 12 was unconstitutional as a violation of the dormant commerce clause and privileges and immunities clause.

In its 18-page opinion, the court held that Prop 12 “treats all businesses the same by prohibiting all of them from selling non-compliant pork, regardless of where they reside,” and therefore is not discriminatory against out-of-state producers. It also disagreed with IPPA’s arguments that the law is unduly burdensome in relation to its benefits and that it violates the Packers and Stockyards Act.

After several unsuccessful attempts to invalidate the law, Prop 12 has been fully implemented in California. An academic study in March found that the new restrictions had caused a 20% increase in the price of pork in California. In May, the House Agriculture Committee passed a new five-year farm bill that would overrule Prop 12 if it becomes law.

New push to include MCOOL in next farm bill

Senator Mike Rounds (R-S.D.) is renewing his push for mandatory country-of-origin labeling to be included in the next farm bill. Rounds is seeking cosigners for a letter he plans to send to Senate Agriculture Committee leaders to combat what he says are current weaknesses in USDA regulations allow foreign meat products to have “Product of USA” labels.

“It is past time to reinstate mandatory country of origin labeling for beef,” said Rounds. “U.S. farmers and ranchers work hard to produce high-quality products for their fellow Americans. They deserve to have their beef differentiated from foreign-made product. Consumers want to be able to purchase beef born, raised and processed in the United States without wondering if it’s secretly coming from a foreign country.”

MCOOL was passed in the 2002 farm bill but was repealed in 2015 due to trade disputes with Mexico and Canada arising from the policy. Some trade analysts have warned that reinstating MCOOL could lead to quick retaliation by Mexico and Canada, which would adversely impact American farmers. The House Agriculture Committee passed its version of the farm bill in May without including language mandating country-of-origin labeling. In March, USDA issued regulations allowing voluntary labeling of meat, poultry and egg products as “Product of USA” if they are “born, raised, slaughtered and packaged in the United States.”

About the Author(s)

Eric Bohl

Eric Bohl is an agricultural policy leader with extensive experience on Capitol Hill. He served six years as Chief of Staff to Congressman Jason Smith (R-MO) and Congresswoman Vicky Hartzler (R-MO), and previously served as Legislative Director to Rep. Hartzler. During that time, he led her work on the House Agriculture Committee and was influential in efforts to craft the 2014 Farm Bill, as well as handling environmental, energy, transportation and infrastructure, and agricultural trade issues.

Eric’s experience starts at the ground level. His family has deep roots in both animal and row-crop farming going back several generations. This understanding of the unique challenges real farmers face brings valuable perspective to help solve clients’ needs. His midwestern values also allow him to build meaningful relationships with people on both sides of the political aisle and find common-sense solutions that transcend partisan lines.

This approach has continued to be the cornerstone of Eric’s career in grassroots advocacy. He served more than five years as Director of Public Affairs and Advocacy for Missouri Farm Bureau. He was a senior member of the organization’s legislative team and led communications and coalition advocacy efforts, including on the 2018 Farm Bill. His writings on agriculture and rural policy have been published in newspapers across the nation. He serves as First Vice President of the St. Louis Agribusiness Club and is a board member of the Agricultural Business Council of Kansas City, two of the nation’s largest and strongest organizations supporting agribusinesses.

Before his career in public policy, Eric was a practicing attorney for nearly five years, focusing on real estate and agricultural law, commercial transactions, and commercial litigation. Eric earned undergraduate and law degrees from the University of Missouri, graduating from both programs with honors, and served as the Managing Editor of the Missouri Law Review.

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