Processing Magazine

Obama Proposes Tighter Meat Industry Antitrust Rules

June 22, 2010
The Obama administration has proposed new antitrust rules for meat companies that will shift the balance of power between farmers and processors and regulate the industry long dominated by a handful of corporate giants, according to the Associated Press. The rules would place the sharpest limits on meat companies since the Great Depression, drastically lowering the bar that farmers and ranchers must meet to sue companies whom they accuse of demanding unfairly low prices. The rules would dictate how meatpackers buy cattle on the open market, and prohibit them from showing preference to big feedlots by offering them special incentives not available to smaller producers. They would also limit the control chicken companies have over the farmers who raise birds for them. The companies couldn''t require farmers to take on debt to invest in chicken houses, for example, unless farmers were guaranteed to recoup 80 percent of the cost. The law would also make it easier to file suits under the Depression-era Packers and Stockyards Act by stating that farmers don''t need to prove industry-wide anticompetitive behavior to file a lawsuit under the act. Farmers and meat company lobbyists expressed surprise at the scope of the rules, and prominent meat industry trade groups immediately criticized it. Farmers and meat companies have until Aug. 23 to submit comments on the rules. Congress can comment on the rule but does not have authority to shape the final language.