USDA asks for feedback on competitive livestock market practices

...The P&S Act was implemented to provide fair competition, payment protection, guard against deceptive and fraudulent trade practices and protect consumers and the livestock industry.
Last week, the USDA proposed criteria it said would ensure fair and competitive markets for the livestock, meat and poultry industries. It is inviting public comment on the proposed criteria.
According to the USDA, the P&S Act states it is unlawful for a packer, swine contractor or live poultry dealer to make or give any undue or unreasonable preference or advantage to a seller or grower of livestock or poultry. An unreasonable preference or advantage, the USDA said, is an action that creates excessively favorable conditions for one or more persons, reducing opportunities for optimal pricing.
Under the proposed rule, the USDA would consider whether a preference or advantage meets one or more of the following criteria:
• Cannot be justified on the basis of a cost savings related to dealing with different producers, sellers or growers.
• Cannot be justified on the basis of meeting a competitor’s prices.
• Cannot be justified on the basis of meeting other terms offered by a competitor.

• Cannot be justified as a reasonable business decision that would be customary in the industry.
The USDA states they would not be limited to considering only these four criteria. The agency could take factors into consideration on a case-by-case basis.
“The act prevents undue and unreasonable preferences,” said Aaron Popelka, vice president of legal and governmental affairs at the Kansas Livestock Association. But, he added, a bulk discount or a premium for a larger lot would be allowed.
The Organization for Competitive Markets in Nebraska said the USDA fails to set out which actions are unfair, unjustly discriminatory or deceptive by meatpackers and processors, saying this act is both an anti-trust law and a producer protection law...MORE