WASHINGTON – Sens. Chuck Grassley (R-Iowa) and Jon Tester (D-Mont.) sent a letter to United States Department of Agriculture (USDA) Secretary Sonny Perdue recommending they clarify an ambiguous proposed rule regarding the undue and reasonable preferences provision of the Packers and Stockyards Act.
As the only two farmers in the U.S. Senate, Grassley and Tester are urging USDA to ensure the new rule protects small livestock and poultry farmers from unreasonable practices of packers and poultry companies. In their letter, they outlined specific changes to address this proposed rule.
“This rule not only fails to address many of these abusive and unreasonable industry practices, but it actively establishes criteria insulating packers and poultry companies from scrutiny under this section of the Act. Unless significantly revised, these criteria will ensure that producers’ margins are slashed, and consolidation will continue, to the detriment of the nation’s farmers, ranchers and rural communities,” the senators wrote.
The 2008 Farm Bill required USDA to establish criteria to determine whether an undue or unreasonable preference or advantage has occurred in violation of the Packers and Stockyards Act. In January 2019, Agricultural Marketing Services (AMS) published a proposed rule in an effort to establish such regulations. Broadly, the rule falls short of specific unreasonable practices. The rule also appears to provide legal protection for packers and integrators who are able to justify a practice based on the need to save costs and reduce prices, or if their practices are deemed “customary” in the industry because they align with those of their competitors.  
The full text of the letter can be found HERE.