June 5, 2024

USDA to Propose Rule to Significantly Alter Poultry Contracts

This week, USDA announced an upcoming proposed rule that would make significant changes to how payments are handled for broiler chickens. They cited ongoing unfairness and deception within the poultry grower ranking system (also known as the tournament system) as the main reasons for the proposed changes. Those changes would include: prohibiting live poultry dealers (LPDs) from discounting or reducing broiler grower’s contractually stated compensation rate; establishing a duty to conduct fair comparisons and require LPDs to adopt a fair ranking system; and requiring LPDs to provide disclosure documents to broiler growers when growers are required to make additional capital investments.

AFBF President Zippy Duval shared positive comments following the announcement, saying, “The current poultry tournament system puts tremendous pressure on farmers, while providing them little information and recourse throughout the contracting process.” The National Chicken Council was quite critical in their public remarks, suggesting the proposal would lead to higher costs and decreased competition. We will be examining the proposal more closely as well when it is officially published, but please reach out to Matthew Viohl if you have initial comments on this proposal. 

USDA Announces Voluntary H5N1 Dairy Herd Status Pilot & Additional Funding

Late last week, USDA announced several actions related to combating the spread of H5N1 (bird flu, avian influenza). First, $824 million would be made available in emergency funding through the Commodity Credit Corporation (CCC) for testing, tracking, and mitigation efforts. That includes standing up a new Voluntary H5N1 Dairy Herd Status Pilot Program that would attempt to ease the process for the shipment of dairy cows across state lines. While they have not yet determined which states will be included in this pilot, enrolled producers will have the ability to test bulk milk by itself before moving dairy cows, as opposed to the current requirement for individual testing. More information on this pilot can be found below, but we will be sure to update members if California is included in its rollout.

Biden Issues Executive Order on Asylum Seekers

On Tuesday, President Biden issued an executive order that would clamp down on the entry of asylum seekers at the border. Immigration and border security challenges have been a long-standing area of criticism from his Republican counterparts; however, the President has painted his executive orders as necessary due to Congressional inaction. Bipartisan efforts in the House and Senate have mostly stalled up until this point, and with election season now upon us, the prospects of a major deal getting done are slim.

The executive order would effectively restrict asylum during periods of high-volume border crossings—in this case, when the daily average for a weeklong period exceeds 2,500. Per the administration, the current rate is well above that. While not necessarily directly tied to agriculture, the indirect impacts of potential legislative and executive actions could prove challenging for many ag-heavy areas of the country. It also speaks to the difficult political climate in which a potential agricultural labor bill must go through to get passed—the prospects of which remain dim in this current Congress. 

Matthew Viohl

Federal Policy, Director

Erin Huston

Federal Policy, Consultant

Isabella Quinonez

Public Policy Coordinator