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Late last month, USDA announced a proposed new rule that would make it easier for farmers, ranchers, and other market participants to sue livestock, meat, and poultry companies over perceived unfair businesses practices. Consolidation in these industries has come under scrutiny during the Biden administration, with several rules being proposed over the past year. The latest rule would set clearer standards by which unfair market practices are determined. USDA and early supporters have cited decades of inconsistent judicial rulings as undermining the Packers & Stockyards Act in favor of larger companies.
The rule would institute the following means test for determining unfair practices: (1) the practice causes or is likely to cause substantial injury to one or more market participants, which (2) the participant or participants cannot reasonably avoid, and which (3) the regulated entity that has engaged in the act cannot justify by establishing countervailing benefits to the market participant or participants or to competition in the market that outweighs the substantial injury or likelihood of substantial injury. A comment period will be open through August 27th. CAFB is currently reviewing the potential impacts for members. Staff: Matthew Viohl; mviohl@CFBF.com
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