Farm Aid Praises USDA Final Rule Improving Fairness for Poultry Growers

As a member of Campaign for Contract Agriculture Reform (CCAR), Farm Aid embraces USDA’s Packers and Stockyards Act final rule improving fairness for poultry growers. The rule addresses longstanding complaints about payment practices, forced capital investments in the poultry industry.

On January 14, 2025 Agriculture Secretary Tom Vilsack announced the finalization of a new rule under the Packers and Stockyards Act, significantly reforming the payment system commonly used by poultry companies to pay contract poultry growers. The rule also addresses the unfair practice of poultry companies forcing their contracted poultry growers to make costly capital equipment upgrades to their poultry houses at the grower’s expense, without providing any clear benefit to growers for making the investment.

“Contract poultry growers enter the business expecting a fair working relationship with their poultry company, only to realize the payment system is inherently stacked against them and penalizes them over things beyond their control. This rule establishes some important guardrails around the ‘tournament’ payment system to end deceptive aspects of the system and require the use of commonsense fair business practices.”

— Steve Etka, Policy Director for CCAR

Specifically, the Poultry Grower Payment Systems and Capital Improvement Systems rule:

• Requires poultry companies to provide contract broiler growers with a clear base pay
• Rate in their contracts and prohibits any deductions from the base price, but permits performance bonuses to be paid above the base price;
• Limits the variability of the grower payments to provide growers with more financial certainty and stability;
• Ensures poultry companies comply with a “duty of fair comparison” to ensure that when growers receive different payment rates based on performance, those performance
  comparisons are conducted in a reasonable and equitable manner; and
• Requires full disclosures to growers regarding financial risks and rewards of making expensive capital improvements to their poultry growout houses.

This new rule builds on a prior Packers and Stockyards rule finalized by USDA in November 2023 that requires poultry companies to make full disclosures to prospective poultry growers about what they can expect if they sign a contract to grow chickens for the company, as well as disclose details to existing growers about how their pay is calculated.

The new rule also builds on a July 2022 U.S. Department of Justice Consent Decree related to the merger between Sanderson Farms and Wayne Farms, in which the merged poultry integrator firms agreed to make certain reforms to address abusive practices in how they pay contract poultry growers.

This rule is the third in a series of important Packers and Stockyards Act rule updates promulgated by the Biden Administration to address abusive and deceptive practices of poultry companies and meatpackers in their dealings with farmers and ranchers. Two rules, the ‘Transparency in Poultry Grower Contracting and Tournaments,’ and the ‘Inclusive Competition and Market Integrity Under the Packers and Stockyards Act,’ have already been finalized.

“Secretary Vilsack deserves high praise for his diligence in making necessary changes to the outdated Packers and Stockyards Act regulations,” said Etka. “We look forward to working with the Trump Administration to implement these pro-farmer rules.”

Link to the rule and related documents can be found here.

CCAR is a national alliance of organizations working to provide a voice for farmers and ranchers involved in contract agriculture, as well as the communities in which they live. The member organizations of CCAR include Farm Aid, Farm and Ranch Freedom Alliance, Government Accountability Project- Food Integrity Campaign, National Family Farm Coalition, National Farmers Union, National Sustainable Agriculture Coalition, R-CALF USA, Rural Advancement Foundation International, and Western Organization of Resource Councils.