Contract Poultry: Comments Still Open on Proposed Integrator Disclosure Rules

— Written By
en Español

El inglés es el idioma de control de esta página. En la medida en que haya algún conflicto entre la traducción al inglés y la traducción, el inglés prevalece.

Al hacer clic en el enlace de traducción se activa un servicio de traducción gratuito para convertir la página al español. Al igual que con cualquier traducción por Internet, la conversión no es sensible al contexto y puede que no traduzca el texto en su significado original. NC State Extension no garantiza la exactitud del texto traducido. Por favor, tenga en cuenta que algunas aplicaciones y/o servicios pueden no funcionar como se espera cuando se traducen.

English is the controlling language of this page. To the extent there is any conflict between the English text and the translation, English controls.

Clicking on the translation link activates a free translation service to convert the page to Spanish. As with any Internet translation, the conversion is not context-sensitive and may not translate the text to its original meaning. NC State Extension does not guarantee the accuracy of the translated text. Please note that some applications and/or services may not function as expected when translated.

Collapse ▲

There is still time to comment on the regulations proposed by the USDA Agricultural Marketing Service (AMS) concerning the level of disclosure required between poultry integrators and their contract growers. The comment period closes on August 8, 2022. The proposed rule – promulgated under authority of the Packers and Stockyards Act of 1921 – expands existing disclosure concepts under the Packers and Stockyards Act in 7 U.S.C 197(a) through (c) and 9 CFR 201.100. The comment period on the proposed rule closes August 8.

The proposed regulation targets what AMS describes as a need for greater transparency regarding factors that may impact grower compensation under the so-called “tournament system.” (The tournament system is a term used to describe an incentive mechanism that ranks of growers in a cohort, whereby additional compensation is tied to performance [in matters of weight, mortality, etc] relative to the average performance of that cohort, rewarding growers demonstrating superior flock management skills.) AMS contends that grower rankings in the system fluctuate due to uneven input distribution by the integrator, and that inadequate disclosure of such negatively impacts growers. (Input factors include feed disruptions, variations in stocking density and gender/age/breed of supplied poults, as well as health of breeder flocks and medical interventions to certain flocks.

The proposed rule requires greater disclosure from the integrator regarding input distribution – a matter outside of the growers’ control – to help growers “avoid, mitigate, or manage the risks arising from the integrator’s decisions.” (87 FR 34990). AMS likewise contends that greater transparency will allow growers to “individually assess the relationships between input variability, grower management and skills, and tournament payments.” (87 FR 34991).

The proposed rule thus amends § 201.100 (Records to be furnished poultry growers and sellers) to require a “Live Poultry Dealer Disclosure” statement to current and prospective growers that includes information on bird placements, stocking density, prior litigation with poultry growers, and prior bankruptcy filings. Also, information on payments to poultry growers in prior years (in five ranges) to demonstrate potential outcomes for growers.

The proposed rule also requires enhanced disclosure on flock settlement statements to show input distribution among growers, their housing specifications, and any feed disruptions.

Poultry integrators harvesting less than 2 million pounds weekly are exempt from the proposed rule disclosure requirements.

Written By

Robert Branan, N.C. Cooperative ExtensionRobert BrananExtension Assistant Professor (Agricultural and Environmental Law) Call Robert Email Robert Agricultural & Resource Economics
NC State Extension, NC State University
Updated on Aug 2, 2022
Was the information on this page helpful? Yes check No close
Scannable QR Code to Access Electronic Version