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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Tournament System Under Pressure

09/15/2022

Despite the defense of the current grower compensation model by the National Chicken Council, both the Department of Agriculture and the Department of Justice appear to be intent on eliminating the tournament system for broiler growers.  Based on requests the USDA has extended the public comment period through December 26th. 

 

Submissions responding to the Advance Notice of Proposed Rulemaking will be used to frame regulations and to set policies.  The NCC opposes rulemaking by the AMS that conflicts with the current contract system.  The Council considered that elimination of the tournament system would have “devastating financial impacts on the U.S. chicken industry by raising costs, contributing to increasing food prices for consumers and ultimately destabilizing a successful compensation system.”

 

On September 14th, the U.S. Department of Justice Antitrust Division organized a meeting in conjunction with the National Farmers Union to consider competition in agricultural markets and enhancing antitrust enforcement.

 

Assistant Attorney General, Jonathan Kanter of the DOJ Antitrust Division, stated, “Competition in agriculture is critical.  Too often, farmers and livestock producers have too few suppliers to buy from and too few buyers to sell to.”  He added, “Protecting competition and the rule of law in agricultural markets is core to the work of the Antitrust Division and we will vigorously enforce the antitrust laws in this area.”

 

The DOJ is working closely with the USDA to prevent monopolies, illegal mergers, collusion or other anticompetitive activities in agriculture.

 

Given recent statements by USDA and DOJ, it would appear that the current Administration is intent on eliminating the tournament system but has not indicated any alternative that would be more functional or more fair than the current system that works to the benefit of both contractors and integrators and indirectly reduces the cost of chicken to consumers.


 
Copyright © 2022 Simon M. Shane