WASHINGTON — The US Department of Agriculture rolled out its third installment of regulatory reforms under the Packers and Stockyards (P&S) Act on Jan. 14. The finalization of this new rule, known as “Poultry Grower Payment Systems and Capital Improvement Systems,” seeks to give chicken farmers better insight into companies’ payment rates for their birds, the agency said.

Specifically, the rule will work to institute stability in the tournament system, to provide farmers with key information on capital improvements that companies require farmers to make in order to keep or renew contracts, and to give farmers stronger leverage when companies do not adhere to the rules.

These changes under the P&S Act will take effect on July 1, 2026, following publication in the Federal Register. A preview of the final rule is available here.

Since the rule was first proposed in June 2024, industry trade group the National Chicken Council (NCC) has voiced its opposition. With the finalization of the regulation, NCC’s concerns continue.

“The Biden administration, with just six days remaining, is racing to impose the last pieces of its anti-business regulatory agenda,” said Harrison Kircher, president of NCC. “This rule — which Congress never asked for — will lead to rigid, one-size-fits-all requirements on chicken growing contracts that would stifle innovation, lead to higher costs for consumers, decrease competition and cost jobs by driving some of the best farmers out of the chicken business. The vast majority of chicken farmers in rural America are happy and prosper raising chickens in partnership with companies, and they don’t want the government meddling on their farms and telling them how they should run their businesses.”

Back in August 2024, NCC wrote to the USDA, urging that the proposed rule be withdrawn in its entirety.

Before the Poultry Grower Payment Systems and Capital Improvement Systems rule, USDA finalized two other rules under the P&S Act.

In November 2023, the agency introduced “Transparency in Poultry Grower Contracting and Tournaments,” which requires Live Poultry Dealers to give critical information about the terms of their agreements to the poultry growers with whom they contract.

The second rule finalized was the Inclusive Competition and Market Integrity under the P&S Act. With this regulatory reform, introduced in March 2024, discrimination is prohibited, and companies are banned from retaliating against farmers for activities like communicating with government agencies, joining producer associations and asserting legal rights.

Additionally, in June 2024, USDA proposed the “Fair and Competitive Livestock and Poultry Markets” rule, which sought to define unfair practices under the P&S Act. USDA received over 13,000 comments on the proposal.

The agency has decided to withdraw the proposed regulation, citing complexity and length of time needed to finalize the rule as the reasoning behind this action. USDA noted it will reexamine these issues in the future, allowing more time to discuss with stakeholders how to best implement the requirements of the P&S Act.

The official withdrawal notice will be published in the Federal Register.