President Biden signed Executive Order (EO)

Last week President Biden signed an Executive Order (EO), some of which pertains to agriculture and livestock markets. In the Order, the President:

· Directs USDA to consider issuing new rules under the Packers and Stockyards Act making it easier for farmers to bring and win claims, stopping chicken processors from exploiting and underpaying chicken farmers, and adopting anti-retaliation protections for farmers who speak out about bad practices.

· Directs USDA to consider issuing new rules defining when meat can bear “Product of USA” labels, so that consumers have accurate, transparent labels that enable them to choose products made here.

· Directs USDA to develop a plan to increase opportunities for farmers to access markets and receive a fair return, including supporting alternative food distribution systems like farmers markets and developing standards and labels so that consumers can choose to buy products that treat farmers fairly.

· Encourages the FTC to limit powerful equipment manufacturers from restricting people’s ability to use independent repair shops or do DIY repairs—such as when tractor companies block farmers from repairing their own tractors.

Since that time there have been many questions, and the Biden Administration is making efforts to make these initiatives clearer. 

On Tuesday of this week SDSGA participated in a zoom meeting with USDA Secretary Tom Vilsack as well as Sen. Chuck Grassley (R-IA), and Sen. John Tester (D-MT) to clarify and unpack the EO. During that meeting Sec. Vilsack emphasized that in addition to the EO, they will be authorizing $500 Million from the American Rescue Act for a grant loan program to expand processing in beef, poultry, and pork. He also highlighted from the EO

                 •          Strengthening Packers and Stockyards Act (PSA)

                 •          Taking a strategic look at labeling: specifically “Product of U.S.A”

•          Focus on existing processing facilities, especially small and large, to help them comply with existing federal and state regulations 

He stated “the big problem is that 90% of farms don’t generate income.”

Sen. Grassley agreed with the EO and spoke about beefing up anti-trust enforcement and the PSA as well as expanding market transparency. He believes the cattle market needs reformed through legislation. Senator Tester said the EO as a giant step forward and praised Sec. Vilsack for being a leader for rural America and Sen. Grassley for being a fighter since day one. He highlighted the lack of competition in the marketplace that needs to work for consumers, cow-calf producers, and feeders.

During the Q&A session, Sec. Vilsack spoke about having more data, more information, and more price discovery. Sen. Tester agreed this is an important step. Sec. Vilsack also made clear they are going to do a comprehensive review on labeling and will focus on getting this done quickly. MCOOL was not specifically mentioned by the administration. 

During the EO proclamation President Biden stated “Consolidation also limits farmers’ and ranchers’ options for selling their products. That means they get less when they sell their produce and meat—even as prices rise at the grocery store. For example, four large meat-packing companies dominate over 80% of the beef market and, over the last five years, farmers’ share of the price of beef has dropped by more than a quarter—from 51.5% to 37.3%—while the price of beef has risen.” He also said, “American farmers and ranchers are also getting squeezed by foreign corporations importing meat from overseas with labels that mislead customers about its origin. Under current labeling rules, meat can be labeled “Product of USA” if it is only processed here—including when meat is raised overseas and then merely processed into cuts of meat here. For example, most grass-fed beef labeled “Product of USA” is actually imported. That makes it hard or impossible for consumers to know where their food comes from and to choose to support American farmers and ranchers.”

Friday the Whitehouse’s outreach efforts continued as SDSGA Executive Director James Halverson participated in a closed WH briefing on the issue with National Economic Council Deputy Director, Bharat Ramamurti, on President Biden’s Competition Executive Order. During the briefing Ramamurti reiterated the reason for the EO is a reaction to increasing concentration in many sectors of agriculture leading to higher prices for consumers and lower profits for producers. He also touched on there being fewer innovations because of the lack of competition and fewer choices for end-consumers. He informed folks the EO spells out 72 specific actions that will be taken across all federal agencies. The first action he referred to was bolstering competition within meat packing. 

Mau Wu, Deputy Undersecretary for Marketing and Regulatory programs at USDA spoke about the Administration’s desire to form a better, more resilient food system. She said USDA is implementing a Request for Information from producers and other stakeholders to get a better feel for the needs of Rural America. Andy Green, USDA’s Senior Advisor for Fair and Competitive Markets also joined the meeting. Mr. Green said there will be a series of official rule making processes undergone to revitalize the Packers and Stockyards Act that turns 100 years old this year. In addition to emphasizing an entire Department review of the “Product of USA” label, he also said they will be working intensely with the Department of Commerce on seed and other input costs ensuring competition in that arena as well as working with the Fair Trade Commission on looking at monopolies in the retail space sector.  During the Q&A session Deputy Director Ramamurti again emphasized their efforts to enhance and enforce antitrust violations and that they are committed to working in a bipartisan way with Congress on this issue.