Federal regulators are set to release the most sweeping antitrust rules covering the meat industry in decades, potentially altering the balance of power between meat companies and the farmers who raise their animals.
Activists, farmers and meat industry officials have been anxiously awaiting the new rules, which will be released this spring for public comment and are set to take effect this summer. The regulations are seen as a kind of litmus test for the Obama administration and how far it will go in regulating competition in the meat industry.
At issue is how much power farmers have as they produce cattle, hogs and chickens for large companies such as JBS SA, Smithfield Farms and Tyson Foods. The new rules will govern how meatpackers buy their cattle on an open market and what demands poultry companies can make on the independent contractors who raise their chickens.
The 2008 Farm Bill required updated rules but left the specifics to the U.S. Department of Agriculture. Farm state lawmakers such as Sen. Tom Harkin (D-Iowa) had long been concerned a lack of competition among meat companies was driving down prices farmers were paid for their cattle and poultry.
Just four companies buy and slaughter 80 percent of all U.S. beef, limiting competition in the meat industry. Meanwhile, big poultry companies dictate chicken prices and can demand farmers take on debt to upgrade their chicken houses for the companies' benefit.
