USDA Rule: A Game Changer for Poultry Growers
Thursday, Jan 16, 2025 2:46 pm ET
3min read The American Farm Bureau Federation (AFBF) has welcomed a new USDA rule under the Packers & Stockyards Act as a step in the right direction. The final rule, which includes changes long advocated for by the AFBF, aims to level the playing field for contract poultry growers by introducing flexible provisions for a more transparent payment system and a predictable payment structure. Additionally, the rule requires capital investment disclosures to be provided to growers by integrators when expensive updates or modifications for existing structures are required.
Sam Kieffer, vice president of public policy with AFBF, highlighted the significance of these changes, stating that they will help growers by providing a fair environment in which to operate. The rule allows the market to set prices that will give contract growers more certainty with base prices they can rely on. This increased transparency and predictability can foster a more trusting relationship between integrators and growers, as growers will have a better understanding of the costs and expectations associated with their contracts.
The capital investment disclosure requirements can help growers avoid unexpected expenses or disruptions in their operations. By knowing in advance about required capital investments, growers can plan and budget accordingly, reducing the financial pressure they may face. This can lead to a more stable and sustainable relationship between integrators and growers, as growers will be better equipped to manage the costs and risks associated with their operations.
Kieffer also noted that there will be a bit of delay before the implementation of the rule, which is expected to go into effect on July 1, 2026. The AFBF is committed to ensuring that the rule goes into effect intact to help poultry growers across the country.
In conclusion, the new USDA rule is expected to have a positive impact on the financial stability of contract poultry growers by providing them with more information, reducing uncertainty, and enhancing their negotiation power. This increased transparency can foster a more trusting and stable relationship between integrators and growers, enabling them to work together more effectively in the poultry growing process.
Sam Kieffer, vice president of public policy with AFBF, highlighted the significance of these changes, stating that they will help growers by providing a fair environment in which to operate. The rule allows the market to set prices that will give contract growers more certainty with base prices they can rely on. This increased transparency and predictability can foster a more trusting relationship between integrators and growers, as growers will have a better understanding of the costs and expectations associated with their contracts.
The capital investment disclosure requirements can help growers avoid unexpected expenses or disruptions in their operations. By knowing in advance about required capital investments, growers can plan and budget accordingly, reducing the financial pressure they may face. This can lead to a more stable and sustainable relationship between integrators and growers, as growers will be better equipped to manage the costs and risks associated with their operations.
Kieffer also noted that there will be a bit of delay before the implementation of the rule, which is expected to go into effect on July 1, 2026. The AFBF is committed to ensuring that the rule goes into effect intact to help poultry growers across the country.
In conclusion, the new USDA rule is expected to have a positive impact on the financial stability of contract poultry growers by providing them with more information, reducing uncertainty, and enhancing their negotiation power. This increased transparency can foster a more trusting and stable relationship between integrators and growers, enabling them to work together more effectively in the poultry growing process.
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