USDA Proposes Another Step Toward Making Chicken Farming Equitable

Jul 12, 2024

By Dave Dickey

If you beat the brains out of the competition and win a title, the league can choose to reward you with additional TV appearances that result in more money in your pocket. On the other hand, if you finish dead last, the league can choose to not only drop you off the TV schedule but reduce your team’s revenue sharing.

For its part, the league is perfectly happy with the arrangement, believing all its member teams will be forced to play harder, as well as invest heavily in infrastructure — stadium improvements for example — to avoid finishing at the dreaded bottom.

Then why would anyone want to own a team with those kinds of risks and rewards? Who would do such a thing?

Welcome to chicken farming.

As it turns out under Big Poultry’s tournament system producers who fail to meet production goals receive deductions — call them fines — in their base pay. Those dollars are then funneled to producers who exceed production goals.

If that’s not enough that Big Poultry controls all the inputs, determining which of their chicken producers get the best feed and most desirable chicks. And poultry companies can dictate to individual chicken producers the need for facility upgrades.

It is fairly obvious that competent chicken farmers who get the best of everything have a competitive advantage and are more likely to win tournaments — and be rewarded by Big Poultry with cash attaboys. If you grow the biggest chickens in your group you get a bonus. If your chickens are scrawny, you get penalized.

In a tournament system Big Poultry can stack the deck, giving favored chicken producers a head start over their less fortunate rivals. Big Poultry has been developing and tweaking the tournament system ever since the 1948 Chicken of Tomorrow contest.

The Biden Administration is attempting to make chicken farming, and for that matter competition across all businesses, more equitable.

Last November, USDA finalized a rule requiring poultry companies to be more transparent to assist contract poultry growers considering farm investments. That was a baby step in the right direction.

Now USDA is calling for a new rule that would end the ability of poultry companies to deduct from a chicken farmer’s base pay. The rule is largely based on a settlement reached in 2022 between the Department of Justice and Cargill, which was accused of illegally exchanging wage and benefit information.

While the new rule still allows performance bonuses for producers finishing at the top of a tournament, payouts won’t come from producers at the bottom of the group.

The proposed Poultry Grower Payment Systems and Capital Improvement Systems rule also would require Big Poultry to specifically document how they make fair comparisons between individual growers.

It hasn’t taken Big Poultry long to squawk about the perceived unfairness of USDA attempting to level the playing field.

Big Poultry’s mouthpiece, the National Chicken Council, accused USDA of playing politics over the rule proposal. NCC President Mike Brown issued a statement saying, “This is the latest example of the Biden administration racing to impose its anti-business regulatory agenda ahead of November’s election. The administration likes to deflect the blame at our country’s food producers as the reason for high grocery prices, instead of looking in the mirror at their failed policies and increased regulation.”

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Video: CEOs of the Industry, A Conversation with Daniel Rivest, President & CEO, Olymel

Swine Web’s CEOs of the Industry series welcomes Daniel Rivest, President & CEO of Olymel, for a wide-ranging conversation about leadership, the future of Canadian pork, and the opportunities ahead for one of North America’s largest pork and poultry processors.

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The discussion also tackles some of the biggest issues facing Canadian pork production today, including labor availability, global competition, animal health, trade and export markets, automation, and the growing potential of artificial intelligence throughout the food production system.

Topics include:

• Daniel Rivest’s path to becoming President & CEO of Olymel

• Olymel’s current position and strategic direction

• The outlook for Canadian pork production

• Building stronger relationships with producers

• Global trade and key export markets

• Automation, innovation and artificial intelligence

• Leadership lessons and opportunities for the next generation

The conversation concludes with a Fast Five, giving viewers a more personal look at Rivest’s leadership approach and his vision for Olymel’s future.