From USDA Agricultural Marketing Services.
The Transparency in Poultry Grower Contracting and Tournaments Final Rule amending the regulations under the Packers and Stockyards Act (Act) was published in the Federal Register on November 28, 2023. On December 20, 2023, the U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS), Packers and Stockyards Division (PSD) hosted a webinar to share information about the rule. Stakeholders submitted questions prior to, during, and following the webinar.
This FAQ synthesizes and responds to pertinent questions but does not seek to provide a comprehensive summary of the rule’s requirements. AMS encourages parties to read the final rule and other resources on the rule available at AMS.
- When is the rule effective?
The rule is effective on February 12, 2024.
- Do amendments to growing arrangements made prior to the effective date of this rule (February 12, 2024) require the Disclosure Document (9 CFR 102 (b), (c) and (d)) be provided to growers?
When made prior to the effective date of this rule, no.
- What changes to poultry growing arrangements (contracts) can growers expect as a result of this rule? (Question added February 7, 2024)
This rule is a transparency rule. It requires live poultry dealers to include minimum annual placements and minimum stocking density for each flock in the written broiler growing arrangement.
The requirement is in 9 CFR 201.102(h):
Contract terms. A live poultry dealer engaged in the production of broilers must specify in the true written copy of the broiler growing arrangement the following:
(1)The minimum number of placements of poultry at the broiler grower’s facility annually.
(2) The minimum stocking density for each flock placed with the broiler grower under the broiler growing arrangement.
The rule also defines “minimum number of placements” and “minimum stocking density” in 9 CFR 201.102:
Minimum number of placements means the least number of flocks of poultry the live poultry dealer will deliver to the grower for growout annually under the terms of the poultry growing arrangement.
Minimum stocking density means the ratio that reflects the minimum weight of poultry per facility square foot the live poultry dealer intends to harvest from the grower following each growout.
This rule requires disclosure of a grower’s existing rights and duties under an existing poultry growing arrangement. It does not require changes to a grower’s existing rights and duties. This rule does not require changes that would reduce the number of placements guaranteed under the original poultry growing arrangement. Contract addendums pursuant to this requirement should be consistent with the intent of the original agreement. Contract modifications made to comply with this rule require agreement of the parties. As contract modification requires the assent of both parties, the rule does not require growers to accept contract modifications.
AMS does not provide legal advice to growers or live poultry dealers. AMS encourages growers to report any concerns with deception, unfairness, or otherwise immediately to AMS and the Department of Justice through farmerfairness.gov.
- How can the live poultry dealer reflect its annual minimum number of placements at the grower’s facility under 9 CFR 201.102(b)(5)(i) and (h)(1)?
The annual minimum number of placements is the minimum guaranteed number designed to set minimum grower expectations under the contract. It is not an average. As broiler production is primarily contract-based, “annual” might be calculated using different non-deceptive formulas, such as:
- The number for annual minimum placements could be counted from the date of execution of the contract, irrespective of the calendar year.
- In a multi-year contract, the number could be counted from the anniversary of the date of execution.
- In a multi-year contract, the number of annual minimum placements could be based on a calendar year, provided disclosure of minimum placements is made for any stub periods at the beginning or end of the contract period that did not align with the calendar.
- Can the live poultry dealer reflect its annual minimum number of placements at the grower’s facility under 201.102(b)(5)(i) and (h)(1) as a fraction?
Unless growers are compensated on a fractional flock, AMS expects the minimum placement to be a whole number.
- Does the requirement for disclosing the minimum flock placements and stocking densities in the poultry growing arrangement (the contract) permit the use of estimated or approximate terms, including “approximately” “intends to” or “anticipates”?
No. 9 CFR 201.102(h) requires that broiler growing arrangements contain the minimum number of guaranteed placements of poultry at the grower’s facility annually. Minimum number of placements means the least number of flocks of poultry the live poultry dealer will deliver to the grower for growout annually under the terms of the poultry growing arrangement. Minimum flock placements are different from tentative placements, and align better with longer-term obligations that farmers must undertake.
- Is there a USDA form available to report required disclosure data?
No. There is no fillable form/template available from the USDA.
The PSD 6100 Live Poultry Dealer Disclosure Document Form Instructions contains instructions that guide live poultry dealers in developing the processes and procedures that will facilitate accurate and complete collection, maintenance, and disclosure of required data from the effective date forward in the order, form, and content (9 CFR 201.102(b), (c), and (d)).
AMS expects live poultry dealers to disclose data in a consistent, non-discriminatory, and uniform manner, including when the data is not collected or available and why, particularly within a complex.
- What is the minimum amount of time a live poultry dealer engaged in the production of broilers must give a grower to evaluate a broiler growing arrangement and any required disclosures before the live poultry dealer executes the broiler growing arrangement?
Seven calendar days is the minimum amount of time a prospective or current grower must be provided for the opportunity to review the broiler growing arrangement and any required documents under 9 CFR 201.102. A prospective or current grower is entitled to at least 14 calendar days to review before the live poultry dealer executes the broiler growing arrangement, however, a grower may elect to waive up to 7 calendar days of that time period (9 CFR 201.102(a)(1)). The waiting period applies to the live poultry dealer’s execution of the poultry arrangement. The rule does not regulate execution by growers.
- Who can I contact with additional questions I may have?
Questions may be submitted to AMS-AskPSD@usda.gov. Alternatively, questions may be directed to any of our regional offices by calling 404-562-5840 (Atlanta, Georgia), 515-323-2579 (Des Moines, Iowa), or 303-375-4240 (Denver, Colorado). Depending on the nature of the question, AMS staff may respond directly, and AMS may update these FAQs from time to time.