The GIPSA Livestock Marketing Rule: A Summary

"The rule will hurt not just producers but consumers, as well. One reason for a 20-year decline in beef demand was that beef lacked consistency."

Language included in the 2008 Farm Bill directed GIPSA to promulgate regulations related to livestock marketing and industry structure.

The topics contemplated by Congress included:

  1. undue or unreasonable preferences or advantages under the P&S Act;
  2. giving reasonable notice to poultry growers regarding suspending delivery of birds under a poultry growing arrangement;
  3. requiring additional capital investments pursuant to a poultry growing arrangement or swine production contract; and
  4. what constitutes a reasonable period of time for a poultry grower or a swine production contract grower to remedy a breach of contract.
  5. What resulted was a proposed rule, commonly called the "GIPSA Rule," that went far beyond the Congressional mandate. So significant were the potential consequences for meat and livestock producers (pdf) and for poultry producers that considerable debate and controversy arose.

    Industry analysts such as Steve Kay of Cattle Buyers Weekly wrote: “The rule will hurt not just producers but consumers, as well. One reason for a 20-year decline in beef demand was that beef lacked consistency. One in four steaks was deemed unacceptable in quality. The industry tackled this issue, in part by implementing marketing systems that identified carcass quality and rewarded producers for upgrading their cattle. The result was the industry arrested the decline in demand in 1996, then significantly improved demand in subsequent years. Consumers began to pay more for beef because they were more assured that each cut would provide a satisfying eating experience. I shudder to think what might happen to beef quality and demand if GIPSA’s rule takes effect.”

    In 2011, Congress withheld funding preventing GIPSA from finalizing and implementing the proposed rule.