Shutdown Hits Packers and Stockyards Division, USDA Cancels More Antimonopoly Projects

The government shutdown, set to enter a fourth week, threatens vulnerable farmers and families. Critical food assistance programs are only fully funded through the end of the month, farm disaster and conservation payments are on pause, and federal farm loan offices are closed. Among the many furloughed USDA offices is one that protects farmers from corporate abuse, the Packers and Stockyards division.

The shutdown is just the latest blow to agriculture antimonopoly enforcement, as the Trump administration quietly dismantles Biden-era projects. Over the past few months, the USDA has canceled several antimonopoly partnerships, including a contract that managed its Farmer Seed Liaison initiative. Ending these programs runs counter to USDA’s recent promise to collaborate with the Department of Justice to improve competition in agricultural input markets.

From seeds to grocery stores, a few corporations dominate every step of the food supply chain: just four companies sell 80% of all U.S. corn seed, three control 76% of all nitrogen fertilizer, and two process 45% of all chicken. Farmers say they are getting squeezed between high input costs and low crop prices. The government shutdown and cancellation of antimonopoly programs at USDA make it harder to hold dominant agribusiness corporations accountable for price-gouging, exclusionary conduct, and other anti-competitive behavior.

Government shutdown rules permit federal agencies to continue work related to “emergencies involving the safety of human life or the protection of property.” USDA used this rationale to continue running its Market News commodity price reports, which many meatpackers and food manufacturers rely on to price their contracts. However, the USDA decided to furlough all the staff in its Packers and Stockyards division, which protects farmers from late or short payment, a form of property theft.

This is not unprecedented; President Obama’s USDA also furloughed the Packers and Stockyards division during the 2013 government shutdown. Nonetheless, closing this division means that livestock producers will experience delays in investigating and enforcing potential violations of the Packers and Stockyards Act, leaving them more vulnerable to underpayment, discrimination, or market manipulation. Further, any backlog of investigations into meatpacker abuse will be further delayed.

New programs introduced during the Biden administration to support meatpacker competition may also experience delays, namely the Meat and Poultry Processing Technical Assistance program, Meat and Poultry Processing Expansion Plant grant program, and the Local Meat Capacity grant program.

The Trump administration had already curtailed competition policy enforcement at USDA before the shutdown. Last month, USDA ended a $15 million project with the State Center, called the Agricultural Competition Partnership, which hosted educational events and distributed grants to state attorneys general to support agricultural antitrust enforcement. A group of 31, bi-partisan state attorneys general were counting on these resources to support new investigations and possible litigation against unfair corporate practices in food and farm markets. State attorneys general have substantial authority to challenge dominant agricultural input manufacturers, retailers, and food processors; however, these offices have very limited funds and staff time to take on costly antitrust cases.

The Agricultural Competition Partnership was one of several fair competition cooperative agreements to get the axe in September. The USDA also canceled its Seed Liaison partnership with the University of Wisconsin-Madison, which helped farmers and seed breeders navigate the complex world of seed patents and contracts. Patent restrictions make it challenging for breeders to develop new plant varieties or for independent researchers to study the performance of different patented seeds. Restrictive contracts and exclusionary marketing tactics also make it hard for independent seed companies to break into the market and for farmers to find cheaper seed options. Opaque online seed labels further obscure plant varieties so farmers may think they’re buying multiple varieties when in fact they aren’t.

The Seed Liaison project took steps to help farmers, small seed companies, and plant breeders navigate these challenges, such as publishing seed contract guides, a newsletter of upcoming plant variety patents, and a report on competition issues in the seed industry. It ran a tip line for farmers and seed businesses to anonymously report complaints about unfair seed contracts or onerous IP restrictions. It also coordinated a working group between the USDA, the U.S. Patent Office, the DOJ, and the FTC, which all share different aspects of seed regulation, resulting in new guidance to improve federal seed researchers’ ability to study some patented varieties. 

Earlier this month, USDA Secretary Brooke Rollins announced that USDA will collaborate with the DOJ to investigate anticompetitive conduct by seed companies, just weeks after USDA canceled a program that did exactly this. Kiki Hubbard, one of the University of Wisconsin staff that worked on the Seed Liaison cooperative agreement, hopes that USDA will build upon their work. “Our team is pleased to see that the USDA wants to continue coordinating with the Department of Justice by looking into competition concerns in seeds and other agriculture markets,” Hubbard says. “We hope they will lean on the foundation of research that has already been done.”

The Senate Farm Bill proposed funding an in-house seed liaison team at USDA. However, Farm Bill negotiations are at a standstill after Republicans renewed large segments of the Farm Bill through budget reconciliation. Further, the Office of Management and Budget has pushed USDA to cut staff, not add. USDA has lost more than 15% of its workforce, which has set back agricultural research and exacerbated delays for farmers, particularly those seeking safety net payments or applying for conservation programs.

OMB director Russ Vought urged agencies to carry out reduction-in-force plans during the shutdown to lay off more federal workers. Some agencies attempted to lay off more than 4,000 workers, but a Judge temporarily blocked these and future firings during the shutdown, siding with unions that argued these layoffs were illegal.