R-CALF Urges Regulators to Unwind Vertically Integrated Poultry Industry

In comments submitted Tuesday to the U.S. Department of Agriculture in support of the agency's proposed rule, "Transparency in Poultry Grower Contracting and Tournaments," R-CALF USA asks the agency to use the rulemaking process to lay the foundation for unwinding the horizontally and vertically integrated poultry industry that is, in the ranch group's view, a failed poultry production model that jeopardizes America's food security.

The group described the current poultry industry as a highly concentrated, centralized, and horizontally/vertically integrated poultry-production model that is incapable of withstanding either market or environmental shocks. Citing news reports, the group says the poultry industry's concentration and skeletonized supply chain resulted in the euthanasian of millions of chickens following the COVID-19 pandemic and avian influenza outbreaks.

The group states that its interest in the proposal was predicated on its membership's strong desire to prevent the cattle industry from ever succumbing to the poultry production model.

In support of the proposed rule, the group states the reforms designed to increase transparency would help rebalance the disparate market and bargaining power between poultry integrators and poultry growers.

This rebalancing of power, according to the group, would allow for the reemergence of long suppressed competitive market forces that would create niche opportunities for investors and entrepreneurs to begin competing in one or more of the production stages of the chicken supply chain that is currently captured and controlled by poultry integrators.

The group contends the disaggregation of production within the various stages of the chicken supply chain should be a high priority as it will enhance supply chain resiliency and national food security, as well as provide new economic opportunities for entrepreneurs and aspiring poultry growers.