In February 2024, the USDA implemented the Transparency in Poultry Grower Contracting and Tournaments, marking the beginning of a new chapter for fully integrated poultry companies requiring increased transparency and fairness with growers. It requires all new and renewed contracts between processors and growers to align with the USDA's standards immediately. 

OVERVIEW OF THE NEW RULE

The final rule introduces mandatory disclosures and information requirements for live poultry processors engaged in broiler production. These new requirements are designed to provide poultry growers with critical information about their growing arrangements and the financial aspects of their contracts. The rule specifically targets practices related to broiler contracting and performance, intending to protect growers from deceptive practices and ensure a level playing field within the industry.

KEY COMPONENTS OF THE RULE

Disclosure Requirements:

• Live poultry processors must now furnish detailed disclosure documents to poultry growers and prospective growers. These documents will include information on litigation history, bankruptcy filings, policies on grower payments during unforeseen events, grower turnover rates, and more. This measure aims to give growers a comprehensive understanding of the potential risks and rewards associated with their contracts.

Financial Disclosures:

• Processors are required to provide historical payment data, including average annual gross payments to growers, broken down by quintiles to reflect the full range of outcomes. This transparency will help growers better assess their potential earnings and manage financial risks.

Poultry Grower Ranking Systems:

• For those using grower ranking systems to determine payments, additional disclosures are mandated. These include details on flock stocking density, breed names and ratios, and health conditions, among others. The intention is to offer growers insights into the factors influencing their payments and to promote fair competition.

Governance and Compliance:

• The rule mandates that live poultry processors establish a governance framework to ensure the accuracy and completeness of the disclosures provided. A senior executive must certify compliance, enhancing accountability within the sector.

PARTNERING FOR COMPLIANCE AND SUCCESS

FACTA offers tailored solutions to ensure proper implementation and long-term success by offering: 

• Efficient Audits: Detailed and thorough compliance checks.
• Certification Support: Get certified and showcase your adherence.
• Customized Audits: Our auditing services are designed to align your operations with USDA mandates and ensure you meet all regulatory requirements.
• Streamlined Documentation: Gain access to comprehensive documentation and reporting solutions that simplify the compliance process.

By choosing to work with FACTA, beyond complying with these new standards, you receive:  

• Risk Mitigation: Proactively manage compliance to avoid potential penalties and legal challenges.
• Trust & Transparency: Strengthen relationships with your growers.
• Grower Confidence: Our emphasis on transparency strengthens relationships with growers, fostering trust and cooperation.
• Strategic Focus: With compliance in expert hands, you can focus on strategic initiatives that drive productivity and profitability.

SCHEDULE A CONSULTATION

Take the first step towards ensuring seamless compliance and enhancing your operational efficiency. Contact Jacquelyn Babcock, FACTA's Director of Animal Welfare Auditing and Training at [email protected] or Cell: 269.365.3588, FACTA Direct Line: 501.420.4270 to explore how we can support your business's transition to the new regulatory standards.