The Packers and Stockyards Act: A History of Failure to Date

Peter Carstensen, Apr 29, 2010

Congress adopted the Packers and Stockyards Act (“PSA”) in 1921 to achieve two goals that antitrust law and state market regulation had failed to achieve.

First, Congress sought to ensure that the practices of buyers and sellers in livestock (and later poultry) markets were fair, reasonable, and transparent. This goal can best be described as market facilitating regulation. The underlying concept was to create a broadly defined standard and confer on the Secretary of Agriculture expansive rule making authority to implement these policies. This goal is the basis for the first two provisions of the statute:

It shall be unlawful for any packer or swine contractor with respect to livestock, meats, meat food products, or livestock products in unmanufactured form, or for any live poultry dealer with respect to live poultry, to:

a)     Engage in or use any unfair, unjustly discriminatory, or deceptive practice or device; or

b)     Make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect…

This goal received some sporadic enforcement in the period when livestock were largely sold at stockyards, but with the radical changes in the industry starting in the later 1950s when modern transportation moved livestock to direct purchases, the Secretary ceased to provide…

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