[Federal Register Volume 62, Number 27 (Monday, February 10, 1997)] [Proposed Rules] [Pages 5935-5937] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-3217] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Grain Inspection, Packers and Stockyards Administration 9 CFR Part 201 RIN 0580-AA51 Regulations Issued under the Packers and Stockyards Act: Poultry Grower Contracts, Scales, Weighing AGENCY: Grain Inspection, Packers and Stockyards Administration, USDA. ACTION: Advance notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: The Agency is considering the need for issuing substantive regulations to address concerns in the poultry industry with respect to contract payment provisions tied to the performance of other growers, with respect to feed deliveries to contract [[Page 5936]] growers, and with respect to practices and procedures related to weighing of live birds delivered to processors. This notice requests comments on the need for regulations and the content of such regulations. DATES: Comments are due on or before May 12, 1997. ADDRESSES: Comments may be mailed to the Acting Deputy Administrator, GIPSA, Packers and Stockyards Programs, Stop 3641, 1400 Independence Avenue, SW., Washington, DC 20250-3641. FOR FURTHER INFORMATION CONTACT: Tommy Morris, Director, Packer and Poultry Division, (202) 720-7363. SUPPLEMENTARY INFORMATION: Currently, the predominant method utilized to pay growers for flocks grown under a poultry growing arrangement is based on a system which compares a grower's results to that of other growers during a specified time period. Many poultry growers have repeatedly expressed concern to the Agency that comparison of their production costs against production costs of other growers in determining their payment is unfair. Others in the industry have suggested that a comparison of the growout results of a group of growers that have grown birds during the same time period and weather conditions is the most equitable way to determine grower performance and payment. Some growers are opposed to a system that bases their payment on how well or how poorly their neighbor performs, asserting that a bias is being created because the initial quality of production inputs are exclusively under the control of the live poultry dealer. Under this system of determining grower payment, consecutive flocks grown by the same grower having similar production costs could receive substantially different payment amounts because of the results of other growers in the settlement group. Growers have expressed exasperation over this form of settlement because they have no way of estimating in advance how much to expect in payment. Concern has also been expressed about the disproportionate effect a small flock may have under a flock comparison payment system. Growers have suggested, to ensure fairness in their flock's compensation, that all results should be weighted. They feel that by weighting results in any flock compensation program, smaller growers, who might have an advantage in smaller flock numbers, would not have an undue influence on results. The Agency is considering the need for a regulation that would prohibit poultry grower settlements that base payment on a comparison of other growers' results and is seeking public comment on whether such a regulation is needed and, if so, the content of such a regulation. Comments are also being sought addressing the concept of weighting the results of relatively small flock settlements. Those opposing such a regulation are encouraged to provide information explaining their position. In particular, the Agency is interested in comments as to why this settlement method is, or is not, a fair, equitable way of determining grower payment. The weight of feed delivered to a poultry grower during the course of a growout cycle is an integral part in determining ultimate payment to the grower under most growing contracts. While many of the scales used to weigh feed deliveries to contract growers are regularly tested for accuracy and are equipped with printing devices, there are currently no regulations under the Packers and Stockyards Act requiring feed scale testing or the mechanical printing of feed tickets. Likewise, there are no Packers and Stockyards regulations related to the information required to be shown on feed scale tickets, nor are there requirements pertaining to other feed delivery or weighing documentation. A number of poultry growers have expressed concern over the lack of regulatory requirements relative to the weighing of feed delivered during the course of a growout cycle. Growers assert that feed is at times weighed on scales that are not certified as accurate, that weighing is seldom performed by certified weighmasters, and that scale tickets sometimes contain weights that are hand printed rather than printed by a scale integrated printing device. The Agency is considering the need for regulations requiring periodic testing of feed scales, mechanical printing of feed tickets, and more complete feed weighing and delivery documentation. Comments are being sought from the public regarding the need for feed weighing regulations and, if needed, the content of such regulations to help assure the accuracy of feed weights. Comments suggesting that feed weighing regulations are not needed should include information regarding safeguards currently in place that help assure the accuracy of feed deliveries and feed returns at the end of the growout cycle. Essentially all poultry growing arrangements include live poultry weight as a key element in determining grower payment. Live poultry weight is determined by weighing the birds while loaded in coops on flat bed trailers (gross weight) and subtracting the weight of the trailer and empty coops (tare weight) to determine the net or grower pay weight. In order to determine an accurate weight of poultry for grower payment, both the gross weight and tare weight must be accurate. The weight of the trailer, coops, and often the tractor is included in the process of determining both the gross and tare weights that result in the live poultry weight. It is critical in ascertaining an accurate live weight that the weight of the vehicle remain unchanged between the gross and tare weighings. The weight of live poultry begins to decrease when feed is removed from birds at the grower's farm and continues to decline during loading, transporting, and while being held at the plant prior to processing. Loads of poultry are held for various lengths of time prior to processing and at times are not processed in the order in which they arrived at the plant. Because of these variables, the Agency believes that prompt transporting of birds after loading and immediate weighing of the loads on arrival at the processing plant or holding area provides the most accurate weight for grower payment. The Agency is considering the need for promulgating regulations relative to the weighing of live poultry for grower payment. Comments are being sought concerning the need for such regulations and, if needed, the content of such regulations. In particular, the Agency is interested in knowing how such regulations could help assure the accuracy of the live poultry weighing process. Many poultry growers are concerned that they are in an unequal bargaining position vis-a-vis integrated poultry companies and believe rulemaking is necessary to provide growers with a level of assurance that their settlements will be equitable. Regulations involving live poultry weighing and feed weighing and delivery documentation may provide poultry growers with increased assurance that deliveries are weighed accurately. The Agency believes that such rules would place little increased burden on live poultry dealers. The Agency also believes that there would be little increased burden on live poultry dealers resulting from new regulations prohibiting grower flock comparison for settlement purposes. However, the Agency is seeking comments from all segments of the industry regarding anticipated benefits and/or burdens, and the cost, especially to smaller operations involving less than $500,000 in poultry annually, that may [[Page 5937]] result from the rulemaking under consideration. Dated: February 4, 1997. James R. Baker, Administrator, Grain Inspection, Packers and Stockyards Administration. [FR Doc. 97-3217 Filed 2-7-97; 8:45 am] BILLING CODE 3410-EN-P