By Julie Tomascik
Editor

The U.S. Department of Agriculture (USDA) is proposing to delay implementation of a rule aimed at reforming how contract poultry growers are paid, pushing the effective date to Dec. 31, 2027.

The Poultry Grower Payment Systems and Capital Improvement Systems rule, finalized in January 2025, was designed to address concerns with the poultry “tournament system,” a payment structure that ranks growers against one another and adjusts compensation based on performance.

According to USDA’s Agricultural Marketing Service, the proposed delay would provide more time to assess the rule’s economic impact and determine whether its expected benefits outweigh potential costs and unintended consequences.

The rule includes provisions that would limit how much compensation can be tied to tournament rankings and restrict poultry companies from lowering base pay through performance-based discounts. It also addresses concerns about growers being required to make costly facility upgrades without assurances they will recover those investments.

USDA officials have noted uncertainty about how the changes could affect grower incentives, production efficiency and overall market participation, as well as the potential for increased administrative costs for both poultry companies and growers.

Contract poultry production is a major part of U.S. agriculture, and many growers operate under agreements with integrators who supply birds, feed and veterinary services while growers provide housing and labor.

The proposed delay has drawn criticism from the American Farm Bureau Federation (AFBF).

“Farm Bureau has been a consistent voice advocating for America’s contract poultry growers,” AFBF President Zippy Duvall said. “The Poultry Grower Payment Systems and Capital Improvement Systems final rule would address longstanding issues our growers have seen with tournament pay and requirements to make significant capital investments to their operations without any information or guarantee that they will recoup the cost of that investment.”

Duvall called the proposed delay “disappointing,” noting growers have been pushing for more transparency in how they are compensated.

“Growers have spoken on the need to level the playing field with more transparency surrounding how they are compensated, and they believed progress was being made,” he said. “AFBF looks forward to reminding the administration during the public comment period that farmers come first and poultry companies should not be prioritized over the men and women who work to put food on the table for all of America’s families.”

USDA’s Agricultural Marketing Service will accept public comments through April 17.

Comments can be submitted through the Federal Register.