GIPSA Says Packers Can Ask for Records

Producers, packers, and others have raised questions about the mandatory country of origin labeling program and the relationship between implementing regulations and the Packers and Stockyards Act of 1921.  The Grain Inspection, Packers & Stockyards Administration offers the following principles to provide guidance as the Agricultural Marketing Service develops the regulations to implement mandatory country of origin labeling program.

Treating producers differently. While country of origin labeling is a retail labeling law, the Secretary may require retailers to have a verifiable record keeping audit trail. The voluntary guidelines provide that retailers must ensure that such an audit trail is maintained. Packers must make information indicating country of origin available to retailers. As regulations to implement the mandatory country of origin labeling program develop, some packers may have to develop different business practices to address the record keeping requirements. For example, mandatory labeling may affect the way some packers process livestock. To meet the requirements of the law, some packers may choose to process only livestock that were born and raised in the United States during one shift and process only livestock that were born in Mexico and raised in the United States during another shift.

The Packers & Stockyards Act does not prohibit packers from discriminating between producers. The law prohibits packers from discriminating unjustly. Treating producers differently, by itself, is not a violation of the P&S Act. If a packer has a reasonable business justification for treating similarly situated producers differently, and if the differences in treatment are reasonable, the packer has not violated the P&S Act.

Questions GIPSA asks to determine unjust treatment. 

•  Did the packer treat the producer differently than other producers were treated?

•  Was the producer who was treated differently “similarly situated” to other producers?

•  Did the packer have a business reason for treating the producer differently from other “similarly situated” producers?  If so, was the packer’s business justification reasonable?

Record keeping.

Under country of origin labeling, the Secretary may require retailers to have a verifiable record-keeping audit trail. Packers are required to provide information to the retailers regarding country of origin, and they may be required to maintain records. In response, packers will likely require others in the supply chain to keep records. The P&S Act does not prohibit packers from requiring their suppliers to maintain records, or from auditing the records that the packer requires. If a packer’s record keeping requirements are reasonable in light of the mandatory program and if the packer fully discloses the record keeping requirements to the seller prior to purchasing livestock, the packer has not violated the P&S Act.

Questions GIPSA asks about record keeping.

•  Are the packer’s record keeping requirements reasonable in light of regulatory requirements?

•  Are the packer’s record keeping requirements reasonable in light of the packer’s business justifications?

•  Is the packer uniformly applying its record keeping requirements so that all similarly situated sellers have the same requirements?

•  Did the packer fully disclose its record keeping requirements to its sellers prior to purchasing livestock?