20-5 National Pork Producers Council ("NPPC")

U.S. DEPARTMENT OF JUSTICE
Antitrust Division
MAKAN DELRAHIM
Assistant Attorney General
Main Just ice Building
950 P ennsylvania Avenue, N.W.
Washingt on, D.C. 20530-0001
(202) 514-2401 / (202) 616-2645 (Fax)
May 15, 2020

Martin M. Toto
White & Case LLP
1221 Avenue of the Americas
New York, NY 10020

Re: National Pork Producers Council Business Review Request Pursuant to
COVID-19 Expedited Procedure

Dear Mr. Toto:

This letter responds to your request, on behalf of the National Pork Producers
Council (“NPPC”), for the issuance of a business review letter under the Department of
Justice’s Business Review Procedure, 28 C.F.R. § 50.6. Specifically, the Department
understands that NPPC’s request is made under the expedited, temporary review procedure
as detailed in the Joint Antitrust Statement Regarding COVID-19 dated March 2020
(“Joint Statement”).
1
As indicated in the Joint Statement, the Department’s statement of
its current enforcement intentions as set out in this letter will be in effect for one year from
the date of this letter.

In the Joint Statement, the Department indicated its aim to address COVID-19
related requests “addressing public health and safety” within seven days of receiving all
necessary information. In a request on May 8, 2020, you sought a statement of the
Department’s current antitrust enforcement intentions with respect to (i) NPPC and its
members assisting the United States Department of Agriculture (“USDA”) in humane ly
and efficiently depopulating unmarketable hogs and (ii) NPPC sharing information with its
members about best practices for depopulating unmarketable hogs (“Proposed Conduct”).
2

Your request arises amidst a challenging time in the pork industry. As explaine d
in an Executive Order issued by President Donald J. Trump on April 28, 2020, the closure
1
Dep’t of Justice & Fed. Trade Comm., Joint Antitrust Statement Regarding COVID-19 (Mar. 2020),
https://www.justice.gov/atr/joint-antitrust-statement-regarding-covid-19 [hereinafter “Joint Statement”].
2
Letter from Martin M. Toto, National Pork Producers Council, to the Honorable Makan Delrahim, Assistant
Attorney General for Antitrust, U.S. Dep’t of Justice (May 3, 2020) [hereinafter “Request Letter”] at 5.

1

of processing facilities has led to a “reduction in some of those facilities’ processing
capacity.”
3
The Executive Order addresses bringing those facilities back online, but in the
meantime, processing capacity reductions have had impacts up and down the supply chain.
Your request explains that those impacts have included some hogs becoming unmarketable
due to the inability to process them in a timely manner. As a result, some farmers may
need to humanely euthanize unmarketable hogs—a “tragic choice [they] are being forced
to make because of COVID-19 closures of pork packing facilities.”
4

In the midst of these challenges, competition remains critically important to
consumers and market participants in the pork and other meat industries, and addressing
anticompetitive conduct in these industries is therefore a top priority for the Department.
At the same time, it is also important to provide antitrust guidance to hog farmers and
others that have been adversely impacted by the current pandemic, especially where they
seek to cooperate with the government in beneficial and procompetitive ways. Follow ing
an expedited review, the Department can conclude that it does not presently intend to
challenge the Proposed Conduct by the NPPC. Based on your representations, most of this
conduct will occur at the direction and under the supervision and coordination of the
USDA—a government agency—and therefore should not raise concerns under the antitrus t
laws. Moreover, NPPC’s communication of non-competitive ly sensitive information to its
members, e.g., best practices for depopulating unmarketable hogs, even if not occurring at
the direction of and under the supervision and coordination of the USDA, similarly is
unlikely to raise concerns. In accordance with the Department’s usual practice, however,
it reserves the right to challenge the conduct in the future if it is later revealed to be
anticompetitive in purpose or effect.
While for the reasons explained below your Proposed Conduct appears
procompetitive , the Department would have serious concerns if industry participants, such
as meat processors, engaged in coordination that facilitated price fixing, output restrictions ,
market allocation, anticompetitive exchanges of information, or other anticompetitive
conduct.
5
As always, the Department would welcome the NPPC’s assistance, its members,
or that of any other industry participant in preventing and identifying violations of the
antitrust laws in this critical industry.
I. Background
The spread of COVID-19 has created unprecedented challenges for industrie s
across America. Major disasters have been declared in all 50 states, more than 1,250,000
Americans have been infected with the virus, and more than 75,000 have died from it.
6

3
Exec. Order. No. 13,917, 85 Fed. Reg. 26 (April 28, 2020).
4
Request Letter at 4.
5
See Joint Statement.
6
Fed. Emergency Mgmt. Agency, Disasters, https://www.fema.gov/disasters (last visited May 8, 2020);
Johns Hopkins University, Coronavirus COVID-19 Global Cases by the Center for Systems Science and
Engineering, https://coronavirus.jhu.edu/map.html (last visited May 8, 2020); see also Letter from the
Honorable Makan Delrahim, Assistant Attorney General for Antitrust, U.S. Dep’t of Justice to Lori A.
Schechter, McKesson Corp., Jessica L. Mayer, Cardinal Health, Inc., Michael S. Ettinger, Henry Schein, Inc.,
Alex Liberman, Medline Indus., Inc., & Nicholas J. Pace, Owens & Minor, Inc. (Apr. 4, 2020),

2

Measures to mitigate the spread of COVID-19, moreover, “have taken a dramatic toll on
the United States economy and critical infrastructure.”
7

The meat and poultry industries are among the industries affected. For example,
facilities processing meat, e.g., pork, have been forced to reduce capacity or close entire ly,
affecting the entire supply chain.
8
As a result of these closures, hog farmers and others
who supply Americans with pork are facing unprecedented hardships.
In response, President Donald J. Trump issued an Executive Order recognizing that
“the continued functioning of the national meat and poultry supply chain” is “critical” to
the health and security of Americans.
9
The President therefore directed the Secretary of
the USDA, pursuant to the Defense Production Act, to “take all appropriate action . . . to
ensure that meat and poultry processors continue operations” and “determine the proper
nationwide priorities and allocation of all the materials, services, and facilities necessary
to ensure the continued supply of meat and poultry.”
10

The USDA’s Animal and Plant Health Inspection Service (“APHIS”) has also
recognized that “American livestock and poultry producers are facing an unprecedented
emergency due to COVID-19, particularly with the closing of meat processing plants in
several states.”
11
USDA’s Under Secretary for Marketing and Regulatory Programs is
initiating a program to facilitate the depopulation of unmarketable hogs. The Under
Secretary has directed APHIS’s National Incident Coordination Center (“NICC”) to carry
out activities under the program. APHIS’s NICC will help hog producers “whose animals
cannot move to market as a result of processing plant closures” by identifying alternative
markets or, “if necessary,” advising “on depopulation and disposal.”
12

The NPPC is a national association representing pork producers, i.e., hog farmers.
Its business review request arises based on the exigent circumstances described above.
II. NPPC’s Efforts to Maintain Pork Supply and Facilitate Depopulation
The facts set forth in this section regarding NPPC’s Proposed Conduct are based
on your representations to the Department, the Department’s discussions with the USDA,
and publicly available information.

https://www.justice.gov/atr/page/file/1266511/download [hereinafter “PPE Distributor BRL”] and Letter
from the Honorable Makan Delrahim, Assistant Attorney General for Antitrust, U.S. Dep’t of Justice to John
G. Chou, AmerisourceBergen (Apr. 20, 2020), https://www.justice.gov/atr/page/file/1269911/download
[hereinafter “AmerisourceBergen BRL”].
7
Exec. Order. No. 13,917, 85 Fed. Reg. 26, 313 (April 28, 2020).
8
Id.
9
Id.
10
Id.
11
U.S. Dep’t of Agric., Animal & Plant Health Inspection Serv., USDA APHIS Establishing Coordination
Center to Assist Producers Affected by Meat Processing Plant Closures (Apr. 25, 2020),
https://www.aphis.usda.gov/aphis/newsroom/stakeholder-info/sa_by_date/sa-2020/sa-04/meat-processing-
coordination-center.
12
Id.

3

In a normally functioning market, hog producers deliver their hogs to pork packers,
i.e., companies that process hogs into pork. Producers sell to packers based on preexisting
contracts or on the spot market.
13
As a result of the pandemic and reduced packing
capacity, however, hog producers are unable to sell all of their hogs previously raised “just-
in-time” for slaughter to packers. Producers also cannot keep these hogs until packing
capacity rebounds because when hogs “exceed a certain weight . . . they are no longer
marketable—no one will buy them as they do not fit on the production line equipment at
the packing plants.”
14
This has created “an overwhelming oversupply of live hogs in the
United States.”
15
Maintaining unmarketable hogs is expensive and limits farmers’ ability
to make space in barns to raise hogs for future supply.
16

Unable to sell or keep these unmarketable hogs, many farmers plan to “humane ly
euthanize” them.
17
Hog farmers, however, “generally lack the knowledge, equipment, and
facilities needed to humanely euthanize large numbers of animals.”
18
By contrast, pork
packers have the ability to do so. Several packers have even volunteered to help producers
with whom they have contracts depopulate their unmarketable hogs.
19
In some areas,
though, these services may not be available or packers might be unable to depopula te
enough hogs. Producers who sell on the spot market and lack existing contractua l
relationships with packers may also struggle to depopulate their unmarketable hogs at
scale.
In response to these circumstances, NPPC explains that it and its members propose
to engage in two categories of conduct.
First, NPPC proposes to work “in conjunction with officials from the USDA” or
“relevant state and local governments” to “implement an orderly euthanization and
disposal process” and “communicat[e] with farmers who may need assistance humanely
euthanizing and disposing of unmarketable hogs.”
20
As noted above, one initiative in this
area involves APHIS’s NICC. The Department understands from NPPC and USDA that
APHIS’s NICC will work with farmers and packers to facilitate hog depopulation and that
any coordination among farmers to implement USDA’s policies will happen at the
direction and under the supervision of the USDA or state governmental authoritie s.

13
Some packers are also vertically integrated, meaning they process their own hogs as well.
14
Request Letter at 4.
15
Id.
16
Int’l Trade Comm’n, Pork and Swine Industry & Trade Summary (Oct. 2014) at 18,
https://www.usitc.gov/publications/332/pork_and_swine_summary_its_11.pdf (noting that hogs are
typically marketable “at 5–6 months of age”).
17
Request Letter at 4 (“It is a tragic choice, but one that thousands of hog farmers are being forced to make
because of COVID-19 closures of pork packing facilities.”).
18
Id. at 4-5 (noting the difficulty that individual producers would have depopulating in a humanely and
“environmentally responsible manner”).
19
Id. at 5.
20
Id.

4

Ultimately, though, each producer will unilaterally decide how many of their hogs to
depopulate.
Second, NPPC proposes to help federal and state agencies develop other initiative s
“to address the logistical, economic, ethical, and environmental challenges pork-
processing facility closures and capacity constraints caused by the COVID-19 outbreak
have caused for hog farmers.”
21
The Department’s understanding is that, to the extent
NPPC helps implement these initiatives, it would do so at the direction and under the
supervision of federal or state agencies, e.g., APHIS’s NICC or State Veterinarians, or that
NPPC’s conduct would involve relaying best practices for supply chain management and
depopulation, rather than competitively sensitive information, to its members, based on
publicly available information or information from federal or state agencies.
22

III. Legal Framework and Analysis
a. Collaboration and Coope ration with Fe de ral and State Age ncies
The Department has indicated that it will not challenge conduct aimed at addressing
COVID-19 if it is (i) “compelled by an agreement with a federal agency or a clearly defined
federal government policy” and (ii) “supervised by a federal agency.”
23

NPPC and its members, i.e., hog producers, working with APHIS’s NICC fits
within this two-part framework.
24
First, while producers may not have a formal agreement
with APHIS’s NICC, they “will be acting at [its] direction in the context of a clearly define d
federal program” and in furtherance of that program.
25
Second, their actions will be “at the
direction and supervision of the USDA.”
26
In particular, while producers will unilatera lly
decide whether to depopulate their hogs and in what quantities, APHIS’s NICC will tell
those producers where they should take those hogs to be depopulated. The Department
understands that this conduct is necessary as a result of the situation created by the current
pandemic. The Department further understands that the conduct will not be used as a
mechanism to depopulate more hogs than necessary, i.e., the conduct is limited to the
depopulation of hogs that become unmarketable due to a reduction in processing plant

21
Id.
22
See id. at 7.
23
AmerisourceBergen BRL at 8 (internal brackets omitted); see also PPE Distributors BRL at 7 n.30
(“[T]he Department stands ready to work with federal agencies to ensure their efforts promote competition”).
24
The Department expresses no view on packers sharing of information with APHIS or state governments.
The Department does note, however, that “bilateral communication with [a federal agency], as opposed to
communication [among competitors], should not raise antitrust concern.” PPE Distributors BRL at 8.
25
AmerisourceBergen BRL at 8; see also Exec. Order. No. 13,917, 85 Fed. Reg. 26, 313 (April 28, 2020)
(directing USDA “to determine the proper . . . allocation of all the materials, services, and facilities necessary
to ensure the continued supply of meat”).
26
Request Letter at 7.

5

capacity. Given the above caveats, the Department is satisfied that this and similar conduct
should not raise concerns under the antitrust laws.
27

b. Collaboration and Coope ration Among Compe titors
Although NPPC represents that much of the Proposed Conduct will be under the
direction and supervision of USDA or other government officials, NPPC’s request also
covers collaborations independent of government involvement.
NPPC also intends to provide its members with “clear and consistent guidance with
regard to how producers should dispose of [their hogs].”
28
For example, producers who
elect to depopulate their unmarketable hogs without the help of packers must navigate a
patchwork of local, state, and federal laws along with other safety and environme nta l
considerations. To the extent NPPC communicates with its members to help USDA,
APHIS’s NICC, and other agencies, under their direction and supervision, the Department
is satisfied that this conduct should not raise concerns under the antitrust laws.
29
Likewis e ,
NPPC sharing information about euthanization methods, protocols, equipment, or
processors with its members – even if not at the direction of USDA or another
governmental entity – is unlikely to raise concerns under the antitrust laws.
30

By contrast, the Department would have concerns if industry participants shared
competitively sensitive information or otherwise engaged in coordination that facilitate d
price fixing, output restrictions, market allocation, anticompetitive exchanges of
information, or other anticompetitive conduct. While your request does not address the
communication of competitively sensitive information, we note that further guidance is
available in the Antitrust Guidelines for Collaborations Among Competitors issued jointly
by the Antitrust Division and the Federal Trade Commission.
31

IV. Conclusion
This letter expresses the Department’s current enforcement intention and is
predicated on the accuracy of the information and assertions you have provided, as well as
the additional qualifications set forth in the letter. It expresses the Department’s current
enforcement intention in the exercise of its prosecutorial discretion in the context of the

27
In some circumstances, state authorities, e.g., a state veterinarian or animal health authority, may direct
producers to specific facilities for depopulating their unmarketable hogs (based on information from USDA
or otherwise). The Department would analyze this conduct using the same two-part framework discussed
above.
28
Request Letter at 5.
29
AmerisourceBergen BRL at 9 (quoting PPE Distributors BRL at 9).
30
The same is true for NPPC seeking to “help USDA/APHIS, and state and local government representatives
develop policies and initiatives” to addressing the effects of COVID-19. Request Letter at 5.
See AmerisourceBergen BRL at 11–12 (discussing Noerr–Pennington immunity).
31
Fed. Trade Comm’n and U.S. Dep’t Of Justice, Antitrust Guidelines for Collaborations Among
Competitors at § 2.1 (2000), https://www.justice.gov/atr/page/file/1098461/download.

6

antitrust laws.
32
The letter also reflects the outcome of an expedited, temporary review
procedure that is necessarily less thorough than ordinary business review procedures and
should not be interpreted as applying to any matter other than the Proposed Conduct as it
relates strictly to, or arises directly out of, the COVID-19 pandemic. In accordance with
our normal practices, the Department reserves the right to bring an enforcement action in
the future if the actual operation of the proposed conduct proves to be anticompetitive in
purpose or effect.

This statement is made in accordance with the Department’s Business Review
Procedure, 28 U.S.C. § 50.6, and subject to the limitations and reservations of rights
therein. Pursuant to its terms, your business review request and this letter will be made
publicly available immediately, and any supporting data you have submitted will be made
publicly available within thirty days of the date of this letter, unless you request that part
of the material be withheld in accordance with paragraph 10(c) of the Business Review
Procedure.

Sincerely,

/s/

Makan Delrahim

32
The Department therefore expresses no opinion on whether the Proposed Conduct or other actions by
NPPC or its members implicates the Packers and Stockyards Act.