Agricultural Economics Department


Date of this Version



Cornhusker Economics, University of Nebraska–Lincoln Extension, April 1, 2015.


Copyright 2015 University of Nebraska.


Legislative Bill 176 would authorize custom feed-ing contracts between packers and Nebraska pork producers. Some producer protection provisions for these contracts are currently established under federal law and in several states but not yet in Ne-braska. This newsletter discusses some of these issues.

Would LB176 authorize custom feeding con-tracts with packers? Yes, and these contracts are regulated federally and in several states to pro-tect producers.

Why do producers need protections in these custom feeding contracts? Production contracts were first used in the poultry industry and much of what we are discussing here is in response to pro-cessor abuses that occurred in connection with poultry production contracts.

What are the federal producer protections? These are the somewhat controversial 2011 GIP-SA (USDA Grain Inspection, Packers & Stock-yards Administration) rules. The GIPSA rules deal primarily with (1) contract cancellation, (2) capital investment disclosure, and (3) dispute resolution.