For the Week Ending December 9, 2016

December 9, 2016


President-elect Donald Trump has wasted no time in piecing together his cabinet and top officials. Trump Wednesday announced Iowa Governor Terry Branstad as his pick for U.S. ambassador to China, citing his experience on trade and agricultural issues and long-term relationship with Chinese President Xi Jinping. Last month, Branstad made his seventh visit to China, meeting with the country’s agriculture minister as well as officials from Iowa’s sister province, Hebei. Trump Thursday announced Oklahoma Attorney General Scott Pruitt as his pick to be administrator of the Environmental Protection Agency (EPA). Pruitt has been a longtime critic of EPA, including leading his state’s effort in suing the agency over its controversial Waters of the United States rule. The selections of Branstad and Pruitt have received praise from leading agriculture organizations, including NPPC, which called their selection “good for our industry, good for agriculture and good for rural America and the country at large.” Among Trump’s nominations to cabinet posts are Sen. Jeff Sessions, R-Ala., as head of the Justice Department and U.S. attorney general; Dr. Ben Carson as secretary of Housing and Urban Development; businesswoman and education activist Betsy DeVos as secretary of Education; Rep. Tom Price, R-Ga., as secretary of Health and Human Services; former Labor Secretary Elaine Chao as secretary of Transportation; businessman Steven Mnuchin as secretary of the Treasury; businessman Wilbur Ross as secretary of Commerce, retired U.S. Marine Corps Gen. James Mattis as secretary of Defense; and retired U.S. Marine Corps Gen. John Kelly as secretary of the Department of Homeland Security. Picked to be administrator of the Small Business Administrator is businesswoman Linda McMahon. Trump has yet to name a secretary of Agriculture, but among those being at least rumored for the post are Kansas Gov. Sam Brownback; Chuck Conner, president and CEO of the National Council of Farmer Cooperatives; former Nebraska Gov. Dave Heineman; Sen. Heidi Heitkamp, D-N.D.; Ted McKinney, current director of the Indiana Department of Agriculture; former Georgia Gov. Sonny Perdue; former Texas Gov. Rick Perry and the state’s current agriculture secretary, Sid Miller; and Iowa agri-businessman Bruce Rastetter.



The House Thursday approved a continuing resolution (CR) to keep government programs funded at fiscal 2016 levels through April 28 of next year. (The Senate was set to pass the measure over the weekend.) The CR extends a previous one that covered from Oct. 1 – the start of fiscal 2017 – through today.



NPPC this week joined the National Retail Federation and 24 other organizations in petitioning the Federal Maritime Commission (FMC) to promulgate a new rule prohibiting terminal operators and shipping lines from charging detention, demurrage and per diem fees when circumstances – such as labor disputes – don’t allow cargo to be picked up or dropped off within contracted times. Cargo owners and trucking companies normally are given a number of free days to pick up containers of imported goods from ports after they have been unloaded from ships. After that, they can be charged demurrage, a fee intended to ensure that containers are removed quickly and efficiently. In addition, detention and per diem fees can be charged if the cargo containers and the trailers used to haul them are not returned to the terminal within a specified time. The federal Shipping Act requires that the fees and related practices must be “just and reasonable.” The petition asks the FMC to adopt a policy that would require free days to be extended during times of port congestion, weather-related events, port disruptions or delays caused by government actions or requirements beyond the control of the parties picking up or returning containers. Demurrage and similar fees charged during such incidents would be declared “unreasonable.” In some cases, “compensatory” fees could be charged provided they do not exceed actual storage or equipment use costs. In late 2014-early 2015, work slowdowns at West Coast ports caused severe disruptions in pork and other goods exports. The proposed policy would apply to ocean carriers and marine terminal operators. The effort is the latest in a series of actions NPPC has taken as part of the Agriculture Transportation Coalition, the Ports Coalition and the Coalition for Fair Port Practices to help avoid disruptions in U.S. exports.



The U.S. Government Accountability Office (GAO) this week issued a report on freight rail pricing and contract practices, which have been subjects of concern to rail shippers. The report, required by the Surface Transportation Board Reauthorization Act of 2015, found that contract (negotiated) shipping rates – compared with tariff (set) rates – offer flexibility but that contracts including rates for multiple origin-to-destination routes can have high rates on some routes. The report notes that this is an issue particularly for “captive” shippers – ones served by a single railroad and lacking an economically viable transportation alternative. Some shippers interviewed by GAO said contracts that combine captive and non-captive routes – for products going to multiple destinations – can compel them to accept unreasonable rates. While tariff rates, which tend to be higher than contract rates, can be reviewed by the Surface Transportation Board for their reasonableness, contract rates cannot. (The board doesn’t have oversight of contracts.) Shippers also said the board process for reviewing tariff rates is “complicated, time-consuming and expensive.” The GAO report makes no conclusions or policy recommendations on railroad shipping rates. NPPC is monitoring the shipping rates issue because increasing pork is being shipped by rail, which already moves about 40 percent of U.S. freight. (Click here to read the GAO report.)



A recent research paper from the Ohio State University detailing the discovery of an antibiotic-resistant gene from a bacteria found in one farrowing barn has been criticized by NPPC and the National Pork Board, which said it would analyze the initial findings. In a statement issued this week, the National Pork Board said the most important “takeaway” from the study is that the U.S. pork supply is safe. The resistant gene was not found in a market hog, and the researchers acknowledged that it is not known how the bacteria was introduced to the barn. Although the biosecurity protocols, if any, used on the farms aren’t known, the fact that the resistant bacteria was found only in one area of the barn indicates that current internal biosecurity measures are effective, the National Pork Board pointed out. “To draw the conclusions this study draws without further validation, replication and research is an overreach from the data and, in the worst case, is sensational in nature,” said NPPC. Hogs farms across the country are voluntarily offering access to Ohio State University’s Public Health Preparedness for Infectious Diseases Program to conduct research so that pork producers can better understand emerging disease issues.



The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) this week announced that meetings have been scheduled to discuss collective bargaining issues associated with the master labor contract covering the nation’s East Coast and Gulf Coast ports. In 2013, when ILA and USMX had disputes over labor contracts, NPPC expressed concern in a letter to President Obama about a possible strike at ports and emphasized the importance of international trade to the vitality of American animal agriculture. About 80 percent of U.S. pork exports reach their destinations through Last year, the two sides announced the possibility of an early extension of the master labor contract, which expires in September 2018, but little progress had come of those talks.





After approving a continuing resolution that funds government programs through April 28, 2017, the 114th Congress adjourned sine die – without a date for reassembling. The new (115th) Congress is expected to convene Jan. 3. Capital Update will be published on an as-needed basis until lawmakers resume a full schedule.



For questions, comments and suggestions or to unsubscribe, contact: Dave Warner, Director of Communications, NPPC, at 202-347-3600. To read previous issues of Capital Update, click here.

Follow NPPC on Twitter, and view NPPC’s Facebook page.