For the Week Ending February 5, 2010

February 5, 2010

Washington, D.C., February 5, 2010 

PRESIDENT ANNOUNCES PROPOSED FISCAL 2011 BUDGET


President Obama Monday unveiled his fiscal 2011 budget proposal, which includes an investment of more than $1 billion in efforts to reduce food-borne illnesses from U.S. Department of Agriculture-inspected food products and a $1 billion decrease in USDA discretionary budget authority. A major change in this year’s budget comes in the form of direct payments to farmers, which are payments to them based on historical production. Payments would be reduced from $40,000 per person per year to $30,000. The budget proposal adds user fees for meat and poultry inspections. Plants that have sample failures or require additional inspection activities due to a pattern of regulatory non-compliance would be charged a performance-based user fee. A flat fee, based on plant size, would apply to facility applications and annual renewal activities. USDA estimates these proposals at $4 million and $8.6 million. The budget would boost funds for USDA’s Food and Nutrition Services programs such as the National School Lunch Program and Woman, Infants and Children by $400 million. To view the proposed budgets for all federal agencies, visit the following link: FY 2011 Budget Proposal.

 

USDA UNVEILS NEW ‘FRAMEWORK’ FOR ANIMAL ID SYSTEM

The U.S. Department of Agriculture yesterday announced a “new, flexible framework for animal disease traceability” as it relates to the National Animal Identification System (NAIS). The new framework is the result of input USDA received during last year’s 15-city listening tour on the NAIS. Among other things, only animals moved in interstate commerce will need to have an ID number, and disease traceability data will be administered by the states. Most of the details of the new system will be developed and implemented through the rule-making process, which is likely to take several months to complete. NPPC supports a national, mandatory ID system for all relevant species as a way to prevent and control animal disease. Along with the National Pork Board, it has implemented a national swine ID system, which includes registration of swine premises. Through 2009, more than 85 percent of all swine premises had been registered.

 

EPA ISSUES FINAL RFS RULE

The U.S. Environmental Protection Agency Feb. 3 issued a final Renewable Fuels Standard rule – the so-called RFS II – to implement the 2007 Energy Independence and Security Act. RFS II does not change the mandate for production of biofuels. In issuing the rule, EPA retained an international indirect land-use calculation for determining the amount of greenhouse gases (GHGs) cut by the production of different biofuels. The reasoning behind the controversial calculation is that if more crops in the United States go to biofuels production, crops for food – and feed – will need to be grown elsewhere and may require the destruction of lands, including forests, that sequester carbon dioxide, a prime GHG. The agency calculated that GHG emissions are reduced by:

•  21 percent with corn ethanol produced in a natural gas-fired plant.
•  1 percent with corn ethanol produced in a coal-fired plant.
•  57 percent from soy biodiesel.
•  61 percent from sugarcane ethanol.
•  110 percent from switchgrass cellulosic ethanol.

Because corn-ethanol doesn’t meet a 50 percent GHG reduction target included in the 2007 energy law, it does not qualify as an “advanced” biofuel. Without the land-use consideration, corn-based ethanol achieves a 52 percent GHG reduction. Cellulosic ethanol – made from crop waste and woody biomass – achieves a 72 to 130 percent reduction, depending on the feedstock and conversion process used. EPA also reduced the amount of cellulosic ethanol that must be produced each year under the RFS. This year, 100 gallons were mandated to be produced; EPA reduced the amount to 6.5 million gallons. The RFS requires that 36 billion gallons of ethanol be produced by 2022, including 20 billion gallons from corn. The agency also reiterated its support for increasing the percentage of ethanol that can be blended into gasoline to 15 from the current 10 percent. Commodity prices will increase under the new RFS rule, according to EPA, with corn prices rising by 8.2 percent, soybeans by 10.3 percent and soybean oil by 38 percent. NPPC is analyzing the 1,100-page rule.

 

PORK EXPORTS CREATE U.S. JOBS

Rising U.S. pork exports spur increases in pork production and higher prices for producers, which, in turn, create jobs, according to a recent analysis conducted by Iowa State University economist Dermot Hayes. Each additional 1 percent of U.S. pork production that is exported adds $3 to the price producers receive per hog, and higher prices eventually stimulate more pork production. For each 1 percent increase in pork production, 920 direct pork industry jobs are generated and 4,575 total jobs are created. Hayes pointed out that U.S. pork exports have grown over the past 15 years from nearly 0 percent of pork production to almost 20 percent but that there is still a potential for exports to grow. To achieve its export potential, said Hayes, the U.S. pork industry must maintain access to important customers such as China and Russia and expand market access in markets such as Colombia, Panama and South Korea. As countries recover from the current economic crisis, added Hayes, an increased meat consumption trend will occur, which provides huge export potential and growth for the pork industry. To view the full report, visit the following link:Pork Exports Create U.S. Jobs. [[[[[[pdf]]]]]]]

 

LAWMAKERS SEND LETTER TO PRESIDENT SUPPORTING HIS TRADE PLEDGE

Sen. Mike Johanns, R-Neb., last week sent a letter to President Obama in support of pledges on trade made in his State of the Union address. Signed by a bipartisan group of senators, including Senate Agriculture Committee Chairwoman Blanche Lincoln, D-Ark., the letter reaffirmed the group’s commitment to helping the president meet the goals of doubling American exports over the next five years and ratifying pending trade agreements with Colombia, Panama and South Korea. To read the letter, click the following link: Letter to President Obama.

 

WHAT’S AHEAD

 

HOUSE AGRICULTURE APPROPRIATIONS BUDGET HEARING

The House Appropriations Subcommittee on Agriculture Wednesday will hold a hearing on FY2011 budget requests for the Food and Drug Administration.

 

U.S. AGRICULTURAL SALES TO CUBA

The House Committee on Agriculture Wednesday will hold a hearing on U.S. agricultural sales to Cuba.

 

NPPC, NATIONAL PORK BOARD ANNUAL MEETINGS MARCH 4-6

NPPC and the National Pork Board will hold their 2010 annual meetings – the National Pork Industry Forum – March 4-6 in Kansas City, Mo. For more information on the meeting, call (515) 278-8012. Media inquiries should be directed to Dave Warner at (202) 347-3600; for media registration, visit 2010 National Pork Forum.

 

NPPC WORLD PORK EXPO JUNE 9-11

NPPC’s annual World Pork Expo will be held June 9-11 at the Iowa State fairgrounds in Des Moines. Visit World Pork Expo’s new Facebook page and follow @NPPCWPX on Twitter at http://twitter.com/NPPCWPX for announcements and updates on the largest pork-industry trade show and exhibition in the world.