For the Week Ending October 9, 2009

October 9, 2009

Washington, D.C., October 9, 2009 

LAWMAKERS URGE USDA TO HELP U.S. PORK PRODUCERS

Members of the U.S. Senate and House have urged the U.S. Department of Agriculture to lend assistance to U.S. pork producers to help them out of a 2-year-old economic crisis. NPPC applauded the congressional request. In separate letters recently sent to Agriculture Secretary Tom Vilsack, 24 senators and 63 representatives asked that USDA take the following actions to provide “much-needed emergency relief” to the U.S. pork industry:

  • Purchase $100 million of pork with funds from the Section 32 program, which uses customs receipts to buy non-price-supported commodities for federal food-assistance programs.
  • Collaborate with other federal agencies to help address swine disease surveillance on farms, related diagnostic and vaccine development and swine industry support.
  • Work with the U.S. Trade Representative to open export markets to U.S. pork, particularly China, which continues to impose non-science-based restrictions on U.S. pork since the outbreak of H1N1.

The congressional efforts, led by Al Franken, D-Minn., and Richard Burr, R-N.C., in the Senate and by Tim Walz, D-Minn., and Steve King, R-Iowa, in the House, were made to help pork producers deal with losses averaging $22.50 per hog since September 2007. Over the past two years, the U.S. pork industry has lost more than $5 billion, and producers have lost more than 65 percent of the equity in their operations. In mid-August, NPPC urged USDA to make three $50 million purchases of pork, using fiscal 2009, fiscal 2010 and Section 32 funds. USDA agreed in early September to buy $30 million of pork, using fiscal 2009 funds.

 

NPPC BACKS NEW USDA RESEARCH AGENCY

NPPC applauded the launch Thursday of a new research and education arm within the U.S. Department of Agriculture. The National Institute of Food and Agriculture (NIFA), which was created under the 2008 Farm Bill, will “advance knowledge for agriculture, the environment, human health and well-being and communities by supporting research, education and extension programs in the Land-Grant University System and other partner organizations.” NIFA replaced the former Cooperative State Research, Education, and Extension Service (CSREES), which had been in existence since 1994. NIFA, which also administers the national 4-H program, USDA’s 105-year-old youth development program, is directed by Dr. Roger Beachy, who reports to USDA Under Secretary for Research, Education and Economics Dr. Rajiv Shah. NPPC long has supported increased emphasis on agricultural research.

 

FISCAL 2010 AGRICULTURE SPENDING BILL APPROVED

The Senate and House this week approved a compromise fiscal 2010 agriculture appropriations bill, which would provide $121.2 billion, including $23.3 billion in discretionary funds. The Senate voted 76-22 for passage; the House approved the measure on a 263-162 vote. The bill includes $350,000 for a national trichinae certification program, $5.3 million for the U.S. Department of Agriculture’s National Animal Identification System and $2.5 million for Pseudorabies management. The measure also includes language allowing USDA to conduct a scientific risk assessment on the safety of Chinese chicken imports, a measure strongly backed by NPPC.

 

NPPC OFFICIALS TRAVEL TO MEXICO FOR PRODUCER MEETINGS

NPPC board members and staff traveled to Mexico to meet with a number of Mexican pork producer groups regarding the regionalization of Mexico for hog cholera, the H1N1 flu virus and other issues affecting the North American hog industry, including the current financial crisis. On the trip, NPPC also met with Canadian producer representatives. NPPC has been meeting with Mexican and Canadian pork producer representatives since about the time the North American Free Trade Agreement was reached in 1994. Over the years, there have been many attempts by Mexican producers to restrict U.S. pork and live hog exports. NPPC continues to work hard to keep the border open. Likewise, NPPC has worked hard to ameliorate the impact of Canadian hog sector subsidies on U.S. pork producers.

 

DOJ ENLISTS STATE ATTORNEYS GENERAL TO SCRUTINIZE AGRICULTURE MARKETS

In recent remarks to state attorneys general at Columbia Law School in New York, Christine A. Varney, Assistant Attorney General in the U.S. Department of Justice’s Antitrust Division, said the division needs the help of the states’ top law enforcement officials to “police” agriculture markets. The Antitrust Division plans to look into the general state of competition in agriculture markets through a number of workshops in 2010 hosted jointly with the U.S. Department of Agriculture. DOJ wants to look into the level of transparency of market transactions and the degree of vertical integration and buyer power in the agricultural markets. Varney said her division has been heavily involved in reviewing proposed mergers in livestock markets, involving pork and beef, and “will maintain a watchful eye on the marketplace.”

 

WHAT’S AHEAD

NPPC TO TESTIFY ON PORK INDUSTRY ECONOMIC CRISIS

NPPC will testify Oct. 22 on the economic crisis in the U.S. pork industry before the House Committee on Agriculture’s Subcommittee on Livestock, Dairy, and Poultry. Pork producers have suffered losses of an average of $22.50 per hog for the past two years.


HOUSE AG. COMMITTEE TO MARK-UP COMMODITY SPECULATION BILL

House Ag. Chairman Collin Peterson’s commodity speculation bill is expected to be marked-up in the coming weeks.  The draft legislation would regulate the market for over-the-counter (OTC) derivatives.  The discussion draft bill contains provisions addressing OTC clearing, trading, capital and margin requirements, and position limits.  It builds on legislation the House Ag. Committee passed earlier this year, H.R. 977, the Derivatives Markets Transparency and Accountability Act of 2009,  a bill to strengthen the oversight of futures, options and OTC markets.