For the Week Ending August 26, 2022
NPPC Comments on Proposed USDA ‘Poultry Rule’
Although it is taking no position on the new regulation, NPPC recently submitted comments on USDA’s proposed “Transparency in Poultry Grower Contracting and Tournaments” rule, which is related to enforcement and interpretation of the Packers and Stockyards Act (PSA). The PSA also deals with livestock transactions.
The so-called “poultry rule” includes heightened disclosure requirements between poultry dealers and growers, allowing growers to exchange specific contractual information with competing growers and other industry participants.
That, said NPPC in its comments, could lead to exchanges of “specific and competitively sensitive information between a wide range of actual and potential competitors.” Such exchanges without adequate safeguards could result in anticompetitive effects, the organization said. NPPC pointed out that courts have recognized carve-outs for information exchanges that contain safeguards such as aggregated data or information exchanged anonymously. It cited the Livestock Mandatory Reporting (LMR) system, which requires meatpackers to report to USDA the prices they pay for cattle, hogs, and lambs and other information, as “the best framework … for information sharing that balances the need for information symmetry with confidentiality-driven protections from price signaling.” Pork producers rely on LMR for timely and accurate information to sell their hogs.
NPPC also warned that too much transparency — i.e., mandated information exchanges — could have a chilling effect on current livestock marketing schemes. It noted: “If dealers are required to disclose certain performance metrics, inputs, and terms across all growers and then face increased legal liability — [from, for example, offering some growers premiums] — this may lead to uniform terms.”
USDA is expected to issue two additional PSA regulations related to livestock transactions by the end of the year. One of the proposed rules was submitted on Aug. 16 to the White House Office of Management and Budget for review, but the text of it is not yet available.
NPPC supports rules that recognize the right of producers to freely enter into contracts to sell and buy livestock and poultry. (Click here to read NPPC’s comments on the “Poultry Rule.”)
U.S. to Begin Trade Talks with Taiwan in Fall
The United States and Taiwan last week agreed to begin formal trade talks this fall. In early June, the countries announced they would begin negotiations on improving their economic and trade relationship.
The “U.S.-Taiwan Initiative on 21st-Century Trade” will focus on facilitating more agricultural trade and trade by small and medium enterprises; advocating for sound, transparent trade regulations; establishing anti-corruption standards; supporting the environment and climate action; and addressing “non-market” policies and practices that could be hindering trade.
NPPC supports discussions with Taiwan with the objective of eliminating several non-tariff barriers to U.S. pork, including a ban on the use of the feed additive ractopamine and a country-of-origin labeling scheme.
Budget Reconciliation Bill Excludes Most Harmful Tax Provisions
The fiscal 2023 budget reconciliation bill known as the Inflation Reduction Act (IRA) that President Biden signed into law last week includes several tax law changes but does not include many of the detrimental tax provisions that were in the so-called Build Back Better budget bill approved last year by the House. The Senate objected to that legislation and wrote a new budget bill, which both chambers approved in early August.
NPPC, informed by a producer-led Tax Task Force, fought to keep out of the IRA provisions that were in the 2021 House-passed bill treating capital gains as ordinary income, increasing the tax rate for high-income earners, and raising the corporate tax rate. (Previous proposals also had provisions eliminating the stepped-up basis for inherited assets, imposing capital gains taxes on assets transferred at death, and changing existing estate tax thresholds, which were dropped after pressure from NPPC and other trade associations.)
NPPC and a coalition of nearly 200 agricultural organizations and Main Street employers also voiced opposition to the Senate IRA bill expansion of the 3.8% Net Investment Income Tax and continuation of the limitation on excess business losses, which would raise taxes on small businesses in profitable years while limiting their flexibility during a downturn.
While the IRA’s tax policy changes — a 15% corporate minimum tax on C-corporations with more than $1 billion in profit, a 1% excise tax on stock buybacks, a two-year extension of the limitation on excess business losses, and increased IRS enforcement — will have varying impacts on agriculture, small businesses, and the overall economy, NPPC was successful in preventing many of the changes that would have most harmed U.S. pork producers and family farms. (Click here for a summary of NPPC’s action on the Inflation Reduction Act.)
USDA Allows More Packing Plants to Run Faster Line Speeds
USDA’s Food Safety and Inspection Service (FSIS) approved two more pork packing plants to run faster line speeds under a trial program. The Swift Pork plant in Beardstown, Illinois, and the Tyson plant in Madison, Nebraska, have been allowed to operate with increased harvesting line speeds.
The agency now has let six plants operate with faster lines, which could increase packing capacity and alleviate supply issues in the face of strong pork demand. FSIS established the line speeds program last November, after a provision in USDA’s 2019 New Swine Inspection System (NSIS) regulation was struck down by a U.S. District Court in March 2021. NPPC urged USDA to reinstate the faster line speeds.
Nine pork packing plants that had adopted the NSIS — six of which were operating with faster line speeds — were allowed to apply for the program, under which they need to collect data on the effects of the faster speeds on workers and share it with USDA and the U.S. Occupational Safety and Health Administration. The information could be used to formulate a new regulation for allowing plants to run faster line speeds.
NPPC’S Zieba Moderates Trade Panel at Export Summit
NPPC Vice President of International Affairs Maria Zieba this week at the Midwest Agricultural Export Summit in Sioux Falls, South Dakota, moderated a trade panel that discussed market access challenges facing U.S. agriculture, supply chain issues, and the need for the United States to work with international organizations.
Panel members included current USDA Deputy Under Secretary for Foreign Agricultural Services Jason Hafemeister; Kip Tom, the former U.S. ambassador to the United Nations’ Agencies for Food and Agriculture; and Aimpoint Research chief economist Gregg Doud, who was the chief agricultural negotiator for the Office of the U.S. Trade Representative during the Trump administration.
NPPC was a sponsor of the summit, which was hosted by the South Dakota District Export Council.
NPPC Fall Legislative Fly-in Sept. 14-15
NPPC’s fall Legislative Action Conference in Washington, D.C., is set for Sept. 14-15. More than 100 pork producers from around the country are expected to attend the biannual fly-in to meet with their members of Congress to discuss various issues of importance to the U.S. pork industry.
Pork producers interested in attending should contact NPPC — 515-278-8012 — or their state pork association.