For the Week Ending July 15, 2022

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Report Highlights Pork Industry Contributions To U.S. Jobs, Economy
NPPC released a new economic report highlighting how America’s pig farmers are significant contributors to the agricultural and overall U.S. economy. The report, authored by NPPC staff economist Holly Cook and Iowa State University economist Lee Schulz, features the U.S. pork industry’s value chain contributions and growth over the past five years.

Key findings include:
– The pork industry supports 613,823 direct and indirect jobs in the United States.
– In 2021, more than 66,000 pig farms sold more than 140 million hogs, generating more than $28 billion in gross cash receipts.
– Farming and processing sectors support more than $35 billion in personal income and boost economic activity in related services such as trucking, grain elevators, insurance, and other rural-based businesses.
– In 2021, approximately 25% of U.S. pork was exported, which equates to 7 billion pounds of pork valued at $8.1 billion. Those exports added more than $62 per head in value to each pig marketed last year.
– The pork industry generates significant economic activity through its purchase of inputs, such as corn and soybean meal, which account for an estimated 56% of total U.S. production costs.

In addition to the national report, NPPC released 22 state-level economic reports that highlight how the pork industry contributes at the grassroots level and show the breadth of the industry that produces affordable, safe, and nutritious pork for consumers here and abroad. (Click here for pork industry economic data.)

Agriculture, Business Organizations Oppose Tax Increases
NPPC joined 191 agriculture and business organizations representing family-owned and small farms and companies in voicing opposition to two key changes to the tax code that may become part of a budget reconciliation bill.

Media reports suggest Senate lawmakers want for non-corporate taxpayers to expand the current 3.8% Net Investment Income Tax (NIIT) to all non-wage income and expand and extend the “excess business loss limitation.” Both provisions were included in the $1.6 trillion budget reconciliation package of mostly social welfare and environmental spending approved by the House last fall.

For pass-through entities such as most pork operations, the NIIT increase would directly impact the bottom line; limiting deductions of excess business losses would reduce the ability of farm operations to recover from bad years.

In a July 11 letter, the groups urged both parties’ Senate and House leaders not to raise taxes. “In the face of a possible recession, 40-year high inflation, unprecedented supply-chain challenges, and chronic labor shortages, raising taxes on small, individually, and family-owned businesses is the wrong approach and should be rejected,” they wrote.

The reconciliation bill currently being floated in the Senate is smaller – possibly as low as $500 billion – compared with the House measure and is significantly reduced from the original Sen. Bernie Sanders (D-Vt.) sponsored bill of $7 trillion. The timing of action on any budget legislation is uncertain.

Senate Urged to Take Up H-2A Visa Bill to Address Farm Labor Shortage
Feeling the pressure of addressing a farm labor shortage, House Republicans this week urged the Senate to take up the “Farm Workforce Modernization Act” (FWMA). The bill would expand the H-2A visa system for agricultural workers. In March 2021, the House approved the FWMA.

Currently, H-2A visas allow immigrant farm laborers to enter the United States for temporary, seasonal work. The FWMA would open the H-2A visa program to year-round labor and provide a path to legal status for agricultural workers already in the country. But the measure caps the number of year-round visas at 20,000 annually, a provision opposed by NPPC and most other agricultural organizations.

In a June 12 press conference, GOP Reps. Jim Baird (Ind.), Doug LaMalfa (Calif.), Dan Newhouse (Wash.), and Mike Simpson (Idaho) highlighted the impact of farm labor shortages on food costs and cited a new study from Texas A&M University that shows increasing H-2A visa admissions is strongly correlated with a decrease in inflation, higher average wages, and lower unemployment.

NPPC is asking Sens. Michael Bennet (D-Colo.) and Mike Crapo (R-Idaho) to introduce in the Senate the FWMA bill without a cap.

Biden, Obrador Discuss Immigration, Economic Relationship
This week in Washington, D.C., President Biden and Mexico chief executive Andrés Manuel López Obrador met to discuss immigration and the strong U.S.-Mexico economic relationship. During the meeting, the Biden administration indicated it will increase the number of H-2A temporary worker visas. Many U.S. farmers and NPPC don’t think this goes far enough as year-round laborers are needed.

On trade, Obrador called for suspending tariffs that have not already been eliminated under the U.S.-Mexico-Canada Agreement (USMCA) and removing regulatory measures and “tedious” procedures and red tape related to trade in food and other products to lower prices for consumers in both countries.

Under the USMCA, pork exports among the three nations have a zero-tariff rate, helping U.S. shipments to Mexico top $1.6 billion last year and making that country the No. 3 destination for U.S. pork. Through May 2022, Mexico was the top destination for U.S. pork by value and volume, taking $715 million and nearly 397,000 metric tons of product in the first five months of the year.


NPPC Fall Legislative Fly-in Set for September
NPPC’s fall Legislative Action Conference in Washington, D.C., will take place Sept. 14-15. The biannual fly-in draws more than 100 pork producers from around the country to meet with their members of Congress to discuss various issues of importance to the U.S. pork industry. The Capitol Hill-famous “BaconFest” also will return after a two-year hiatus because of COVID-19 restrictions. Pork producers interested in attending should contact NPPC – 515-278-8012 – or their state pork association.