For the Week Ending July 7, 2017

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The European Union and Japan this week reached a trade agreement in principle that will phase out tariffs on high-quality cuts of pork and reduce duties on lower-quality cuts over 10 years. In a statement issued immediately following Wednesday’s announcement of the agreement, NPPC President Ken Maschhoff said, “The United States must quickly finalize a trade deal with Japan if it wants to maintain this important market. We can’t stand by while countries around the world negotiate agreements that give them a competitive advantage over American products.” Japan is the highest value market for U.S. pork exports, with Japanese consumers purchasing nearly $1.6 billion of American pork in 2016.



The U.S. Court of Appeals for the District of Columbia Circuit on Monday denied a request by NPPC and the U.S. Poultry and Egg Association for a rehearing of a case that rejected an exemption for farms from emissions regulations under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the Emergency Planning Community Right to Know Act (EPCRA). CERCLA is used to recover natural resources damages caused by hazardous substances; EPCRA is for use by state and local emergency responders when dealing with hazardous chemical releases. The U.S. Environmental Protection Agency had provided farms an exemption from reporting low-level emissions of ammonia and hydrogen sulfide generated from the natural breakdown of animal manure after an agency evaluation determined that any emergency response was “unnecessary, impractical and unlikely.” Environmental activist groups sued EPA over the exemption. NPPC expects EPA to ask the court to stay its April 11 decision so the agency can figure out what it will do next. Regardless, NPPC will continue to explore regulatory solutions.



NPPC this week submitted to the House Ways and Means Committee testimony on the importance of trade to the U.S. pork industry. The organization focused on the benefits of the North American Free Trade Agreement (NAFTA), stressing the vital role the agreement has played in U.S. economic and agricultural expansion. In 2016 alone, U.S. exports to Canada and Mexico were $38 billion, or 28 percent of all U.S. exports. NPPC suggested measures that could be added to a renegotiated NAFTA and stressed that the Canadian and Mexican export markets must not be disrupted and that NAFTA modernization efforts should focus on minimizing the unnecessary regulatory restrictions in the agreement. In addition, NPPC emphasized the importance of expanding trade in the Asia-Pacific region through bilateral trade agreements, with the priority being Japan.



Based on feedback from the U.S. pork industry, USDA’s Agricultural Marketing Service (AMS) has made two changes to its Livestock Mandatory Reporting (LMR) program to better reflect current industry trends and dynamics. Effective Aug. 7, 2017, USDA will expand swine premium price reporting to include an “other” category. The category, which for reasons of confidentiality will be reported cumulatively without individual elements broken out, includes animal welfare, antibiotic free, diet/feed, genetics, meat quality, process verified program, sow housing and weight. Additionally, USDA will enhance the pork cutout by removing these products from the belly primal: the 14-16 pound and 16-18 pound skin-on bellies. In doing so, the pork cutout will provide more accurate belly primal and overall pork cutout values. In 2016, this change would have lowered the daily average overall pork cutout value by $0.04. More detail is available in this USDA press release.



The U.S. pork industry lost a giant this week with the passing of Professor Glenn Grimes, who died July 2. The University of Missouri agricultural economist, who at one time was consulting economist for NPPC, began his career in 1951 as a county extension agent in southern Missouri. Five years later, he became a state livestock marketing specialist and served in that position at the university until 1985, when he retired – for the first time. From then through 2009, he served as professor emeritus, and worked part-time in the University of Missouri’s Department of Agricultural Economics. Grimes, who earned a master’s degree in agricultural economics in 1965 from Mizzou, received numerous awards for his work, which included a series of studies on the structure of the pork industry and on characteristics, practices and attitudes of pork producers that chronicled the changing industry from the late 1970s through the 2000s. He developed the demand index as a way to quantify demand for meat products and livestock. Among his accolades, Grimes was given the National Pork Board’s Distinguished Service Award, was named Alumnus of the Year in 2010 by the University of Missouri College of Agriculture, Forestry and Natural Resources and was included in National Hog Farmer’s Top 50 Men and Women in the Pork Industry in 2005. In 2006, he was honored with the magazine’s Master of the Pork Industry award. NPPC in 2010 inducted him into its Pork Industry Hall of Fame. NPPC CEO Neil Dierks in a statement said: “Finding words to express what Professor Grimes meant to the U.S. pork industry is extremely difficult given the decades of fundamental work and knowledge he contributed to it. He examined and framed the foundational economics of today’s pork industry for the benefit of all participants, particularly producers. His contributions to the understanding of markets and his educational efforts to share that understanding are beyond significant.”





NPPC and the American Association of Swine Veterinarians on July 11-12 will host a Washington, D.C., legislative fly-in. Swine veterinarians from across the country will visit congressional lawmakers, discussing their priority issues. The veterinarians are expected to urge members of Congress to include in the 2018 Farm Bill language establishing a vaccine bank to address a potential Foot-and-Mouth Disease outbreak.



The House Committee on Agriculture next Wednesday will host a Farm Bill hearing titled The Next Farm Bill: Technology & Innovation in Specialty Crops. Set to begin at 10 a.m., the full committee hearing will feature witnesses who are expected to offer recommendations for improving public-private partnerships and innovation for specialty crop producers. The committee’s Subcommittee on General Farm Commodities and Risk Management on July 13 at 10 a.m. will hold a hearing on The Future of Farming: Technological Innovations, Opportunities, and Challenges for Producers. Additionally, committee Chairman Michael Conaway, R-Texas, and Ranking Member Collin Peterson, D-Minn., announced three additional Farm Bill listening sessions, part of a series titled The Next Farm Bill: Conversations in the Field. The sessions, which will be held July 31 in San Angelo, Texas, Aug. 3 in Morgan, Minn., and Aug. 5 in Modesto, Calif., will gather insight from farmers, ranchers and other industry stakeholders from around the country.