For the Week Ending July 9, 2021

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Today, President Biden signed the “Promoting Competition in the American Economy” executive order addressing competition in various industries. Among provisions, the order directs USDA to address many core competition and antitrust mechanics in an effort to increase producer power and enable new actors entry into the market. Specifically, the order asks USDA to engage in rulemaking to end the need to prove industry-wide harm in Packers and Stockyards Act (PSA) suits, update the definitions and criteria for undue preferences violations of the PSA, provide model contracts and other tools to lower transaction costs for farmers, and improve transparency regarding products from sustainable agricultural practices. NPPC plans to review the executive order, as well as subsequent rulemakings, and evaluate the potential economic and legal impacts on pork producers. NPPC continues to educate policymakers about the role competition has played in making the United States a global leader in pork production. In their paper, found here, economists Dr. Steve Meyer of Partners for Production Agriculture and Dr. Barry Goodwin of North Carolina State University provide an overview of the current competitive dynamics of the U.S. pork industry. In a Friday afternoon press conference with U.S. Rep. Cindy Axne (D-Iowa) to discuss the executive order, USDA Secretary Tom Vilsack announced the availability of $500 million to increase capacity at plants that are not federally inspected. NPPC supports expanding the number of pork harvest facilities as long as they operate under federal inspection standards. Once the USDA announcement is formally made in the Federal Register, organizations will have 45 days to comment on how the money will be administered. Non-USDA measures include directing the Department of Justice and Federal Trade Commission to review methods to protect workers from wage collusion by employers. The executive order also encourages the Federal Maritime Commission (FMC) to ensure vigorous enforcement against maritime shippers charging U.S. exporters exorbitant fees, which NPPC strongly supports. Last month, NPPC President Jen Sorenson testified before Congress on shipping delays at U.S. international ports, disrupting U.S. exports, including pork. Expedited FMC enforcement preventing unreasonable U.S. financial penalties was among NPPC’s recommendations. 

Senate Democratic leaders are working quickly to consider a bipartisan deal to improve traditional infrastructure, aiming for a vote as soon as the week of July 19. The bill, containing nearly $1 trillion in spending over five years, focuses on physical infrastructure funded by increased IRS enforcement, redirection of unused COVID-19 funding and various other sales and fees. Agreed to by a group of centrist senators from both parties, the plan is not without critics. Some Democrats remain concerned that the plan does too little on environmental and equity issues, while some Republicans oppose funding. Democrats concerned with the bill are counting on a future use of budget reconciliation to focus on so-called “human infrastructure” funded by tax reform. 

On Friday, representatives from Vietnam and the U.S. Trade Representative’s office met virtually to discuss a number of trade issues, as the United States considers whether to impose tariffs on Vietnamese products over currency concerns. In early January, the Trump administration decided not to impose tariffs on Vietnamese imports, despite self-initiating a Section 301 investigation on currency manipulation. In late December 2020, NPPC Assistant Vice President of International Affairs Maria Zieba testified that tariffs on Vietnamese imports would have left U.S. hog farmers vulnerable to retaliation on U.S. pork imports. Vietnam is a major pork-consuming nation dealing with African swine fever outbreaks in its domestic herd, with significant demand for imported pork. The U.S. does not have a free trade agreement with Vietnam and is at a competitive disadvantage to Canada, the EU, Mexico and other supplier nations. A number of non-tariff barriers act as an additional barrier on U.S. pork exports to Vietnam. Greater market access for U.S. pork in Vietnam is one of NPPC’s top priorities. 

Congress is on recess, which means lawmakers are back home in their districts, eager to hear from constituents about important local issues. In a “Hogs on the Hill” blog this week, NPPC highlighted the opportunity for pork producers to discuss two priority issues with lawmakers: appeal of a recent damaging court ruling on harvest facility line speeds and the urgent need for agriculture labor reform. NPPC’s top priority the past few months has been urging the administration to appeal a recent court ruling on harvest facility line speeds. While the ruling is in effect, the administration has until the end of August to appeal. NPPC is also seeking waivers for the impacted plants until a longer-term solution, acceptable to all industry stakeholders, is realized. Additionally, NPPC is urging Congress to address labor reform that both opens the H-2A visa program to year-round labor, without a cap, and provides legal status for agricultural workers already in the country. “The most powerful voice in Congress is yours. If you can, take the opportunity to talk to your local lawmakers about these top issues….” the blog noted. Read more here.   

Public comments are due Monday, July 12 to the California Department of Food and Agriculture on its proposed rules for implementing Proposition 12. Set to go into effect on Jan. 1, 2022, Proposition 12 will impose arbitrary animal housing standards that reach far outside the state’s borders to farms across the country, while driving up costs for both pork producers and consumers. NPPC plans to file comments by Monday’s deadline, and urges stakeholders to request a delay in the implementation deadline. To file comments, email NPPC and the American Farm Bureau Federation have filed a lawsuit in the U.S. Court of Appeals for the Ninth Circuit, asking the court to strike down Proposition 12 as unconstitutional under the dormant commerce clause. Oral arguments were held in mid-April and a court ruling is anticipated soon. 

NPPC President Jen Sorenson and Vice President and Counsel, Global Government Affairs Nick Giordano will be addressing next week the National Pork Industry Conference (NPIC), hosted by the 21st Century Strategic Forums. On Monday, July 12, Sorenson will discuss the challenges and priorities facing U.S. pork producers, while on Wednesday, July 14, Giordano will discuss a number of NPPC’s top issues, including Proposition 12, agriculture labor reform and expanding market access for U.S. pork producers.