For the Week Ending March 17, 2017

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NPPC this week commended Robert Lighthizer, President Trump’s nominee for ambassador of the Office of the U.S. Trade Representative, for committing to place high importance on agricultural trade. Lighthizer Wednesday appeared before the Senate Finance Committee, which has jurisdiction over trade, telling the panel, “I assure you, we will prioritize agriculture.” That’s welcome news for U.S. pork producers, whose No. 1 priority is access to international markets. At NPPC’s recent annual meeting, producers expressed concern about disruptions in pork exports, particularly to Mexico in light of the Trump administration’s desire to renegotiate the North American Free Trade Agreement. Several lawmakers on the committee expressed concern about reopening NAFTA, but Lighthizer, who was deputy USTR in the Reagan administration, seemed to allay those fears. “We have to be careful not to lose what we gained,” he told the committee. He also addressed another worry of the U.S. pork industry: lost market share in the Asia-Pacific region, following the administration’s withdraw from the Trans-Pacific Partnership. “I think opening up more markets for agricultural sales is a priority for us,” said Lighthizer, who told the committee that Japan would be a top target for increasing market access.



Former Georgia Gov. George “Sonny” Perdue, President Trump’s pick to be the next secretary of agriculture, finally will get a hearing on his nomination. The Senate Committee on Agriculture, Nutrition and Forestry next Thursday will hold a hearing to consider him. NPPC supports Perdue to head the U.S. Department of Agriculture, saying he will be “very good for America’s farmers and ranchers.” Trump tapped Perdue, who is a veterinarian and businessman, Jan. 19. He served on Trump’s agricultural advisory team during the 2016 presidential campaign. Perdue was governor of Georgia from 2003 to 2011, and prior to that, he served in the Georgia Senate for 10 years. In his two terms as governor, Perdue presided over the state’s top-performing agricultural economy. He grew up on a row crop farm in central Georgia and owned agricultural businesses.



President Trump this week announced he will nominate J. Christopher Giancarlo to be chairman of the Commodity Futures Trading Commission. The CFTC oversees and regulates the futures markets, which farmers use to manage risk. It ensures the futures, options and swaps markets work properly and helps deter and prevent fraud and manipulation. Giancarlo, who was sworn in as a commissioner on the five-member CFTC in June 2014, was named acting chairman on Trump’s first day in office. He is expected to have a nomination hearing soon before the Senate Committee on Agriculture, Nutrition, and Forestry.



Representatives of 11 of the 12 countries that were part of the Trans-Pacific Partnership, along with China, Colombia and South Korea, met this week in Chile to discuss the future of trade in the Asia-Pacific region. (No representative from the United States, which earlier this year withdrew from the trade deal, was in attendance.) With so much riding on the TPP and the U.S. withdraw effectively ending the agreement, former TPP countries are looking to fill the void. That may be accomplished through the Regional Comprehensive Economic Partnership (RCEP), which consists of 16 Asia-Pacific countries, including China, Japan, the Philippines and Vietnam, all large markets for U.S. pork. The United States is not part of the RCEP talks. China and Japan are locked in a tug of war over control of that agreement. China is looking for a rapid conclusion to negotiations – perhaps late 2017 – which likely would mean the deal only would cover tariff reductions. Japan, on the other hand, is looking to incorporate much of what it agreed to in the TPP. If either version of the agreement is finalized, it would have a negative effect on U.S. pork exports to the region, which is why NPPC has urged President Trump to quickly begin bilateral trade talks with Japan, the Philippines and Vietnam.



First Minister of Scotland Nicola Sturgeon this week announced she would seek a second referendum on Scottish independence from the United Kingdom. This comes after the U.K. voted last year to leave the European Union, an event referred to as “Brexit.” With Brexit’s anticipated completion in spring 2019, Sturgeon wants a vote on the referendum to be held between fall 2018 and spring 2019 and reiterated her commitment to providing Scotland a choice between a “hard Brexit” and independence. She says it is important that Scotland be able to exercise the right to choose its future. U.K. Prime Minister Theresa May, however, was quick to reject the call for a Scottish independence referendum. In an interview with ITV News in London, she said, “My message is very clear: now is not the time. It would be unfair to the people of Scotland to ask them to vote on independence before Brexit is settled.”



After much debate and deliberation, the United Kingdom’s House of Lords early this week passed a final bill, allowing Prime Minister Theresa May to begin the process of formally withdrawing from the European Union – the so-called Brexit. To begin the process, May must trigger Article 50 of the EU agreement; she is expected to do so later this month. Then, over a two-year period, negotiations will be completed between the U.K. and the remaining 27 member nations of the EU. May wants to keep free trade open between the U.K. and EU, which is Great Britain’s second largest trading partner. Without a free trade agreement, there likely would be tariffs on goods flowing into the country. The U.K. also is looking to form free trade agreements with other countries, including the United States. NPPC strongly supports a free trade deal with the U.K. and urged President Trump to begin negotiations as soon as possible.



The U.S. Department of Labor’s Bureau of Labor Statistics Wednesday released for February its Consumer Price Index (CPI) data, which provides insight into the average change over time in the prices paid by urban consumers for various goods and services, including pork products. The overall CPI increased just 0.1 percent, the smallest one-month rise since July 2016. The 2.2 percent year-over-year increase in the core CPI, which strips out the more volatile food and energy categories, was the highest in five years. The food index rose 0.2 percent in February, following an increase of 0.1 percent in January. Looking at specific pork products, bacon, boneless chops and ham prices increased in February from the previous month, while bone-in chops fell 7.6 percent from January. All four products were below year ago levels. The same day, the U.S. Department of Agriculture’s Economic Research Service released for February its Meat Price Spreads report, which provides insight into relative prices paid by consumers for red meat and poultry. The beef, pork and broiler complexes all increased from January but were lower than year ago levels. Turkey prices, on the other hand, were lower from January and higher by more than 5 percent year over year. As a percent of beef prices, pork retail prices actually increased last month, indicating it is relatively less competitive in the retail meat case. The broiler composite remained steady as a percent of beef prices, while turkey’s share decreased from January.




NPPC Vice President David Herring, a pork producer from Lillington, N.C., next Tuesday will testify on the next Farm Bill on behalf of NPPC before the House Committee on Agriculture Subcommittee on Livestock and Foreign Agriculture. Also next Tuesday, the committee’s Subcommittee on Nutrition will examine nutrition distribution programs, and the full committee next Wednesday will hear from the dairy industry about policies that affect it.