For the Week Ending May 27, 2022

USDA PROPOSED RULES ON POULTRY INDUSTRY TO BE PUBLISHED SOON
USDA soon will publish a proposed rule and an advanced notice of proposed rulemaking (ANPRM) related to poultry production now that the White House Office of Management and Budget has completed its review of the regulations. NPPC is watching the rules, which could provide a preview of livestock industry regulations expected to be issued this summer. The proposed Packers and Stockyards Act (PSA) rule will address unfair practices in the poultry industry’s tournament system, in which poultry processors pay growers according to their performance against other growers. The rule would require processors to be more transparent about feed and other inputs they provide growers, on growers’ expected financial returns, and about processors’ level of control over grower operations. The ANPRM will consider banning the tournament system. While neither regulation would affect the pork industry, both indicate a new PSA rule on the buying and selling of livestock likely will address differences in prices paid by meatpackers to producers.

U.S. AGRICULTURE WANTS U.S. TARIFFS TO BE SUSPENDED, REDUCED OR DROPPED
NPPC joined 40 other agricultural groups this week in urging the Biden administration to suspend, reduce, or eliminate U.S. Section 232 and Section 301 tariffs on foreign products coming to the United States in return for countries’ commitments to suspend retaliatory tariffs on U.S. goods. In a letter to U.S. Trade Representative Katherine Tai sent Thursday from Farmers for Free Trade, an agriculture trade advocacy group that includes NPPC, the groups pointed out that “[b]y rolling back 301 and 232 tariffs and eliminating retaliatory tariffs, you can increase market access for U.S. food and agriculture exports and reduce costs for critical machinery, fertilizer, agricultural chemicals and other food and agriculture inputs. These efforts would have an immediate effect and would ease the uncertainty felt by all rural America.” The Office of the U.S. Trade Representative in early May began a review of Section 301 tariffs on more than $370 billion of Chinese goods. Section 301 of the Trade Act of 1974 allows USTR to enforce U.S. rights under trade agreements and address unfair foreign barriers to U.S. exports. During the Trump administration, Section 232 tariffs were put on steel and aluminum imports. That section of the Trade Expansion Act of 1962 ostensibly is used to protect U.S. national security interests. Because of Section 232 tariffs remain on Chinese steel, U.S. pork continues to face a 25% retaliatory duty on product going to China.

USDA PUBLISHES REPORT ON COMPETITION IN AGRICULTURE
Complying with President Biden’s 2021 executive order on competition in the American economy, USDA this week published a report on its efforts to promote competitive markets in the meat and poultry industries. Largely focused on meatpacking and the beef industry, the report details efforts to increase packing capacity and the need for regulations to spur competition. It endorses the “Meat and Poultry Special Investigator Act,” which would create an office within USDA to bring civil actions for violations of the Packers & Stockyards Act. The PSA ensures fair competition and fair trade practices in the livestock and poultry industries. The report also indicates that the first two of three PSA rules related to the buying and selling of livestock will be issued toward the end of summer. NPPC opposes the special investigator legislation, which is pending in the Senate and the House, and has concerns about any regulations that would restrict livestock transactions between private parties.

NPPC CONTINUES PUSH FOR MARKET ACCESS IN ASIA-PACIFIC COUNTRIES
While President Biden last weekend launched the Indo-Pacific Economic Framework (IPEF), a U.S.-led trade initiative that includes Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam, NPPC is continuing to push for better market access through the elimination of tariffs and non-tariff barriers in a number of the IPEF countries. The IPEF talks are expected to focus on supply chain issues, clean energy and climate change, infrastructure, and taxation and anti-corruption; they will not address tariff barriers. Most recently, the United States negotiated a temporary reduction in tariffs on U.S. pork going to the Philippines and Vietnam. NPPC is advocating for permanent tariff cuts, which could be achieved under the Comprehensive and Progressive Trans-Pacific Partnership if the United States joins that 11-nation trade bloc or through market access agreements as part of the IPEF. Farmers for Free Trade, an agriculture trade advocacy group that includes NPPC, also has been urging the White House to pursue a more ambitious IPEF deal, one that includes agricultural market access. The organization will hold a virtual discussion for media with former U.S. Sens. Max Baucus (D-MT) and Pat Roberts (R-KS) to discuss trade issues. Baucus was chairman of the Senate Finance Committee; Roberts was chairman of the Senate Agriculture, Nutrition, and Forestry Committee.

NEW MONEY AVAILABLE FOR MEAT PROCESSING CAPACITY, TRAINING
USDA this week made available two pots of money for meat and poultry operations. The Meat and Poultry Intermediary Lending Program (MPILP) provides grant funding to certain lenders to finance startup, expansion, or operation of meat and poultry harvesting and processing facilities. The program has $200 million available for grants of up to $15 million total — $10 million is the highest single loan amount — for independent meat and poultry operations. Funding of $25 million is available for workforce training. Intermediary lenders may include private entities, nonprofit corporations, public agencies, federally recognized tribes, and cooperatives. (For more information on the MPILP, click here.)

WHAT’S AHEAD

WORLD PORK EXPO BEGINS JUNE 8
NPPC’s annual World Pork Expo will be held June 8-10 at the Iowa State Fairgrounds in Des Moines, IA. For more information about and to register for the world’s largest pork industry trade show and exhibition, click here.