For the Week Ending May 5, 2017

PORK INDUSTRY MOURNS LOSS OF THREE IN CZECH REPUBLIC

The U.S. pork industry is mourning the tragic loss of three people in a motor vehicle accident this week in Prague, Czech Republic. Killed in the accident were Dr. Bob Morrison, a professor in the Swine Group with the University of Minnesota College of Veterinary Medicine; Pam Wetzell, wife of Dr. Tom Wetzell, a professional services veterinarian with Boehringer Ingelheim Vetmedica, who was treated at a hospital and released; and Debbie Spronk, wife of swine veterinarian Dr. Gordon Spronk, who also was treated and released. Dr. Spronk, who works for the Pipestone System pork operation in Minnesota, is the brother of NPPC past president Randy Spronk. Jeanie Morrison, wife of Dr. Morrison, remains in a hospital in Prague. Drs. Morrison, Spronk and Wetzell were attending a swine health management conference in Prague. NPPC requests that the families be kept in the thoughts and prayers of all involved in the pork industry.

CONGRESS PASSES BUDGET FOR FISCAL 2017

After last week’s passage of a continuing resolution extending the government’s funding for one week, Congress this week approved a $1.1 trillion budget for the remainder of fiscal 2017, which began Oct. 1, 2016, and runs through September. Farm and food programs under the budget will receive $141.2 billion in funding, $12.8 billion more than they received last year but $16.3 billion below the requested amount. Programs essential to pork producers, such as the U.S. Department of Agriculture’s Food Safety and Inspection Service, which is charged with the inspection of packing plants, and USDA’s Animal and Plant Health Inspection Service, which protects agricultural health, will receive funding above fiscal 2016 levels. Other programs that aid rural development will receive an extra $166 million compared with the previous fiscal year. Also included in the 1,665-page bill is funding for the Federal Crop Insurance Cooperation, which is set to receive “such sums as may be necessary,” and an allocation of $8 billion for farm ownership and operating loans.

NPPC URGES WHITE HOUSE NOT TO WITHDRAW FROM ‘KORUS’

Various news organizations this week reported that President Donald Trump was considering withdrawing from the Korea-U.S. (KORUS) Free Trade Agreement (FTA). NPPC, which strongly supported the trade deal, is urging the administration to renegotiate rather than withdraw from the agreement. In 2011, Congress and then-President Obama signed KORUS into law, providing U.S. pork producers duty-free access to South Korea. The Asian market is important for the U.S. pork industry not only because of the volume of pork it imports – more than $365 million in 2016 – but because of the cuts of pork it buys. A large portion of the U.S. pork destined for South Korea is offal and various off-cuts, products that have little demand in the United States. Without KORUS, U.S. pork producers would be paying steep duties – ranging from 22.5 to 54 percent – to sell to South Korea. Additionally, NPPC points out, should the United States withdraw from KORUS, it would lose market share to Chile and the European Union, which finalized trade pacts with South Korea in 2004 and 2015, respectively.

JAPAN HOPEFUL U.S. WILL REJOIN TPP; NPPC URGES FTA WITH JAPAN

Some Japanese lawmakers, in Washington, D.C., this week, said they are hopeful the United States will rejoin the Trans-Pacific Partnership, the 12-nation Asia-Pacific regional trade deal that was concluded in October 2015. On his first full day in office, President Trump signed an executive order withdrawing the country from the TPP. The remaining 11 TPP countries are moving ahead with implementing the agreement. While it is unlikely the White House will reverse course on the TPP, it has indicated it would like to negotiate a bilateral free trade agreement (FTA) with Japan, a move strongly supported by NPPC. Japan is the No. 1 export market for the U.S. pork industry, which last year shipped almost $1.6 billion of pork to the Asian nation. There is tremendous potential for increased U.S. pork exports to Japan if that nation’s protections are eliminated through an FTA, according to NPPC. But if the United States does not negotiate a bilateral FTA with Japan, warns NPPC, exports of pork from the United States will decline as the EU and other nations implement trade deals with Japan that give them a competitive advantage. In addition to Japan, NPPC is urging the administration to negotiate with other countries in the Asia-Pacific region, including Vietnam and The Philippines.

FRENCH, ITALIAN ELECITONS COULD AFFECT FUTURE OF EU

Upcoming presidential elections in France and Italy could help determine the fate of the European Union. The French will go to the voting booths May 7, and while opinion polls show centrist Emmanuel Macron as the front runner, they don’t rule out last-minute gains by far-right candidate Marine Le Pen. Should Le Pen win the election, she has indicated she would renegotiate France’s EU membership, but her National Front Party previously has called for exiting the economic bloc. (Last June, the United Kingdom voted to get out of the EU.) The Italian election is expected to be held in about a year, although a snap election could be called at any time. The country’s economic woes – public debt is 133 percent of GDP and productivity is stagnant – have boosted the populist Five Star Movement, which wants to hold a referendum on Italy’s membership in the euro system. The party currently is tied in the polls with the center-left Democratic Party. Next spring’s general election may not produce a clear winner, but the Five Star Movement could garner enough votes in the Parliament to form an alliance with the anti-euro Northern League. Given the uncertain future of the EU and its recalcitrance over the past four years to negotiate with the United States on agricultural issues in the Transatlantic Trade and Investment Partnership, NPPC is urging the Trump administration to focus its trade efforts on other regions of the world, particularly the Asia-Pacific. NPPC is supportive, however, of the administration negotiating a trade deal with the U.K. once it exits the EU.

BRANSTAD NOMINATION TO BE AMBASSADOR TO CHINA ADVANCES

Iowa Gov. Terry Branstad drew praise from both sides of the political aisle, following his recent Senate Finance Committee confirmation hearing to be U.S. ambassador to China. President Trump nominated Branstad based on his experience on trade and agricultural issues and his long-term relationship with Chinese President Xi Jinping. Last November, Branstad made his seventh visit to China, meeting with the country’s agriculture minister as well as officials from Iowa’s sister province, Hebei. During his Tuesday confirmation hearing, Branstad noted that almost one out of every two rows of Iowa soybeans is sent to China, and almost $34 million of U.S. pork was shipped there in 2016.

SECRETARY PERDUE VISITS HEAVEN, ER, IOWA

U.S. Agriculture Secretary Sonny Perdue Friday was in Iowa visiting agricultural facilities and hosting a town hall meeting with farmers at the Courser Cattle Co. farm in Nevada. During the meeting, Perdue reiterated his commitment to rural America, U.S. agriculture and farmers and ranchers, stating, “They are part of our national security.” After talking about the Trump administration’s commitment to agriculture and its efforts on trade, including renegotiating the North American Free Trade Agreement, the secretary took questions from those in attendance. Dave Struthers, an Iowa pork producer and former president of the Iowa Pork Producers Association, told Perdue that the livestock industry needs a Foot-and-Mouth Disease vaccine bank to deal with an outbreak. The secretary acknowledged the devastation FMD could have on the U.S. economy. He also pledged to make sure federal regulations aren’t too burdensome. “We want to let farmers farm,” he said.

WHAT’S AHEAD

SENATE SET TO VOTE ON FDA NOMINEE, MAY CONSIDER USTR CANDIDATE

A vote in the Senate to stop debate on and to proceed on consideration of the nomination of Dr. Scott Gottlieb to serve as commissioner of the U.S. Food & Drug Administration is set for Monday. The upper chamber next week also may hold a confirmation vote on Robert Lighthizer’s nomination to be ambassador to the Office of the U.S. Trade Representative.

WORLD PORK EXPO JUNE 7-9

NPPC’s annual World Pork Expo will be held June 7-9 at the Iowa State fairgrounds in Des Moines. For more information about, and media registration for, the world’s largest pork industry trade show and exhibition, click here.