For the Week Ending October 8, 2021

MASSACHUSETTS TAKES MAJOR STEP TOWARD DELAYING IMPLEMENTATION OF PROP. 12-TYPE INITIATIVE
The Massachusetts House – by an overwhelming margin of 156-1 – voted this week to delay until Jan. 1, 2023, a provision of the Question 3 initiative that will prohibit the sale of pork that doesn’t meet the state’s production standards, a move championed by NPPC, which aggressively has been seeking relief for pork producers and the pork supply chain. The House also transferred jurisdiction for drafting regulations from the state’s Attorney General to the Massachusetts Department of Agriculture. The measure is expected to easily pass the state Senate next week before heading to Massachusetts Governor Charlie Baker for signing. Originally set to take effect Jan. 1, 2022, the voter-approved 2016 ballot initiative – similar to California’s Proposition 12 – bans the sale of pork from hogs born to sows housed in pens that don’t comply with Massachusetts’ new standards. It applies to any uncooked pork sold in the state, whether it’s produced there or outside its borders. Nearly all pork currently produced in the United States fails to meet Massachusetts’ arbitrary standards. Like California’s 2018 ballot initiative, Question 3’s supporters claimed it would improve animal welfare and food safety. But the measure’s requirements will have no effect on either and may negatively affect both, according to numerous studies on animal housing. NPPC and the American Farm Bureau Federation recently petitioned the U.S. Supreme Court to take their case against California’s Prop. 12. The agricultural organizations are challenging the constitutionality of one state imposing regulations that reach outside its borders, arguing that it stifles interstate and international commerce.

VIETNAM WEIGHS REDUCTION OF TARIFFS ON IMPORTED FROZEN PORK
A tariff rate reduction on imported frozen pork is still under review by Vietnamese authorities, but sources indicate the Most Favored Nation (MFN) tariff will be cut from 15 to 10 percent, a major success for NPPC and the U.S. pork industry. This comes on the heels of a visit to Vietnam by Vice President Kamala Harris, where pork market access was at the top of her list of deliverables. Late last year, NPPC Assistant Vice President of International Affairs Maria Zieba testified on the importance to U.S. pork producers of the Vietnamese market and urged the Trump administration not to impose U.S. tariffs on goods from Vietnam over that country’s alleged currency manipulation. NPPC also led recent efforts, including a letter from more than 70 members of Congress, asking U.S. Trade Representative Katherine Tai to press Vietnam to eliminate tariffs on U.S. pork. While the tariff cut will help, because the United States does not have a free trade agreement with Vietnam, the U.S. pork industry remains at a competitive disadvantage to pork-supplying countries that do, including the countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. NPPC has been urging the Biden administration to join the 11-nation CPTPP. The United States was part of that trade pact’s predecessor, the Trans-Pacific Partnership, which NPPC strongly supported, but the Trump administration withdrew from the deal before it was finalized. In a presentation this week to the Global Business Dialogue, NPPC Vice President and Counsel, Global Government Affairs Nick Giordano laid out the case for U.S. participation in the CPTPP. View his presentation here.

NPPC TESTIFIES ON STATE OF U.S. PORK INDUSTRY
NPPC Vice President Scott Hays, owner of Two Mile Pork in Monroe City, MO, yesterday testified before the House Agriculture Committee on the state of the U.S. pork industry, laying out the challenges for and priorities of pork producers. Among the latter, Hays told the panel, are maintaining authorization and funding for the Livestock Mandatory Reporting law, allowing pork packing plants to run faster processing line speeds – a federal court recently disallowed them – and addressing agriculture’s labor shortage. Hays also thanked committee members and Agriculture Secretary Vilsack, who also testified at the hearing, for their efforts to prevent and prepare for an outbreak of African swine fever. USDA last week committed $500 million to help fight ASF. Read NPPC’s written testimony here.

U.S. PORK EXPORTS TO PHILIPPINES SOAR
U.S. pork exports increased more than 157 percent in the first eight months of 2021 after Philippines President Rodrigo Duterte early in the year signed an executive order increasing the minimum access volume (MAV) for pork imports to 254,210 metric tons. Additionally, tariffs on imported pork under the MAV were reduced for 12 months from 30 percent to 5 percent for the first three months and to 10 percent thereafter. Tariffs for imported pork above the MAV were reduced for 12 months from 40 percent to 15 percent for the next three months and to 20 percent thereafter. Securing better access to the Philippines market has been a top, long-term trade priority for NPPC. The Philippines has been battling African swine fever (ASF) since 2019, and NPPC has been pressing both the U.S. and Philippines governments to lower pork import tariffs since ASF outbreaks began in the country.

AGRICULTURE COMMITTEE MEMBERS WEIGH IN ON REGULATING GENE-EDITED ANIMALS
In a letter noting that the existing U.S. Food and Drug Administration process for reviewing animals developed or improved through biotechnology requires significant improvement, 37 members of the House Agriculture Committee this week asked USDA and FDA to consider feedback from stakeholders when establishing regulations for genetically engineered animals. NPPC supports giving USDA regulatory authority over gene editing in food animals, pointing out that the agency’s Animal and Plant Health Inspection Service already has a review process in place for gene editing in plants, which can serve as a model for livestock. Under a USDA-proposed rule, the agency would have “primary” regulatory jurisdiction of gene-edited animals.

USDA ANNOUNCES LOAN GUARANTEE PROGRAM TO EXPAND PACKING CAPACITY
USDA on Monday announced it will guarantee up to $100 million in private loans for expanding meatpacking capacity. By ensuring that lenders can cover riskier loans, the funds are expected to leverage hundreds of millions of dollars more to expand meat and poultry processing capacity and finance other food supply chain infrastructure. The new program is unrelated to USDA’s previously announced $500 million of American Rescue Plan funds for improving infrastructure, increasing capacity and promoting diversification in the meat processing industry, on which NPPC recently submitted comments. USDA is expected to publish rules on the loan guarantee program in the coming weeks.

USTR LAYS OUT PLAN FOR U.S. TRADE WITH CHINA
U.S. Trade Representative Katherine Tai in a speech this week at the Center for Strategic and International Studies – a Washington, DC, think tank – detailed the Biden administration’s plan for conducting trade with China. Among its efforts, USTR will discuss with China its performance under the Phase One Agreement – the trade deal struck by the Trump administration – begin a targeted tariff exclusion process that allows certain Chinese imports into the United States duty-free and raise concerns with Beijing about its harmful state-centered and non-market trade practices. Tai said protecting the U.S. economy and American workers, though, begins at home through investing in research and development and clean energy technology, strengthening the U.S. manufacturing base and incentivizing companies to buy American products. In a related matter, the U.S. Central Intelligence Agency is establishing a China Mission Center to gather information about the Asian country and to counter its espionage efforts, including industrial espionage, against the United States.

DEADLINE TO SIGN UP FOR COVID LIVESTOCK INDEMNITY PROGRAM NEXT WEEK
Livestock producers who suffered COVID-related losses because of reductions in harvest capacity have until next Tuesday to apply for USDA’s Pandemic Livestock Indemnity Program (PLIP). The majority of the program’s more than $300 million in payments is expected to be directed to pork producers and to livestock farmers who had to depopulate their herds between March 1 and Dec. 26, 2020. To be eligible, producers must have had an average adjusted gross income of less than $900,000 for tax years 2016, 2017 and 2018. PLIP covers 80 percent of the loss of eligible livestock and the cost of depopulation and disposal of animals.

AGRICULTURE GROUPS GET MORE TIME TO COMMENT ON EPA PESTICIDE DECISION
The U.S. Environmental Protection Agency granted a 30-day extension on the comment period for its proposal to severely restrict the application of widely used insecticides. NPPC last week filed a request for more time on behalf of more than 45 other livestock and agricultural organizations. Pyrethrins and Piperonyl, included on EPA’s list of potentially affected insecticides, are used by livestock and poultry farmers to control insects and other bugs, maintain biosecurity and eliminate the spread of disease. The comment period now runs through Nov. 3.

USDA TO HOLD WEBINARS ON LIVESTOCK MANDATORY REPORTING
USDA will hold a series of educational webinars on the Livestock Mandatory Reporting (LMR) Program for pork producers. Set for Oct. 12, 19 and 26 from 11 a.m. to 12:30 p.m. Central Time, the webinars will feature USDA Market News staff and a panel of pork industry representatives who will provide an overview of LMR live hog and wholesale pork reporting and how that data can be used to make marketing decisions at the farm and other points in the supply chain.