For the Week Ending June 18, 2021

June 18, 2021

NPPC PRESIDENT URGES CONGRESS TO ADDRESS PORT BOTTLENECKS
Expansion of export markets is crucial to the continued success of the U.S. pork industry and U.S. pork annually ships more than $7 billion to foreign destinations. However, recent shipping delays at U.S. international ports are disrupting exports and if not soon addressed, could lead to serious bottlenecks for pork and other agriculture exports, NPPC President Jen Sorenson testified before a House Transportation Subcommittee on Tuesday. All U.S. ports are experiencing shipping delays, but the West Coast is the most heavily impacted since it sends product to Asian-Pacific destinations. The Asia-Pacific region is the top region for U.S. pork exports. “Currently there are over 1,000 containers of pork sitting at West Coast ports waiting to be exported,” Sorenson testified. “Shipping delays to the Asia-Pacific region are increasing costs and positioning the United States as an unreliable trading partner. If left unaddressed, this may also negatively impact future trade agreements with Southeast Asian trading partners as we seek better market access for U.S. pork,” Sorenson said. Among recommendations to alleviate the port bottlenecks, she urged for expanded operating hours for U.S. ports, and expedited Federal Maritime Commission enforcement preventing unreasonable financial penalties for exporters. More information is available here

NPPC URGES MASSACHUSETTS TO DELAY RESTRICTIVE PORK PRODUCTION INTIATIVE
On Thursday, NPPC filed comments on a Massachusetts state bill (S. 2470) that would make substantive changes to Question 3, a 2016 ballot initiative which prohibits the sale of pork produced using certain production methods. In many ways, Question 3 is substantially similar to Proposition 12, a California ballot initiative which passed in 2018. The Massachusetts initiative is set to begin on Jan. 1, 2022, but first requires the commonwealth’s attorney general to draft implementation rules—which have not been started. Among changes, S. 2470 would shift primary responsibility for promulgating regulatory requirements to the Massachusetts Department of Agricultural Resources, with the Massachusetts Attorney General having an advisory role. “NPPC strongly supports this provision, which has been put forth by the attorney general,” it wrote. Meantime, NPPC reiterated the need for Question 3’s implementation to be delayed by two years, to Jan. 1, 2024. “Meeting the requirements of Question 3 is difficult enough to do in normal conditions, requiring significant investments of labor and capital as farmers must convert to a compliant system in order to meet Question 3’s requirements.  The time and cost of this challenge has been exacerbated over the last two years as the industry struggles to overcome the challenges – both to our workers and to the marketplaces for pigs and pork – caused by COVID-19,” NPPC wrote. A copy of NPPC’s comments is here.  

NEW TEXAS A&M STUDY DETAILS FARM IMPACTS OF DEMOCRATIC TAX PROPOSALS
This week, Texas A&M University released a new study analyzing the potential impacts of two Democratic-led tax proposals introduced in the Senate. The first, the STEP Act, is led by Sen. Chris Van Hollen (D-Md.) and would repeal the “step up” from basis calculations while also instituting a capital gains tax at death. The second, “For the 99.5 Percent Act” from Sen. Bernie Sanders (I-Vt.), would significantly reduce the estate tax exemption. The study, produced at the requests of House and Senate Agriculture Committee Ranking Members Sen. John Boozman (R-Ark.) and Rep. GT Thompson (R-Pa.), found that the step-up/capital gains proposal would cost the average farm over $726,000, while the estate tax proposal would cost the average farm in excess of $2.1 million – each of the proposals likely to impact over 97 percent of operations. Researchers with Texas A&M noted that the overwhelming majority of farms subject to these new tax liabilities would need to debt-fund their repayments. To read the study, click here. NPPC opposes elimination of the “stepped up basis,” as it would significantly reduce the appeal of farming as a means of passing livelihood generation to generation. 

CDC TO TEMPORARILY BAN IMPORTED RESCUE DOGS FROM HIGH-RISK RABIES COUNTRIES
Effective July 14, the Centers for Disease Control and Prevention (CDC) will temporarily suspend the importation of dogs from more than 100 countries that are classified as high risk for dog rabies and countries that are not at high risk if the dogs have been in high-risk countries during the previous six months, the CDC announced this week. “This temporary action is necessary to ensure the health and safety of dogs imported into the United States and to protect the public’s health against the reintroduction of canine rabies virus variant (dog rabies) into the United States,” CDC explained. Earlier this year, NPPC sounded the alarm on the potential for imported rescue dogs from foreign animal disease (FAD)-positive countries to serve as disease carriers from their bedding, crates or coats. Preventing African swine fever and other FADs from entering the country is one of NPPC’s top priorities, and NPPC will continue to advocate for USDA to develop rules to address the safe importation of rescue dogs from FAD-positive countries.  

USDA CONDUCTING OUTREACH WITH SWINE-RELATED SURVEYS
Starting this month, USDA’s National Agricultural Statistics Service is reaching out to a sampling of pork producers for a handful of swine-related surveys. The data from the surveys, including quarterly hog and pig inventory, swine health and feral swine surveys, will be valuable to individual operations and the overall industry, the agency noted. For more information about the surveys, contact Jim Barrett at 202-577-7604, or jim.barrett@usda.gov. 

SENATE APPROVES RADHIKA FOX AS HEAD OF EPA’S WATER OFFICE
The Senate on Wednesday voted 55-43 to approve the nomination of Radhika Fox as head of EPA’s Office of Water. Fox currently serves in this capacity on an acting basis. Prior to joining EPA, she served as CEO of the U.S. Water Alliance. Among near-term priorities, Fox will be tasked with revising the definition of Waters of the United States (WOTUS), which EPA announced last week. EPA said it plans to initiate a new rulemaking process, and anticipates developing a new rule that defines WOTUS “and is informed by a robust engagement process.” NPPC looks forward to constructively engaging with the administration and we are hopeful the voice of agriculture, the respect for private property rights, and the practical needs of farmers to produce food is recognized and appreciated.  

FDA ANNOUNCES FINAL GUIDANCE ON OTC ANTIMICROBIAL ANIMAL ANTIBIOTICS 
Last week the Food and Drug Administration (FDA) announced final guidance regarding recommendations to sponsors of medically important antimicrobial antibiotics approved for over-the-counter use in animals. The guidance contains information for sponsors of new animal drugs to facilitate voluntary changes to the prescription marketing status. The guidance– from over-the-counter use to under veterinary oversight– will be phased in over the next two years. Additionally, FDA plans to work with stakeholders to solicit feedback. In 2017, all feed and water-delivered antibiotics for animals transitioned either to under the Veterinary Feed Directive or prescription status, and this recent guidance is the next step, covering the remaining medically important injectable or oral antibiotics. In previous comments on this issue, NPPC supported the proposal, but urged FDA to address potential challenges for pork producers who lived in remote areas with limited access to veterinarians. To learn more about the issue, visit here

USDA ANNOUNCES ADDITIONAL AID FOR CFAP ASSISTANCE
USDA announced on Tuesday additional aid to agriculture producers and businesses as part of the agency’s Coronavirus Food Assistance Program (CFAP). While details were scarce, the agency plans to provide assistance for livestock and poultry producers left out of previous CFAP rounds, including livestock and poultry producers forced to euthanize animals during the pandemic (from March 1-Dec. 26, 2020). In March, USDA announced $6 billion in available funds would be used to support additional CFAP efforts. The agency plans to implement this week’s funding within 60 days.  

U.K., AUSTRALIA ANNOUNCE FTA
This week, the U.K. and Australia announced a free trade agreement (FTA)—the first major trade deal negotiated since the U.K. left the European Union. The main elements were agreed Monday by U.K. Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison. As the U.K. noted, the FTA is also a gateway into the fast-growing Indo-pacific region and will boost the country’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Under the agreement, both countries agreed to independent Sanitary and Phytosanitary (SPS) checks to facilitate trade while ensuring protection of human, animal and plant life and health. Imports will still have to meet the same respective UK and Australian food safety and biosecurity standards. Read more about the FTA specifics here

U.S., E.U., END AVIATION TRADE DISPUTE
On Tuesday, the United States and the European Union reached a deal to end their 17-year fight over aircraft subsidies and suspend punitive tariffs for five years. The announcement was made as President Joe Biden met with EU leaders in Brussels. The volatile trade disagreement between the U.S. and the E.U. heated up in 2019, when the U.S. imposed retaliatory duties that affected $7.5 billion of EU exports. In response, in November 2020, the EU imposed 25 percent tariffs on U.S. agricultural goods, although it did not include pork. According to a joint agreement, “[t]he two sides intend to promote their relations in the large civil aircraft sector by moving to a more collaborative and consultative relationship. They seek to promote a level playing field, address shared challenges, overcome longstanding differences, and avoid future litigation.” More information is available here. On Wednesday, the U.S. struck a similar agreement with the U.K.