For the Week Ending June 25, 2021

June 25, 2021

Seventy lawmakers joined Sen. Chuck Grassley (R-Iowa) and Reps. Jim Hagedorn (R-Minn.) and Dusty Johnson (R-S.D.) in letters this week, asking the administration to stop a recent court order from harming U.S. hog farmers. The letters call on Agriculture Secretary Vilsack and Acting Solicitor General Prelogar to appeal a recent federal district court striking down pork harvest facility line speeds allowed under the U.S. Department of Agriculture’s New Swine Inspection System. The court order is set to go into effect on June 29. Earlier this week, NPPC warned the ruling will lead to increased U.S. pork industry market concentration, as described in a paper prepared by two economists. “The great irony here is even before COVID, there was a lot of talk among policymakers about increasing meat industry capacity and facilitating competition, providing an environment that smaller producers can flourish in, and making sure that producers have their fair share of leverage vis-à-vis others in the supply chain. This judge’s order, in one fell swoop, undermines all of these things. It’s a real problem for the industry,” NPPC Vice President and Counsel, Global Government Affairs Nick Giordano told Agri-Talk on Wednesday. Read more about the damage the court ruling will have here

The Food Equity Alliance, a statewide coalition of California retailers and grocery stores, restaurants, business organizations, food processors, and food equity supporters, issued an analysis this week, warning that if Proposition 12 goes into effect as planned on Jan. 1, 2022, it will drive up prices for consumers and throughout the supply chain. According to the analysis, anticipated higher pork prices will reduce overall demand for the protein or cause consumers to spend more to meet their consumption needs.  “The hasty implementation of Proposition 12 greatly impacts the entire food supply chain – from farmers and food processors to retailers, grocers, restaurants and consumers,” said California Retailers Association President Rachel Michelin. “It will create food insecurity and increase food prices on small businesses and families who cannot afford it,” she said. The alliance is urging California Gov. Gavin Newsom (D) to delay implementation of Proposition 12. California’s Proposition 12 applies to any pork sold in California, whether raised there or outside of the state’s borders. California was required to finalize implementation rules by Sept 1, 2019, and only issued its draft proposal last month. In related news, NPPC sent a formal request today to the California Department of Food and Agriculture, requesting a public hearing as part of the agency’s development of implementation regulations on Proposition 12. Comments on those regulations are currently due July 12. NPPC and the American Farm Bureau Federation have filed a lawsuit with the court, asking it to strike down Proposition 12 as unconstitutional under the dormant clause. A ruling in the case is expected by mid-summer. 

Thanks in part to NPPC’s advocacy efforts, the United Kingdom recently increased its tariff-rate quotas (TRQ) for pork that will provide greater market access for U.S. producers. As part of the UK’s recent exit from the European Union, both parties had to agree on how to address TRQs for numerous agricultural products, including pork. NPPC worked closely with the U.S. Trade Representative to ensure the interests of U.S. pork producers were well represented. The U.K. and E.U. ultimately decided the following: a) UK TRQ: 1,349 metric tons (MT) for meat of swine, fresh, chilled or frozen, with or without bone.  b) UK TRQ: 29,545 MT for meat of swine, fresh, chilled or frozen, boneless loins and hams; and c) 4,922 MT U.S. only TRQ: meat of swine, fresh, chilled or frozen, boneless loins and hams.  NPPC appreciates the expanded access for U.S. pork into the U.K., and will continue to advocate for greater market growth when the U.S. and U.K. restart free trade agreement discussions. 

On Thursday, the White House announced it and a group of centrist Senate negotiators had agreed to a $973 billion infrastructure plan. The agreement calls for more than $550 billion in new spending focused on various projects including roads/bridges, waterways, electric vehicle infrastructure, broadband access, and port upgrades. Funding for the plan relies on increased IRS enforcement to close the tax gap, redirection of unused COVID-19 relief funds, and various other sales and fees. Though Democratic leadership in both chambers of Congress were quick to support the plan in principle, more progressive Democrats made clear that they will need a guarantee from the White House and key Congressional leaders of a second, budget reconciliation driven package in order to support the measure. Such a bill would be likely to include substantial measures for investment in environmental protection, housing, and worker benefits funded by tax reform. To read the White House’s summary of the agreement, click here

By a 92-8 vote, the Senate on Thursday approved a bipartisan bill that encourages farmer participation in the carbon credit offset markets. The Growing Climate Solutions Act, by Sens. Mike Braun (R-Ind.), Debbie Stabenow (D-Mich.), Lindsey Graham (R-S.C.) and Sheldon Whitehouse (D-R.I.), would create a certification program at USDA to solve technical entry barriers that prevent farmer and forest landowner participation in carbon credit markets. USDA’s certification program would provide transparency, legitimacy and informal endorsement of third-party verifiers and technical service providers that help private landowners generate carbon credits through a variety of agriculture and forestry-related practices. The bill would also create an advisory council comprised of agriculture experts, scientists, producers and others, to ensure the certification program remains relevant and credible. NPPC is among numerous groups in support of the bill —just as it backed the legislation last year—and believes it will ensure U.S. pork producers and others in agriculture receive credit for current and future contributions to reduce greenhouse gas emissions. The legislation now heads to the U.S. House of Representatives for approval.  

On Tuesday, the Senate Finance Subcommittee on International Trade, Customs, and Global Competitiveness held its first hearing of the 117th Congress, focused on the benefits of enhanced U.S. trade policy in the Asia-Pacific region, specifically focused on the United States re-entering the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). The CPTPP includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, some of the world’s largest pork-consuming nations. Earlier this month, the U.K. was given the green light to begin the process of joining CPTPP. Re-joining the CPTPP, created after the Trump administration withdrew from the proposed TPP, is among NPPC’s top trade priorities and would provide significant, new market opportunities for U.S. exporters. The focus of this week’s hearing was welcome news, as NPPC continues to advocate for the Biden Administration to re-enter into the pact.    

On Monday, NPPC submitted comments to USDA, highlighting the essential role that U.S. pork producers play in keeping the U.S. food supply chain running. In a February executive order, President Biden asked each federal agency to work with stakeholders to ensure the country has resilient, diverse and secure supply chains. “U.S. pork producers annually provide more than 28 billion pounds of safe, wholesome and nutritious meat protein to consumers worldwide, including to the federal government for food assistance programs and institutional food service. To deal with any potential national emergency, it is extremely important that the federal government reviews and fortifies America’s supply chains, especially the food supply,” NPPC wrote. Unfortunately, a recent federal district court ruling striking down faster harvest facility inspection speeds allowed by USDA’s New Swine Inspection System (NSIS) could have a significant effect on U.S. pork supply. “The prohibition on faster speeds will reduce packing capacity – and stymie capacity growth at all pork packing plants – which in turn will depress hog prices, cut pork supplies and raise consumer prices,” NPPC added. A link to NPPC’s comments is here

In comments to the U.S. Trade Representative on the eligibility of sub-Saharan African nations to receive African Growth and Opportunity Act (AGOA) benefits, NPPC wrote that it supports AGOA’s trade preferences that allow eligible countries to enter the U.S. market duty-free, as long as those nations provide reasonable and equitable market access to U.S. exports. “South Africa represents a growing market for U.S. pork producers, but unfortunately, we are hampered by unwarranted, non-scientific restrictions that are preventing the United States from realizing reasonable and equitable access to the country’s pork market,” NPPC wrote. Therefore, NPPC is urging the removal of South Africa’s eligibility for AGOA benefits. “NPPC is an active supporter of expanded trade. However, NPPC will no longer tolerate South Africa reaping the rewards of preferential U.S. tariff programs while providing significantly limited market access for U.S. pork,” the comments added. Read the full comments here.