For the Week Ending May 22, 2009

May 22, 2009

Washington, May 22, 2009 


A U.S. trade agreement with Panama will provide new market opportunities for a wide range of American agricultural products, NPPC yesterday told a Senate committee, and it will level the playing field for U.S. pork producers and other food producers. NPPC President-Elect Sam Carney, a pork producer from Adair, Iowa, testifying before the Senate Committee on Finance, noted that most products from Panama enter the United States at a zero tariff rate because of the Caribbean Basin Economic Recovery Act and the Generalized System of Preferences, while most U.S. agricultural products going to the Central American country are subject to an average tariff of 43 percent. U.S. pork exports to Panama currently are restricted by a small quota and out-of-quota duties as high as 80 percent. Under the Panama Trade Promotion Agreement, U.S. pork variety meats would receive immediate duty-free treatment, and the trade deal would expand market access for U.S. pork muscle meat through tariff rate quotas (TRQs). The TRQs will be phased out in 15 years, and when the agreement is fully implemented, U.S. pork will have unlimited duty-free access to the Panamanian market. In addition to the favorable market access provisions, the agreement resolves significant sanitary and technical issues. Panama, for example, will recognize the meat inspection system of the United States as equivalent to its meat inspection system. According to Iowa State University economist Dermot Hayes, the Panama trade agreement will add 20 cents to the price producers receive for each hog marketed, with pork exports to Panama expected to be worth about $23 million a year.



Legislation to restrict the use of certain livestock contracts was introduced in the Senate this week. Sens. Byron Dorgan, D-N.D., Mike Enzi, R-Wyo., Charles Grassley, R-Iowa, and Tim Johnson, D-S.D., are sponsoring a bill that would amend the Packers and Stockyards Act of 1921 to end what they call certain anti-competitive forward marketing contracts. The so-called Livestock Marketing Fairness Act comes just a few months after President Obama made a commitment to “pass a packer ban.” The legislation would:

·   Require that forward contracts for livestock (cattle, hogs and lambs) be traded in public markets where buyers and sellers can witness bids as well as make their own offers.

·   Require marketing agreements to have a firm base price derived from an external source.

·   Limit to 30 the number of hogs that can be sold under one contract.

The bill would exempt producer-owned cooperatives, packers with low volumes and packers who own only one processing plant. NPPC, which strongly opposes efforts to restrict pork producers’ marketing options, will monitor the legislation as it moves through the Senate.



The U.S. pork industry strongly supports a mandatory national animal identification system, said David Kempen, a pork producer from Poteet, Texas, at a U.S. Department of Agriculture listening session on the topic held May 21 in Austin, Texas. Presenting comments on behalf of NPPC and the Texas Pork Producers Association, Kempen told USDA officials, “Until animal identification is made mandatory and all premises are registered, it will never have the intended effects of improving the animal health infrastructure, aiding in the control and eradication of highly contagious foreign and domestic animal diseases and, ultimately, protecting the U.S. livestock industry, its producers, processors and hundreds of related businesses and more than a half million mostly rural jobs for Americans.” Kempen addressed specific concerns about USDA’s National Animal Identification System (NAIS), some of which have been raised by critics of such a system:

·   The cost of the NAIS would be minimal and would be far outweighed by the cost of not having the ability to quickly identify, control and eradicate an animal disease.

·   The infrastructure and operating costs of the NAIS should be funded through federal appropriations.

·   With regard to keeping animal ID information private, there would be no data required by such as system that is not already available through a telephone directory, farm records required by USDA’s Farm Services Agency or state and local permits.

·   There is no increased liability from participation in the NAIS.

·   More funds need to be allocated to states for registering livestock premises.

·   The expectation of recording and reporting all animal movements is too rigorous, too expensive and not necessary to achieve the objectives of the NAIS.

The U.S. pork industry in 1988 established a swine ID system, which helped eradicate pseudorabies from the commercial herd. It since has enhanced its system – and made it consistent with the NAIS – by registering swine premises and asking pork packers to require premises registration as a condition of sale. NPPC and the National Pork Board have registered more than 54,000, or 80 percent, of the estimated 67,300 hog farms. Premises registration data includes the physical location of a farm, a contact telephone number and other publicly available information.



The Codex Alimentarius Commission, which is part of the World Health Organization and the U.N. Food and Agriculture Organization and which sets worldwide food-safety standards and guidelines, this summer will consider setting a maximum residue limit (MRL) for ractopamine after recently concluding that the feed additive does not need to be re-evaluated. Ractopamine is used in U.S. pork production under the brand name Paylean to promote leaner meat; it was tested and approved by the U.S. Food and Drug Administration and has been accepted by 25 other countries, including Australia, Brazil, Canada, Indonesia, Mexico, the Philippines and South Korea. China, the European Union and Taiwan do not allow imports of pork from pigs fed ractopamine. The EU and China had asked the Codex Alimentarius Commission to re-evaluate ractopamine, which was a contentious point of discussion at the 18th session of the Codex Committee on Residues of Veterinary Drugs in Foods held last week in Natal, Brazil. Because no new data on the product was presented, the commission decided to keep the ractopamine MRL process at Step 8, the final step before approval; it had been held at Step 8 since last summer. Re-evaluating ractopamine would have moved the process back to Step 6. NPPC has been asking Codex to set an MRL for ractopamine and urging countries that ban imports of pork from pigs fed the product to lift their restrictions.



The European Union has agreed to the continued use of both non-metric and metric labeling on product packaging for U.S. imports, a move that will save U.S. businesses hundreds of millions of dollars. The ruling will allow U.S. firms to use non-metric units on packaging and extends current dual-labeling provisions indefinitely. The rule was published May 7, 2009, in the Official Journal of the European Union and will be fully in force in the 27 member EU states by Jan. 1, 2010. The U.S. Commerce Department established an EU Metric Only Task Force to work with its EU counterparts and U.S. industry representatives to monitor and provide input on the issue. NPPC submitted comments on the EU’s proposed metric labeling requirement, saying it would be a burdensome measure that would add significant costs for separate packaging, labeling, warehousing and inventory systems for U.S. pork exports to the EU. The estimated long-term impact on the US pork industry, said NPPC, would be in the millions of dollars; a significant investment for a single, limited EU market. Moreover, the requirement would not add value to either the product or provide critical information to the consumer. NPPC also argued that an EU metric-only labeling requirement would not be consistent with World Trade Organization rules, because it would have the effect of creating unnecessary obstacles to international trade. Given the current tariff rate quotas for pork entering the EU, U.S. pork exports are already at an artificial price disadvantage and metric-only labeling would add additional and unnecessary costs for U.S. pork exporters, NPPC noted in its comments. As a result of the new EU directive to allow dual labeling, the United States can continue its efforts to go metric according to its own timeline without facing a major trade barrier in the EU.


NPPC last week weighed in on food-safety issues at a meeting held by USDA Secretary Tom Vilsack and Health and Human Services Secretary Kathleen Sebelius. In the opening session of the White House Food Safety Working Group, the two secretaries outlined several challenges in what was called the beginning of a significant process that will review the safety of America’s food supply. Among the challenges, said Vilsack, are animal disease surveillance, response and prevention. Sebelius said that today’s food safety system responds to crises and that it must be changed to one that prevents contamination in the first place. NPPC offered input about on-farm testing for foodborne pathogens and about animal identification. For more information, visit the White House Food Safety Working Group’s new Web site:





The 21st annual World Pork Expo will be held June 3-5 at the Iowa State Fairgrounds in Des Moines. As the largest pork-industry trade show and exhibition in the world, the expo draws more than 30,000 pork producers, exhibitors and visitors from across the country and around the globe. For more information, visit the World Pork Expo Web site at