For the Week Ending October 30, 2009

October 30, 2009

Washington, D.C., October 30, 2009 


China yesterday announced that it will lift its ban on U.S. pork imports. The ban was implemented in late April in the wake of an outbreak in humans of novel H1N1 influenza, which the media misnamed “swine” flu. NPPC hailed the announcement, which came at the conclusion of the U.S.-China Joint Commission on Commerce and Trade meeting in Hangzhou, China. The bilateral forum was held to resolve trade issues between the countries. U.S. Trade Representative Ron Kirk, Agriculture Secretary Tom Vilsack and Commerce Secretary Gary Locke attended the meeting. Re-opening the Chinese market to U.S. pork was at the top of their agenda. The U.S. pork industry shipped nearly 400,000 metric tons of pork worth nearly $690 million to China in 2008, making it the No. 3 destination for U.S. pork. This year, due mostly to the H1N1-related ban, U.S. pork exports to China through August were down by 50 percent over the same period last year. NPPC is urging the Obama administration to continue working with the Chinese government on other trade issues that are hampering our pork exports to the Asian nation. Among those issues are China’s ban on U.S. pork produced with ractopamine, an FDA-approved feed additive that improves efficiency in pork production, and the subsidies China provides its domestic pork producers. The Chinese pork industry also derives significant benefits from an exemption from corporate income taxes and a partial exemption from the country’s value-added tax.



While the U.S. Environmental Protection Agency today issued a final rule requiring the reporting of greenhouse gases (GHGs) by all sectors of the economy. The rule, which becomes effective Dec. 29, will not cover pork and other livestock operations thanks to an amendment included in the fiscal 2010 Interior Appropriations bill approved this week. EPA’s GHG reporting rule would have required livestock operations with more than 25,000 metric tons of the CO2 equivalent of methane and nitrous oxide from their manure management systems to report their emissions starting next year. Depending on the manure management system used and the average temperatures in a region, some pork operations with 34,600 finishing animals might have had to report their emissions under the rule. But the amendment sponsored by Rep. Tom Latham, R-Iowa, and actively supported by NPPC stops EPA from implementing any provision in 2010 involving reporting GHG emissions from manure. The Latham measure received strong endorsement by the House, which voted 267-147 to instruct the House conferees negotiating with the Senate on a final Interior Appropriations bill to ensure that Latham’s amendment remained in the final bill. The fix is only a temporary one. The final GHG reporting rule requires 2010 emissions to be reported in 2011, after the fiscal 2010 Interior Appropriations bill expires next Sept. 30. It is not clear how pork producers should prepare to meet the GHG reporting rule requirements in 2011, if at all. NPPC will continue to follow closely and work on the issue and will keep producers informed of further developments and of any actions they might need to consider in 2010. In addition, Congress also adopted in the same fiscal 2010 appropriations bill a provision stopping EPA from creating in 2010 any rule that would require Clean Air Act permits for GHG emissions from pork and other livestock operations (the so-called cow tax). The provision in the House was sponsored by Rep. Todd Tihart, R-Kansas, and in the Senate by Sen. Sam Brownback, R-Kansas. EPA indicated that it was set to make a final decision on the first steps for regulating under the Clean Air Act GHG emissions from industries if Congress did not take action on a cap-and-trade bill. Now, for pork producers and other livestock producers, any such effort in 2010 has been stopped by the Tihart-Brownback amendment.



The Senate Environment and Public Works Committee this week held hearings on its version of climate change legislation. A bill sponsored by committee Chairwoman Barbara Boxer, D-Calif., and Sen. John Kerry, D-Mass., (S. 1733) would require by 2020 a cut in emissions of 20 percent over 2005 levels. A House climate change bill, which passed in late June, calls for a 17 percent reduction in emission over the same period. The Senate measure – like the House bill – calls for a cap and trade program, which would set a limit, or cap, on the amount of greenhouse gases that specific large industries such as energy utilities could release to the atmosphere. A business that has an emissions amount that falls below its cap could sell the unused amount up to the cap as offset credits; one that exceeds its cap would need to buy credits or reduce its emissions. In addition, uncapped sectors could sell offset credits for adopting practices and technologies that reduce emissions. The Senate bill would exempt businesses that put out less than 25,000 tons of carbon dioxide a year. A group of Republicans who strongly oppose the Senate bill have threatened to boycott upcoming committee work sessions. A major concern for U.S. pork producers is how much climate change legislation will cost them. The Senate Finance, Energy and Natural Resources, Agriculture, Commerce and Foreign Relations committees will have an opportunity to consider the bill in the coming weeks before a final version is crafted and voted on by the full Senate.

The House Agriculture Subcommittee on Conservation, Credit, Energy, and Research held a hearing Thursday on the future of next-generation biofuels, focusing on the challenges facing the biofuels industry in making the transition from using feed grains to produce ethanol to using other feedstocks, including sorghum, woody biomass, algae, perennials and other crop residues. To meet the goal of creating 36 billion gallons of biofuels by 2022 as mandated by the federal Renewable Fuels Standard (RFS), Obama administration officials and biofuels industry witnesses agreed that there must be expanded research for second- and third- generation biofuels. Agencies such as the Department of Energy and the Department of Agriculture will need to commit significant funding to advancing biofuels.