For the Week Ending September 11, 2009

September 11, 2009

Washington, D.C., September 11, 2009 –  


The U.S. Department of Agriculture last week agreed to NPPC’s request to purchase additional pork products, which will be used for various federal food programs. Secretary Tom Vilsack, who heard from hundreds of hurting pork producers, announced a $30 million pork purchase Sept. 3. USDA also is working to reopen pork export markets that closed in the wake of the H1N1 flu outbreak. In an Aug. 17 letter to the secretary, NPPC urged USDA to take immediate action to address a crisis that since September 2007 has seen producers losing an average of more than $21 on each hog marketed. The pork industry has lost more than $4.6 billion in equity over the past two years. NPPC asked the agency to:

  • Purchase immediately an additional $50 million of pork for various federal food programs, using fiscal 2009 funds. Fiscal 2009 ends Sept. 30. (USDA annually buys pork for food programs; it bought $62.6 million worth in 2008, for example.)
  • Support congressional efforts to lift a spending cap on Section 32, and use funds to purchase pork for the program, which uses customs receipts to buy non-price-supported commodities for food programs.
  • Buy on Oct. 1 a minimum of $50 million of pork, using fiscal 2010 funds. Fiscal 2010 begins Oct. 1. The purchase would be in addition to USDA’s annual buy.
  • Use $100 million of the $1 billion appropriated for addressing the H1N1 virus for the swine industry, including $70 million for swine disease surveillance, $10 million for diagnostics and H1N1 vaccine development and $20 million for industry support.
  • Work with the U.S. Trade Representative to open export markets to U.S. pork. Several countries, including China, continue to impose unwarranted bans on U.S. pork, citing the H1N1 flu.
  • Study the economic impact on the livestock industry of an expansion of corn-ethanol production and usage. EPA has proposed raising the cap on blending ethanol into gasoline to 15 percent from its current 10 percent.



NPPC President Don Butler, President-elect Sam Carney and Steve Meyer, president of Paragon Economics, along with staff from NPPC’s Washington public-policy office, today held briefings on the U.S. pork industry’s current economic situation for Senate and House staff. The industry has lost more than $4.6 billion since September 2007, with producers losing more than an average of $21 per hog since then. Rising production costs – including higher corn, soybean meal and energy prices – and declining exports along with the outbreak of H1N1 flu, which the media misnamed “swine flu,” are the main causes for the dire economic circumstances.



U.S. Agriculture Secretary Tom Vilsack yesterday in a media briefing on the novel H1N1 flu urged reporters to refer to the virus by that name and not “swine” flu. “The job of the media is to get it right and not necessarily to get it convenient,” said Vilsack. “To get it [the virus name] right, it’s H1N1. It is fundamentally different [from swine flu], it’s unique, we’ve never seen it before.” The secretary told reporters that calling the virus “swine” flu “upsets the markets, it upsets these producers, and it didn’t have to be. It’s just as easy to say ‘H1N1’ as it is to say ‘swine.’” Days after the H1N1 outbreak was first widely reported April 24, the World Health Organization named the virus “Influenza A,” and the World Organization for Animal Health said it never should have been named “swine” flu. “I want folks who are in this business of conveying messages,” said Vilsack, “to understand that behind that message there is a family today … wondering how they’re going to be able to pay the bills when they continually sell pork for less than what it costs to produce, and they continue to get hammered for something that they have absolutely nothing to do with.” Cash hog prices fell sharply in the three weeks following initial media reports of the H1N1 flu outbreak, as consumer demand for pork dropped and some U.S. trading partners closed their markets to U.S. pork over fears of the media misnamed “swine” flu. The total of actual and projected pork industry revenue reductions from April 24 to the end of 2009 is nearly $2.2 billion. According to the Centers for Disease Control and Prevention, H1N1 flu is not transmitted by food, and people cannot get H1N1 from eating or handling pork or pork products.(Click here for facts about the H1N1 flu.)



An ad hoc coalition, which includes NPPC and 33 other food and agricultural organizations, last week sent a letter to U.S. Trade Representative Ron Kirk urging him to consider the consequences of actions he might recommend be taken against China over tires imported into the United States. President Obama is expected to make by Sept. 17 a decision on the findings of a U.S. International Trade Commission investigation of imports of certain car tires from China. The United Steelworkers filed a complaint with the ITC, claiming that a surge of Chinese tire imports had cost the union thousands of jobs. The ITC recommended a “safeguard action” of a 55 percent tariff on Chinese tires. If the president accepts the ITC recommendation, the food and agricultural coalition is concerned that China will retaliate against U.S. products. Pork and soybeans, for example, have been mentioned as candidates for retaliation.



Sen. Blanche Lincoln, D-Ark., has accepted the chairmanship of the Senate Agriculture Committee, replacing Sen. Tom Harkin, D-Iowa, who will fill the seat left by Sen. Edward Kennedy D-Mass., as chairman of the Senate Committee on Health, Education, Labor and Pensions (HELP). NPPC praised Harkin as a “true friend” of America’s pork producers, and welcomed long-time Agriculture Committee member Lincoln as the panel’s new chairwoman. Lincoln has served on the Senate Agriculture Committee since January 1999 and was the chair during the most recent Congress of the committee’s on Rural Revitalization, Conservation, Forestry, and Credit Subcommittee. She served as the chair of the Subcommittee on Production, Income Protection, and Price Support during the 110th Congress. In 2004, Lincoln founded the bipartisan Senate Hunger Caucus to help focus the Senate’s attention on the hunger that exists in the country. When she was a member of the House of Representatives, Lincoln served on the House Committee on Agriculture from 1993-1995. NPPC said it looks forward to working with Chairwoman Lincoln to advance important pork industry issues.



After a five week summer recess, members of the House and Senate returned to Washington this week to take up legislative business. With much of the focus being on health care reform, it is expected that legislation important to the U.S. pork industry, including a climate change bill, will take a back seat. Senate Democrats intended to offer their cap-and-trade climate bill this week, but it is now expected to be introduced sometime in October. The Senate Agriculture Committee earlier this week did hold a hearing on climate change legislation and its potential affect on the agriculture industry. The House in July passed its version of climate change legislation, which NPPC did not support due in part to the impact the legislation would have on the cost of electricity, diesel fuel, grain, propane, animal health products, fertilizer, chemicals, farm equipment and materials such as steel and concrete that are necessary for the continued operations of pork operations and the well-being of animals. Additionally, the Senate is expected to take up the House-passed food-safety bill, H.R. 2749, though no specific date has been set for consideration. The House bill addresses on-farm concerns important to America’s pork producers and takes a more targeted approach for new authority granted to the U.S. Food and Drug Administration to prohibit or restrict the movement of food. NPPC will be closely monitoring the progress of food safety and climate change legislation as they move through the Senate.




NPPC’s Fall Legislative Conference will be held September 16-17 in Washington, D.C. Pork producers will travel to Capitol Hill to meet with their congressional representatives to discuss key issues currently affecting the U.S. pork industry. Attendees will hear from political prognosticator Charlie Cook; Sen. Mike Johanns, R-Neb., the former Secretary of Agriculture; and Rep. Frank Lucas, R-Okla., who is the ranking member on the House Agriculture Committee. The highlight of the two-day conference is the Washington-famous NPPC “Rack of Pork” congressional reception September 16. For more information, click here. [nppc link]]]]