Capital Update – For the Week Ending Jan. 20, 2023
In this week’s National Pork Producers Council Friday recap: trade, GIPSA comments and a legal challenge over the WOTUS rule. Take a deeper dive below.
Ghana Officially Opens Market to U.S. Pork
What happened: The African nation of Ghana signed a letter to the U.S. Department of Agriculture (USDA) officially opening its market to exports of U.S. pork and pork products. NPPC worked with USDA’s Food Safety and Inspection Service (FSIS) on the export certificate, which was submitted last October to the government of Ghana.
In a Jan. 12 letter from the acting chief veterinary officer of the Ghanaian Veterinary Services Directorate of the Ministry of Food and Agriculture to the veterinary medical officer of FSIS, the country formally accepted the proposed certificate of export for pork and pork products.
Why it matters: Ghana’s import pork market was valued at nearly $16 million in 2021. Imports have increased steadily over the past five years, topping 15,000 metric tons in 2021. Countries in the European Union have dominated the Ghanaian pork market, with the United States not being a significant player. With its 32 million inhabitants, the West African country makes for a potentially lucrative market for U.S. pork.
Learn more: USDA’s Foreign Agricultural Service Press Release
Countries Agree to Address North American Supply Chain Issues
What happened: The United States, Canada, and Mexico vowed last week at the North American Leaders Summit in Mexico City to address supply chain issues in a move to help facilitate the flow of North American trade.
Speaking at the National Palace in Mexico City, President Biden told Mexican President López Obrador, “We’re going to discuss how we can further deepen [the U.S.-Mexico] relationship, not only in Mexico but the Western Hemisphere. This includes strengthening our supply chains to make the hemisphere even more competitive.”
NPPC and 16 other agricultural organizations urged representatives of the three countries to strengthen trade in agricultural products through the U.S.-Canada-Mexico Agreement (USMCA) and to promote the adoption of “technology that advances food security, agricultural sustainability and rural prosperity and [to] foster a variety of cost-effective food choices for our consumers.”
Why it matters: Agricultural trade among the United States, Canada, and Mexico, initially fostered by the 1994 North American Free Trade Agreement and sustained through the USMCA, increased from $7.7 billion in 1994 to $67.1 billion in 2021, a nearly 770% increase. The three countries have the largest trilateral agricultural trade relationship in the world, which positions North America as a critical region for supporting global food security.
Mexico and Canada are the No. 2 and No. 4 export markets, respectively, for the U.S. pork industry. The United States exported $1.675 billion of pork to Mexico and $952.3 million to Canada in 2021.
U.S., Taiwan Conclude Round of Trade Talks
What happened: The United States and Taiwan concluded four days of negotiations under the U.S.-Taiwan Initiative on 21st-Century Trade. Launched June 1, 2022, the initiative is intended to develop a roadmap to deepen the nation’s economic and trade relationship, advance trade priorities, and promote innovation and economic growth for workers and businesses.
Why it matters: In 2020, the U.S. pork industry exported nearly $54 million of product to Taiwan, making the island nation the No.15 destination for American pork. However, in 2021, because of new trade barriers imposed by Taiwan, that amount fell to just under $16 million, a 70% drop.
NPPC’s take: NPPC supports negotiations between the United States and Taiwan that eliminates tariff and non-tariff impediments to U.S. pork.
Learn more: U.S.-Taiwan Negotiating Mandates
NPPC Submits Comments on GIPSA Proposed Rule
What happened? NPPC submitted comments on USDA Agricultural Marketing Service’s (AMS) Proposed Rule “Inclusive Competition and Market Integrity under the Packers and Stockyards Act”.
Background: In 2021, the Biden administration issued an Executive Order that directed USDA to engage in rulemaking to strengthen the Packers and Stockyards Act. In a May 2022 report to the White House Competition Council, USDA stated intentions to publish “a modern set of rules under the [Packers and Stockyards Act] PSA.” This rule represents the second in a series of three rules.
Why is this important? The new regulations within the proposed rule are intended to protect producers, particularly those falling into a new category of “market vulnerable individuals,” from discrimination, retaliation, and deception in livestock markets. Pork producers rely on the enforcement of the PSA to ensure fair markets and competitive pricing opportunities.
NPPC’s take: The Association appreciates USDA’s intent for the new regulations is to promote inclusive competition and market integrity. However, the proposed new rule does not appear to address any specific existing pork industry issues, which could create significant uncertainty.
Key highlights from NPPC’s submission:
-The Proposed Rule attempts to create protections that are already covered by existing antitrust, anti-discrimination, and other state and federal laws.
-The Proposed Rule over-extends the PSA to cover conduct outside of the scope of conduct that the PSA was enacted to regulate.
-The definitions and regulations in the Proposed Rule are vague and overbroad, creating uncertainty about what it means to comply with the new rules, which could lead to costly and burdensome litigation in the pork industry.
What’s next: A third proposed rule focusing on unfair practices, undue preferences, and harm to competition under the PSA is expected later this year. In its comments, NPPC asked that USDA consider re-proposing all the new regulations together so that industry stakeholders can assess the potentially overlapping impacts of the new rules.
Learn more: For more information on the rule, a fact sheet and current regulations are available.
NPPC Statement on New WOTUS Rule
What happened? On Jan. 18, the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers issued a final rule defining Waters of the United States (WOTUS) under the Clean Water Act (CWA). That evening, NPPC, along with 16 other coalition partners, filed a lawsuit in federal court in Texas challenging the rule.
What does the final rule state: The agency’s rule purports to clarify their definition of WOTUS, and the jurisdiction of the federal Clean Water Act and its programs.
What’s our take: Once again, EPA and the Army Corps of Engineers are seeking to exert jurisdiction and control of a staggering range of farmlands and water features far beyond what Congress intended when it passed the Clean Water Act. Under the rule, pork producers will be at constant risk that any feature on their farmland that sometimes holds water will be deemed WOTUS using vague and unpredictable standards. This could force farmers to obtain permits for all manner of routine activities on their farms – from planting seeds to applying fertilizer.
“Stewardship of natural resources is a top priority for pork producers. The WOTUS rule creates significant confusion, still seeks to regulate land use activities and drainage features constructed by farmers that are far beyond EPA’s jurisdiction and will create significant concerns for both livestock and row crop farmers.” – Michael Formica, Chief Legal Strategist
Learn more: For more information, visit our website.