Capital Update – For the Week Ending February 2, 2024

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In this week’s National Pork Producers Council (NPPC) Friday recap: NPPC advocates for clear labels for ‘fake meat’; NPPC wants Miscellaneous Tariff Bill renewed; bipartisan legislation aims to safeguard U.S. agriculture from cyberattacks; House lawmakers launch Ag Trade Caucus; U.S. secures positive outcomes at Codex meeting; Canada raises trade concerns about USDA labeling rule and California Prop. 12; U.S. holds trade talks with Kenya; and USDA funds $207 million for renewable energy and fertilizer projects. Take a deeper dive below.

NPPC Advocates for Clear Labels for ‘Fake Meat’

What happened: Sen. Roger Marshall (R-KS) and Rep. Mark Alford (R-MO) introduced the “Fair and Accurate Ingredient Representation on Labels Act of 2024.” Backed by NPPC and other livestock and poultry organizations, the legislation would define “imitation” and “cell-cultured” meat and poultry. The U.S. Department of Agriculture would oversee the labeling of such products and work with the U.S. Food and Drug Administration to maintain inspection standards.

The labels must include terms like “imitation” or similar language, accompanied by a clear disclaimer for products not containing meat or poultry. In the case of cell-cultured meat and poultry, they would require labeling representing lab-grown food sources.

NPPC’s take: NPPC wants consumers to have the ability to make informed decisions about the products they choose, especially with protein products.

“Accurate meat labeling at the grocery store benefits all consumers, regardless of dietary preferences,” said NPPC President Scott Hays, a pork producer from Missouri. “Labeling an imitation product as pork undermines the hard work that pork producers, like me, put in every day to deliver a reliable and affordable protein source.”

NPPC Wants Miscellaneous Tariff Bill Renewed

What happened: NPPC joined 36 agribusiness groups and organizations in urging the renewal of the expired Miscellaneous Tariff Bill (MTB).

In a letter to Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) and House Ways and Means Committee Chairman Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA), the agriculture groups pointed out that, since the MTB lapsed in December 2020, their members and other U.S. businesses have paid more than $1.5 billion in tariffs on imported products, including inputs needed to produce their commodities. That has affected jobs and raised prices for consumers.

“A renewed MTB would mean lower input prices and decreased price pressures for U.S. farmers, ranchers, and consumers,” wrote the organizations. “It is vital that the MTB passes this year to support [the] American agriculture supply chain.”

Why it matters: MTB temporarily reduces or suspends tariffs on imported products that are either not available or in short supply in the United States. NPPC, other U.S. agriculture organizations, and businesses support MTB as a way to decrease production costs — by reducing or eliminating import tariffs on inputs — and make end-use products more affordable to consumers. Pork producers, for example, get many of the vitamins and minerals they feed hogs from overseas.

Bipartisan Legislation Aims to Safeguard U.S. Agriculture from Cyberattacks

What happened: Senate and House lawmakers have introduced the Farm and Food Cybersecurity Act, which directs the Secretary of Agriculture to conduct a biennial study of cybersecurity threats and vulnerabilities within the agriculture and food sectors and submit a report to Congress.

The legislation aims to strengthen cybersecurity protections for the food and agriculture infrastructure sector by identifying weaknesses and improving the protective measures of the government and private entities. Additionally, the Secretary of Agriculture — in coordination with the Secretaries of Homeland Security and Health and Human Services and the director of National Intelligence — must conduct an annual cross-sector crisis simulation for food-related cyber emergencies.

Sens. Tom Cotton (R-AR) and Kristen Gillibrand (D-NY) and Reps. Brad Finstad (R-MN) and Elissa Slotkin (D-MI) are the primary sponsors of the bill.

NPPC’s take: Cyberattacks can threaten the U.S. food supply and jeopardize America’s national security. NPPC strongly supports the legislation, as a critical step in protecting the nation’s food supply and American farmers.

House Lawmakers Launch Ag Trade Caucus

What happened: House lawmakers launched the bipartisan Congressional Ag Trade Caucus to keep members of Congress informed about agricultural trade and pursue policies that boost U.S. agriculture exports. This involves urging the Biden administration to negotiate comprehensive trade agreements and eliminating trade barriers to U.S. farm goods.

The caucus includes House Ways & Means Subcommittee on Trade Chairman Adrian Smith (R-NE) and member Jimmy Panetta (D-CA) and Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development Chairman Dusty Johnson (R-SD) and Livestock, Dairy, and Poultry Subcommittee Ranking Member Jim Costa (D-CA).

NPPC’s take: The U.S. food and agriculture sector contributed more than $2.6 trillion in total wages in 2023 and generated more than $8.6 trillion in total economic output. Significant portions of that are attributable to exports, which annually are about 20% of total production. NPPC applauds this bipartisan effort to eliminate or significantly reduce impediments to U.S. pork exports through comprehensive trade agreements.

U.S. Secures Positive Outcomes at Codex Meeting

What happened: The U.S. achieved favorable outcomes at the recent Codex Alimentarius Commission (CAC) meeting, reinforcing science-based food safety standards and continued foreign market access for U.S. food and agricultural exports.

Key achievements included final adoption of Maximum Residue Limits (MRLs) for Zilpaterol Hydrochloride and prevention of revisions to key portions of the Codex Procedural Manual that ensure science- and risk-based decision making.

NPPC’s take: The CAC is the United Nation’s international food safety standard-setting body. It seeks to create a science-based, level playing field through the development of international standards – as well to enhance economic opportunities for American farmers, ranchers, food producers, manufacturers, transporters, suppliers, retailers, and others in the food and agriculture value chain.

NPPC joined 21 other agricultural organizations expressing their support for Codex actions during recent meetings of the 85th Codex Executive Committee and 46th CAC. They thanked U.S. leadership for “encouraging the adoption of science-based standards that help grow exports of U.S. food and agricultural commodities.”

Canada Raises Trade Concerns About USDA Labeling Rule and California Prop 12

What happened: Canada is raising international trade concerns regarding two U.S. regulations involving changes to voluntary country-of-origin labeling (VCOOL) and California Proposition 12.

In a meeting last month with U.S. Agriculture Secretary Tom Vilsack, Canadian Agriculture Minister Lawrence MacAulay said the U.S. Department of Agriculture’s proposed changes to VCOOL regulations for meat, poultry, and eggs — and California’s Proposition 12, which dictates animal housing practices — could restrict trade and disrupt supply chains.

Last March, the Biden administration proposed a rule that would allow U.S. food companies to voluntarily label meat, poultry, and eggs as “Product of USA” or “Made in the USA” only when they are derived from animals born, raised, slaughtered, and processed in the United States.

In California, voters approved Proposition 12 in 2018. Agricultural groups, including NPPC, challenged it in federal courts up to the U.S. Supreme Court, which upheld the law last May. Proposition 12 bans the sale of pork, eggs, and veal in California that do not meet the state’s arbitrary production standards.

NPPC’s take: Last June, NPPC urged USDA to reconsider the VCOOL rule, arguing the regulation would increase costs for livestock producers, offer little to address consumer confusion about product origins, and strain the diplomatic ties with trading partners, potentially leading to tariff retaliation against U.S. agricultural goods.

On Proposition 12, NPPC is working with Congress to address the problems caused by state regulatory overreach, including significantly raising the cost of pork production.

U.S. Holds Trade Talks with Kenya

What happened: The Office of the U.S. Trade Representative (USTR) held a third round of negotiations with Kenya under the Strategic Trade and Investment Partnership (STIP). Key issues addressed included agriculture, anti-corruption, domestic regulation of services, digital trade, the environment and climate action, good regulatory practices, standards collaboration, trade facilitation, and customs procedures.

Assistant U.S. Trade Representative Constance Hamilton led the U.S. delegation for the round, which was held Jan. 29-31 and focused on agriculture, good regulatory practices, and workers’ rights and protections.

NPPC’s take: With a population of about 50 million, an expanding middle class, and relatively strong tourism-driven demand from its hotel, restaurant, and institutional food service sectors, Kenya has the potential to be a significant export market for U.S. pork. NPPC supports the talks aimed at opening Kenya’s market to U.S. pork.

In comments to USTR shortly after the July 2022 announcement of the STIP, NPPC urged U.S. trade negotiators to press Kenya to remove unjustified restrictions on U.S. pork imports. Those include onerous testing and inspection requirements, non-science-based sanitary and phytosanitary barriers, as well as failure to recognize the equivalence of U.S. pork production practices and U.S. food safety inspection and approval system for pork slaughter, and processing, and storage plants.

USDA Funds $207 Million for Renewable Energy and Fertilizer Projects

What happened: Agriculture Secretary Tom Vilsack announced $207 million in funding for agricultural producers for renewable energy and fertilizer projects through the Rural Energy for America (REAP) and Fertilizer Production Expansion (FPEP) programs.

These programs help farmers lower energy bills, generate income, create jobs, and strengthen competition while addressing climate change.

REAP is awarding $157 million for 675 projects in 42 states, with part of the funding coming from President Biden’s Inflation Reduction Act. In announcing the awards, Vilsack noted several projects that will be funded, including the installation of a refrigeration system for Sturgis Meats in Meade, South Dakota, which will save $32,000 in energy costs annually.

Under FPEP, USDA is providing $50 million for seven projects in seven states, including the installation of an anaerobic digestion facility in Monroe County, North Carolina. The facility is expected to produce 50,000 tons of organic fertilizer and ammonium sulfate annually and capture biogas, which can be sold to power companies, that will generate 55,000 megawatts of clean energy a year.

NPPC’s take: NPPC supports these funding efforts because pork producers are committed to continuous improvement to deliver the safest, highest quality pork supply in the world.

For more information: USDA is accepting REAP applications through Sept. 30, 2024. Click here for more information on REAP. FPEP is not accepting new applications.