Capital Update – For the Week Ending February 16, 2024

Vilsack urges Congress to fix California Proposition 12 | U.S. pork exports set new record in 2023 | Ag Census shows fewer, older farmers running bigger farms | NPPC urges Supreme Court to hear case on CWA discharge permits | NPPC leads coalition asking EPA to scrap proposed rodent rule | results available for USDA study on small swine operations | H-2A, H-2B visa fees to increase April 1 | NPPC welcomes new trade team member

Vilsack Urges Congress to Fix California’s Proposition 12

What happened: In wide-ranging testimony before the House Agriculture Committee, Agriculture Secretary Tom Vilsack said Congress needs to fix California Proposition 12.

Prop. 12 bans in the state the sale of pork from hogs born to sows raised anywhere in the world in housing that fails to meet California’s arbitrary standards.

“When each state has the ability to define for itself and for its consumers, exactly what farming techniques or practices are appropriate,” Vilsack testified, “It does create the possibility of 50 different sets of rules and regulations.”

The agriculture secretary said there will be “chaos in the marketplace” unless congressional lawmakers address Prop. 12.

NPPC’s take: NPPC has fought against Prop. 12 for the past five years, including challenging it before the U.S. Supreme Court, and is working with members of Congress on a solution to the problems created by the law.

Why it matters: Pork producers across the country who do not comply with Prop. 12 must forgo selling into the California market of 40 million people who consume nearly 15% of all pork sold domestically. With producers losing an average of $30 — sometimes exceeding $40 to $60 — on each hog marketed in 2023 and with continued challenges expected in 2024, most can’t afford the millions of dollars it would cost for a new sow barn or to retrofit an existing one. The negative effects of Prop. 12 would be compounded if other states were to adopt similar restrictive laws and regulations.

U.S. Pork Exports Set New Record in 2023

What happened: U.S. pork exports set a new value record in 2023, according to data from the U.S. Departments of Agriculture and Commerce. The U.S. pork industry shipped $8.16 billion of product to foreign destinations last year, topping the previous record set in 2021 of just under $8.11 billion. While 2023’s volume of 2.906 million metric tons (MT) was down from 2020’s record 2.986 million MT, it was the third highest on record.

Mexico was the No. 1 volume and value market for U.S. pork producers in 2023, taking 1.1 million MT of pork valued at more than $2.35 billion. Other countries in the top five U.S. markets were, in value order: Japan, which imported more than 342,000 MT valued at nearly $1.4 billion; China, almost 505,000 MT valued at $1.27 billion; Canada, just under 220,000 MT valued at about $876 million; and South Korea, which took more than 191,000 MT valued at more than $633 million.

Countries that had significant value increases in U.S. pork imports over 2022, albeit from smaller baselines, were Australia (86%), El Salvador (25%), Guatemala (29%), Malaysia (1,558%), New Zealand (42%), and Vietnam (37%). NPPC continues to work to expand market access globally.

Why it matters: Exports represent an important component of total pork demand and accounted for 25% of U.S. production in 2023, a 1.5% increase from 2022. The $8.2 billion in export value equates to $64 in value from each hog that was marketed in 2023, up 4% from 2022.

Ag Census: Fewer, Older Farmers Running Bigger Farms

What happened: There are fewer, but larger, farms in the United States, run by older farmers, according to the 2022 Census of Agriculture. Data collected from 2017 to 2022 showed there were 1.9 million farms, a 7% decline, while the average farm size increased 5% to 463 acres. The total number of acres used for farming was 880 million acres, a 2% drop, but comprising 39% of all U.S. land. There were a little more than 3,374,000 farmers (and farm workers) in the country, with an average age of 58.1 years, an increase of six months over the previous survey in 2017.

The number of hog farms with inventory declined from 66,439 to 60,809 farms with all size categories experiencing a decline from 2017 to 2022. The number of hog farms with sales declined from 64,871 to 56,265 farms, and 80% of the decline was due to having fewer farms with sales of 100 hogs or less.

Why it matters: The Census of Agriculture, taken every five years, counts and details U.S. farms and is used to shape the nation’s agricultural policies. The data also helps inform decisions about farm jobs, transportation, production practices, new technologies, marketing opportunities, and farm services and programs, according to USDA.

NPPC Urges Supreme Court to Hear Case on CWA Discharge Permits

What happened: NPPC and a coalition of major organizations representing nearly every sector of the U.S. economy urged the U.S. Supreme Court to hear a case defending long-standing legal protections against activist suits that are provided to permit holders under the Clean Water Act (CWA).

The U.S. Court of Appeals for the Ninth Circuit, which covers seven western states, including Montana, recently ruled that environmental discharge permits under the CWA can include broad requirements to not contribute to the degradation of the water quality generally. Because it is an impossible standard to meet, it will open permit holders to potential legal attacks from activist groups for any activity that can be alleged to harm the water quality.

NPPC’s take: NPPC and the 14 other organizations pointed out in their friend-of-the-court brief that in adopting the CWA, Congress created a Permit Shield that allows regulators to impose specific discharge limitations needed to protect water quality while providing permit holders clear notice of their regulatory obligations and security from liability from discharges that occur under the terms of the permit.

“The Ninth Circuit’s decision effectively eliminates these protections … because operators (in that circuit) now cannot know whether they are complying with their permits,” the groups argued. They also pointed out that the Ninth Circuit split with a decision by the Second Circuit, which ruled that discharge permits must provide specific guidance as to what discharges may be made and still comply with the CWA.

Why it matters: Allowing the Ninth Circuit’s ruling to stand “will cause widespread regulatory uncertainty and litigation risk for the business community, undermining the core purpose of the (discharge) permitting program and the Permit Shield,” said the groups in their brief. Because Montana sits in the Ninth Circuit but falls under the jurisdiction of EPA’s Region 8 office, this could result in similar requirements being imposed locally by EPA throughout the Midwest and ultimately nationwide. Allowing the use of generic permit conditions, along with the Ninth Circuit’s decision, nullify the long-standing Permit Shield that some pork producers rely on and eliminates the primary incentive for entities to obtain CWA discharge permits.

NPPC Leads Coalition Asking EPA to Scrap Proposed Rodent Rule

What happened: NPPC led a coalition of poultry and livestock groups in filing  comments with the U.S. Environmental Protection Agency (EPA) on its proposed regulation of rodenticides to control vermin on farms. The groups urged the agency to scrap the proposed rule and conduct studies “needed to develop sound and appropriate mitigation measures that effectively and efficiently reduce the potential for harm for non-target species from unintended exposures to rodenticides.”

To protect animals other than mice and rats – the target species – EPA wants to limit the purchase and application of rodenticides to certified applicators and, in some states, individuals supervised by certified applicators. It also wants additional, detailed record keeping for rodenticide use on farms.

NPPC’s take: In their comments, the organizations pointed out that requiring the hiring of certified applicators or training and certifying farm workers in rodenticide application will add costs to producers, won’t improve rodent control, and likely would have no effect on “non-target species.” Likewise, more record-keeping will add costs.

Additionally, the groups said, “The use of outside, contracted certified applicators … would for many producers present unacceptable levels of biosecurity risk, as well as a risk that the provision of essential rodent control services would be disrupted should there be disease outbreaks at other operations in the area.”

Why it matters: Rodenticides are an important part of the agriculture industry. Uncontrolled mice and rats have a detrimental effect on the environment and farms and ranches. Along with crop destruction, rodents transmit bacteria and viruses that can infect and cause animal diseases. They also consume and spoil feed, which increases the environmental footprint of farms and food. Fewer rodents mean less fuel, fertilizer, and water are needed to raise animals and crops, reducing a farm’s environmental footprint and lowering costs for farmers.

Results Available for USDA Study on Small Swine Operations

What happened: The U.S. Department of Agriculture published the results of a study it conducted on small swine operations — farms with fewer than 1,000 hogs — with a focus on health and production practices. The study also looked at trends in health and disease management; pig movements, mortality, and slaughter channels; and differences between small and large operations.

Conducted in June and July 2021 by USDA’s National Animal Health Monitoring System (NAHMS), in collaboration with the agency’s National Agricultural Statistics Service (NASS), the third national study included about 5,000 swine operations in 38 states, representing about 95% of small U.S. swine operations.

The results from a separate study of large operations conducted from July 2021 to January 2022 are not yet available.

NPPC’s take: NPPC helped publicize the NAHMS-NASS study and encouraged pork producers to participate. The results can help inform the pork industry on smaller operations, a growing sector because of its role as a primary supplier of niche-market products.

Guest Worker Visa Fees to Increase April 1

What happened: The U.S. Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS) issued updated immigration filing fees effective April 1, substantially increasing fees for most agricultural worker visas — including H-2A, H-2B, and TN visas, among others.

The proposed fee increases for several employment-based visas — the first adjustments since 2016 — are being made to address increases in the agency’s operating costs and ensure adequate service. According to USCIS, 96% of its funds for immigration and naturalization services come from filing fees, not congressional appropriations, making the higher fees necessary to handle casework, due to a rise in border crossings.

It is estimated the $1.14 billion increase in fees will generate more than $4.4 billion annually. For more information, including a table of the new fees, click here.

NPPC’s take: USCIS says the increase is designed to reduce processing and wait times for the influx of visa applicants. Pork producers, however, do not have access to the H-2A program, making any decrease in processing time of limited value to pork producers, who need year-round workers — not temporary ones. At the same time, it makes accessible programs, such as the TN professionals visa, more expensive.

Why it matters: The U.S. pork industry continues to struggle with a challenging labor market and inadequate visa programs. The fee increases make recruiting a reliable workforce more expensive.

NPPC Welcomes New Trade Team Member

What happened: NPPC has hired Cole Spain as manager of international affairs in its Washington, DC, public policy office. He reports to Maria C. Zieba, the organization’s vice president of international affairs. Spain previously served as NPPC regional manager of producer services for Iowa.

Spain, who grew up in northeast Iowa on a diversified crop and livestock farm, with a small farrow-to-finish hog operation, holds a master’s degree in international agriculture from Oklahoma State University and a bachelor’s degree in agriculture and life sciences education from Iowa State University. While in college, he held several leadership roles and participated in numerous activities, including service as Pork Youth Ambassador in 2018 for the Iowa Pork Producers Association and a Real Pig Farming student social forces team member with the National Pork Board in 2019.