Capital Update – For the Week Ending March 15, 2024

NPPC applauds USDA purchase of more pork for food nutrition, assistance programs | NPPC’s Dr. Carr engages in Codex Commission | President’s budget requests funding for swine programs | USDA issues final ‘Product of USA’ labeling rule | House Ag labor group recommends reforms to H-2A program

NPPC Applauds USDA Purchase of More Pork for Food Nutrition, Assistance Programs

What happened: Using funds from its Commodity Credit Corporation (CCC), the U.S. Department of Agriculture (USDA) is purchasing an additional 33.5 million pounds of pork — worth more than $78.6 million — for distribution to various food nutrition and assistance programs. Earlier this year, USDA bought $25 million of pork under Section 32 of the Agricultural Adjustment Act of 1935, which authorizes the Secretary of Agriculture to make commodity purchases, entitlement purchases, and disaster assistance using funds appropriated annually from U.S. customs receipts.

NPPC’s take: NPPC applauded USDA’s purchase and will continue working with the agency to identify additional opportunities to find support for U.S. pork producers during challenging market conditions. More information on becoming a USDA-approved vendor is available here.

Why it matters: The U.S. pork industry has faced a challenging economic market over the past 18 months, with producers losing an average of $30 — sometimes $40 to $60 — on each hog marketed in 2023. These pork purchases provide much-needed support to the hog and wholesale pork markets and secure affordable, nutritious pork products for USDA recipient programs.

NPPC’s Dr. Carr Engages in Codex Commission

What happened: NPPC’s Dr. Trachelle Carr, senior director of international technical affairs, attended the 54th meeting of the Codex Committee on Food Hygiene (CCFH) in Nairobi, Kenya. Jointly hosted by the United States and Kenya, the meeting was a strong display of international partnership, focused on elevating food hygiene standards that promote the importance of safe and nutritious foods. CCFH is a part of Codex Alimentarius, the international food safety standards-setting body for the Food and Agriculture Organization of the United Nations and the World Health Organization.

NPPC’s take: Dr. Carr served as a lead representative for the U.S. pork industry, working to build international consensus around technical rules and regulations that may redefine how pork producers conduct business globally.

Among several proposed standards, CCFH delegates discussed the Guidelines for Food Hygiene Control Measure in Traditional Markets for Food. These guidelines for food businesses, consumers, market authorities, and stakeholders alike will provide guidance on issues from food handling to personnel health, and from environmental considerations to training and education. NPPC’s participation at Codex showcased trade associations’ vital role on the global stage.

Why it matters: Standards adopted by Codex have wide-ranging implications, as they are used throughout international trade negotiations as the baseline for text. This is why standards must be based on science. NPPC works closely with food and agriculture groups in several countries to gather consensus to support the work of CCFH, which, through its guidelines and standards on protecting consumer health, helps ensure that the food being traded is safe for consumers.

Codex provides the U.S. pork industry an opportunity to engage on a global stage on standards impacting the safety of our food, food production, and international trade.

President’s Budget Requests Funding for Swine Programs

What happened: President Biden’s fiscal 2025 budget proposes $29.2 billion in discretionary authority for USDA, a $2 billion increase from the 2023 level. It includes several funding requests beneficial to the pork industry, such as money for addressing African swine fever (ASF).

Among the funds for USDA’s Animal and Plant Health Inspection Service (APHIS) are:

• $4.7 million for swine health programs, including $4.25 million for establishing the Swine Health Improvement Plan (SHIP), a national strategy for biosecurity, traceability, and surveillance of diseases, including ASF.
• $6.5 million — a $20,000 increase over fiscal 2024 — for APHIS’s National Veterinary Stockpile, which consists of animal vaccines, antivirals, therapeutic products, supplies, and equipment to respond to animal disease outbreaks.
• $3.99 million for APHIS’s Biotechnology Regulatory Services, which oversees the development and introduction of genetically engineered organisms.

The budget also provides nearly $3.8 billion for agricultural research, education, and outreach.

NPPC’s take: NPPC advocated for and supports increased funding for USDA programs that address animal disease prevention and preparedness and programs that support agricultural producers. NPPC appreciates the administration’s acknowledgment and willingness to address the pork industry’s concerns for keeping the U.S. swine herd healthy and keeping food safe.

Why it matters: While budgets from the White House typically are not approved as-is by congressional lawmakers, the fiscal plans serve as blueprints for program funding levels.

USDA Issues Final ‘Product of USA’ Labeling Rule

What happened: USDA issued a final rule on labeling meat “Product of USA,” allowing that claim only for meat from animals born, raised, harvested, and processed in the United States. Meat from live animals imported into the United States for feeding, harvesting, and processing could no longer make such a claim. Minimally processed products could use a qualified U.S.-origin claim, such as “sliced and packaged in the United States using imported pork.” Companies have until Jan. 1, 2026, to comply with the new rule.

Meatpackers would not be required to label their product, but if they voluntarily use “Product of USA” or “Made in USA” or an American flag, they must be able to provide proof of the claim. USDA will generically approve labels — no special process verification programs or additional approval steps are needed.

The rule only applies to domestic U.S. sales; all exports will continue to follow the labeling rules of the country of destination. If a product includes multiple ingredients, all must comply with the rule’s criteria, except for spices and flavorings in processed products. For example, a beef and pork sausage would have to source products from cattle and pigs that were born, raised, and slaughtered in the United States to use “Product of USA.” The regulation also allows for state or locality-based claims — “Product of Iowa,” for example — as long as the claim follows the same born, raised, slaughtered, and processed criteria.

NPPC’s take: NPPC is concerned that the regulation will strain the relationships between the United States and its trading partners, particularly Canada and Mexico, and could result in disputes being filed with the World Trade Organization (WTO) or under the U.S.-Mexico-Canada Agreement (USMCA) against the United States, with a likelihood of tariff retaliation against U.S. goods, particularly agricultural products. In June 2023, NPPC submitted comments on the draft regulations, highlighting concerns about disruptions of the integrated supply chain between the three countries.

Why it matters: Under USMCA (previously NAFTA), supply chain integration between the US, Canada and Mexico has been highly encouraged. The U.S. exported pork and pork products worth over $2.3 billion to Mexico and over $875 million to Canada in 2023. The U.S. imports pork, pork products, and live swine from USMCA partners.

House Ag Labor Group Recommends Reforms to H-2A Program

What happened: The House Agriculture Committee’s Agriculture Labor Working Group (ALWG) released a final report on the H-2A visa program, which includes recommendations to streamline and expand program access to help ensure agricultural producers, particularly livestock producers, have a reliable workforce.

The H-2A visa program currently allows a limited number of foreign workers entry into the United States for temporary seasonal agricultural work. It does not allow for year-round workers, making it largely inaccessible for livestock producers who need a year-round workforce.

Among its 20 recommendations, the ALWG called for:

• Expanding the H-2A program to allow year-round workers.
• Establishing one new, streamlined H-2A application processing system through the creation of an Internet-based electronic portal.
• Requiring the U.S. Department of Labor (DOL) to consult with USDA prior to making changes or updates to the H-2A program.
• Reforming wage calculation standards to provide stability in farmworker pay rates.
• Providing DOL the authority to exempt farms under a certain size from the Adverse Effect Wage Rate. (DOL sets the AEWR annually to prevent adverse employment effects for U.S. workers.) DOL could waive the AEWR requirement for H-2A workers for farms with a gross cash farm income of less than $350,000.

NPPC’s take: NPPC supports expanding access to the H-2A visa program to year-round agricultural workers without setting numerical caps. It also backs reforming the visa system to address complexity, backlogs, predictability, and costs. NPPC welcomes the proposals, as the organization worked closely with the ALWG as it prepared these recommendations. NPPC encourages Congress to advance these critical reforms to the H-2A program.

Why it matters: As ALWG members pointed out in their report, “The agricultural sector is currently facing urgent challenges caused by producers’ lack of access to an adequate workforce … U.S. farmers are already reeling from record-high production costs that have translated into thin and negative margins. The inability to find and hire workers is only exacerbating this negative trend. The time to act is now.”