Capital Update – For the Week Ending November 3, 2023

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In this week’s National Pork Producers Council (NPPC) Friday recap: NPPC cautions FDA on antimicrobial use data proposal; NPPC briefs House Republican Conference on producers’ priorities; Biden visits pork farm to tout investment in rural America; Biden talks economic cooperation with Western Hemisphere nations; USTR Tai in South Africa to discuss AGOA; Take a deeper dive below.

NPPC Cautions FDA on Antimicrobial Use Data Proposal

What happened: NPPC submitted comments on a U.S. Food and Drug Administration (FDA) draft proposal for collecting and analyzing data on antimicrobial use in food-producing animals.

The FDA wants a framework for establishing a public-private partnership to gather the data used to foster antimicrobial stewardship and slow the development of antimicrobial resistance, which can lead to treatment failures in humans. You can learn more in the FDA summary report the agency released in August.

Why it matters: Antimicrobial products are used to maintain animal health and well-being and to produce safe food. Producers and veterinarians collect data to help them make informed decisions on appropriate interventions and treatments.

NPPC’s take: NPPC strongly supports antimicrobial stewardship and the production of safe, wholesome protein for consumers. In its comments to the FDA, NPPC cautioned the agency not to rely on antibiotic use data to establish causality for antimicrobial resistance in human illnesses. Also, NPPC expressed opposition to antimicrobial performance standards, which could negatively affect animal health and welfare, and urged the agency to protect data privacy. NPPC asked the FDA to consider feedback it gathered from public meetings on the antimicrobial use proposal and to hold additional forums with stakeholders to help shape the plan.

NPPC Briefs House Republican Conference on Producers’ Priorities

What happened: NPPC staff engaged with House Republicans to brief them on the current economic landscape of the U.S. pork industry and the pressing priorities of pork producers as they look towards the horizon of a new farm bill.

NPPC economist Holly Cook and senior policy and compliance adviser Andrew Bailey spoke with the House Republican Conference to call for inclusion of strong animal health components and a solution to address the challenges created by California’s Proposition 12, highlighting the potential financial hardships producers may face if absent.

Why it matters: An outbreak of a foreign animal disease (FAD) could close U.S. pork export markets and having robust funding for programs for preventing, preparing, and responding to animal health issues is paramount. With the pork industry already grappling with economic headwinds, finding a solution to Proposition 12 would ease producers’ financial worries. The California initiative bans the sale of pork from hogs born to sows that are not housed in pens that meet the state’s arbitrary standards. Producers are faced with the expensive choice of converting their sow barns — at a cost of millions of dollars — to continue selling pork in the Golden State, which makes up about 15% of the domestic pork market.

Biden Visits NPPC Member’s Farm to Tout Investment in Rural America

What happened: NPPC member and pork producer Robert Kluver hosted President Joe Biden at his Northfield, Minnesota, farm on Wednesday. Kluver raises hogs, corn, and soybeans. Biden was on a tour of the Midwest, touting billions of dollars in aid he recently pledged for rural America.

One issue the Dutch Creek Farm owner brought up with the president was the need for more transparency on hog prices. Currently, producers rely on price reports produced twice daily by the U.S. Department of Agriculture under the Livestock Mandatory Reporting Act (LMRA). LMRA requires meatpackers to report the prices they pay for cattle, hogs, and lambs and other information. 

“The Kluver family passionately and humbly welcomed President Biden, Secretary Vilsack, Governor Walz, and viewers from across the country onto their farm,” said Minnesota Pork Producers Association CEO Jill Resler. “The visit was a unique opportunity to discuss social, environmental, and economic sustainability; opportunities and challenges rural America experiences; and the legacy that multi-generational family farms are working to build every day across this country.”

Why it matters: The White House announced $5 billion to “advance rural prosperity, economic development, competition, and sustainability.” Included in those funds is $1.7 billion for “climate-smart” agricultural practices such as planting cover crops that sequester carbon and protect soil and installing riparian buffers to stop soil erosion and protect waterways. Another $1.1 billion is for rural infrastructure.

Biden visits Nancy and Rusty Kluver at Dutch Creek Farms

President Biden greets Dutch Creek Farms owners Nancy and Robert “Rusty” Kluver and their son Rob Kluver III. Credit: Star Tribune.

Biden Talks Economic Cooperation with Western Hemisphere Nations

What happened: President Biden Friday hosted representatives from the countries in the Americas Partnership for Economic Prosperity (APEP), a framework for regional cooperation to foster “competitiveness, resilience, shared prosperity, and inclusive and sustainable investment.” Officially launched in January, member nations include Barbados, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Panama, Peru, Uruguay, and the United States.

At the APEP Leaders’ Summit at the White House, Biden reaffirmed the U.S. commitment to “work together with our partners to deepen economic integration in our hemisphere, drive more inclusive and sustainable economic growth, and tackle the underlying economic drivers of irregular migration in our hemisphere.” 

Why it matters: Forging closer economic and cultural ties with countries in the Western Hemisphere could improve prospects for increased trade among the APEP countries and pave the way for comprehensive trade agreements. The U.S. pork industry is dependent on trade, with exports accounting for more than 25% of total annual sales. In 2022, the industry shipped nearly $7.7 billion of pork to foreign destinations.

NPPC’s take: While NPPC supports the goals of the APEP, it has concerns that the administration may forego formal trade deals in the region. Sen. Tim Kaine (D-VA), in an Oct. 5 letter to Secretary of State Antony Blinken, U.S. Trade Representative Katherine Tai, and National Security Adviser Jake Sullivan, raised the same concerns. The chairman of the Senate Foreign Relations Committee’s Western Hemisphere subcommittee noted that the administration was “shifting from pursuing text-based agreements with binding commitments and is instead developing a ‘forum’ intended to bring leaders together to broadly discuss areas of mutual interest and shared goals.”

USTR Tai in South Africa to Discuss AGOA

What happened: U.S. Trade Representative Katherine Tai this week was in South Africa to discuss renewal of the African Growth and Opportunity Act (AGOA), which allows eligible sub-Saharan African countries to export goods to the United States duty-free. The trade preference program is set to expire in 2025.

Tai was scheduled to meet with South African President Cyril Ramaphosa and senior government officials from other AGOA-eligible countries to talk about the future of the program and ways to improve it.

While South Africa is a beneficiary of the AGOA program and partially opened its market to U.S. pork, it has restrictions in place that limit the amount and types of pork it will take.

Why it matters: The objectives of AGOA are to expand U.S. trade and investment with sub-Saharan Africa, stimulate economic growth in the region, and facilitate African nations’ integration into the global economy. In many AGOA countries, pork is an important source of protein, making them potentially significant markets for U.S. pork.

NPPC’s take: NPPC supports renewal of AGOA but wants the Biden administration to press beneficiary countries to provide “reasonable and equitable treatment” for U.S. imports, a requirement of the program. In July, NPPC urged the Office of the U.S. Trade Representative to remove South Africa and Nigeria from AGOA, pointing out that the two countries are reaping the benefits of the program but providing “significantly limited” market access for U.S. pork.

South Africa imports almost no pork from the United States because of unwarranted, non-scientific restrictions, while Nigeria prohibits the importation of raw pork. Just days before the AGOA meeting, President Biden removed Nigeria, among several other countries, from the trade preference program’s eligibility list.