Capital Update – For the Week Ending November 10, 2023

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In this week’s National Pork Producers Council (NPPC) Friday recap: EPA’s proposed wastewater regulation sparks concerns; NPPC participates in 13th annual antibiotics symposium; ag groups weigh in on WTO trade issues; support for tax credit for renewable fuel from methane; NPPC addresses pork industry issues at USMEF meeting; and FDA moves to withdraw use of Carbadox for piglets. Take a deeper dive below.

Concerns Raised Over EPA’s Proposed Wastewater Regulation

What happened: NPPC’s Chief Legal Strategist Michael Formica, along with representatives from the U.S. Poultry and Egg Association and the North American Meat Institute, met with White House Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) officials to discuss concerns about a forthcoming Environmental Protection Agency’s (EPA) proposed rule on wastewater from meat and poultry processing facilities. OIRA review is the final steps in the federal regulatory review process prior to approval for a federal agency to release a regulation.

Why it matters: EPA’s proposed regulation is expected to require meatpackers and processors to install millions of dollars of upgrades to their wastewater management systems. The costs would be burdensome for small- and medium-sized processors and packers, potentially jeopardizing their existence. Larger operations may be forced to slow production while upgrades are implemented.  EPA has been under pressure from activists to revise its permit terms for meat and poultry processing, and following a lawsuit from activists, is under a court order to propose new rules before the end of the year.

During the meeting, NPPC addressed the impact that the proposed rule would have on pork producers who are already struggling through the worst economic crisis in a generation and can’t afford the potential loss of further markets that might occur under the proposed rule. NPPC also pointed out how the impact on small and medium sized processors run contrary to the Biden administration’s efforts to foster growth within the meat and poultry processing sector. Additionally, they underscored the vital role processors and packers play in enhancing water quality in rural communities by making substantial investments in these regions.

NPPC Participates in 13th Annual Antibiotics Symposium

What happened: Dr. Ashley Johnson, NPPC’s Director of Food Policy participated in a round table discussion at the 13th Annual Antibiotics Symposium of the National Institute for Animal Agriculture (NIAA). The 2023 symposium, “Thriving in a Changing Landscape,” connected leaders from animal, human, and environmental health organizations, and the food system, providing an opportunity to collaborate on research, education, and communication.

Dr. Johnson’s discussion centered around three key areas of education, research, and communication. She highlighted the need for the United States to lead the conversation globally and continue collaboration with all stakeholders. 

Why it matters: The NIAA convenes animal agriculture experts and allies in collaborative settings to explore, discuss, learn, and develop knowledge that fosters interdisciplinary cooperation for the improvement and continuous progress of animal agriculture.

Ag Groups Weigh in on Trade Issues for Upcoming WTO Meeting

What happened: NPPC and 29 other agricultural organizations urged the Biden administration to “pursue achievable, short-term goals while laying the groundwork for a more ambitious, long-term effort to reform the agricultural trading system” at the upcoming World Trade Organization (WTO) meeting in the United Arab Emirates.

In a letter sent this week to U.S. Trade Representative Katherine Tai and Agriculture Secretary Tom Vilsack, the coalition underscored the importance of the goals, emphasizing the need for a proposal on market access and discussions focused on restoring binding dispute settlement mechanisms to enforce international trade rules.

The upcoming WTO’s Ministerial Conference, scheduled for February 26-29, 2024, represents the organization’s top decision-making body.

Why it matters: U.S. agriculture relies on a fair trading system, with the WTO to enforce trade agreements and international trade rules to ensure the flow of farm exports. U.S. agriculture is dependent on exports. U.S. exports topped $2 trillion in 2022, with agricultural exports accounting for more than $160 billion. These exports sustain more than 9 million U.S. jobs, including a million in the agricultural sector, according to the U.S. International Trade Administration.

Groups Back Tax Credit for Renewable Fuel from Methane

What happened: In a unified front, NPPC, the National Milk Producers Federation, and the Coalition for Renewable Natural Gas voiced strong support for continuing a tax credit aimed at promoting renewable natural gas (RNG) and enhancing agriculture’s role in helping to address the challenges of climate change. In the letter to Treasury Secretary Janet Yellen and Agriculture Secretary Tom Vilsack, the groups emphasized the “Inflation Reduction Act presents a major opportunity to reduce greenhouse gas (GHG) emissions – and we believe the sustainable development, deployment, and utilization of RNG should play a key role in those pursuits.”

The Inflation Reduction Act of 2022 includes a tax credit for RNG. When captured and processed from livestock farms, RNG serves as a crucial feedstock for clean hydrogen production, actively contributing to the reduction of GHGs and development of clean energy sources. For pork producers, the emergence of markets for RNG provides an additional potential revenue stream for producers to help facilitate the installation of lagoon covers, digesters, and other on farm environmental enhancements.

The letter was sent as eco and animal rights extremists, along with U.S. Senator Corey Booker (D-NJ), have increased their pressure on the Department of Treasury to withhold the tax credit for RNG produced from livestock manure because of their broader opposition to livestock production.

Why it matters: In their letter, the groups underscored the “overwhelming research demonstrating that avoiding, capturing, and utilizing manure methane at dairy and swine farms offers not just GHG emissions reductions, but also environmental, economic, and health benefits.” Granting the tax credit for methane avoidance would increase investment in abatement and recycling measures on livestock operations, the group argued.

NPPC High-Level Dialogue on Key Pork Issues at USMEF Meeting

What happened: NPPC Past President and Ohio pork producer Jim Heimerl, Vice President of International Affairs Maria C. Zieba, and International Technical Services Specialist Dr. Trachelle Carr took center stage at the U.S. Meat Export Federation’s (USMEF) strategic planning conference.

As chair, Heimerl facilitated the meeting of USMEF’s pork committee. Zieba provided a comprehensive update on critical issues facing the pork industry, focusing on pivotal matters such as African swine fever (ASF) and the ongoing efforts within the U.S. pork sector to establish a robust swine traceability system. Zieba also delved into market access challenges confronting the pork industry, addressing the USMEF exporter committee and the pork committee.

Why it matters: USMEF, of which NPPC is a member, is an association of livestock and meat organizations and producers that enhances demand in export markets. Exports are vital to the U.S. livestock industry, adding significantly to the bottom line of every producer. For U.S. pork producers, exports account for about 25% of total annual sales. In 2022, the pork industry shipped nearly $7.7 billion of product to more than 100 foreign destinations. Increasing demand in foreign markets is vital to growing U.S. pork exports.

FDA Takes Action to Withdraw Carbadox Use in Piglets

What happened: The U.S. Food and Drug Administration (FDA) is once again attempting to stop the use of carbadox, a medication utilized in piglet feed to prevent diarrhea, citing concerns over potentially carcinogenic residues in pork.

Carbadox has been used for nearly 50 years, and its manufacturer repeatedly has proved the safety of the animal drug. It is not considered medically important to human medicine, so is not a concern for antimicrobial resistance in human pathogens.

The FDA recently issued a final order, revoking the approved method for detecting carbadox residues. Separately, because there is no approved method for detecting residues, the FDA will withdraw approval of animal drug applications for carbadox use in feed. In 2020, the FDA dismissed a 2016 proceeding, opting for a fresh review of the regulatory method for carbadox approval, despite Phibro Animal Health, the drug’s manufacturer, previously providing extensive research supporting its safety.

NPPC’s take: NPPC will continue to advocate for pork producers’ continued access to carbadox. In comments submitted to the FDA in May 2022, NPPC points out that carbadox usage at the nursery stage involves a 42-day withdrawal period, likely exceeding 60 days, providing an additional safety buffer against residues. The removal of carbadox from the market, as warned by NPPC, could potentially escalate the use of alternative antibiotics, increasing the risk of difficult-to-control antimicrobial resistance in bacterial pathogens.