Capital Update – For the Week Ending December 1, 2023

Spread the love

In this week’s National Pork Producers Council (NPPC) Friday recap: Association applauds USDA’s extension of pork processing line speeds program; NPPC asks Export Council to address trade issues; NPPC representatives participate in Codex Commission meeting; U.S. pork plants get green light to export to China; and NPPC’s Zieba moderates WITA panel on trade career opportunities. Take a deeper dive below.

USDA Extends Pork Processing Line Speeds Program

What happened: The U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS) announced Tuesday that it granted a 90-day extension for trials at six pork packing plants with faster harvest line speeds. The harvest capacity facilitated by higher line speeds at the six trial plants represents over three percent of national capacity. Extending and making permanent this added capacity is a major NPPC priority.

In late 2019, a new USDA rule established for processing facilities the New Swine Inspection System (NSIS), which included a provision that allowed plants to determine their own line speeds based on their ability to maintain process control. In March 2021, a U.S. District Court vacated the provision, citing a lack of safety data. At NPPC’s urging, in November 2021, FSIS implemented a time-limited trial for six NSIS facilities to operate at increased slaughter line speeds for one year while collecting data to evaluate the impact of the faster speeds on worker safety. Recently, though, it was determined that the data submitted was not sufficient for such an evaluation.

In October, NPPC urged USDA to ensure line speed provisions of the trial were extended before the program’s November 30 expiration. NPPC developed an economic impact analysis estimating the loss of the trial’s added harvest capacity on producers and met with the Administration and Congress to emphasize the need to avoid this damage. In November, Sen. Chuck Grassley (R-IA) and Rep. Brad Finstad (R-MN) asked Agriculture Secretary Tom Vilsack requesting extension of the trial.

NPPC’s take: Ensuring sufficient harvest capacity at packing plants is critical to the ability of the U.S. pork industry to provide products to consumers around the globe. Without the increased line speeds at the six trial plants – and the resulting decrease in packing capacity – some producers could have incurred an additional loss of nearly $10 a head in the first and second quarters of 2024, according to industry economists. NPPC supports expanding and making permanent the NSIS line speed provisions, which could increase packing capacity and help alleviate supply issues.

Click here for more information.

Ag Groups Ask Export Council to Address Trade Issues

What happened: More than 30 agricultural organizations, including NPPC, sent a letter this week urging the President’s Export Council to adopt a proposal to “expand export markets opportunities for U.S. food and agriculture, eliminate unwarranted non-tariff barriers, and reinforce global food security.”

Last year, U.S. agriculture had a $2.4 billion trade deficit, its first shortfall since 1959. Over the previous 10 years, U.S. agriculture has had an average trade surplus of $12.5 billion. The U.S. Department of Agriculture is predicting an agricultural trade deficit of $17 billion.

What they want: With U.S. food and agricultural exports down 9% in value and 16% in volume, the food and agriculture organizations asked the council to:

  • Ask the Biden administration to diversify sourcing and/or incentivize cost-effective U.S. production of agricultural inputs such as fertilizers, vitamins, and chemicals to maintain U.S. agricultural production.
  • Establish a robust agricultural trade agenda that includes expanding domestic trade promotion programs, recommitting to comprehensive trade agreements, and eliminating tariff and non-tariff trade barriers.
  • Enforce existing trade agreements, including by strengthening the World Trade Organization dispute resolution process.
  • Urge the U.S. government to promote a unified message on agricultural sustainability that focuses on voluntary, incentive-based programs that support sustainable productivity growth, keep food accessible, support climate-smart agricultural practices, and provide additional market opportunities.

Why it matters: 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%. Through September, food and agricultural exports were nearly $127 billion.

NPPC Representatives Engage in Codex Commission Meeting

What happened: NPPC’s Dr. Trachelle Carr, international technical services specialist, and Dr. Ashley Johnson, food policy director, this week attended the 46th annual meeting of the Codex Alimentarius Commission in Rome, Italy. The commission serves as the international food safety standards-setting body for the Food and Agriculture Organization of the United Nations and World Health Organization.

Why it matters: Members of the Codex commission discussed guidelines for the control of Shiga toxin-producing Escherichia coli (STEC) and for the safe use and reuse of water in food production and processing. They also adopted a maximum residue limit (MRL) for Zilpaterol, a veterinary drug used in cattle. The adoption of this standard supports the Codex Commission’s science-based safety for food.

In addition to commemorating the 60th anniversary of Codex and adopting new texts and revisions and amendments to existing ones, the commission discussed the application of statements of principle on the role of science in the Codex decision-making process and the extent to which other factors should be considered. It also addressed the need for standards and related texts on new food sources and production systems, guidelines for the prevention or reduction of ciguatera poisoning, and hygiene control measures in traditional markets for food.

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

This is the most important Codex meeting of the year, as the entire body gathers to move forward standards, based on the committee meetings throughout the year, which Drs. Carr and Johnson participated. Codex provides the U.S. pork industry an opportunity to speak up about standards impacting the safety of our food, food production, and international trade on a global platform.

Forty-sixth meeting of the Codex Alimentarius Commission in Rome.

U.S. Pork Plants Get Approval to Export to China

What happened: China granted approval for a dozen U.S. pork facilities to export products as part of the U.S.-China Phase One Economic and Trade Agreement. The additional plants are expected to help boost U.S. pork exports to China.

Why it matters: The U.S. pork industry is dependent on exports, which annually account for about a quarter of all sales and contribute significantly to every producer’s bottom line. China is one of the top five foreign destinations for U.S. pork exports. Last year, China/Hong Kong took nearly $1.4 billion of U.S. pork, or almost 20% of total exports in 2022, making it the No. 2 export market.

NPPC’s take: While NPPC welcomed the news, it remains concerned with China’s tariffs on and non-tariff barriers to U.S. pork. For example, China still requires all food manufacturers, processors, and storage facilities to be registered and bans the feed additive ractopamine. Since April 2018, China imposed a 25% retaliatory tariff on U.S. pork in response to U.S. duties on a host of Chinese products over China’s steel and aluminum exports to the United States.

NPPC’s Zieba Moderates WITA Panel on Trade Career Opportunities

What happened: NPPC Vice President of International Affairs Maria C. Zieba this week participated in an event, Pathways to Opportunity, put on by the Washington International Trade Association (WITA) for students from the University of Nebraska, University of Kansas, and University of Denver. WITA is the largest non-profit, non-partisan organization dedicated to providing a neutral forum in the nation’s capital for the open and robust discussion of international trade and economic issues.

Zieba, who serves on the WITA board of directors, moderated a panel on government and public affairs jobs in the private sector. The panel featured Gregg Doud, chief operating officer for the National Milk Producers Federation and former chief agricultural negotiator in the Office of the U.S. Trade Representative (USTR), and Maureen Hinman, former director of environment and natural resources at USTR and co-founder and chairman of Silverado Policy Accelerator, a non-profit organization dedicated to solving geopolitical challenges in trade and industrial security, economic and ecological security, and cybersecurity.

Why it matters: WITA, whose members include trade leaders in business, law, academia, non-governmental organizations, embassies, and the U.S. government, educates policy makers and the public about pressing international trade and economic policy issues. It regularly holds events and meetings on such topics. Through moderating a panel for dozens of students, Zieba shed light on the vast opportunities for careers within the pork industry. Zieba’s leadership within WITA has elevated the importance of NPPC’s international trade priorities amongst policy makers and the public.

Maria C. Zieba moderates WITA’s Pathways to Opportunity webinar.