Capital Update – For the Week Ending Feb. 24, 2023
In this week’s National Pork Producers Council (NPPC) Friday recap: USDA Ag Outlook Forum, Farm Bill hearings, Codex Alimentarius meeting updates, Mexico’s ban on GMO corn, White House Rural Stakeholders call, NASDA to fight ASF and South Korea ASF report. Take a deeper dive below.
USDA’s 99th Annual Agricultural Outlook Forum
What happened: The United States Department of Agriculture’s (USDA) Ag Outlook Forum kicked off on this week gathering industry leaders and subject matters experts to discuss hot topics and key issues impacting agriculture.
Secretary of Agriculture Vilsack delivered the keynote address that stressed key issues for USDA. Vilsack mentioned the importance of agricultural trade, recent trends in net farm income and opportunities that exist for farmers to pursue new profit centers through climate smart and value-added agricultural programs.
Forecasts issued: USDA Chief Economist Seth Meyer highlighted current trends and risks for U.S. commodity markets this year. In his speech he reaffirmed the Forum’s theme of “Seeds of Growth Through Innovation.” Noting that the past three years of economic uncertainty and market disruption brought on by the pandemic reinforces the importance of productivity growth in maintaining an abundant and affordable food supply.
Meyer also noted that:
- The U.S. economy and farm economy are strong, but some risks remain
- Grain market volatility eases, but prices remain elevated
- Increases in hog and poultry production while cattle decline
- Exports forecast to fall in fiscal year 2023 from record fiscal year 2022 levels; imports remain strong
- Net farm income is expected to decrease in 2023 on lower receipts and higher expenses
Read his full remarks here:
USDA released its forecasts for farm income, prices and production in 2023. These forecasts show an increase in total pork production for 2023, and lower average hog prices and reduced cash recipients from 2022.
NPPC’s take: USDA is forecasting higher pork production and lower prices for hogs in 2023, resulting in 2023 cash receipts forecasted to be five percent smaller than 2022. USDA also predicts that the season-average price of corn and soybeans will be lower this year than 2022 but still high compared to historical averages.
2023 Farm Bill Corner
Agriculture Hearings Ramping up on Capitol Hill
What’s happening: Marking the first official House Agriculture hearing of the year. Chairman of the House Committee on Agriculture, Glenn “GT” Thompson (PA-15), announced the committee will hold a hearing on Tuesday, Feb. 28 to discuss “inflationary pressures and regulatory burdens” on American farmers. Hearing witnesses have not yet been announced.
Senate Farm Bill Hearings Continue
March 1: Conservation and Forestry Programs
Hearing dates can change – stay up to date by checking the hearing calendar here.
NPPC’s take: We are encouraged that both the Senate and the House Ag Committees continue to discuss the 2023 Farm Bill. We urge them to move the legislation forward so it can be passed this year.
Codex Alimentarius Recent Meeting Updates
What happened: Dr. Trachelle Carr, NPPC’s International Technical Services Specialist, served as a U.S. delegate at the Codex Alimentarius’ 26th Codex Committee on Residues of Veterinary Drugs in Foods (CCRVDF 26) in Portland, Oregon. The U.S. Codex Office is housed in the USDA’s Trade and Foreign Agricultural Affairs mission area that conducts international outreach and provides education to promote and support the development of a sustainable global agricultural system and improved international nutrition efforts.
Why it matters: The first in-person meeting since 2019, brought together participants to develop science-based standards that recommend maximum residues levels of various substances, as well as to determine priorities for consideration and codes of practices of residues of veterinary drugs in foods.
NPPC’s take: As a collection of guidelines and standards that focus on protecting consumer health, it is important to ensure that any food being traded is safe for consumers. To learn more about CCRVDF 26, click here.
Mexico’s Ban on GMO Corn Allows It for Animal Feed … For Now
What happened: Mexico’s ban on the importation of genetically modified (GMO) corn, including seeds, went into force last week, but Mexican President Andrés Manuel López Obrador simultaneously issued a new decree, supplanting one from December 2020, clarifying that GMO corn still can be used in animal feed and industrial processes for foods.
While the ban only applies to corn for human consumption, the country’s minister of economy said Mexico will phase-out GMO corn for animals and manufactured products. Currently, most U.S. corn exports to Mexico are for livestock feed.
The new decree also indicates if U.S. GMO corn passes the sanitary requirements of the Federal Commission for Protection against Sanitary Risks (COFEPRIS), it may be imported into Mexico. Additionally, COFEPRIS may grant authorization for GMO corn to be used as animal feed or for industrial use in human food until a substitute is found.
The U.S. asked Mexico to present scientific evidence by Feb. 14 to support its ban on GMO corn, as well as its prohibition on glyphosate, a herbicide used on crops.
Why it matters: Most U.S. pork producers use GMO corn – given that 92% of corn grown in the U.S. is GMO – in the feed they give their hogs. (Soybean meal, the other main ingredient of feed, comes from the 94% of GMO soybeans grown in the United States. Mexico’s GMO regulation does not apply to soybeans.)
Mexico’s prohibition on GMO corn also raised concerns among U.S. agricultural industries over the effectiveness of the rules-based trading system under the U.S.-Mexico-Canada Agreement (USMCA). The U.S. could ask that a USMCA dispute settlement panel resolve the GMO issue.
White House Hosts Rural Stakeholders Call
What happened: On Feb. 23, the White House held a Rural Stakeholders call with Will McIntee, Associate Director of the White House Office of Public Engagement, and Sean Babbington, Senior Advisor for Climate for USDA.
The update featured discussion of recent USDA announcements concerning the rollout of the Inflation Reduction Act funding to support climate-smart agriculture and an update on the Biden-Harris Administration’s response to the Ohio train derailment.
- Babbington called attention to Secretary Vilsack’s announcement that $850 million of funding from the Inflation Reduction Act would be available for fiscal year 2023 through several Natural Resources Conservation Service (NRCS) programs.
- Secretary Vilsack’s announcement of the Western Water and Working Lands Framework for Conservation Action was highlighted.
- McIntee touched on the Biden-Harris Administration’s multi-agency effort to respond to the Norfolk Southern train derailment in East Palestine, Ohio.
U.S. Pork Industry Partners with USDA, NASDA to Fight ASF
What happened: NPPC partnered with the USDA and the National Association of State Departments of Agriculture (NASDA) to tackle African swine fever (ASF). The groups last week formed a partnership to coordinate efforts to prepare for and prevent an outbreak of ASF in the United States.
Why it matters: The collaboration allows for “effective harmonization of federal and state response plans to enable producers to prevent, plan and recover from African swine fever outbreaks,” said the organizations in a joint news release. They also will be able to better encourage industry preparation for future outbreaks and disease responses in other livestock sectors.
ASF was confirmed in the Dominican Republic in July 2021 and shortly after in Haiti, marking the first time in 40 years the pig-only disease has been in the Western Hemisphere. The island of Hispaniola is just 750 miles from U.S. shores.
An outbreak of ASF in the United States would immediately stop exports of U.S. pork, which last year were nearly $7.7 billion and accounted for 23.5% of total U.S. production.
NPPC’s response: NPPC and several federal agencies have been monitoring ASF since the mid-2000s, when it started moving through Eastern Europe, and preparing for the disease when it was detected in China in 2018.
More recently, the pork industry has worked with USDA and U.S. Customs and Border Protection to stop the spread of ASF from the Dominican Republic and Haiti to neighboring islands, including Puerto Rico and the U.S. Virgin Islands.
South Korea Reports Another Case of ASF
What happened: South Korea recently reported a case of African swine fever (ASF) at a hog farm in Yangyang-gun in the northeast part of the country. It was the fourth case reported this year and the 32nd since the pig-only virus was first confirmed in the country in September 2019.
The South Korean government culled nearly 2,000 hogs at the commercial farm and issued a 48-hour standstill order on livestock facilities in most areas of the Gangwon Province. It is estimated that more than 21,000 hogs are being raised within about a 6-mile radius (10 kilometers) of the infected farm.
Why it matters: In 2022, South Korea was the number five destination for U.S. pork exports when the country imported more than $608 million of product. That was 9% more than in 2021.
The U.S. pork industry is dependent on exports, which in 2022 were nearly $7.7 billion, represented 23.5% of total pork production, and added $61.26 to the price producers received for each hog marketed.