Capital Update – For the Week Ending July 14, 2023
In this week’s National Pork Producers Council (NPPC) Friday recap: Agriculture Secretary Vilsack meets with NPPC, Massachusetts extends Q3 implementation deadline, National Pork Industry Conference highlights, NPPC asks court to defend private property rights of farmers, NPPC testimony on U.S. pork trade, ag groups push for ‘comprehensive’ trade deals, May U.S. pork exports are up and NPPC congratulates new USDA Deputy Secretary. Take a deeper dive below.
NPPC Leadership Met with Secretary Vilsack on Recent Section 32 Purchase
What happened: NPPC leadership met with U.S. Secretary of Agriculture to discuss the current state of the pork industry and to thank him for his support of last month’s U.S. Department of Agriculture Marketing Service pork products solicitation as part of its plans for the Section 32 purchase of $50.1 million of pork for distribution to various food nutrition and assistant programs.
The offering is for anyone who can sell the required quantities of pork products to the federal government. This offering is focused on loins – individual roasts weight ranging from 3.5 – 6.5 lbs., with six roasts per case.
Why it matters: The U.S. pork industry faces a challenging market environment resulting in the worst seven months of average losses in more than 20 years. Section 32 of the Agricultural Adjustment Act of 1935 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 position: NPPC applauds USDA’s purchase and looks forward to continuing to work with the administration to identify additional opportunities to find support for U.S. pork producers during these challenging market conditions.
NPPC president and Missouri pork producer Scott Hays, and NPPC CEO, Bryan Humphreys met with United States Secretary of Agriculture, Tom Vilsack, to thank him for the recent Section 32 purchase of $50.1 million of pork for distribution to various food nutrition and assistant programs, as well as discuss the status of the pork industry.
Judge Signs Order Extending Implementation for Massachusetts Question 3
What happened: Last week, NPPC and various New England-based state restaurant associations, together with the state of Massachusetts, asked the U.S. District Court for Massachusetts to extend the current stay on implementation of Question 3 (Q3) until August 23, 2023. On Monday, a federal judge granted the motion and extended the injunction against the implementation of Massachusetts Q3 until August 23, 2023.
Why it matters: Massachusetts officials have been slow to prepare for Q3 implementation. Following the U.S. Supreme Court’s May 11 decision on California Proposition 12, Massachusetts was free to impose production standards on pork being sold in the Massachusetts’ marketplace. Other issues raised in NPPC’s Q3 challenge last summer, such as restrictions on the transshipment of pork products through Massachusetts to other New England states (as well as export), were still left to be worked out.
NPPC’s take: This extended implementation allows the coalition and Massachusetts to continue discussions on implementation to ensure a smooth transition – including the transshipment and exports of pork through Massachusetts – so pork can continue to reach other New England states as well as provide guidance to the industry and supply chain.
It is important to note that this “Status Report and Joint Motion to Extend Stay” does not change Q3, the rules, or what it means to be compliant. It simply extends the existing enforcement stay for a few more weeks.
NPPC Highlights Policy Work at the 2023 National Pork Industry Conference
What happened: Pork producers and allied industries across the value chain gathered at the Kalahari Resort in the Wisconsin Dells this past week to attend the 27th annual National Pork Industry Conference (NPIC). The theme of the conference was “Sustainability = Profitability and Viability.” Attendees participated in various educational seminars covering animal welfare, pork production, industry financial health, and policy topics such as California Proposition 12 implementation.
Building on that, NPPC President Scott Hays, moderated a panel with NPPC subject matter experts to discuss the pressing policy issues of the U.S. pork industry and the proactive efforts the association is taking to address them. Panelists included Kelly Cushman, vice president of domestic policy; Michael Formica, chief legal strategist; Cody McKinley, vice president of state and national relations, and Jeff Pigott, vice president of industry relations, covered a range of topics including what’s next with California Proposition 12, state ballot initiatives and the work with food service and retail leaders and provided a behind the scenes view of the important work that NPPC staff does to advance the interests of pork producers.
Additionally, NPPC’s CEO Bryan Humphreys joined the National Pork Board CEO, Bill Even, for a fireside chat. The CEOs discussed the distinct roles of the two organizations, how they work together to sustain pig farming and to expand markets for U.S. pork exports. Humpherys highlighted the work NPPC does that focuses on representing producers before state, federal and international officials responsible for legislation and regulations concerning farming, production and expanding trade. Even discussed the National Pork Board’s work with Pork Checkoff-funded research, promotion and consumer information projects.
Building on that fireside chat, the two CEOs were joined on stage by Jack Hubbard, a co-owner of Berman & Company to discuss industry efforts to address challenges from animal rights and other extremists targeting U.S. pork producers and the opportunities for each to work together and coordinate their efforts to advance the industries priorities.
Why it is important: NPPC serves a unique role as the global voice for the U.S. pork industry. Over the past 60 years, the organization has built a robust grassroots membership, strong producer leadership, and relationships with state, national and international levels of government. It is the only organization preserving the nation’s pork farmers’ freedom to operate and to expand access to global markets through advocacy. NPPC is credited for enacting reasonable policies and often preventing unreasonable ones to allow producers to continue its critical role in agriculture.
Industry conferences, like NPIC, serve as a platform for NPPC to raise awareness and educate industry stakeholders about the current public policy issues facing pork producers and how they can get involved.
From left to right: NPPC subject matter experts Scott Hays, NPPC President and pork producer from Missouri; Michael Formica, NPPC Chief Legal Strategist; Kelly Cushman, NPPC Vice President of Domestic Policy; Jeff Pigott, NPPC Vice President of Industry Relations; and Cody McKinley, NPPC Vice President of State and National Relations.
NPPC Asks Court to Defend Private Property Rights of Farmers
What happened: Seeking to uphold the NC Property Protection Act against a legal challenge by PETA and other animal rights extremists, NPPC, the NC Pork Producers, the NC Chamber of Commerce, and the American Farm Bureau Federation, filed a brief to the United States Supreme Court in support of an appeal by NC Attorney General Josh Stein (D) this week.
Why it matters: Like many other states, the state of North Carolina has a compelling interest in protecting the rights of private property owners and discouraging fraud. As a result, the state legislature passed the NC Property Protection Act to address the very real and ever-increasing harm of extremists who use fraud and deception to obtain employment with private businesses.
Following the passage of the law, PETA and other extremists sued, arguing their first amendment rights trump criminal fraud laws and the right of property owners to exclude the public from their property. In striking down the law, the 4th Circuit Court of Appeals created an unfettered right for extremists to violate the law and commit fraud in pursuit of their otherwise illegal entry into non-public areas of farms, access farms, at any times, as long as they claimed to be engaged in journalism.
NPPC’s take: Biosecurity, infrastructure, animal welfare and worker safety are at risk when individuals illegally access non-public facilities, including farms. When these individuals make unauthorized recordings, thieve or copy documents and data, sabotage equipment, or steal animals, the consequences could be catastrophic for the U.S. food supply.
NPPC Submits Testimony on Importance of U.S. Pork Trade
What happened: This week, NPPC and the Minnesota Pork Producers Association (MPPA) submitted testimony for the congressional record on the importance of trade to the U.S. pork industry. House Committee on Ways and Means Chairman Jason Smith (R-MO) and panel member Rep. Michelle Fishbach (R-MN), who also serves on the committee’s Subcommittee on Trade, held a field hearing in Kimball, MN, to discuss “Trade in America: Agriculture and Critical Supply Chains.”
“Free and fair trade has helped the United States become an economic powerhouse,” said NPPC and MPPA in their testimony. To maintain that position, the country must expand trade in existing markets and open new markets, and it must resolve issues, including with supply chains, that could negatively affect the ability to trade.
Why it’s important: Trade is vital to America’s pork producers, who annually export about a quarter of their total production to more than 100 countries. The U.S. pork industry exported nearly $7.7 billion of pork in 2022. Those exports equated to about $61, or 25 percent, of the value of each hog marketed last year, supported 155,000 American jobs and contributed more than $14.5 billion to the U.S. economy, according to Iowa State University economists.
NPPC’s position: In the testimony, NPPC and MPPA said trade initiatives only would benefit America’s farmers and grow U.S. exports if they address market access and eliminate tariffs on and non-tariff trade barriers to U.S. pork and other U.S. agricultural products. The organizations also pointed out several trade-limiting issues Congress should address, including:
- A lack of available agricultural laborers. The existing H-2A agricultural visa program only allows for temporary seasonal workers. Livestock farmers and packing plants need access to year-round workers.
- A proposed U.S. Department of Agriculture regulation on “Product of the USA” labeling for meat. Canada and Mexico could challenge the rule with the World Trade Organization as an unfair non-tariff trade barrier and be authorized by the WTO to impose retaliatory tariffs on U.S. products, including pork.
- Labor strife at shipping ports. Dockworkers at West Coast ports occasionally have used work slowdowns as a bargaining ploy during ongoing contract talks with port facilities owners, causing shipping delays and other supply chain problems.
- A potential outbreak of African swine fever. Detection of the swine-only disease in the United States would prompt the immediate closure of U.S. pork export markets, which would devastate pork producers and other agricultural producers.
Ag Groups Ask White House to Pursue ‘Comprehensive’ Trade Deals
What happened: Facing an agricultural trade deficit for the first time in decades, a coalition of agricultural organizations urged the Biden administration to pursue comprehensive free trade agreements and redouble efforts to expand export markets for U.S. food and agricultural products by reducing tariffs.
In a letter sent late last week to U.S. Trade Representative Katherine Tai, 24 agricultural groups, including NPPC, said, “the opportunity to open markets for American workers is particularly notable in the rapidly growing economies represented in the IPEF” – the Indo-Pacific Economic Framework for Prosperity.
The IPEF, which consists of Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, United States and Vietnam, is a U.S.-led initiative to forge closer ties with nations in the Asia-Pacific region. Talks are focused on supply chains; clean energy, decarbonization, and infrastructure; tax and anti-corruption; and trade. However, the White House decided not to negotiate on removing tariff and non-tariff trade barriers or addressing standards-related and other technical barriers.
In its letter, the coalition said to “capture the potential of the framework, IPEF must tackle key non-tariff barriers that are hindering American exporters.”
Why it matters: U.S. food and agriculture exports are vital to the American economy. Last year, the agricultural sector exported almost $200 billion of products, which supported millions of U.S. jobs. Historically, the sector has been a net exporter, but the latest U.S. Department of Agriculture forecast predicts a food and agriculture trade deficit of $17 billion for 2023. The 14 countries in the IPEF have about 60% of the world’s population representing 40% percent of global GDP and 28% of the world’s trade in goods and services.
NPPC’s take: NPPC supports the IPEF talks but wants the Biden administration to pursue a more ambitious agreement that addresses agricultural market access. That means a deal must eliminate tariff and non-tariff barriers and require adopting of science-based technical, sanitary and phytosanitary standards.
U.S. Pork Exports Up Again in May
What happened: May exports of U.S. pork continued their upward trajectory, topping 261,000 metric tons (mt) for the month, up 16% from a year ago, the ninth largest on record, and the largest since May 2021. May export value climbed 11% year-over-year to $731.1 million, also the highest since May 2021 and the seventh highest on record. For the year through May, exports were 14% above last year’s pace at 1.22 million mt, valued at $3.35 billion – up 13% – according to data issued late last week from the U.S. Department of Agriculture.
Destinations for U.S. pork: Mexico still was the top destination for U.S. pork exports, taking nearly 97,000 mt worth almost $199 million in May, up 19% and 15%, respectively, from a year ago. For January through May, export volume was 447,081 mt and value was $890.1 million, 11% and 23% higher than the same period in 2022.
U.S. pork exports to Australia, Central America – mostly Guatemala, Honduras, and Nicaragua – Malaysia, the Philippines, South Korea, and Taiwan continued their robust growth. Exports in May to South Korea were $73.4 million, the highest in more than five years and the fourth highest on record, while export volume to Taiwan was the largest in 12 years.
What it means for producers: May’s export value equated to $69.41 per hog marketed, an increase of 6% from a year ago. For the first five months of the year, the value equated to an average of $63.68 a head, up 10% from the same period in 2022. Exports accounted for 27.2% of total May pork production and 25.0% for January through May, compared with 25.2% and 23.2%, respectively, from the same periods a year ago.
Torres Small New USDA Deputy Secretary
What happened: This week, Xochitl Torres Small, USDA’s Under Secretary for Rural Development (RD), was confirmed by the U.S. Senate as the agency’s deputy secretary. She takes over from Jewel Bronaugh, who resigned earlier this year.
Torres Small, who served as RD undersecretary since October 2021, represented New Mexico’s 2nd Congressional District in Congress for one term (2019-2021). She previously held positions as a field representative for Sen. Tom Udall (D-NM), a clerk for the U.S. District Court for the District of New Mexico, and a private practice attorney. She earned a law degree from the University of New Mexico School of Law, an undergraduate degree from Georgetown University’s School of Foreign Service, and an international baccalaureate from Waterford Kamhlaba United World College of Southern Africa.
Why is this important: As Agriculture Secretary Tom Vilsack’s deputy, Torres Small will help implement the 2023 Farm Bill and oversee other agriculture programs.
NPPC’s take: NPPC supported Torres Small’s nomination to be USDA’s deputy secretary, joining more than 50 other agricultural groups in a March letter to the Senate Committee on Agriculture, Nutrition, and Forestry urging her approval. The groups noted that Torres Small has “a deep commitment to addressing challenges in the agricultural supply chain, fostering economic opportunities and security through rural infrastructure investments, and fighting for the needs of rural Americans.