Capital Update – For the Week Ending June 23, 2023
In this week’s National Pork Producers Council (NPPC) Friday recap: California Proposition 12 implementation modification, swine vets lobby for FAD funding in 2023 Farm Bill, extension period request to review GHG and carbon sequestration guidelines, lawmakers form working group to address farm labor shortage, India’s Modi meets with Biden, USDA investing in rural economies and GAO issues report on COVID at meatpacking plants. Take a deeper dive below.
The Facts on California Proposition 12 Implementation Modification
What happened: On Thursday, the state of California released a court order that modifies the California Proposition 12 implementation.
Contrary to some reporting – this is not a delay of all of Proposition 12, rather it is an adjustment related to the sale of whole pork meat.
This is an extension of time for the sale of non-compliant whole pork meat, provided that the meat is in the supply chain by July 1. If it is in the supply chain by July 1, that product can be sold in California until December 31. Anything harvested after July 1, to be sold in California, will still have to be Proposition 12 compliant.
What is the significance of this order: California recognized that if something was not done on the implementation of Proposition 12, consumers in the state could potentially face increased food prices and a significant decrease in amount of pork supplied to the state.
NPPC’s take: On Thursday, in reaction to the court order, NPPC released the following statement from CEO Bryan Humphreys:
“It is welcome news to America’s pig farmers and consumers that California recognized the challenging situation the July 1 Proposition 12 implementation date will have on our industry and food supply. Granting six months of additional relief for products in the supply chain allows grocery stores to remain stocked so the 40 million Californians have uninterrupted access to affordable, safe and nutritious pork products, especially with rising food prices.
“We appreciate Governor Newsom, Attorney General Bonta and the California Department of Food and Agriculture for their efforts over the past month to find a solution to achieve a smoother transition for the entire pork value chain, including our foreign trading partners.
“While this temporary solution does not solve the challenges and uncertainty California Proposition 12 brings to our industry, NPPC looks forward to working with Congress to find a permanent bipartisan solution to this problem.”
What is next: NPPC continues to work with Congress to find a permanent, bipartisan solution to Proposition 12 that will ensure all American families have access to abundant, safe and nutritious pork products.
For resources and to learn more about compliance guidelines, please visit:
Swine Vets Lobby for Foreign Animal Disease Funding in 2023 Farm Bill
What happened: On Tuesday, June 20, swine veterinarians from around the country flew into Washington, DC to lobby Congress to secure funding for foreign animal diseases (FAD) prevention in the 2023 Farm Bill.
The subject matter experts highlighted the importance of the “three-legged stool”, which includes the National Animal Vaccine and Veterinary Countermeasures Bank (NAVVCB), National Animal Health Laboratory Network (NAHLN), National Animal Disease Preparedness and Response Program (NADPRP) and the National Veterinary Stockpile (NVS).
Swine veterinarians received a farm bill debrief from NPPC staff, heard from Dr. Koren Custer, USDA APHIS’ Assistant Director of Swine Health, on how funds from the 2018 Farm Bill were utilized, and Dr. Doug Ensley, Boehringer Ingelheim’s Director of Veterinary Public Health provided an update on veterinary vaccine and countermeasures banks. After much discussion and conversation, participants went to meet with U.S. Senators and Representatives.
Why is it important: The Western Hemisphere has detected an outbreak of African swine fever (ASF) – a highly contagious, viral and deadly disease with no vaccine or cure – for the first time in 40 years. If funding is not provided for preventative measures and programs to stop other FADs from entering the U.S., American agriculture is at risk.
The “three-legged stool” programs provide stability for producers and veterinarians when faced with challenges from FADs such as ASF, classical swine fever (CSF), foot-and-mouth disease and more.
NPPC’s take: By prioritizing animal health and well-being, NPPC strongly supports and advocates for additional funding for FAD prevention and protection of the American food supply in the 2023 Farm Bill.
Learn more: For more information, check out NPPC’s animal well-being page.
From left to right: Dr. Ashley Johnson, NPPC Director of Food Policy, Dr. Patrick Halbur, Dr. Meghann Pierdon, Dr. Rick Tubbs and Dr. Andrew Bowman.
Extension Period Request to Review GHG and Carbon Sequestration Guidelines
What happened: NPPC, together with 11 other agricultural organizations, submitted a request for a 60-day extension to the comment period for the 2023 Update to Technical Guidelines for Quantifying Greenhouse Gas (GHG) Emissions and Carbon Sequestration at the Entity-Scale for Agriculture and Forestry.
Why is it important: These technical guidelines, originally drafted following the 2008 Farm Bill, form the basis for how USDA measures carbon benefits from conservation and agricultural land management activities, and are part of the basis for how the U.S. will negotiate with international partners on sustainability metrics.
USDA has only allowed for a brief 30 days to review, analyze and comment on a 597 technical document. Given the critical importance of these guidelines, their length and complexity, it is imperative that adequate time is given for an in-depth review and understanding of USDA’s significant updates from the 2014 guidelines and their implications for the pork industry as many production systems have notably evolved over the past nine years and undoubtedly will continue to do so.
NPPC’s take: The international community has focused on including sustainability metrics and standards in international agreements. The goal of the U.S. government is to use this document and benchmarks as the U.S. standards on suitability for future negotiations. If not accurately representative of the U.S. pork industry, it could have a major impact on future international negotiations.
Lawmakers Form Working Group to Address Farm Labor Shortage
What happened: Members of the House Committee on Agriculture have formed a bipartisan Agricultural Labor Working Group to tackle the agriculture industry’s labor shortage and address other workforce issues.
The working group is being chaired by Representatives Rick Crawford (R-AR) and Don Davis (D-NC) and will look at solutions to the agriculture industry’s labor needs, including reforming the existing H-2A visa program. Currently, those visas allow agricultural employers who meet specific requirements to bring a limited number of foreign nationals to the United States to fill temporary, seasonal farm jobs. That number is insufficient to meet the workforce needs of livestock farmers, who need year-round workers.
An interim report detailing the industry’s labor woes and their impacts on food security and a final report with recommendations to address the workforce issues will be issued by the 14-member working group and used as the basis for potential legislation.
Why it matters: U.S. agriculture relies heavily on immigrant workers and faces a severe labor shortage. Shrinking rural populations, declining immigration to rural areas and the rising median age of farmers have contributed to the lack of available workers, causing negative effects throughout the food supply chain, including in the U.S. pork industry.
NPPC’s take: NPPC supports expanding the H-2A visa program to year-round agricultural laborers. It also backs reforming the visa system to address complexity, backlogs, predictability and costs. Although Congress has yet to reach a consensus on immigration reform, NPPC is pleased that lawmakers are discussing U.S. agriculture’s workforce needs.
India’s Modi Meets With Biden, Addresses Congress
What happened: This week, the Indian Prime Minister Narendra Modi traveled to Washington, DC to meet with President Biden and a speech to a joint session of Congress, where he called for strengthening U.S.-India ties, including through the Indo-Pacific Economic Framework for Prosperity (IPEF).
While the IPEF, which includes Australia, Brunei, Fiji, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Thailand, the United States and Vietnam, includes talks on supply chains, clean energy, tax and anti-corruption and trade, India has yet to agree to the so-called trade pillar. Furthermore, the U.S.-led initiative will not address market access or trade barriers, such as tariffs.
In the meantime, India and the United Kingdom are inching closer to a free trade agreement, recently concluding their 10th round of negotiations. The free-trade agreement (FTA) is expected to cut tariffs on goods and ease or eliminate barriers to trade between the countries.
Why it matters: The 14 countries in the IPEF have about 60% of the world’s population and represent 40% percent of global GDP and 28% of the world’s trade in goods and services. In 2022, nearly one-third of the U.S. pork industry’s exports – nearly $2.4 billion – were sent to IPEF countries despite several of them restricting U.S. pork through tariff and non-tariff barriers.
NPPC’s take: While it supports the IPEF talks, NPPC would like the Biden administration to pursue a more ambitious agreement, one that addresses agricultural market access and tariff and non-tariff barriers. India has a population of 1.26 billion, meaning the potential market opportunity is significant.
USDA Investing in Rural Economies
What happened: Last week, USDA announced $320 million in investments through four programs designed to create economic opportunities for rural areas in 19 states. The programs are the Food Supply Chain Guaranteed Loan Program, Meat and Poultry Intermediary Lending Program (MPILP), Business and Industry Loan Guarantee Program, and the Rural and Economic Development Loan and Grant Program.
The supply chain program supports investments in infrastructure for food aggregation, processing, manufacturing, storage, transportation, wholesaling and distribution to increase capacity and create a more resilient, diverse, and secure U.S. food system. The MPILP provides grants to intermediary lenders who finance the start-up, expansion or operation of slaughter facilities or other meat and poultry processing operations, while the other two programs help improve rural economies by increasing access to business capital and providing funding for rural projects.
States eligible for the programs are Alabama, California, Connecticut, Iowa, Idaho, Kentucky, Massachusetts, Michigan, Minnesota, Montana, North Carolina, North Dakota, New Hampshire, New York, Ohio, Oklahoma, Pennsylvania, Texas and Virginia.
Why it matters: Loans, loan guarantees and grants provided by USDA’s Rural Development department help expand economic opportunities, create jobs and improve the quality of life for millions of Americans in rural areas. The assistance supports infrastructure improvements; business development; housing; community facilities such as schools, public safety and health care; and high-speed internet access.
NPPC’s take: NPPC supports efforts to improve rural economies, where most of the country’s food, including pork, is produced and processed.
GAO Issues Report on COVID at Meatpacking Plants
What happened: On Tuesday, the Government Accountability Office (GAO) sent a report to Congress detailing hazards at meatpacking plants that resulted from the COVID-19 pandemic and urging the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) to work with the USDA’s Food Safety and Inspection Service (FSIS) to prepare for future such events.
The report noted that while OSHA increased plant inspections during COVID, its standards did not cover hazards fostered by the virus, such as workers in close proximity to each other.
The North American Meat Institute (NAMI), which represents the vast majority of meatpackers, is reviewing the GAO report but said that during the outbreak, as soon as more became known about how the COVID virus spread, companies acted immediately to protect employees. The meatpacking industry spent more than $1 billion on personal protective equipment and COVID tests, safety protocols and contact tracing, and state-of-the-art ventilation systems, according to NAMI. Those efforts reduced illnesses at packing plants well below the national average.
Why it is important: The meatpacking industry was deemed a “critical essential infrastructure” during the COVID-19 pandemic and was required to continue operations. While it had no protocols for such a “black swan” event, the industry has continued to implement policies and procedures prompted by the pandemic to protect its workers.
Action taken: In August 2022, OSHA and FSIS updated a 1994 memorandum of understanding between them that, among other things, calls on FSIS to report hazards including infectious diseases to OSHA. The GAO report recommends the two agencies better collaborate on meat and poultry worker safety.