Capital Update – For the Week Ending March 3, 2023
In this week’s National Pork Producers Council (NPPC) Friday recap: House and Senate Committee on Agriculture hearings, NPPC signs coalition letter disapproving WOTUS CRA resolutions, Philippines’ agencies to expedite approval of meat imports and USDA forecasts fiscal 2023. Take a deeper dive below.
House Committee on Agriculture Hearing
What happened: On Tuesday, Feb. 28, the House Committee on Agriculture held a hearing entitled “Uncertainty, Inflation, Regulations: Challenges for American Agriculture.” Various industry representatives served as witnesses, including Zippy Duvall, American Farm Bureau Federation President, and Mike Brown, National Chicken Council President.
Committee Chair Glenn “GT” Thompson (R-PA) opened by urging committee members to view the 2023 Farm Bill renewal through the lenses of science, technology and innovation. Chairman Thompson went on to celebrate the progression of agricultural production since the 1930s, but drew attention to the challenges and geopolitical unrest the COVID-19 pandemic brought. Thompson emphasized and underscored that the committee’s mandate to address the most pressing issues impacting farmers, producers and the agricultural sector as a whole comes down to a strong farm bill.
- Market access, consolidation and instability – Members inquired about expanding market access and concerns over consolidation in the grocery and livestock industries.
- Crop protection tools – Members asked witnesses about new regulations on crop protection tools, including chlorpyrifos and atrazine.
- Fertilizer – Witnesses responded to questions concerning the fertilizer industry, including how to strengthen domestic fertilizer production.
- Federal regulations and safety net programs – Members questioned witnesses about the effect of federal regulations on producers and how to improve the farm safety net.
- Food assistance programs – Members and witnesses discussed how producers support food assistance programs like the Supplemental Nutrition Assistance Program (SNAP).
- Trade, self-reliance and geopolitical concerns – Members and witnesses discussed ocean shipping and increasing domestic production to address national security concerns.
- Rising costs – Members asked witnesses how rising input costs, food costs, and interest rates have affected producers.
- Labor issues – Members and witnesses discussed labor issues, including changes to the overtime wage rate calculation in the H2A visa program. Duvall noted, “a wage rate that climbs faster than inflation, there’s something wrong.” In response to a follow-up question, when Rep. Cammack (R-FL-3) asked what regulation needed to be eliminated, Duvall responded with, “guest worker programs.”
- Farm equipment – Witnesses discussed right-to-repair issues for farm equipment.
- Underserved communities – Members asked how the industry can support underserved populations.
- Energy and environmental concerns – Members expressed concern over the Biden-Harris Administration’s energy policies and conservation efforts.
Senate Farm Bill Hearings Continue
What happened: On Wednesday, March 1, the Senate Committee on Agriculture, Nutrition and Forestry held a Farm Bill hearing on conservation and forestry programs. Representatives from the U.S. Department of Agriculture (USDA), the Farm Service Agency and the U.S. Forest Service served as witnesses.
In her opening statement, Chair Debbie Stabenow (D-MI) stressed the importance the Farm Bill has on providing farmers with conservation tools to improve their land and protect wildlife habitat. As urban agriculture played a role in the 2018 Farm Bill, it was noted it would also be a focus in the 2023 Farm Bill. Additionally, Sen. Stabenow called attention to wildlife disasters in Western states.
Sen. Tommy Tuberville (R-AL) asked Mr. Terry Cosby, USDA Natural Resources Conservation Service (NRCS) Chief, about the Feral Swine Eradication and Control Pilot Program (FSCP). In his response, Mr. Cosby noted, “the NRCS needs to improve technology to trap feral swine.”
- Farm Service Agency (FSA) programs – Senators asked how FSA conservation programs, including the Conservation Reserve Program (CRP), can be improved.
- NRCS programs – Senators discussed the impact and potential improvements to the Inflation Reduction Act (IRA) funding for NRCS conservation programs.
- Forestry and disaster relief – Senators and witnesses discussed how the United States Forest Service (USFS) maintains forest health, wildfire resilience and timber production.
- Invasive species concerns – Witnesses explained how the Department of Agriculture (USDA) is responding to the threat of invasive species, including feral swine.
- Water resources – Senators asked about the Waters of the United States (WOTUS) rule and how USDA is working to address pollutants in water.
- Reaching underserved populations – Senators discussed how conservation programs could increase accessibility to underserved populations.
- Distressed borrower relief – Senator Cory Booker (D-NJ) asked questions about debt relief for farmers.
NPPC’s take: We are encouraged that the House and Senate Agriculture Committees continue to discuss the 2023 Farm Bill. We urge them to move the legislation forward so it can be passed this year.
NPPC Signs Coalition Letter Disapproving WOTUS CRA Resolutions
What happened: On Tuesday, Feb. 28, the House Committee on Transportation and Infrastructure approved H.J.Res.27 by a vote of 30 to 24. This resolution would use the Congressional Review Act (CRA) to void the Biden-Harris Administration’s revised definition of Waters of the United States (WOTUS), which is scheduled to go into effect on March 20.
NPPC’s take: WOTUS must be workable for farmers, and this final rule causes concern for pork producers as it may require costly CWA permits for many activities on or near covered waters, which may now include drainage features typically found in or next to farm fields. This could eventually force farmers to obtain permits to undertake some basic farming practices, such as planting seeds or applying nutrients or crop protectants to their fields.
“Stewardship of natural resources is a top priority for pork producers. The WOTUS rule creates significant confusion, still seeks to regulate land use activities and drainage features constructed by farmers that are far beyond EPA’s jurisdiction and will create significant concerns for both livestock and row crop farmers.” – Michael Formica, Chief Legal Strategist
A farmer’s decision to implement edge-of-field and in-field conservation practices and nutrient management methods should not be micromanaged and infringe on farmers’ freedom to operate with abusive citizen enforcement suits.
Learn more: For more information, please visit our website.
Philippines’ Agencies to Expedite Approval of Meat Imports
What happened: The Philippines recently announced it is setting up two agencies within its Department of Agriculture to fast track the accreditation of foreign companies that want to export meat to the country.
Senior Under Secretary for Agriculture Domingo Panganiban issued special orders to re-form the Pre-Inspection Committee (PIC) and the Accreditation Review Body (ARB), which oversee accreditations. The agencies were originally formed in 2016 but discontinued after a few years.
The PIC, chaired by the country’s director of the Bureau of Animal Industry (BAI), is expected to draft guidelines and training for inspectors, as well as develop official procedures and reporting requirements for inspections. The ARB, which will be chaired by the Department of Agriculture Undersecretary for Policy, Planning and Regulations, will review the findings and recommendations made by inspectors.
The Philippines’ import inspectors ensure meat imports comply with the country’s health and food safety standards.
Why it matters: NPPC will continue to monitor the situation to ensure that the agencies’ goal to streamline the import process is met. The Philippines is an important Asian market for the U.S. pork industry. Last year, America’s pork producers shipped more than $133 million of product to the island nation, making it the number 15 market for U.S. pork exports. While that amount was significantly lower than 2021’s record $204 million, it was the second-highest total.
NPPC has been working with the U.S. and Philippines governments to expand access for U.S. pork to the Philippines market. In May 2021, Manila temporarily reduced its tariff on U.S. pork imports, dropping the in-quota rate to 15% from 30% and the out-of-quota rate to 25% from 40%. The Philippines, which is battling African swine fever, has continued those tariff rate reductions for the second time, and most recently extended them throughout 2023.
USDA Forecasts Fiscal 2023 Agricultural Trade Deficit
What happened: Last week, USDA released its fiscal 2023 agricultural forecast, which predicted the country will have a record $14.5 billion farm trade deficit.
USDA is projecting agricultural exports will decline to $193.5 billion in fiscal 2023 from $196 billion in fiscal 2022, while imports will increase to $197 billion from $192 billion. The resulting $3.5 billion agricultural trade deficit would be the second largest since 1990.
Why it matters: U.S. agricultural trade is vital to America’s farmers, ranchers, and overall U.S. economy. Over the past three and a half decades, particularly since it began negotiating free trade agreements, the United States has had agricultural trade surpluses nearly every year.
Pork exports contribute significantly to producers’ bottom line. Last year, when pork producers shipped $7.68 billion of product to foreign destinations – the third highest on record – those exports added $61.26 to the price producers received for each hog marketed. The average price per hog in 2022 was $208.47.