Capital Update – For the Week Ending May 5, 2023

In this week’s National Pork Producers Council (NPPC) Friday recap: the importance of international trade, NPPC’s Stevermer to testify on agricultural trade, NPPC policy series for Hill staff, USTR meets with Indo-Pacific economic framework countries, shipping coalition asks Congress to address railroad storage fees, USDA to open 12 regional food business centers and congressional hearings on the next farm bill continue. Take a deeper dive below.

International Trade: Why It’s Important to U.S. Pork Producers

What happened: In honor of World Trade Month, the National Pork Producers Council (NPPC) is highlighting the important role international trade plays for U.S. pork farmers and the U.S. economy.

What’s the word: “U.S. pork farmers have built a global reputation for providing domestic and foreign markets with high-quality, safe, and affordable pork products,” said Lori Stevermer, NPPC’s President-elect and pork producer from MN. “To grow exports and support high-paying jobs in rural communities, the United States must open new and expand existing markets through trade agreements, trade and investment framework agreements, and market access deals.”

“It is important that the United States maintain current markets but extend preferential trade agreements to smaller and lesser-developed countries,” added Stevermer. “Over the past decade we have seen how dependent we have become to foreign markets – we export more to the 20 countries we have a free trade agreement than to the rest of the world combined. Trade market access can make enormous impacts for American pork farmers making the U.S. more globally competitive by boosting exports, supporting jobs, and offering nutritious and affordable pork products.”

Quick facts from 2022:

NPPC’s take: NPPC advocates for the social, environmental and economic sustainability of U.S. pork producers and their partners by supporting reasonable public policies allowing them to export pork products globally. NPPC works to safeguard existing markets and for greater market access to high-quality, affordable pork products for consumers through trade agreements and trade initiatives that eliminate tariff and non-tariff barriers to U.S. pork exports.

To learn more about NPPC’s take on trade priorities, go to: https://nppc.org/pork-industry-issues/international-trade/.

NPPC’s Stevermer to Testify on Agricultural Trade

What: NPPC President-elect Lori Stevermer, a pork producer from Easton, MN, will testify next Thursday before the House Committee on Agriculture’s Subcommittee on Nutrition, Foreign Agriculture and Horticulture, giving pork producers’ perspectives on agricultural trade.

Stevermer will discuss the U.S. pork industry’s trade priorities, including negotiating comprehensive trade agreements; expanding market access in countries, particularly in the Asia-Pacific region; renewing U.S. preferential trade programs; addressing the agricultural labor shortage; keeping the United States free from African swine fever; and adequately funding the federal agencies that deal with foreign animal diseases.

Why it matters: U.S. agricultural trade is vital to America’s farmers and the overall U.S. economy. For U.S. pork producers, pork exports contribute significantly to their bottom line. Last year, when they shipped $7.68 billion of products to foreign destinations, those exports equated to about $61 in value for each hog that was marketed in 2022.

NPPC Policy Series for Hill Staff

What happened: On Tuesday, May 2, NPPC held a bicameral and bipartisan briefing to educate Congressional policymakers and their agriculture staff on the state of the pork industry with a specific focus on market conditions.

Leading NPPC Economist, Holly Cook, presented on the various factors affecting current producer returns, including current hog market dynamics, retail price spreads, production costs, demand, exports and labor. The briefing also focused on the total economic importance of pig farming, as well as the structure and makeup of the U.S. pork industry.

NPPC staff in attendance left to right: Andrew Bailey, Matt Grill, Andrew Beardslee, Holly Cook, Ashley Johnson, Christina Banoub, Chase Adams, Cody McKinley and Lucy Russell.

USTR Meets with Indo-Pacific Economic Framework Countries

What happened: The Office of the U.S. Trade Representative this week held meetings with trade officials from several of the countries that are part of the Indo-Pacific Economic Framework for Prosperity.

The IPEF, which includes 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.

USTR Ambassador Katherine Tai held virtual meetings with Australian Minister for Trade and Tourism Don Farrell, New Zealand Minister for Trade and Export Growth Damien O’Connor and Singapore Permanent Secretary for Trade and Industry Gabriel Lim. She met in person with Ashok Kumar Mirpuri, Singapore’s ambassador to the United States.

Deputy USTR Sarah Bianchi met virtually with Fiji Deputy Prime Minister and Minister for External Trade Monoa Kamikamica, Japanese Ministry of Foreign Affairs Senior Deputy Minister Ono Keiichi and Malaysian Deputy Minister of Investment, Trade and Industry Liew Chin Tong.

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.

Shipping Coalition Asks Congress to Address Railroad Storage Fees

What happened: The Ocean Shipping Reform Act (OSRA) Coalition, of which NPPC is a member, this week raised concerns with the House Transportation and Infrastructure Committee about shipping container storage fees charged by railroads.

While the OSRA of 2022 addressed the use of excessive detention and demurrage fees by ocean shipping ports, it did not address fees charged by rail companies when containers are delayed at railyards often because of the railroads’ terminal operations. Ocean carriers often contract with railroads to deliver goods to U.S. inland points under a through bill of lading. If containers are delayed, storage charges must be paid directly to the railroad by importers to gain release of the containers. While the Federal Maritime Commission (FMC) has jurisdiction over ocean shipping practices, it is unclear if it has authority over railroad storage charges.

In a letter sent this week to the transportation committee’s leadership, the coalition asked Congress to clarify that rail storage charges assessed under ocean bills of lading for through transportation – meaning continuous transportation between an origin and destination – should be billed to the ocean carriers and subject to the OSRA of 2022 demurrage and detention requirements, including that they be “reasonable.”

Why it matters: The OSRA Coalition in its letter pointed out that “[railroad storage] charges are often assessed even though they do not promote network efficiencies, contrary to the incentive principle that the FMC has determined by rulemaking governs ocean transportation. These demurrage charges have resulted in costs to U.S. businesses in the hundreds of millions of dollars.” About a quarter of the U.S. pork industry’s total production annually is exported, with much of it shipped on ocean carriers and some of it traveling to shipping ports by rail.

NPPC’s take: NPPC was a strong supporter of the OSRA of 2022 and – along with the OSRA Coalition – is backing the recently introduced “Ocean Shipping Reform Implementation Act” (H.R. 1836), which will further modernize the nation’s maritime policies and amend the Shipping Act of 1984 to provide relief for unfair business practices that adversely affect supply chains and the ocean cargo delivery network.

USDA to Open 12 Regional Food Business Centers

What happened: The U.S. Department of Agriculture will create 12 new Regional Food Business Centers to help farmers, ranchers and food businesses access new markets and find federal, state and local agricultural resources. It also announced a $420 million Resilient Food Systems Infrastructure Program to fund innovative projects in processing and distribution, which should bolster food supply chains and strengthen local and regional food systems.

Last September, USDA announced $400 million would be available for the centers, and 12 organizations recently were selected to lead each one. The centers will provide technical assistance to farmers and ranchers as well as funding for processing capacity and infrastructure improvements and help link producers to wholesalers and distributors.

NPPC’s position: NPPC supports efforts by USDA to assist agricultural producers, particularly small and medium-sized producers, and to strengthen supply chains and expand food processing capacity. With centers in a dozen regions across the country, USDA programs will be more accessible to more farmers.

Congressional Hearings on Next Farm Bill Continue

What happened: Hearings on the 2023 Farm Bill continued this week, with the Senate Committee on Agriculture, Nutrition, and Forestry Subcommittee on Commodities, Risk Management, and Trade holding a couple on farm safety net programs and on risk management and access to credit.

Why it’s important: The five-year Farm Bill authorizes the various agricultural programs and sets farm, conservation, forestry and nutrition policy.

NPPC’s position: NPPC is urging congressional lawmakers to include in the 2023 Farm Bill provisions to prevent and prepare for foreign animal diseases, protect animal health and expand trade market access.