CAPITAL UPDATE

By National Pork Producers Council (NPPC)

For the Week Ending Jan. 7, 2022

ADMINISTRATION TO SPEND $1 BILLION, ISSUE NEW RULES TO SPUR COMPETITION
The Biden administration on Monday announced it will provide $1 billion in federal aid to help independent meat processors expand and will promulgate new regulations to foster more competition in the meatpacking industry. The White House mostly blames anti-competitive practices in the meat industry for high beef, chicken and pork prices. NPPC in August submitted comments to USDA on a proposal to invest $500 million to improve infrastructure, increase capacity and promote diversification across the meat processing industry, actions it strongly supports. It provided the agency with several options for using the American Rescue Plan funds and noted that labor availability – or lack thereof – is a larger barrier to increased packing capacity than available capital. Earlier in the year, NPPC provided the administration with an academic paper on the structure of the U.S. pork industry, giving policy-makers the real-world context on how it operates. More recently, a report on retail pork prices – authored by economists from Iowa State University, North Carolina State University and NPPC – showed farm-level profitability in 2021 within a normal range and meatpacker margins at their five-year average. Increases in retail prices, the report found, likely were driven by a lagged response to high wholesale prices during the summer and increased transportation and labor costs and supply bottlenecks and delays. Those factors have caused price inflation throughout the economy.

IOWA SENATORS WEIGH IN ON CALIFORNIA’S PROPOSITION 12
As the U.S. Supreme Court today holds a conference to decide which cases it will hear during the remainder of its current term, including the NPPC-American Farm Bureau Federation (AFBF) challenge to California’s Proposition 12, Iowa Republican Sens. Chuck Grassley and Joni Ernst this week weighed in on so-called animal welfare initiative. Prop. 12, which took effect Jan. 1, bans the sale in California of pork from hogs born to sows raised anywhere in the world in housing that does not meet the state’s arbitrary standards. Grassley penned an op-ed on the measure for the Des Moines Register, and Ernst issued a press release, decrying the “overreaching and unconstitutional” policy. Both urged the Supreme Court to take the NPPC-AFBF case and strike down Prop. 12. In August, the senators introduced the Exposing Agricultural Trade Suppression (EATS) Act, which would prohibit state and local governments from creating laws affecting the production and manufacture of agricultural products from other states that exceed existing federal, state and local regulations.

U.S. PORK EXPORTS ON PACE TO TOP 2020’S RECORD AMOUNT
According to numbers released this week by the U.S. Department of Commerce, exports of U.S. pork in 2021 are on pace to top 2020’s record $7.7 billion. From January through November, the U.S. pork industry shipped more than $7.5 billion of product to foreign destinations compared with slightly over $7 billion for the same period in 2020. The top five markets for U.S. pork last year – in order, China, Japan, Mexico, Canada and South Korea – were unchanged from 2020. Helping boost last year’s numbers, the Philippines imported 92 percent more U.S. pork in 2021 than in 2020. NPPC worked throughout 2021 for better market access to that Pacific island nation. It also got better access to Vietnam, which this July 1 will cut its tariff on imported frozen pork. There also were significant increases in pork exports to the six countries of the DR-CAFTA, a mid-2000s trade agreement NPPC championed. (Free trade agreements backed by NPPC have led to steady annual increases in pork exports over the past 20 years.) For 2022, NPPC will continue advocating for new and expanded markets for pork producers, pressing the Biden administration to join the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership; get China to remove its retaliatory tariffs on U.S. pork; renew Trade Promotion Authority, which defines objectives and priorities for trade agreements and requires Congress to approve FTAs without changes; make the Philippines and Vietnam tariff reductions permanent; address the country’s aging shipping ports and the ongoing labor shortage; and keep the United States free of African swine fever, which would negatively affect U.S. pork exports.

WHITE HOUSE TAKING STEPS TO EASE PORT PROBLEMS, FIX SUPPLY CHAIN ISSUES
The Biden administration is continuing to focus on fixing supply chain problems, holding a press briefing this week on steps it is taking to address port issues. John Porcari, port envoy to the White House Supply Chain Task Force, detailed the administration’s efforts to date, including its work with the port operators to propose fees on ocean carriers that were leaving import containers for extended periods at the terminals in Los Angeles and Long Beach. The fee has helped reduce long-dwelling containers by 40 percent at the two ports, said Porcari. Those ports also will begin at the end of this month charging fees on empty containers left for more than nine days. The White House also is taking steps to ensure U.S. exporters are treated fairly. The port of Oakland recently announced new actions to improve shipments of U.S. exports, including agricultural exports, Porcari pointed out, to ensure they are not delayed by surging import cargo and persistent congestion at U.S. ports. NPPC has provided information and recommendations for addressing port, labor and transportation challenges that affect the agriculture supply chain to the White House Domestic Policy Council and the National Economic Council.

NPPC, NATIONAL PORK BOARD TRAIN FUTURE PORK INDUSTRY LEADERS
NPPC and the National Pork Board have kicked off their 2022 class of the Pork Leadership Institute (PLI), a comprehensive training curriculum designed to develop future leaders for the U.S. pork industry. The year-long program consists of five learning sessions, running from February to November. Selected participants are educated on the legislative and regulatory processes, the importance of international trade, the roles of the national pork organizations and their state pork associations, and the issues facing producers. They also are trained to be spokespeople for the pork industry and grassroots activists able to disseminate pro-active, targeted messages about the industry. Pork producers are nominated for PLI, with NPPC staff working closely with state pork association executives and field representatives to identify key individuals. Each year about 15-20 producers are selected to participate in the program. The following producers are in the PLI class of 2022:

Katie Beckman – UT

Carl Brehe – MO

Jill Brokaw – IL

Heidi Flory – PA

Jason Foster – SD

John Giefer – MN

Jerry Hairr – NC

John Wesley Hairr – NC

Phillip Hord – OH

Alexandra Kraber – IA

Jarred Lorenz – MI

Lauren Nagel – IN

Mark Schleisman – IA

Nick Seger – OH

Jon Tangen – OK

Jared Teuscher – ID

Ismael Villalobos – OK

Morgan Wonderly – CA

For more information about PLI and to express interest in attending the program, contact your state pork association executive or NPPC’s Janine Van Vark, at [email protected].

 

nppc.org