For The Week Ending Feb. 15, 2013





The Senate Agriculture Committee Thursday held a hearing on “Drought, Fire and Freeze: The Economics of Disasters for America’s Agricultural Producers.” The hearing examined the toll weather disasters have taken on American agriculture and what steps can be taken to safeguard the economy from future catastrophes. Witnesses included USDA chief economist Dr. Joe Glauber, National Oceanic and Atmospheric Administration director of the National Integrated Drought Information System Dr. Roger Pulwarty, as well as farmers and ranchers from across the country. To read testimonies and watch the hearing, click here.


The U.S. pork industry in 2012 exported a record amount of product, according to data released this week by the U.S. Department of Agriculture. Last year, the U.S. pork industry exported more than $6.3 billion – about 2.3 million metric tons – of pork, topping the previous record of $6.1 billion exported in 2011. Exports increased by 4 percent in value compared with 2011 pork exports, and exports represented 27 percent of total U.S. pork production and added nearly $56 to the price producers received for each hog marketed in 2012. Japan again was the No. 1 export market for U.S. pork, worth $1.99 billion. Other top export markets included Mexico, Canada and China. In the coming year, NPPC will continue to press the Obama administration to keep export markets open to U.S. pork and will advocate for the acceptance of new free trade agreements to expand U.S. pork exports abroad.


NPPC, along with 37 other trade associations, expressed concern with the possibility that U.S. meat, poultry and egg products inspectors may be furloughed if sequestration – automatic, across-the-board cuts to the federal budget – were to go into effect, resulting in considerable losses to livestock and poultry farmers. NPPC strongly believes furloughing USDA Food Safety and Inspection Service (FSIS) inspectors is a highly inappropriate response to sequestration and would not be in the public interest. In a letter sent this week to U.S. Agriculture Secretary Tom Vilsack, the groups said that furloughing inspectors would close meat, poultry and egg products plants for more than two weeks and inflict substantial hardships on thousands of inspected establishments, hundreds of thousands of people directly employed by these industries and government employees. Furloughing inspectors would also mean farmers raising livestock and poultry would have nowhere to send their animals and would suffer substantial losses; the robust U.S. export trade in meat, poultry, and egg products would all but dry up; imports would be halted at the border; schools and other public institutions relying on contracted-for meat and poultry products may not be able to obtain alternate sources of affordable, wholesome protein; and American consumers could face their first widespread shortage of meat, poultry, and egg products in generations. The potential furlough would be inconsistent with the mandates of the Federal Meat Inspection Act, the Poultry Products Inspection Act and the Egg Products Inspection Act, which prohibit the production, processing or interstate distribution of meat, poultry and egg products without federal inspection. NPPC recognizes that sequestration presents significant challenges that require USDA and all other federal government agencies to make difficult decisions to prioritize resources but believes cutting an essential, legally mandated program such as food safety inspection is not the way to address the government’s budget deficit.


NPPC Thursday submitted comments to the Commodity Futures Trading Commission (CTFC) on a proposed rule – “Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations” – designed to provide more protection for customer funds in the wake of the MF Global and Perigrine Financial disasters. To read NPPC’s comments, click here. Doug Wolf, NPPC immediate past president and pork producer from Lancaster, Wis., last week participated in a roundtable at CFTC regarding the proposed rule and necessary safeguards that should be in place to protect customer funds. Wolf, the only farmer on the panel, expressed the need for pork producers to use commodity markets as a way to manage risk, and trust in the viability of those markets is crucial. He expressed that while pork producers support the notion of increased protection for customer funds, the right balance must be achieved so as to not force more onerous regulations and potentially costly requirements on those the rule is designed to protect.


The U.S. Department of Commerce recently announced a draft agreement to modify a 1996 trade pact on imports of Mexican tomatoes and avert a possible trade war between the United States and Mexico. Commerce officials worked with Mexican tomato growers and importers to draft the agreement, which resolves issues stemming from the Commerce Department’s 1996 anti-dumping investigation on fresh tomatoes from Mexico. That year, the Commerce Department negotiated a suspension agreement with Mexican producers of fresh tomatoes that has since set a reference price for tomato imports from Mexico. The agreement had been renewed many times, but in June 2012, U.S. tomato producers requested a withdrawal of the underlying anti-dumping petition to terminate the suspension agreement and possibly to file a new anti-dumping case. Following this request, the Mexican government stated that if the suspension agreement were terminated, it was prepared to take retaliatory actions. Other pending trade disputes between the United States and Mexico also could have been negatively affected. NPPC urged Commerce officials to proceed with caution since termination of the agreement could have led to retaliation against U.S. pork exports, putting at risk the 9,000 U.S. jobs supported by current U.S. pork exports to Mexico. If the U.S. pork industry were to lose the Mexican market, U.S. live hog prices would fall by $14 within the first year, according to Iowa State University economist Dermot Hayes. The draft agreement to modify the 1996 trade pact on Mexican tomato imports is open to public comment until Feb. 11 and is expected to take effect March 4.


The Federal Mediation and Conciliation Service issued a statement last Friday that a tentative agreement has been reached between the International Longshoreman’s Association (ILA) and the United States Maritime Alliance (USMX) that would resolve a dispute over labor contracts that threatened to shut down container ports from Maine to Texas. Both parties are now putting the tentative agreement through ratification procedures to vote it into a Master Agreement. The details of the agreement have not been disclosed because local negotiations are still being held, but port operations will continue without interruption. NPPC had expressed concern in a letter to President Obama over a possible strike and emphasized the importance of international trade to the vitality and sustainability of American animal agriculture. Economists estimated that a 2002 West Coast port lockout led to lingering supply chain disruptions that cost the U.S. economy $1 billion for each day of the lockout; it took six months for ports and retailers’ supply chains to completely recover. In 2012, U.S. exports of pork and pork products totaled 2.3 million metric tons valued at $6.3 billion.


In his Tuesday State of the Union address, President Obama announced that the United States will begin talks with the European Union (EU) on a comprehensive Transatlantic Trade and Investment Partnership. NPPC supports the negotiation of a comprehensive free trade agreement with the EU, which represents a tremendous market opportunity for U.S. pork exports, with consumption totaling 20 million metric tons annually – the second largest market in the world for pork consumption. However, numerous barriers prevent the U.S. pork industry from exporting significant amounts of pork to the EU. Current U.S. pork exports to the EU amount to less than a quarter of 1 percent of total EU pork consumption. In addition to multiple quotas with high in-quota duties, the EU maintains numerous non-science-based sanitary and phytosanitary barriers to the importation of U.S. pork. These barriers include a ban on the use of ractopamine, mandatory trichinae mitigation, prohibition on pathogen-reduction treatments that improve food safety and a costly plant approval system. Through NPPC’s leadership, pork producers rallied other agriculture groups and succeeded in making sure that agriculture would be part of the negotiations. The United States and the EU are expected to begin negotiations later this year.


Russia on Monday implemented a complete ban on imports of U.S. pork, beef and turkey, following its rejection of the U.S. pork industry’s proposal to only ship ractopamine-free pork to Russia. In December Russia announced it would require pork imports from the United States to show documentation that the pork does not contain ractopamine residues. The U.S. Department of Agriculture, however, does not have a testing and certification program to detect ractopamine residues in pork because the feed additive has been approved by the U.S. Food and Drug Administration (FDA) as a safe product. In addition to FDA approval, the Codex Alimentarius Commission, an international organization established to promote food safety and harmonize trade, adopted an international safe standard for ractopamine in July 2012. NPPC is disturbed that Russia has closed its market to U.S. pork exports. Russia’s ractopamine ban is only one of many non-science-based barriers maintained by Russia, all of which violate World Trade Organization rules. U.S. pork exports, which constitute one of the biggest U.S. exports to Russia, have fallen by 54 percent since 2008 because of those barriers, including a zero-tolerance standard on pathogens in raw products, a standard no country in the world can meet. NPPC is working closely with other industry partners and the U.S. government to ensure Russia abides by WTO rules and reopens its market to U.S. pork.


NPPC Immediate Past President Doug Wolf, a pork producer from Wisconsin, this week traveled with NPPC Vice President and Counsel for International Affairs Nick Giordano to South America to meet with various countries’ government officials and private-sector representatives to discuss issues of mutual interest to the trade relationship between those countries and the United States. NPPC has worked closely with U.S. and Colombian officials to remove unscientific and burdensome trichinae mitigation measures that Colombia requires the U.S. pork industry to meet. Colombia has now finalized the regulation to remove the requirement. It is pending approval from certain cabinet officials and President Juan Manuel Santos. The removal of the trichinae mitigation requirement and the ability to ship fresh/chilled pork will boost U.S. pork exports. Chile and Peru also maintain non-science-based trichinae mitigation requirements on fresh and chilled U.S. pork products. According to Dr. Ray Gamble, president of the International Commission on Trichinellosis, the odds of trichinae in the U.S. commercial pork supply is 1-in-300 million.


Vietnam recently notified the World Trade Organization (WTO) that it will adopt the Codex Alimentarius Commission maximum residue levels (MRLs) for several veterinary drugs, including ractopamine, a feed ingredient used to promote leanness in pork and beef. The Codex adopted an international standard for ractopamine last summer. NPPC strongly supported the action by Codex, which is the WTO’s reference body for food safety. Ractopamine was evaluated and approved by the U.S. Food and Drug Administration in 1999 and has been approved for use in 26 countries. NPPC views Codex’s adoption of an MRL for ractopamine as a path forward to engage with trading partners, including China, Taiwan, Russia, Thailand and the European Union, that have restrictions on pork from hogs fed ractopamine. NPPC is working with Vietnam to encourage the adoption of other science-based food regulations, including the removal of its ban on white offals, as part of the ongoing Trans-Pacific Partnership trade negotiations.


Auto maker Dodge Feb. 2 debuted its “Farmer” commercial, spotlighting American agriculture, during the NFL’s Super Bowl XLVII. The ad for RAM trucks featured legendary radio broadcaster Paul Harvey’s “So God Made a Farmer” speech, originally delivered at the 1978 Future Farmers of America convention. Dodge is donating up to $1 million to the FFA Foundation’s “Feeding the World – Starting at Home” hunger program for every view, download or share of the ad. The ad already has been viewed 10 million times on the Internet. To watch the ad and help donate, click here. NPPC, along with nearly 250 agriculture organizations, last Thursday expressed heartfelt thanks in a letter to Chrysler Group Chair and CEO Sergio Marchionne. To read the letter, click here.


The European Commission adopted a measure last week authorizing the importation of live U.S. pigs into the European Union (EU) for breeding and production. The measure also permits live pigs to be transported through the EU to a non-EU country destination. The EU import ban on live pigs, as well as a ban on beef washed in lactic acid, will be lifted Feb. 25. The removal of the bans follows years of efforts by the U.S. Department of Agriculture and the U.S. Office of the Trade Representative. The EU’s actions are meant to show European commitment to deepening the trade relationship between the United States and the EU, with the goal of beginning negotiations on a free trade agreement this year. NPPC supports the removal of the EU ban on live pigs as a positive step toward resolving the EU’s other non-science-based sanitary and phytosanitary (SPS) barriers, such as trichinae mitigation requirements, which limit U.S. pork exports to the EU. The U.S. pork industry also uses lactic acid and other approved and safe pathogen reduction treatments (PRTs) to enhance food safety. NPPC wants the EU to remove barriers for all PRTs and other SPS barriers as part of U.S.-EU FTA negotiations.


NPPC Chief Veterinarian Liz Wagstrom last week traveled to Switzerland to serve on the U.S. delegation of the Codex Alimentarius Commission Taskforce on Animal Feeding. The taskforce developed a document on “Applying Risk Assessment Principles to Animal Feeds and Guidance to Government on Prioritizing Potential Hazards in Animal Feeds,” which is expected to be considered by commission in July.




The Senate Health, Education, Labor & Pensions Committee Feb. 27 will hold a hearing on reauthorizing the Animal Drug User Fee Act (ADUFA). First enacted in 2003, ADUFA allows the U.S. Food and Drug Administration to collect fees from animal health companies for the review and approval of animal health products. The fees supplement FDA’s annual congressionally approved appropriation and have enabled the agency to dramatically reduce its review time for new animal drugs, bringing medications to market more quickly while maintaining high standards for safety and effectiveness. NPPC is urging lawmakers to approve a “clean” reauthorization bill. During the 2008 ADUFA reauthorization – the law must be reauthorized every five years – groups opposed to modern livestock production sought to include an amendment to ban from use in food animals certain antibiotics.


The 2013 National Pork Industry Forum will be held March 7-9 at The Peabody Orlando Hotel in Orlando, Fla. For more information on media registration, click here.


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