For The Week Ending Jan. 24, 2014





A nationwide shortage of propane – and record-high prices for it – has NPPC concerned for U.S. pork producers. In some regions of the country, particularly those caught in the recent extreme cold temperatures, distributors are rationing supplies. The National Propane Gas Association indicated that Minnesota, Missouri and Wisconsin have been particularly hard hit, but spot shortages have occurred throughout the Midwest and in the Northeast and Southeast. Because most customers receive their propane by truck, the U.S. Department of Transportation issued emergency orders for 10 Midwestern and 12 Northeastern states, suspending the limits on the amount of time truck drivers can spend on the road. In addition to concerns related to heating homes, NPPC is concerned with the impact on producers regarding short-term spot market availability and costs associated in providing heat for their operations. NPPC is working with Congress, the Obama administration and the energy industry to address the immediate supply situation and with Congress regarding investigation/oversight on the issue. While U.S. propane production has increased in recent years, the higher supplies pushed prices down and made exports more lucrative. The rise in propane exports, which decreased domestic supplies, coupled with weather-related supply disruptions, long periods of unusually low temperatures in numerous parts of the country and even lower supplies in the upper Midwest that resulted from drying a large, relatively late 2013 corn harvest helped lead to the current situation, say analysts. Even if producers can get propane, they’ll be paying a premium for it. The price per gallon has jumped up to nearly $5 this week from less than $2 in mid-January.


A vote was taken recently by the participants, including the United States, of the International Organization for Standardization (ISO) working group on animal welfare for food-producing animals to decide what steps to take next in the process of creating the animal welfare guidelines. ISO, a private for-profit organization, launched the working group in 2012 in conjunction with the World Organization for Animal Health (OIE) to create a technical specification, a tool for private companies to facilitate animal welfare. The results of the vote show that the participants want to move forward. NPPC is concerned, however, because it is unclear whether the working group will be moving in the direction that was indicated by the voters. NPPC wants to ensure that the document produced by the working group does not go beyond OIE standards. Any work that moves forward must not re-create animal welfare standards and must be limited to a simple management system to help countries implement OIE animal welfare standards, according to NPPC. New international standards that are not science-based and that exceed the recommendations of the OIE or PQA Plus would be onerous for producers.


NPPC submitted comments this week to the U.S. International Trade Commission (USITC) on the African Growth and Opportunity Act (AGOA), specifically on South Africa, which is a member of AGOA. NPPC is urging the USITC not to extend AGOA for more than a five-year period. NPPC also weighed in on renewing beneficial trade treatment for African nations that restrict U.S. imports. The Generalized System of Preferences (GSP) offers tariff-free treatment on many products from developing countries. Last year, 130 nations received such benefits on about 5,000 products shipped to the United States. AGOA is similar to GSP. Congress is set to extend AGOA, which expires in 2015, and to renew GSP, which expired at the end of July 2013. In the comments to the USITC, NPPC pointed out that “extending the African Growth and Opportunity Act (AGOA) for more than five years, or worse, making it permanent, would be a serious mistake. Non-reciprocal free trade programs can be useful short-term tools to assist developing countries to compete in foreign markets, but dependence on preference programs for long or indefinite periods is unwise. Beneficiary nations should be encouraged to take the steps necessary to make their economies better able to participate successfully in the global trading system – and that happens when competition occurs in both directions,” NPPC concluded. South Africa is of particular concern to the pork industry because its pork market is closed to the United States, while South Africa still receives foreign economic assistance and trade benefits from the United States. In 2012, South Africa received $2.3 billion in preferential trade benefits from the United States under AGOA.


Nick Giordano, NPPC’s vice president and chief counsel for International Affairs, this week was in Colombia to meet with Colombian pork importers and U.S. embassy officials as a follow up to the recently removed trichinae barriers to U.S. pork. Last December, Colombia removed all trichinae risk-mitigation requirements on U.S. pork, which included testing and freezing of U.S. pork and pork products. NPPC worked closely with the U.S. government and Colombian officials to reach an agreement on removal of all mitigation requirements. Colombia now will recognize the United States as “negligible risk” for trichinae and require that all pigs whose meat is intended for export be part of the Pork Quality Assurance Plus (PQA Plus) program. This concept is consistent with forthcoming international standards on determination of negligible risk for trichinae. Economists estimate that removal of the trichinae mitigation requirements will significantly increase U.S. pork exports to Colombia, which were already expected to grow as a result of the 2012 implementation of the U.S.-Colombia free trade agreement. Currently, Colombia is the ninth largest export destination for U.S. pork and the largest export market in South America. Giordano also met with Colombian trade officials about the ongoing Trans-Pacific Partnership negotiations – Colombia is not currently participating in the negotiations but has expressed an interest in joining – and other trade matters of mutual interest.




A Senate-House conference committee is hoping to finalize a new farm bill early next week. House Republicans are scheduled to begin a retreat next Wednesday, so a farm bill conference report would need to be filed Monday to allow House lawmakers to vote on it before the current farm bill expires Jan. 31. The Senate is in session all next week. Issues that still needed to be resolved at press time included ones related to the dairy program and farm payment limits.


The 2014 National Pork Industry Forum will be held March 6-8, at the Sheraton Hotel Crown Center in Kansas City, Mo. For more information and to register for the joint NPPC-National Pork Board annual meeting, click here.


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