Livestock subcommittee airs farm bill disappointments, concerns about RFS, Brazilian beef imports
April 30, 2014 | 06:22 PM
Members of the House Agriculture Subcommittee on Livestock, Rural Development and Credit used a hearing on the state of the livestock industry today to restate their disappointment that the 2014 farm bill did not address mandatory country-of-origin labeling (COOL) , the California rule on egg production, or the rule governing the Packers and Stockyards Act (GIPSA).
They also expressed their concerns about the Renewable Fuel Standard (RFS) and the Agriculture Department’s plans to allow Brazilian beef to enter the United States.
Joseph Glauber
USDA Chief Economist Joe Glauber, the lead witness, testified that the beef, pork and poultry industries did not experience the same boom that crop producers have had in recent years. He said the industry’s position “is improving,” although the beef and pork industries still face some constraints.
Although several recent news stories have talked about the good times that ranchers are experiencing with high prices, Glauber testified, “Prospects for the beef sector, in the near term, are limited by the decline in cattle inventory, the biological lags inherent in the production system and persistent dryness in the southern plains, now in its fourth consecutive year of drought.”
Glauber also noted that positive producer returns and lower feed costs have set the stage for strong expansion in the hog sector, but said, “the spread of porcine epidemic diarrhea virus (PEDv) through the U.S. herd is expected to sharply limit the supply of hogs compared to earlier expectations.”
But he said that “the poultry industry is able to respond more quickly to market signals” with broiler and egg production likely to be at record levels in 2014.
Members of the subcommittee repeatedly pressed Glauber to use economic data and reasoning to bolster the positions they are taking on a range of issues.
Rep. Rick Crawford, R-Ark., the subcommittee chairman, asked Glauber for the preliminary findings of the report on the economic impact of mandatory country-of-origin labeling that Congress included in the farm bill. Glauber said his staff has begun to work on it, but later told reporters the earliest it would be finished is August.
“We want to do a good job, we want to do an effective job on this,” Glauber told the subcommittee.
Glauber did say that it is already clear that the COOL rule has had a negative effect on the cattle trade, since imports of live cattle and pigs from Canada are down.
He said that since consumers have said they want to know where their meat comes from, but don’t want to pay extra for it, “there is no direct evidence of quantifiable benefits.”
Glauber did acknowledge to reporters afterward that consumers have shown they are willing to pay more for foods that are labeled organic, and that the possible consumer benefits of COOL “are very hard to measure.”
“It’s not like we have 500 studies of COOL,” he said.
Rep. Jim Costa, D-Calif., the subcommittee ranking member, asked Glauber how USDA would respond if the World Trade Organization rules against the COOL rule and Canada and Mexico retaliate against U.S. products.
Glauber replied that if the WTO rules against the current version of COOL, any period of trade retaliation would not come until 2015, since there would be the right of appeal and further negotiations.
He also testified in his opening statement that high feed costs have been one of the challenges facing the livestock industry in recent years, although prices have come down from their highs.
Costa asked whether the RFS has been “price distorting” for animal feed.
Glauber said it has had an impact, but it is important to remember that one-third of the corn is used for ethanol and that even if the RFS were abolished, corn-based ethanol would not go away.
“Corn based ethanol is a vibrant industry,” he said. “You can focus on the RFS, but blenders use it for octane reasons.
Glauber also noted that ethanol is now competitively-priced compared to gasoline, “which explains why ethanol exports have been strong.”
Rep. Michael Conaway, R-Texas, said he was concerned that the GIPSA rule would have an impact on alternative marketing arrangements, but Glauber said he believes the final rule “stuck to the statutory provisions” in the 2008 farm bill.
“It is a delicate balance to establish “fairness” without prohibiting “new practices from emerging,” Glauber said.
Conaway and Rep. Randy Neugebauer, R-Texas, expressed concerns about USDA’s proposal to allow imports of beef from Brazil, where there have been problems with foot and mouth disease.
Glauber noted that USDA’s Animal and Plant Health Inspection Service veterinarians and scientists have concluded that Brazil has met international standards for control of the disease and that U.S. trade officials constantly try to convince other countries to follow international scientific standards on trade questions.
Neugebauer said his constituents are worried that there could be disease outbreaks.
On the industry panel that followed Glauber, Mike Smith of the Harris Ranch testified on behalf of the National Cattlemen’s Beef Association and the North American Meat Association.
“We know that the FMD [foot-and-mouth] virus can travel on fresh and frozen product so that immediately puts our industry at risk,” Smith said. “The World Organization for Animal Health (OIE) has guidelines that define how trade can be accomplished with countries that have disease issues. However, we don’t believe that Brazil has the resources or commitment to implement and fulfill those protocols.”
Smith also said in his written testimony that NCBA and NAMA are not satisfied with APHIS’s process for preparing the rule.
APHIS had proved unwilling to provide some documents that the groups requested and Smith said they has been “forced” to file a Freedom of Information Act request for the documents, although they have not received them.
Barry Carpenter, the NAMA CEO, told The Hagstrom Report in a brief interview that NAMA has no objections to the imports if Brazil can live up to the scientific standards.
During the industry panel, National Farmers Union President Roger Johnson testified in favor of the COOL rule, “strict enforcement of the Packers and Stockyards Act” and the RFS, and in opposition to the Brazilian beef imports.
The representatives of the pork, beef, chicken, sheep and turkey industries emphasized a variety of issues in their presentations.
They also expressed their concerns about the Renewable Fuel Standard (RFS) and the Agriculture Department’s plans to allow Brazilian beef to enter the United States.
Joseph Glauber
USDA Chief Economist Joe Glauber, the lead witness, testified that the beef, pork and poultry industries did not experience the same boom that crop producers have had in recent years. He said the industry’s position “is improving,” although the beef and pork industries still face some constraints.
Although several recent news stories have talked about the good times that ranchers are experiencing with high prices, Glauber testified, “Prospects for the beef sector, in the near term, are limited by the decline in cattle inventory, the biological lags inherent in the production system and persistent dryness in the southern plains, now in its fourth consecutive year of drought.”
Glauber also noted that positive producer returns and lower feed costs have set the stage for strong expansion in the hog sector, but said, “the spread of porcine epidemic diarrhea virus (PEDv) through the U.S. herd is expected to sharply limit the supply of hogs compared to earlier expectations.”
But he said that “the poultry industry is able to respond more quickly to market signals” with broiler and egg production likely to be at record levels in 2014.
Members of the subcommittee repeatedly pressed Glauber to use economic data and reasoning to bolster the positions they are taking on a range of issues.
Rep. Rick Crawford, R-Ark., the subcommittee chairman, asked Glauber for the preliminary findings of the report on the economic impact of mandatory country-of-origin labeling that Congress included in the farm bill. Glauber said his staff has begun to work on it, but later told reporters the earliest it would be finished is August.
“We want to do a good job, we want to do an effective job on this,” Glauber told the subcommittee.
Glauber did say that it is already clear that the COOL rule has had a negative effect on the cattle trade, since imports of live cattle and pigs from Canada are down.
He said that since consumers have said they want to know where their meat comes from, but don’t want to pay extra for it, “there is no direct evidence of quantifiable benefits.”
Glauber did acknowledge to reporters afterward that consumers have shown they are willing to pay more for foods that are labeled organic, and that the possible consumer benefits of COOL “are very hard to measure.”
“It’s not like we have 500 studies of COOL,” he said.
Rep. Jim Costa, D-Calif., the subcommittee ranking member, asked Glauber how USDA would respond if the World Trade Organization rules against the COOL rule and Canada and Mexico retaliate against U.S. products.
Glauber replied that if the WTO rules against the current version of COOL, any period of trade retaliation would not come until 2015, since there would be the right of appeal and further negotiations.
He also testified in his opening statement that high feed costs have been one of the challenges facing the livestock industry in recent years, although prices have come down from their highs.
Costa asked whether the RFS has been “price distorting” for animal feed.
Glauber said it has had an impact, but it is important to remember that one-third of the corn is used for ethanol and that even if the RFS were abolished, corn-based ethanol would not go away.
“Corn based ethanol is a vibrant industry,” he said. “You can focus on the RFS, but blenders use it for octane reasons.
Glauber also noted that ethanol is now competitively-priced compared to gasoline, “which explains why ethanol exports have been strong.”
Rep. Michael Conaway, R-Texas, said he was concerned that the GIPSA rule would have an impact on alternative marketing arrangements, but Glauber said he believes the final rule “stuck to the statutory provisions” in the 2008 farm bill.
“It is a delicate balance to establish “fairness” without prohibiting “new practices from emerging,” Glauber said.
Conaway and Rep. Randy Neugebauer, R-Texas, expressed concerns about USDA’s proposal to allow imports of beef from Brazil, where there have been problems with foot and mouth disease.
Glauber noted that USDA’s Animal and Plant Health Inspection Service veterinarians and scientists have concluded that Brazil has met international standards for control of the disease and that U.S. trade officials constantly try to convince other countries to follow international scientific standards on trade questions.
Neugebauer said his constituents are worried that there could be disease outbreaks.
On the industry panel that followed Glauber, Mike Smith of the Harris Ranch testified on behalf of the National Cattlemen’s Beef Association and the North American Meat Association.
“We know that the FMD [foot-and-mouth] virus can travel on fresh and frozen product so that immediately puts our industry at risk,” Smith said. “The World Organization for Animal Health (OIE) has guidelines that define how trade can be accomplished with countries that have disease issues. However, we don’t believe that Brazil has the resources or commitment to implement and fulfill those protocols.”
Smith also said in his written testimony that NCBA and NAMA are not satisfied with APHIS’s process for preparing the rule.
APHIS had proved unwilling to provide some documents that the groups requested and Smith said they has been “forced” to file a Freedom of Information Act request for the documents, although they have not received them.
Barry Carpenter, the NAMA CEO, told The Hagstrom Report in a brief interview that NAMA has no objections to the imports if Brazil can live up to the scientific standards.
During the industry panel, National Farmers Union President Roger Johnson testified in favor of the COOL rule, “strict enforcement of the Packers and Stockyards Act” and the RFS, and in opposition to the Brazilian beef imports.
The representatives of the pork, beef, chicken, sheep and turkey industries emphasized a variety of issues in their presentations.
