Seventy lawmakers joined Sen. Chuck Grassley (R-Iowa) and Reps. Jim Hagedorn (R-Minn.) and Dusty Johnson (R-S.D.) in letters asking the Biden administration to stop a recent court order from harming U.S. hog farmers.
The letters call on U.S. Agriculture Secretary Tom Vilsack and Acting Solicitor General Elizabeth Prelogar to appeal a recent federal district court striking down pork harvest facility line speeds allowed under the U.S. Department of Agriculture’s New Swine Inspection System (NSIS). The court order, set to go into effect on June 29, will lead to pork industry concentration and increased market power for plant operators at the expense of small hog farmers. The National Pork Producers Council is calling for a longer stay of the court order and/or waivers that would allow the six impacted plants to continue operating at NSIS line speeds until a long-term solution acceptable to all industry stakeholders can be established.
The court decision will result in a 2.5 percent loss in pork packing plant capacity nationwide, and more than $80 million in reduced income for small U.S. hog farmers, according to an analysis by Iowa State University Economist Dr. Dermot Hayes. According to Hayes, the impact will be alarmingly high in Michigan and other states where lost capacity will be as high as 25 percent.
NPPC President Jen Sorenson said, “While the administration can appeal the court’s decision until the end of August, the damage to U.S. pork producers will be immediate. The operational changes impacted plants will be required to implement on June 29 will take time to unwind even if an appeal is filed before the end of August. It’s imperative that the administration act now to preserve industry competition and the livelihoods of small hog farmers.”
Pork industry economist Dr. Steve Meyer of Partners for Production Agriculture described the impact of the court’s decision as follows:
“The district court ruling reduces competition because the impacted plants will process fewer hogs, leaving more pigs available to other packers. Some of these hogs were purchased through negotiated trades, but others were procured through contract arrangements that may be altered or canceled in the face of lower capacity. Producers whose contracts are affected will likely have to accept lower values for their animals. Prices received by all producers may be reduced due to decreased competition. Impacted producers may also incur additional freight costs to move hogs to distant plants with available capacity. The situation will get significantly worse in the fourth quarter when the hog supply reaches its seasonal high.”
The NSIS, initiated during the Clinton administration and evaluated at five pilot plants over 20 years, was approved for industry-wide adoption in 2019. NSIS modernized an inspection system that had remained unchanged for more than 50 years.