CAPITAL UPDATE

 

By National Pork Producers Council (NPPC)

For the Week Ending Sept. 4, 2020

 

SENATE TO TAKE UP A ‘SKINNY’ COVID PACKAGE NEXT WEEK

The Senate returns next week from its August recess and it’s expected that Senate Republican leadership will unveil a new, “skinny” COVID relief package. The bill apparently will not include any relief for pork producers or for most other sectors of the U.S. economy. The focus will be on unemployment and other issues that cut across the economy. The bill is being viewed as more of a messaging tool, given that Senate Republican support for the measure is not guaranteed and, in any event, Senate Democrats are likely to oppose the proposal. Therefore, the bill will not likely pass the Senate and, even if it did, it will not be taken up by the Democrat-controlled House. NPPC is hopeful that the bill will become a catalyst to rekindle talks on another COVID relief package that includes these NPPC priorities: 1) compensation for euthanized and donated hogs; 2) additional funding for animal health surveillance and laboratories, which have appropriately assisted and shared resources with their public health partners; 3) modification of the Commodity Credit Corporation charter so a pandemic-driven national emergency qualifies for funding; 4) additional funds for direct payments to producers without restriction and; 5) extension of the Paycheck Protection Program with modifications to make it useful to more producers.
 
USDA TO ANNOUNCE SECOND ROUND OF CFAP NEXT WEEK
U.S. Department of Agriculture Secretary Sonny Perdue told reporters on Thursday that a second round of payments to farmers from the Coronavirus Food Assistance Program (CFAP) would be announced next week. Speaking at an Iowa farm after touring crop damage in the state, Perdue said the payments would be designed to compensate farmers for losses incurred after April 15 through the end of this year, and indicated those commodities eligible under the initial CFAP would be eligible under the new round. USDA has about $14 billion available in funds allocated by the CARES Act to replenish the Commodity Credit Corporation after July 1. Among other provisions, the first round of CFAP provided $1.6 million in direct payments to hog farmers. The agency is still accepting applications on the first round of payments and recently both expanded commodities eligible for the program and extended the application deadline to Sept. 11. 
 
FOURTH ROUND OF U.S., U.K. TRADE TALKS SCHEDULED NEXT WEEK
The fourth round of trade talks between the U.S. and the U.K will be held next week, starting Sept. 8, UK Trade Department Minister Greg Hands said Thursday. “In terms of the U.S., clearly we keep channels of communication open—we talk with all parts of the U.S. political system. We make sure that senators, members of Congress and governors, from both parties and throughout the United States, buy into a future U.K.-U.S. free trade agreement,” he told Parliament. In October 2018, the Trump administration first announced its intention to negotiate a trade agreement with the U.K. NPPC is supportive of negotiations, provided the agreement eliminates tariff and non-tariff trade barriers on pork, and that the U.K. acknowledges meat industry standards as equivalent. Ambassador Lighthizer continues to warn that the two nations are unlikely to reach a deal before the November elections.
 
NPPC FILES MOTION TO JOIN LAWSUIT SUPPORTING EPA RULE EXEMPTING FARMS FROM AIR EMISSIONS REPORTING
On Tuesday, NPPC, along with the U.S. Poultry and Egg Association, National Cattlemen’s Beef Association and American Farm Bureau Federation, filed a motion to side with EPA against a lawsuit filed by Earthjustice. Earthjustice filed the suit against EPA on behalf of a broad coalition of animal rights and environmental groups, including the Humane Society of the United States and Waterkeeper Alliance, to force producers to submit onerous emissions reports to state and local regulators under the Emergency Planning and Community Right-to-Know Act (EPCRA). In December 2008, EPA issued a rule exempting all farms from having to report releases of hazardous substances emitted to the air from animal waste at farms under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), but requiring the reports to be made under EPCRA.  Both NPPC and the U.S. Poultry and Egg Association challenged that rule in court. Nearly a decade later, the D.C. Circuit, ruling on behalf of the animal rights’ groups, invalidated the 2008 rule in a 2017 decision, which prompted a diverse and bipartisan majority of Congress to pass The FARM ACT, which made clear that farms did not have to report emissions under CERCLA.  Following passage of the FARM Act, EPA issued regulations in 2018 exempting farms from reporting under EPCRA. Tuesday’s legal action comes as the industry still awaits EPA’s publication of long-overdue emission estimating methodologies, required under consent decrees signed in 2006 to help producers comply with air emission reporting and permitting requirements.  A copy of the motion is here.  
 
USTR TO REQUEST GLOBAL SAFEGUARD INVESTIGATION INTO BLUEBERRY IMPORTS

On Tuesday, the U.S. Trade Representative (USTR), USDA, and the Department of Commerce released a report outlining the administration’s plan to address the increase of blueberry, strawberry and bell pepper imports. This follows an August public hearing, where U.S. producers of seasonal and perishable fruits and vegetables testified about these imports damaging their ability to stay competitive. USTR said it will request the International Trade Commission (ITC) initiate a Section 201 global safeguard investigation to review the extent to which increased blueberry imports have caused serious injury to domestic blueberry growers. A case will not be brought on behalf of domestic strawberry and bell pepper growers. Global safeguard cases are independently investigated by the ITC. An investigation can take months to complete and it is unlikely the agency will make a determination by the end of the year. Once complete, the ITC will make a recommendation to the president, who can make a final determination on whether duties will be imposed on products and the amount in total damages. The top U.S. blueberry imports are from Canada, Chile, Mexico and Peru. Canada and Mexico have the ability to immediately impose retaliatory duties equal to the amount imposed by the United States.

 

USTR TO CURB STEEL IMPORTS FROM MEXICO, BRAZIL
On Monday, U.S. Trade Representative (USTR) Robert Lighthizer said the U.S. will cut imports of some steel products from Mexico and Brazil this year. Specifically, Mexico agreed in consultations with USTR to establish a strict monitoring regime for standard steel pipe, mechanical steel tubing and semi-finished steel products to the U.S through June 1, 2021. In exchange, the U.S. will maintain the exemption of the 25 percent Section 232 tariffs on steel imports for these products. In related news, Lighthizer also said the U.S. will reduce Brazil’s remaining 2020 quota for semi-finished steel imports into the country from 350,000 metric tons to 60,000 metric tons, as a result of recent market conditions stemming from the COVID pandemic. In 2018, Brazil agreed to the quota in exchange for an exemption from the Section 232 tariffs on steel imports. In December, the U.S. will hold consultations with Brazil to discuss the semi-finished steel quota for 2021. Last year, the Trump administration agreed to remove the tariffs on steel and aluminum imports from Canada and Mexico. Both countries subsequently retaliated against a host of U.S. products. The administration’s removal of those steel tariffs led to congressional approval of the USMCA trade agreement, ensuring zero-tariff pork trade in North America. 

 

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