National Pork Producers Council

Policy Update Legislative & Regulatory

June 2011

Presentation Summary

Political Outlook Congress

Administration

– Animal Health & Welfare Issues

– Ethanol vs. Feed Availability

– Environmental Issues

– Competition Issues

– 2012 (?) Farm Bill

House Agriculture Committee

• 15 of 28 D’s on Committee Defeated

• Frank Lucas (R-OK) – Chairman

• Collin Peterson (D-MN) – Ranking Member

• The Committee Now Consists of 26 Rs (16

Freshmen) and 20 Ds (8 New Members)

• Only 21 of the 46 Members Served on

Committee During 2008 Farm Bill!

Senate Agriculture Committee

• Stabenow (D-MI) --Ag Chair

• Conrad (D-ND) --Budget Chair

• Roberts (R-KS)-- Ranking Member

• 7 D’s and 1 R up for re-election in 2012

• Stabenow, Conrad, B. Nelson, S. Brown,

Casey, Gillibrand, and Klobuchar – Lugar

(R-IN)

Key Congressional & Admin. Issues

• Budget Deficits

– USD Debt Ceiling

– FY 2011 & FY 2012 Budgets

– Federal Debt Limit

– Social Security

– Medicare/Medicaid

• Near/Middle East

• Healthcare

• Regulatory Environment

Total Federal Debt

Source: GAO

5

7

9

11

13

15

17

19

21

20

30

40

50

60

70

80

90

100

110

2001 2003 2005 2007 2009 2011 2013 2015

$ Trillions Percent

Total Fed Debt as % ofGDP

Total Federal Debt

8

FY 2012 Senate Agriculture Committee Baseline

CBO January 2011 Baseline Update (billions)

Presentation Summary

Political Outlook Congress

Administration

– Animal Health & Welfare Issues

– Ethanol vs. Feed Availability

– Environmental Issues

– Competition Issues

– 2012 (?) Farm Bill

Animal Health & Welfare Issues • Two Non-Ambulatory Petitions

– HSUS & Farm Sanctuary Petitions-Non-Ambulatory Calves/Livestock

– Comments Due April 8th COMPLETE

– State Associations Submit Letter on Letterhead

1000+ Pork Industry Comments

• Preservation of ABX for Medical Treatment Act --H.R. 965 (aka PAMTA) – Who’s Who: AMA, AAP, IDSA, ACOG, etc.

– Human Docs vs. Animal Docs

– Same Bill, Same Supporters—Slaughter (NY) 48 cosponsors--Many Urban—a few Ag Cttee Members—Pingree (ME)

– Sen. Feinstein (CA) ready to introduce

Animal Health & Welfare Issues

• FDA Draft GFI: Antimicrobials – FDA Announces ―Voluntary‖ Removal of AGPs Summer 2010

• Increased Veterinary Oversight on Farms

• Comment period ended in August 2010

– Final Guidance Possibly by Summer?

• FDA VFD Modernization Plan – ANPRM Comment Period Ended in August 2010

– Next step: Proposed Rule & Comment -Early Summer (?)

– Final step: Final Rule

• End-Point Cooking Temperature – Research Shows145 Degrees Plus 3-Minute Hold

• Promotes Food Safety and Better Quality

– NPPC/NPB Met with USDA – COMPLETED

• Animal Welfare Incidents & Plant Shutdowns

Presentation Summary

– Political Outlook • Congress

• Administration

– Animal Health Issues

Ethanol vs. Feed Availability

Environmental Issues – Competition Issues

– 2012 (?) Farm Bill

Ethanol vs. Feed Availability

13

Ethanol vs. Feed Availability

• NPPC Letter to USDA Requesting:

→ Early, penalty-free CRP out; USDA= NO

→ Livestock Task Force to Review Policy

Options=Maybe???

→ NPPC Met with Congressional Leaders

→ NPPC Met with Secretary Vilsack

VEETC and Tariff Blenders Credit & Import Tariff

– 12/31 Expiration

– Once Again ―On the Ropes‖

• Two Votes Went Against Renewal

– Coburn-Feinstein Amendment Awaiting Vote in Senate

– Rider to Defund E15 Passed: 285-136

– Rider to Ban Federal Support of Ethanol Infrastructure Passed: 261-158

Growth Energy Proposal • 1 Year VEETC Extension @ $0.36

• 1 Year Import Tariff Extension @ $0.36

• 4 Year Ethanol Producer Credit @ $0.25

– MAJOR WTO VIOLATION

• New: Use Subsidy for Blender Pumps and Pipeline

• New: “Glide Path” to Eliminate

• New: “ Feed Neutraility” for all feeds to qualify for Advanced Standard

VEETC and Tariff Grassley Proposal

• 2012 Year VEETC Extension @ $0.20

• 2013 Year VEETC Extension @ $0.15

• 2014-2016 Credit could be as high as @ $0.30 if oil is below $50 and

disappears when oil reaches $90

NPPC • Pork Industry Economic Model (CARD, Iowa State)

• Crop Outlook Dictates Development of Safe Harbors and Risk Mgt Tools

**Senator Coburn and Feinstein to have a vote to immediately

repeal VEETC and Tariff next week. Vote expected to pass

Senator’s Klobuchar and Thune have a new proposal to adjust

ethanol subsidies by tying subsidy level to price of oil—They do

not have the votes to pass this……yet.

Environment Issues Water Quality

2008 CAFO Rule VACATED

Major NPPC Victory • EPA Back to the Drawing Board: State CAFO Rules in Limbo Again

―Sweetheart‖ CAFO Settlement Still In Place • New CAFO Rule (But Will Be Different Rule than Enviros Planned)

• Facility registration Rule and Public Access to On Farm Records – Integrator Liability

– Manure Transfer Manifest System

• Watershed Initiative and Gulf of Mexico Task Force

• Chesapeake Bay TMDL – Mandates States Impose Impossible to Meet Ag Nutrient Reductions

– Threatens Financial and Economic Destruction if States Don’t Agree

“This isn't China, where the Communist Party meets and announces that 'We're just doing it,'” - John Hanger, Secretary of Pennsylvania's Department of Environmental Protection (D-PA)

– Mississippi Watershed is Next

– EPA Has Already Signed Contract to Undertake Modeling and is Pressuring States to Adopt Numeric Nutrient Standards

13

Presentation Summary

– Political Outlook • Congress

• Administration

– Animal Health Issues

– Ethanol vs. Feed Availability

– Environmental Issues

Competition Issues – 2012 (?) Farm Bill

Competition Issues

• USDA GIPSA Proposed Rule on Livestock

• Reauthorized Mandatory Price Reporting

18

Comment period end November 22

Pork Industry files 16,000+ comments

Next Steps: Secretary says Cost Benefit Analysis (CBA) to Be Conducted by

USDA

Conducted on Proposed Rule or Final Rule?

When will the Analysis be Released?

Will the Public Be Able to Comment on the Analysis?

USDA Not Sharing ANY Details with the Industry, and Avoiding

Answering Congressional Questions on CBA

Competition: Proposed GIPSA Rule

17

Expect FINAL RULE: LATE 2011

– 2012 House Agriculture Appropriations bill has language

to stop current GIPSA proposal.

– Language will stay in the House bill, which is under

consideration now!

– Next fight is in the Senate

Competition: Proposed GIPSA Rule

17

– Reauthorized: September 2010

5-Year Reauthorization

Weekly Pork Export Reporting – IN DEVELOPMENT

Wholesale Pork Reporting Through a Negotiated

Rulemaking

– Next Steps:

Product of that Final Meeting Will Be a ―Proposed Rule‖

Will Be Published in Federal Register for Comment

Outstanding Issue: FOB Plant vs. Omaha

Competition: Mandatory Price Reporting

Presentation Summary

– Political Outlook • Congress

• Administration

– Animal Health Issues

– Ethanol vs. Feed Availability

– Environmental Issues

– Competition Issues

2012 (?) Farm Bill

• Senate Ag May Lead

→ First Senate Field Hearing end of May in Michigan

+NPPC Producer Will Testify

• Reconciliation Process: Spring 2011?

• Strong Likelihood Extension Into 2013

→ Fall 2012 Presidential Election Lands in the Middle of the

Farm Bill Cycle

2012 (?) Farm Bill

• NPPC 2012 Farm Bill Task Force: ONGOING

Policy Recommendations

Working Groups on Specific Issues

• Participate in Field Hearings & WDC Hearings

Key Pork Issue Areas:

1. Energy Title

2. Environment Title

3. Research Title

4. Livestock Title

5. Nutrition Title

2012 (?) Farm Bill

Thanks to you!

Questions? Comments?