Washington Insider -- Friday

New Federal Rules for Meat Plants

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Rep. Peterson Wants Pandemic Plans For CCC

Getting a plan in place to use the Commodity Credit Corporation (CCC) authority at USDA to address a pandemic in the future like the COVID-19 situation is a key issue that House Ag Committee Chairman Collin Peterson, D., Minn., said he will pursue.

“We are going to have to have a way to respond to emergencies that is off the shelf,” Peterson told reporters. He also said that CCC authorities need to be put in place to pay producers for animals they have to depopulate in emergency situations. “We have got to change the statute, we have got to put this in the CCC law,” Peterson said.

He also noted that the executive order signed by President Donald Trump to invoke the Defense Production Act to keep meat plants operating should help get plants back on line. While some have raised concerns about provisions on liability and that the order lacked protections for workers, Peterson said he believes workers will be protected.

“I think the biggest issue is making sure these workers in the plant are safe,” he added, saying he would not support any move that does not also ensure worker safety.

Meanwhile, USDA Secretary Sonny Perdue has asked Peterson to form a working group to address the closing of pork plants and resulting euthanasia of hogs in Minnesota, Iowa and South Dakota. Peterson noted he spoke with Perdue for about 30 minutes Wednesday morning about the current state of the food system with a focus on packing plants.

US Says China Sticking To Commitments in Phase One Deal

China is still “very, very committed” to meeting the terms of the Phase One trade deal with the U.S. despite the impacts of the COVID-19 situation, according to a senior U.S. trade official.

The two sides hold regular discussions, often daily, on implementation of the trade deal. Despite the challenges from the pandemic, the official said that China is sticking to its commitments.

"We will continually assess its implementation of the Phase One agreement," said the official. "We have had very good interactions with Chinese (officials) on that, and they are continuing to implement their obligations."

The official made the comments during a briefing on the annual USTR Special 301 report, in which it noted it was still assessing intellectual property (IP) changes that China committed to in the Phase One deal.

Washington Insider: New Federal Rules for Meat Plants

The New York Times is reporting this week that “since slaughterhouses became coronavirus hot spots, the meat industry has been asking the administration for help. On Tuesday, the president gave them what they were looking for, a broad declaration that the slaughtering and processing of beef, chicken and pork are “critical.”

This means that federal agencies would now set the criteria for ensuring workers’ safety amid the pandemic, the Times said.

The move came as hundreds of employees have been getting sick or not showing up for work for fear of contracting the virus. Labor unions had started to hold regular news conferences to highlight the growing number of deaths among their workers. And in some states, health departments were shutting down meatpacking plants.

“This order tells them they need to stay open and they get cover,” said Howard Roth, the president of the National Pork Producers Council said on a conference call with meat executives, the president and Vice President Mike Pence.

The executive order, which allows USDA to invoke the Defense Production Act, does not explicitly mandate that plants stay open--but it signals that the decisions around whether to close or reopen a plant should be driven by the feds, not local authorities.

The action followed weeks of lobbying behind the scenes and in public by meat companies led by Tyson Foods, a $40 billion company, the Times said.

After decades of consolidation, only a small group of slaughterhouses concentrated in the Midwest accounts for the bulk of the nation’s meat supply, NYT said. The group exerts heavy-duty leverage on both Republican and Democratic administrations as a major food supplier.

Even so, the meat industry was helped over the weekend when another powerful constituency weighed in. Farmers, who fear that they will need to euthanize as many as 150,000 hogs per day if slaughterhouses remained closed, also pushed for federal intervention.

The executive order could also shield companies from lawsuits by employees who fall ill while cutting meat — a key provision for an industry in which several plants have reopened after shutdowns caused by coronavirus outbreaks. Also, serious questions remain about whether social distancing and the regular use of face masks can stem a new contagion.

Even before Trump’s action, meat companies had pushed back against local health orders. When the major meatpacking company, JBS USA in Greeley, Colo., was shut down this month, local health officials originally wanted the workers tested before it could reopen. But the plant opened back up on Friday without widespread testing, state and union officials said.

JBS, threatened legal action against the local union, although five workers at the plant there have died of the virus. “They somehow think we don’t have a constitutional right to advocate for our workers,” said Kim Cordova, president of Local 7 of the United Food and Commercial Workers.

A local Weld County spokesman said health officials had been in the plant in the days after it reopened to perform on-the-spot testing of any employee who showed possible symptoms.

Neither the administration’s executive order nor recently released federal guidelines specify whether all meat workers should be tested before a plant can reopen, NYT said.

One measure that many health experts and plant workers say would help prevent the virus from spreading again is to slow the production line. Such a move reduces the number of people needed to cut and debone the products and which would allow for more space between employees, NYT says.

However, the companies have spent years lobbying to increase line speeds and have not signaled that they will slow them now. A federal rule adopted in September allows pork-processing lines to move at any speed with fewer inspectors overseeing production. This month, even as the pandemic was raging, USDA issued waivers allowing 15 poultry plants to increase line speeds to as fast as 175 birds per minute.

“They prioritize line speed production,” said Debbie Berkowitz, a former high-ranking official at the Occupational Safety and Health Administration. “It’s shocking to me that the government gave this industry a pass over worker safety.”

However, lines in many of the plants now operating are moving slower because fewer employees are showing up, the United Food and Commercial Workers said. But the union does not expect that the companies will agree to reduce their speeds permanently because that could threaten profits.

Two major meat plants that closed in Pennsylvania have reopened with new measures that spread out workers. The UFCW said the changes were not enough and that there needed to be widespread testing of employees and more protective gear, including face shields. And, last week the union called on governors in several states to step in and enforce health guidelines in light of the administration’s executive order.

At a Worthington, Minn., shuttered JBS plant, Minnesota’s Democratic governor, Tim Walz, said that getting the plants up and running hinges on protecting workers through testing and contact tracing, among other tools. He added, “No executive order is going to get those hogs processed if the people who know how to do it are sick.”

So, we will see. The new policy likely will mean tough regulatory decisions for USDA but the criteria involved seem quite clear and the agency has long experience in safety enforcement. The new oversight will be challenging for the agency and should be watched closely by producers as the fight against the virus continues, Washington Insider believes.

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