Washington Insider-- Tuesday

Pulling Back Pork Line Speeds

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

USTR Section 301 Report Notes US-China Phase One Deal Exam Ongoing

The Office of the U.S. Trade Representative (USTR) on Friday (April 30) issued its 2021 Special 301 report, a 90-page recap of the state of intellectual property (IP) protection and enforcement with U.S. trading partners.

China, not surprisingly, garnered nine of the pages, with attention on several issues regarding IP protections of movies and other media. The report notes that China agreed to several changes via the Phase One agreement that went into effect in 2020, but the report noted that a review of that deal remains ongoing. That echoes what U.S. Trade Representative Katherine Tai told lawmakers last week -- that she was eager to kick off the top-to-bottom review of the agreement to determine areas of success and areas where more work is needed.

"The United States-China Economic and Trade Agreement (Phase One Agreement), signed in January 2020, also includes several trade secret commitments to address a number of long-standing concerns in China, including on expanding the scope of civil liability, covering acts such as electronic intrusions as trade secret theft, shifting the burden of producing evidence, making it easier to obtain preliminary injunctions to prevent use of stolen trade secrets, allowing criminal investigations without need to show actual losses, ensuring criminal enforcement for willful misappropriation, and prohibiting unauthorized disclosure of trade secrets and confidential business information by government personnel or third-party experts," the report said.

March DMC Payments Triggered By Margin Prices

Payments under the Dairy Margin Coverage (DMC) program are triggered when the national all milk price and the national average feed cost (margin) falls below the margin trigger levels selected by producers.

The calculations for March for milk prices and feed components (corn, blended alfalfa hay, and soymeal) will trigger prices for March 2021 as the national average margin is $6.46 per hundredweight (cwt).

As a result, dairy operations that elected Tier 1 margin coverage levels at $9.50, $9.00, $8.50, $8.00, $7.50, $7.00, and $6.50 per cwt., and Tier 2 margin coverage levels at $8.00, $7.50, $7.00, and $6.50 per cwt. will be issued a payment.

Payments range from $0.04 per cwt. for the $6.50 margin trigger to $3.04 per cwt. for the $9.50 margin trigger coverage level.

Washington Insider: Pulling Back Pork Line Speeds

Seaboard Foods is seeking to delay for more than 10 months a court ruling that would prevent the firm and others from speeding up the speed of their slaughtering lines.

A federal judge ruled recently that a Trump administration rule to allow pork plants to run hog kill lines at faster speeds provided their prevent contamination and minimize bacteria. Previously, the government imposed a limit of 1,106 pigs per hour.

A judge in Minnesota determined the rule approved in 2019 was invalid, but opted to stay the rule for 90 days after the March 31 decision. The judge U.S. District Court of Minnesota also stayed other components of the New Swine Inspection System which allowed companies to use their own inspectors instead of USDA inspectors. The stay was aimed at giving the Biden administration time to rewrite the rules.

Seaboard Foods was the first U.S. pork company to invest in machinery to run line speeds faster under the rule, Reuters reported, and thus Seaboard stands to lose from the decision.

Seaboard deployed the faster line speeds at its facility in Guymon, Oklahoma, last year. Reuters reported that workers said the faster line speeds had increased injuries at the plant.

But Seaboard said in new court rulings that it will need 313 days to work through excess hogs in its production process if it has to revert to the slower line speeds.

Seaboard said in court filings on Friday it will need 313 days more to clear out excess hogs from its production process if the company is required to revert to slower processing speeds. "Without a stay of the judgment for 10.5 months, Seaboard faces the loss of thousands upon thousands of animals without compensation," Seaboard said in filings.

The United Food and Commercial Workers Union brought the suit against the 2019 rule and reacted negatively to the delay requested by Seaboard.

UFCW attorney Adam Pulver called the delay requested by Seaboard "absurdly long" and said that the company is not taking into account worker safety. "Seaboard's failure to even acknowledge that is mind boggling," he said.

The Biden administration has not weighed in the court developments, telling Reuters it was reviewing the court's decision.

But the Biden administration pulled back a version of faster line speeds that the Trump administration proposed to apply to the U.S. poultry industry. So it is not seen likely that they would seek to defend the Trump rule on pork line speeds.

The situation has come at an interesting time for the U.S. livestock industry which suffered impacts from the COVID pandemic as slaughter facilities slowed operations or shutdown facilities as COVID infections swept through some plants.

That backed animals up on farms and in some cases for hogs, forced producers to euthanize some animals that could not be brought to market. That came in part as slaughter facilities were not equipped to handle hogs that go beyond a certain weight, another situation which could also have endangered workers.

Congress weighed in on the situation, including provisions in the COVID aid plan approved in December to compensate producers for animals that had to be euthanized. They were among several portions of the ag industry that are to share in $6 billion in aid. But even that aid has yet to be rolled out the door for losses that were incurred as the pandemic raged during 2020.

So we shall see. It is clear that the faster line speeds are not likely to prevail, at least based on the Minnesota court ruling. And the Biden administration has not shown that it is likely to back the faster speeds as well. This sets up a series of potential regulatory and legal developments that should be watched carefully, Washington Insider believes.

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