Ag Policy Blog

A handful of federal lawmakers said the pork industry could suffer an economic blow after a federal court threw out a Trump administration final rule that allowed for higher line speeds at pork packing plants, the lawmakers said in letters to Secretary of Agriculture Tom Vilsack and a U.S. Department of Justice official. The lawmakers called for federal intervention before the end of June.

The U.S. District Court for the District of Minnesota vacated a rule on March 31 that increased line speeds at packing plants. The ruling came as a result of a lawsuit filed by the United Food and Commercial Workers Union. The court found USDA acted arbitrarily and capriciously when it increased line speeds without considering plant-worker safety.

In a letter to Vilsack and DOJ Solicitor General Elizabeth Prelogaron, Sen. Charles Grassley, R-Iowa, and Reps. Jim Hagedorn, R-Minn., and Dusty Johnson, R-S.D., requested the agencies to take action to minimize the damage to the industry.

The National Pork Producers Council said in a news release it was urging USDA and the DOJ to appeal the court ruling that would result in a 2.5% 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 Dermot Hayes.

The federal court ordered the rule to be vacated and delayed the effective date to June 29.

Pork plants in Pennsylvania, Michigan, Nebraska and Minnesota, have been working with the faster line speeds as part of a pilot program for a number of years. Another plant in Oklahoma increased line speeds in 2019, as well.

The court struck down a provision of USDA's New Swine Inspection System, or NSIS, allowing for faster harvest-facility line speeds. NSIS was initiated during the Clinton administration and was evaluated at five pilot plants during the past 20 years.

"At a time when the United States is seeking to increase much-needed pork harvest capacity, the court order will reduce plant capacity at six plants running at NSIS line speeds by as much as 25%," NPPC said in a news release.

In their letter, the lawmakers said, "While the economic impact to these packers will be significant, it is the nation's small- and medium-sized hog farmers who will suffer the greatest harm from upstream impacts. It is imperative that USDA act quickly to move for a stay of the judge's order and an appeal to prevent this reduction in packing capacity, which is set to take place at the end of June."

The lawmakers said unless the DOJ or USDA acts the pork industry could see a wave of consolidation.

"As the hog production cycle spans nearly a year, hogs set to enter this reduced-capacity market are already being raised. Farmers have little ability to alter their supply in the next year," the letter said.

"Many farmers supplying these NSIS plants will need to find alternative destinations for their hogs. The resulting surplus and reduced demand in a concentrated geographic region will shift economic power to pork processing companies. The culmination of economic losses from the pandemic, multiple years of trade retaliation, and the court's decision may result in some producers selling their operation. By failing to act, USDA will drive consolidation in the pork industry."

Read copies of the letter here: https://nppc.org/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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