The past few years have been incredibly difficult for hog farmers like me. After more than two years of trade retaliation that limited our ability to compete effectively around the globe, the COVID-19 pandemic unleashed unprecedented challenges for the entire food supply chain.
Now, just as we are returning to normalcy, another looming disaster threatens my livelihood and the prosperity of many hog farmers like me if not quickly addressed. It will also erode industry competition by placing more market power in the hands of pork packing plant operators.
Recently, a federal court decision struck down a provision of the U.S. Department of Agriculture’s New Swine Inspection System (NSIS), which allows for pork processing facilities to operate at a faster rate. NSIS, initiated during the Clinton administration and evaluated at five pilot plants over 20 years, was approved for industry-wide adoption in 2019. Unless reversed by June 29, the federal court ruling will result in a 2.5 percent loss in pork packing plant capacity nationwide, and $82.3 million in reduced income for hog farmers, according to Dr. Dermot Hayes, an economist with Iowa State University.
While the court decision will affect all U.S. hog farmers, smaller producers will disproportionately bear the brunt, especially those located near affected processing facilities. My farm is only 50 miles away from Clemens Food Group in Coldwater where I ship about 80 percent of my market hogs. If they are required to slow down their processing line, I will have to ship more of my hogs out of state and incur the added transportation cost.
Ironically, many lawmakers on Capitol Hill have called for an increase in federally inspected meatpacking capacity. Some have suggested bringing smaller, state packing plants up to federal inspection standards as a solution. Unfortunately, these state packing plants represent less than one percent of overall pork harvest facility capacity.
The court ruling will affect Michigan’s more than 2,100 pork producers and trickle down throughout the entire economy. The state’s hog production generates 6,121 on farm jobs and an estimated $528 million in total economic impact. All of this could be in jeopardy if this damaging court ruling stands.
If small hog farmers are forced out of business, we will see a more consolidated pork industry. This could reduce competition, drive industry consolidation and concentrate more power in the hands of pork processors — all with the stroke of a judge’s pen.
We can avoid these damaging outcomes. We need USDA to stand up for Michigan hog farmers and producers across the country by both appealing the federal court decision and seeking a stay, halting the ruling from being enacted at the end of June. This will help preserve our state’s highly competitive pork production system, and the significant economic benefits it provides to our communities around the country.
— Edward Reed is a hog farmer in Marcellus.
The Link LonkJune 05, 2021 at 11:15AM
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My Take: Court ruling will concentrate market power in pork sector - HollandSentinel.com
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