House Ag Committee hears from livestock industry

USDA chief economist and industry members testify on economic factors and regulatory burdens the livestock industry currently faces.

Mandatory country of origin labeling, Grain Safety and Inspection Service Agency rule implementation and the Renewable Fuels Standard were some of the top-of-mind issues discussed in a House Agriculture Subcommittee hearing held April 30.

Rep. Rick Crawford (R., Ark.), chairman of the subcommittee on Livestock, Rural Development, and Credit, shared that farmers and ranchers have endured a great deal over recent years from record droughts to higher input costs and the ongoing burden and uncertainty associated with mandatory country-of-origin labeling.

“Combined, all of these issues and others have tightened operating margins, which create challenging business conditions for our producers,” Crawford said.

Costa, who has introduced legislation to overturn MCOOL, said that law as well as the RFS endanger livestock producers’ bottom lines. “[The] hearing gave us the opportunity to highlight the natural, bureaucratic, and regulatory challenges facing the industry," said ranking member Jim Costa (D., Calif.).

U.S. Department of Agriculture chief economist Joe Glauber also gave an overview of the livestock sector and also answered questions from committee members.

He noted that tight livestock margins have constrained expansion for livestock producers, which has led to record high prices for cattle and hogs and near-record prices for broilers. He noted however, that the ability of the beef and pork sectors to expand production will be limited by non-feed cost factors.

He projected red meat production will remain constrained in the near term and forecast in 2014 to be the lowest since 2010 and 1.8% below the 2008 record.

Prospects for the beef sector, in the near term, are limited by the decline in cattle inventory, the biological lags inherent in the production system and persistent dryness in the southern plains, now in its fourth consecutive year of drought, Glauber said. He added it will be at least 2016-17 before any potential expansion could occur, but with producers who have faced repeated droughts, that may be even tougher.

“To get pastures back and get people willing to expand, that’s going to take time,” Glauber said.

Likewise, in the hog sector, positive producer returns and lower feed costs have set the stage for strong expansion. However, the spread of Porcine Epidemic Diarrhea virus (PEDv) through the U.S. herd is expected to sharply limit the supply of hogs compared to earlier expectations, Glauber testified.

In comparison to the beef and pork sectors, the poultry industry is able to respond more quickly to market signals. Broiler production is forecast to be at record levels in 2014, up 1.8% over the previous record set last year. Egg production will likely see record levels as well in 2014.

A handful of members also expressed concern over APHIS’s proposed rule to allow fresh and frozen beef imports from Brazil and update the country’s BSE status.

Glauber said APHIS has conducted a risk analysis and will evaluate the many comments received from concerned parties. But as the U.S. continues to keep urging world trade parties to base import decisions based on sound science, the U.S. also needs to follow that same advice.

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