USDA, EPA missing mark on
president’s Executive Order
wenty-eleven has been a tough year for the chicken industry. But
many analysts feel that 2012 will be better. If, that is, the federal
government does not throw more obstacles in our way.
Executives and analysts speaking at the National Chicken
Council Annual Conference in Washington in October were unanimous in agreeing that 2011 was a year we would rather forget. Sky-high grain prices put companies in a bad spot and drove several of
them out of the business. Fortunately, most of the facilities involved
were taken over by other companies and will continue to operate. But
two plants in North Carolina were shut down, depriving about 1,000
plant workers of their jobs and 150 growers of their contracts.
The hope at the conference was that supply and demand will be
more evenly matched in the coming months. The supply of competitive protein, speci;cally beef, is expected to be tight because of the
See more To access a series of videos from
the National Chicken Council’s Industry Outlook
Panel, visit www.WAT TAgNet.com/25988.html.
drought in the Southwest. Chicken is poised to gain market share as
a result. Chicken production and processing is highly ef;cient, and
export markets have been strong despite dif;culties with Russia and
China. So the industry could be positioned for growth in 2012.
Regulatory wild cards
The wild cards are poor policy choices by the U.S. government.
As I write this, we are awaiting publication of the ;nal rule proposed
by U.S. Department of Agriculture’s Grain Inspection, Packers
& Stockyards Administration, which would cost the poultry and
meatpacking industries billions of dollars. We’re hoping at least
some of the more onerous provisions of the rule will be removed.
After all, it was President Obama who ordered federal agencies by
Executive Order to “ensure that regulations protect our safety, health
and environment while promoting economic growth.”
I implore the President to order the Secretary of Agriculture to
withdraw the GIPSA proposed rule, reissue it within the provisions
in the 2008 Farm Bill, and allow a public comment period on the
new proposal with an in-depth economic impact analysis.
Environmental regulation is another question mark. The
Environmental Protection Agency is pushing
a comprehensive regulatory framework in the
Chesapeake Bay region. Thanks to a questionable
deal settling a lawsuit by environmental advocacy
groups, EPA is trying to grab the power to control
all types of land use in the region, taking that job
away from the states. Since farming is a major
activity in the Chesapeake watershed, it will bear a good deal of the
burden if EPA gets away with its proposed plan.
Government supports for corn ethanol live on
Finally, there is the ethanol program, which has been the biggest
single factor in creating arti;cial demand for corn and running up the
cost of grain. At long last, we are seeing some glimmers of hope.
We expect that one of the supports for the ethanol program, the
Volumetric Ethanol Excise Tax Credit, will expire on schedule at the
end of 2011. However, ethanol groups will go down ;ghting on this.
Despite what they say in public, they will keep trying right down
to the wire to extend the credit or get it rolled over into some type
of subsidy for the infrastructure improvements that they think will
allow them to get more ethanol into gasoline tanks.
Getting rid of VEETC, however, will have only a marginal impact
on the ethanol industry’s demand for corn. That won’t shrink until the
ethanol mandate, of;cially known as the Renewable Fuel Standard, is
reformed. We were pleased when Congressmen Bob Goodlatte, R-Va.,
and Jim Costa, D-Calif., introduced a bill that would tie the amount
of ethanol required by the mandate to the amount of corn available.
If in effect today, the mandate would be reduced by 25%.
This bill shows there are still people in Congress who believe in
balance and common sense and demonstrates the bipartisan opposition to current policy. I hope industry members contact their Congress
representatives, urging them to support the RFS Flexibility Act. ■