November 24, 2023

US Senate Committee says USDA inaction on swine inspection system is affecting pork industry

As the November 30 deadline for the Time-Limited Trial for the New Swine Inspection System approaches, the United States Senate Committee on Agriculture, Nutrition, and Forestry said that the US Department of Agriculture (USDA) inaction is detrimental to the pork industry, Farm Journal's Pork reported.

The Committee said that the lack of action from the USDA exacerbates economic uncertainty for swine farmers, particularly as profitability for farrow-to-finish swine operations is currently at its lowest level in over two decades. The USDA has not provided a permanent solution or an extension for the existing Time-Limited Trial, allowing six pork processing plants to operate at increased line speeds for efficiency and output while maintaining worker and food safety.

Nearly 40% of the US swine supply is within 100 miles of these six processing plants located in Illinois, Michigan, Minnesota, Nebraska, and Pennsylvania. The Committee warns that without a permanent solution or an extension, these processors will have to reduce operational capacity, impacting swine demand, disrupting the supply chain, and contributing to already high inflation in the US food supply.

Iowa State University estimates suggest that the trial's expiration could reduce nationwide pork processing capacity by at least 2.5%, equivalent to nearly 260,000 swine per month. This reduction in output would lead to higher retail pork prices for consumers as supplies decrease in grocery stores and the food service sector.

The Committee emphasises the negative impact on farmers, as reduced plant processing capacity will lower the demand for market-ready swine, resulting in lower prices received by family farmers. Conservative estimates indicate that the trial's expiration could further erode swine farmer margins by an additional US$10 per head due to increased operating costs associated with reduced demand.

The Committee urges the USDA to provide guidance and certainty to the industry, as there are potential dire economic conditions for swine farmers in the present and future.

-      Farm Journal's Pork