    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

                             A REVIEW OF ANIMAL AGRICULTURE
                                 STAKEHOLDER PRIORITIES

       =======================================================================

                                    HEARING

                                   BEFORE THE

                  SUBCOMMITTEE ON LIVESTOCK, DAIRY, AND
                                     POULTRY

                                     OF THE

                            COMMITTEE ON AGRICULTURE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  MAY 17, 2023

                                   __________

                               Serial No. 118-12

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

              Printed for the use of the Committee on Agriculture
                             agriculture.house.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    53-121 PDF                   WASHINGTON : 2023

    -----------------------------------------------------------------------------------

                            COMMITTEE ON AGRICULTURE

                     GLENN THOMPSON, Pennsylvania, Chairman

    FRANK D. LUCAS, Oklahoma             DAVID SCOTT, Georgia, Ranking
    AUSTIN SCOTT, Georgia, Vice          Minority Member
    Chairman                             JIM COSTA, California
    ERIC A. ``RICK'' CRAWFORD, Arkansas  JAMES P. McGOVERN, Massachusetts
    SCOTT DesJARLAIS, Tennessee          ALMA S. ADAMS, North Carolina
    DOUG LaMALFA, California             ABIGAIL DAVIS SPANBERGER, Virginia
    DAVID ROUZER, North Carolina         JAHANA HAYES, Connecticut
    TRENT KELLY, Mississippi             SHONTEL M. BROWN, Ohio
    DON BACON, Nebraska                  SHARICE DAVIDS, Kansas
    MIKE BOST, Illinois                  ELISSA SLOTKIN, Michigan
    DUSTY JOHNSON, South Dakota          YADIRA CARAVEO, Colorado
    JAMES R. BAIRD, Indiana              ANDREA SALINAS, Oregon
    TRACEY MANN, Kansas                  MARIE GLUESENKAMP PEREZ,
    RANDY FEENSTRA, Iowa                 Washington
    MARY E. MILLER, Illinois             DONALD G. DAVIS, North Carolina,
    BARRY MOORE, Alabama                 Vice Ranking Minority Member
    KAT CAMMACK, Florida                 JILL N. TOKUDA, Hawaii
    BRAD FINSTAD, Minnesota              NIKKI BUDZINSKI, Illinois
    JOHN W. ROSE, Tennessee              ERIC SORENSEN, Illinois
    RONNY JACKSON, Texas                 GABE VASQUEZ, New Mexico
    MARCUS J. MOLINARO, New York         JASMINE CROCKETT, Texas
    MONICA De La CRUZ, Texas             JONATHAN L. JACKSON, Illinois
    NICHOLAS A. LANGWORTHY, New York     GREG CASAR, Texas
    JOHN S. DUARTE, California           CHELLIE PINGREE, Maine
    ZACHARY NUNN, Iowa                   SALUD O. CARBAJAL, California
    MARK ALFORD, Missouri                ANGIE CRAIG, Minnesota
    DERRICK VAN ORDEN, Wisconsin         DARREN SOTO, Florida
    LORI CHAVEZ-DeREMER, Oregon          SANFORD D. BISHOP, Jr., Georgia
    MAX L. MILLER, Ohio

                                     ______

                         Parish Braden, Staff Director

                     Anne Simmons, Minority Staff Director

                                     ______

                 Subcommittee on Livestock, Dairy, and Poultry

                         TRACEY MANN, Kansas, Chairman

    SCOTT DesJARLAIS, Tennessee          JIM COSTA, California, Ranking
    TRENT KELLY, Mississippi             Minority Member
    DON BACON, Nebraska                  ABIGAIL DAVIS SPANBERGER, Virginia
    JAMES R. BAIRD, Indiana              JAHANA HAYES, Connecticut
    RANDY FEENSTRA, Iowa                 YADIRA CARAVEO, Colorado
    BARRY MOORE, Alabama                 JILL N. TOKUDA, Hawaii
    RONNY JACKSON, Texas                 CHELLIE PINGREE, Maine
    MARCUS J. MOLINARO, New York         DARREN SOTO, Florida
    MARK ALFORD, Missouri                DONALD G. DAVIS, North Carolina
    DERRICK VAN ORDEN, Wisconsin         ------
                                         ------

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Costa, Hon. Jim, a Representative in Congress from California,
      opening statement..............................................     3
    Mann, Hon. Tracey, a Representative in Congress from Kansas,
      opening statement..............................................     1
        Prepared statement...........................................     2
    Thompson, Hon. Glenn, a Representative in Congress from
      Pennsylvania, opening statement................................     4
        Prepared statement...........................................     5

                                   Witnesses

    Wilkinson, Todd, President, National Cattlemen's Beef
      Association, De Smet, SD.......................................     8
        Prepared statement...........................................    10
        Supplementary material.......................................    87
    Hays, Scott, President, National Pork Producers Council; Member,
      Missouri Pork Association, Monroe City, MO.....................    18
        Prepared statement...........................................    20
        Supplementary material.......................................    87
    Zimmerman, John, Vice Chairman, National Turkey Federation,
      Northfield, MN.................................................    23
        Prepared statement...........................................    25
        Supplementary material.......................................    88
    Burns, J.D., Byran, Vice President and Associate General Counsel,
      North American Meat Institute, Washington, D.C.................    30
        Prepared statement...........................................    32
        Supplementary material.......................................    88
    Hubbard, Laurie, Region I Director, Executive Board, American
      Sheep Industry Association, New Paris, PA......................    46
        Prepared statement...........................................    47
        Supplementary material.......................................    89
    Scott, Kelsey R., Director of Programs, Intertribal Agriculture
      Council, Eagle Butte, SD.......................................    51
        Prepared statement...........................................    52
        Supplementary material.......................................    89

             A REVIEW OF ANIMAL AGRICULTURE STAKEHOLDER PRIORITIES

                                  ----------

                            WEDNESDAY, MAY 17, 2023

                      House of Representatives,
                 Subcommittee on Livestock, Dairy, and Poultry,
                                      Committee on Agriculture,
                                                       Washington, D.C.
        The Subcommittee met, pursuant to call, at 10:03 a.m., in
    Room 1300 of the Longworth House Office Building, Hon. Tracey
    Mann [Chairman of the Subcommittee] presiding.
        Members present: Representatives Mann, DesJarlais, Kelly,
    Bacon, Feenstra, Moore, Jackson of Texas, Molinaro, Alford, Van
    Orden, Thompson (ex officio), Duarte, Johnson, Miller of Ohio,
    Costa, Hayes, Caraveo, Tokuda, Soto, and Davis of North
    Carolina.
        Staff present: Caleb Crosswhite, Justina Graff, Patricia
    Straughn, Erin Wilson, John Konya, Daniel Feingold, Emily
    Pliscott, and Dana Sandman.

      OPENING STATEMENT OF HON. TRACEY MANN, A REPRESENTATIVE IN
                          CONGRESS FROM KANSAS

        The Chairman. The Committee will come to order. Welcome,
    and thank you for joining today's hearing entitled, A Review of
    Animal Agriculture Stakeholder Priorities. After brief opening
    remarks, Members will receive testimony from our witnesses
    today, and then the hearing will be open to questions. In
    consultation with the Ranking Member, and pursuant to Rule
    XI(e), I want to make Members of the Subcommittee aware that
    other Members of the full Committee may join us today.
        Now for a quick opening statement, last month we hosted the
    first hearing of the House Agriculture Committee's Subcommittee
    on Livestock, Dairy, and Poultry in this 118th Congress. As a
    fifth generation Kansan, having grown up on my family farm, and
    having spent thousands of hours on the tractor, combine, and
    riding fence, doctoring sick cattle, I understand the grit,
    tenacity, and courage that it takes to make a living in
    agriculture. I represent the Big First District of Kansas where
    ag producers sell about $10 billion worth of livestock, dairy,
    poultry, and products like beef, milk, and eggs every year.
        At our previous hearing we heard from USDA officials about
    their work to protect the health of livestock in America. It is
    important that this Subcommittee engage with USDA on that vital
    work. Equally important, however, is that we hear from those
    directly involved in the day-to-day business of feeding the
    world. From commodity growers to livestock producers, everyone
    represents a piece of the American agriculture picture. We are
    all in this together. We must remember that, for example, our
    commodity producers greatly benefit from a strong livestock
    sector, as livestock consumes grain. The livestock industry
    benefits from the biofuels industry, as that industry relies on
    them as an important feed source. Agriculture is
    interdependent, and interconnected, and that is important for
    this Subcommittee and the full Committee to understand.
        A few weeks ago Chairman Thompson and I hosted a Food and
    Agriculture Listening Session in a wheat field near Gypsum,
    Kansas, which is almost exactly the center part of the State of
    Kansas. More than 150 farmers, ranchers, and ag producers came
    together to talk about the next farm bill. There is a good
    chance that today's witnesses will highlight many of the same
    priorities raised by livestock producers with Chairman Thompson
    and I while we were in Kansas: Disaster programs and risk
    management tools, research, trade promotion, and animal health
    research like what we will see at the National Bio and Agro-
    Defense Facility opening in Manhattan, Kansas later this month.
    I am eager to continue learning about whether existing programs
    need to be tweaked or enhanced to ensure producer success. I am
    also interested in hearing more about what producers do not
    want in this next farm bill, as time has taught us, even if
    well intended, more legislation and regulation often is not the
    answer.
        Unfortunately, producers know well what can happen to the
    farm when the government gets in the way. I am especially
    concerned with the Biden Administration's false narrative about
    the protein sector's contribution to the skyrocketing cost of
    food in America, the Administration's continued push for a set
    of controversial Packers and Stockyards rules, and more
    recently, the disappointing Supreme Court decision to uphold
    Proposition 12, which opens the door to unthinkable,
    unscientific regulatory overreach against all producers. I am
    looking forward to a productive conversation on these issues
    and a variety of others highlighted in your testimony, and I am
    excited to work together on solutions that benefit the whole
    industry.
        [The prepared statement of Mr. Mann follows:]

     Prepared Statement of Hon. Tracey Mann, a Representative in Congress
                                  from Kansas
        Last month, we hosted the first hearing of the House Agriculture
    Committee's Subcommittee on Livestock, Dairy, and Poultry in the 118th
    Congress. As a fifth generation Kansan having grown up on my family
    farm, I understand the grit, tenacity, and courage that it takes to
    make a living in agriculture. I represent the Big First district of
    Kansas where agricultural producers sell $10 billion worth of
    livestock, dairy, poultry, and products like beef, milk, and eggs every
    year.
        At that hearing, we heard from USDA officials about their work to
    protect the health of livestock in America. It is important that this
    Subcommittee engages with USDA on that vital work. Equally important,
    however, is that we hear from those directly involved in the day-to-day
    business of feeding the world. From commodity growers to livestock
    producers--everyone represents a piece of the American agriculture
    picture. We are all in this together. We must remember that, for
    example, our commodity producers greatly benefit from a strong
    livestock sector as livestock consumes grain. The livestock industry
    benefits from the biofuels industry as the industry relies on them as
    an important feed source.
        A few weeks ago, Chairman Thompson and I hosted a Food and
    Agriculture Listening Session in a wheat field near Gypsum, Kansas.
    More than 150 farmers, ranchers, and agricultural producers came
    together to talk about the next farm bill. There is a good chance that
    today's witnesses will highlight many of the same priorities raised by
    livestock producers with Chairman Thompson and me in Kansas: Disaster
    programs and risk management tools; Research; Trade promotion; and
    Animal health research like what we will see at the National Bio and
    Agro-Defense Facility opening in Manhattan, Kansas this month.
        I am eager to continue learning about whether existing programs
    need to be tweaked or enhanced to ensure producer success. I am also
    interested in hearing more about what producers do not want in the next
    farm bill, as time has taught us, even if well intended, more
    legislation and regulation is often not the answer.
        Unfortunately, producers know well what can happen to the farm when
    the government gets in the way. I am especially concerned with the
    Biden Administration's false narrative about the protein sector's
    contribution to the skyrocketing cost of food in America; the
    Administration's continued push for a set of controversial Packers and
    Stockyards rules; and most recently, the disappointing Supreme Court
    decision to uphold Proposition 12, which opens the door to unthinkable,
    unscientific regulatory overreach against all producers.
        I am looking forward to a productive conversation on these issues
    and a variety of others highlighted in your testimony, and I am excited
    to work together on solutions that benefit the whole of industry.

        The Chairman. With that, I now would like to welcome the
    distinguished Ranking Member, my good friend, the gentleman
    from California, Mr. Costa, for any opening remarks that he
    would like to make.

       OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN
                        CONGRESS FROM CALIFORNIA

        Mr. Costa. Thank you. Thank you, Mr. Chairman. Good morning
    to each and every one of you, and it is nice to have the
    Chairman of the full House Agriculture Committee here as well,
    and other Members, as we set the table, so to speak, literally
    and figuratively, for the reauthorization of the farm bill this
    year. As we all know, the incredible productivity that American
    agriculture does every day, day in and day out, is the envy of
    the world. No one produces more cost-effective food that ends
    up on America's dinner table than American farmers, ranchers,
    dairymen and -women, with farmworkers, who are a critical part
    of that partnership. And, therefore, it is important that this
    Subcommittee, Mr. Chairman, as you have stated in your own
    comments, focus on the issues that are key to the Subcommittee.
    And while livestock may not have its own title, we know it is
    critical in providing protein for America. As I like to say,
    food is a national security issue. And the witnesses that we
    have here at our table this morning reflect a diverse set of
    constituencies that understand that food is a national security
    issue.
        So, we have had a lot of challenges in recent years, with
    the pandemic. We have had disruptions in our supply chain that
    have led to incredibly difficult circumstances. I, for one, did
    not understand, when we saw the impacts of, as an example,
    America's pork industry, that 70 percent of Americans--or
    seven--let me rephrase this. 70 percent of the bacon and pork
    bellies for Americans are consumed in restaurants. I never
    thought about that. So, all of a sudden you close the
    restaurants, and, my gosh, you have a real disruption.
        While we have recently seen a gradual increase in cattle
    prices for small producers, I think it is critical that we take
    lessons learned from the pandemic and ensure that livestock
    operations can continue to remain viable during economic
    downturns. I think that is critical, and we ensure that there
    is security and stability. I am happy to work with Members, as
    I always have, on a bipartisan effort through the number of
    farm bills that we are working on. This is my fourth farm bill
    reauthorization. And the stakeholders, obviously, are key, as
    the Chairman noted, that we listen. That we listen to what has
    worked, and, just as importantly, what hasn't worked, as we
    contemplate the next 5 years to set American farm policy in
    place.
        As a third generation farmer, I know the effectiveness of
    many of the programs in the 12 titles, and the importance that
    we maintain that bipartisanship. In California, as we all like
    to boast about our own states--but California is, obviously,
    the leading the agricultural state of the nation, we do a great
    deal in producing agricultural products. At the farm gate last
    year, over $51 billion: $3 billion of that was in products that
    deal with cattle and calves; $7.4 billion was in the dairy
    industry, which we produced 20 percent of all the milk products
    in America.
        So programs such as the Livestock Indemnity Program,
    otherwise known as LIP, the Livestock Forage Program, otherwise
    known as LFP, don't get as much attention as others, but they
    are essential tools for our producers, especially as we see
    impacts from climate change that lead to more and more extreme
    weather. I think many of you know that we have had extreme
    droughts in the West, and California. It was dry, dry, dry. We
    prayed, we prayed, we prayed for rain. I guess we prayed really
    good, because the last 4 months it has been biblical. It has
    been biblical, in the amount of rain and snow that we have had
    in California, and now we have floods. So, it is one extreme or
    another. That is part of the--roots causes of climate change.
    So we need to support our producers to navigate the fallout
    from weather patterns that will continue to change, whether you
    are in the West, Midwest, or the South, or the Northeast.
        We heard last month from Under Secretary Moffitt on animal
    health programs, which are critical tools to maintaining the
    safe and secure food supply. It is real important that we
    reauthorize those tools for stakeholders, such as the witnesses
    here who will testify today. We want to hear from you, and from
    the comments and the experiences your constituency have. So
    thank you, Mr. Chairman. I am looking forward to the testimony,
    as an essential part of us are putting together through the
    authorization of this year's farm bill. I yield back.
        The Chairman. Thank you. I now recognize Chairman Thompson
    for any opening comments that he would like to make.

     OPENING STATEMENT OF HON. GLENN THOMPSON, A REPRESENTATIVE IN
                       CONGRESS FROM PENNSYLVANIA

        Mr. Thompson. Well, thank you very much. Good morning
    everyone, and thank you to Chairman Mann, Ranking Member Costa,
    for your great leadership, and, quite frankly, for convening
    today's hearing. And more importantly, thank you to our
    witnesses who have taken time out of your busy schedules, your
    families, your business, your farms to appear before us today,
    and I look forward to hearing from each of you. As a fellow
    Pennsylvanian, I am especially proud to have Ms. Laurie Hubbard
    representing not only the sheep industry, but the Keystone
    State on today's panel. Laurie, thank you for doing that.
        As Chairman Mann, noted in his statement, my colleagues and
    I have had the opportunity to hear from a wide variety of
    livestock stakeholders in our travels all across this country.
    But given the size and diversity of the livestock industry, I
    am glad that we are making time for a deeper dive into the
    issues facing the industry's various segments. Especially as we
    head into a farm bill, we need a full picture of on-the-ground,
    or quite frankly, in-the-pasture conditions, and an honest
    assessment of what is and isn't working to ensure that we
    appropriately arm producers with the tools they need for
    success in the coming years.
        And with the impending expiration of the Livestock
    Mandatory Reporting Program, or LMR, I also look forward to
    your thoughts on any necessary programmatic changes, and the
    possibility of a multiyear reauthorization to provide longer-
    term certainty. And just as much as I want to hear your
    priorities for inclusion in the upcoming legislation, sometimes
    I know it is even more important that Congress understand what
    you want kept out and why. So I also welcome your expertise and
    wisdom on avoiding legislative pitfalls as we navigate this
    process.
        Speaking of pitfalls, the livestock and protein processing
    sectors are no strangers to unwarranted regulatory assault, and
    I would like to insert for the record, and request unanimous
    consent to insert, a recent Wall Street Journal op-ed entitled,
    Big Meat Conspiracy Theory Unravels.
        [The article referred to is located on p. 6.]
        The Chairman. So approved.
        Mr. Thompson. This article articulates how the Biden
    Administration simply got it wrong when pointing the finger at
    the packing industry for food inflation. In addition to the
    Administration's continued blame game with industry, I remain
    concerned with the Administration's insistence on contentious
    Packers and Stockyards regulations, and a lack of certainty
    regarding our pork and poultry processors' ability to
    efficiently operate at speeds proven safe and reliable for
    decades. I know there has been some recent--at least in the
    poultry area, some recent support from USDA, and I believe in
    giving credit where credit is due. I just hope for more of that
    as we look at the state of processing.
        I appreciate your partnership as we continue to explore
    potential solutions to these and a variety of other issues that
    will surely be highlighted in today's discussion. Thank you,
    and with that, I yield back.
        [The prepared statement of Mr. Thompson follows:]

    Prepared Statement of Hon. Glenn Thompson, a Representative in Congress
                               from Pennsylvania
        Good morning and thank you to Chairman Mann and Ranking Member
    Costa for convening today's hearing.
        And more importantly, thank you to our witnesses who have taken
    time out of your busy schedules to appear before us today--I look
    forward to hearing from each of you.
        And as a fellow Pennsylvanian, I am especially proud to have Ms.
    Laurie Hubbard representing not only the sheep industry, but the
    Keystone State on today's panel.
        As Mr. Mann noted in his statement, my colleagues and I have had
    the opportunity to hear from a variety of livestock stakeholders on our
    travels across the country.
        But given the size and diversity of the livestock industry, I am
    glad we are making time for a deeper dive into the issues facing the
    industry's various segments.
        Especially as we head into a farm bill, we need a full picture of
    on-the-ground conditions and an honest assessment of what is and isn't
    working to ensure we appropriately arm producers with the tools they
    need for success in the coming years.
        And with the impending expiration of the Livestock Mandatory
    Reporting program, or LMR, I also look forward to your thoughts on any
    necessary programmatic changes and the possibility of a multi-year
    reauthorization to provide longer-term certainty.
        Just as much as I want to hear your priorities for inclusion in
    upcoming legislation, sometimes I know it is even more important that
    Congress understand what you want kept out and why. So, I also welcome
    your expertise and wisdom on avoiding legislative pitfalls as we
    navigate this process.
        Speaking of pitfalls, the livestock and protein processing sectors
    are no strangers to unwarranted regulatory assault, and I would like to
    insert for the record a recent Wall Street Journal op-ed entitled, Big
    Meat Conspiracy Theory Unravels,\1\ that articulates how the Biden
    Administration simply got it wrong when pointing the finger at the
    packing industry for food inflation.
    ---------------------------------------------------------------------------
        \1\ https://www.wsj.com/articles/tyson-foods-profits-meat-packers-
    president-biden-elizabeth-warren-987e6c95.
    ---------------------------------------------------------------------------
        In addition to the Administration's continued blame game with
    industry, I remain concerned with the Administration's insistence on
    contentious Packers and Stockyards regulations, and a lack of certainty
    regarding our pork and poultry processors' ability to efficiently
    operate at speeds proven safe and reliable for decades.
        And the Supreme Court's disappointing decision on Proposition 12
    threatens to even further complicate the regulatory landscape.
        I appreciate your partnership as we continue to explore potential
    solutions to these and a variety of other issues that will surely be
    highlighted in today's discussion.
        Thank you, and I yield back.
                                   Attachment

    [https://www.wsj.com/articles/tyson-foods-profits-meat-packers-
    president-biden-elizabeth-warren-987e6c95]
    The Big Meat Conspiracy Theory Unravels
              Tyson Foods loses money, which doesn't sound like a monopoly.

    By The Editorial Board \1\
    ---------------------------------------------------------------------------
        \1\ https://www.wsj.com/news/author/editorial-board.

    ---------------------------------------------------------------------------
    Updated May 15, 2023 2:42 p.m. ET

        Remember when President Biden and progressives last year accused
    meat packers of colluding to fatten their profits. Are they now
    conspiring to lose money? Tyson Foods \2\ last week reported its first
    quarterly loss since 2009 as meat prices tumbled. Here's a lesson in
    market economics, Mr. President.
    ---------------------------------------------------------------------------
        \2\ https://www.wsj.com/market-data/quotes/TSN.
    ---------------------------------------------------------------------------
        Tyson's stock plunged after it reported anemic sales and downgraded
    its forecast. The quarterly loss at the largest U.S. meat supplier
    marks a stunning reversal from 2021 and early last year when it earned
    record profits amid a run-up in meat prices. What happened?
        Well, meat supply increased as packers ramped up production and
    increased wages for employees to meet demand. But producer costs for
    cattle and chicken have remained elevated. At the same time, consumer
    demand for pricier cuts of beef and pork has declined as inflation ate
    into purchasing power. All of this has shrunk Tyson's margins.
        As we explained in ``Carving Up Biden's Inflation Beef'' \3\ (Jan.
    7, 2022), the gusher of pandemic transfer payments swelled demand for
    more expensive meat products and contributed to a labor shortage that
    constrained production. When demand exceeds supply, business margins
    increase as markets ration scarce goods via prices.
    ---------------------------------------------------------------------------
        \3\ https://www.wsj.com/articles/carving-up-bidens-inflation-beef-
    meat-producers-tyson-prices-11641587628?mod=article_inline.
    ---------------------------------------------------------------------------
        Yet Democrats alleged a corporate conspiracy. Mr. Biden claimed
    that rising meat prices and profits reflect ``the market being
    distorted by a lack of competition'' and ``capitalism without
    competition isn't capitalism; it's exploitation.'' Massachusetts Sen.
    Elizabeth Warren accused Tyson of abusing its ``corporate market power
    and raking in record profits by jacking up meat prices.''
        If markets were ``distorted,'' the culprit was pandemic transfer
    payments that were a disincentive to work. As these programs lapsed,
    hiring became easier. Competition for workers and market share raised
    supplier costs while pushing down prices and profits. Meat prices fell
    0.4% in April and are up only 0.3% over the past 12 months.
        Tyson's stock has fallen by nearly half over the past year and is
    trading at the lowest levels since 2015. This doesn't look like an
    antitrust conspiracy or market oligopoly, but the meat packers and
    their shareholders will never get an apology from Washington.

              Photo: Toby Talbot/Associated Press.
              Copyright 2023 Dow Jones & Company,
            Inc. All Rights Reserved.

                      Appeared in the May 15, 2023, print edition as `The
                    Big Meat Conspiracy Theory Unravels'.

        The Chairman. Thank you. The chair would request that other
    Members submit their opening statements for the record so the
    witnesses may begin their testimony, and to ensure that there
    is ample time for questions.
        To introduce our first witness today, I am pleased to yield
    to our colleague, someone who is no stranger to this
    Subcommittee, the gentleman from South Dakota, Mr. Johnson.
        Mr. Johnson. Mr. Chairman, thank you, and it is an honor
    that today's panel is bookended by South Dakotans. We first
    have Todd Wilkinson, who is the President of the National
    Cattlemen's Beef Association, and in a beautiful town out on
    the South Dakota Prairie, De Smet, Todd Wilkinson runs a cow-
    calf operation, finishing and feeding as well, and he has
    practiced law for nearly 40 years. And, Mr. Chairman, you
    cannot find a more respected voice in cattle country on these
    issues than Todd Wilkinson.
        And we also have Kelsey Scott, from a beautiful town out on
    the South Dakota Prairie of Eagle Butte. She is representing
    the Intertribal Agriculture Council, but she runs a direct to
    consumer beef operation. She really, really understands these
    issues. And she is whip smart and has taught a lot of us a
    whole lot about her world. It is an honor to have them both
    here.
        The Chairman. Thank you. To introduce our second witness
    today, I am pleased to yield to our colleague, the gentleman
    from Missouri, Mr. Alford.
        Mr. Alford. Thank you so much, Mr. Chairman. It is an honor
    to introduce Scott Hays, the President of the National Pork
    Producers Council today. Scott is a fifth generation pork
    producer from Hannibal, Missouri. He is involved in several
    state and national organizations as well, serving as a strong
    advocate for pork producers and the broader agriculture
    industry. I am proud to call Scott a friend. We have gotten to
    know each other quite well over the last couple of weeks
    especially, and I know his expertise is going to be a great
    resource as we dive into pressing issues facing the livestock
    and meat processing industries. Scott, good to have you here,
    and Mr. Chairman, I yield back.
        The Chairman. I thank the gentleman. Our third witness
    today is Mr. John Zimmerman, the Vice Chairman of the National
    Turkey Federation. The next witness is Mr. Bryan Burns, the
    Vice President and General Counsel for the North American Meat
    Institute. The fifth witness is Ms. Laurie Hubbard, who is the
    Region I Director of the American Sheep Industry Association.
    And, as was mentioned, our sixth and final witness today is Ms.
    Kelsey Scott, the Director of Programs for the Intertribal
    Agriculture Council.
        Thank you all for--our witnesses for joining us today. We
    will now proceed with your testimony. You will each have 5
    minutes. The timer in front of you will count down to zero, at
    which point your time will be expired. Mr. Wilkinson, please
    begin when you are ready.

     STATEMENT OF TODD WILKINSON, PRESIDENT, NATIONAL CATTLEMEN'S
                     BEEF ASSOCIATION, DE SMET, SD

        Mr. Wilkinson. Chairman Mann, Ranking Member Costa, and
    Members of the Subcommittee, on behalf of America's cattle
    producers, thank you for inviting me to provide an update on
    the state of the U.S. cattle industry. My name is Todd
    Wilkinson. I currently serve as President of the National
    Cattlemen's Beef Association, the oldest and largest national
    trade association representing the U.S. cattle industry. NCBA
    represents over 25,000 direct members, and approximately
    178,000 producers through our 44 state affiliate organizations.
        When I last appeared before this Committee in October of
    2021, my report to Congress was bleak. Prices were low, and
    cattle were substantially backlogged across the supply chain.
    Countless family farmers and ranchers struggled to remain
    profitable as cattle prices slogged. Today I am pleased to
    report that the state of the cattle industry has greatly
    improved. Earlier this month USDA's Livestock Mandatory
    Reporting Program showed an average fed cattle price of around
    $173 per hundredweight. When I was here last in 2021, that
    figure was closer to $122 per hundredweight. I would be remiss
    if I did not underscore the fact that the entirety of this
    price movement we are currently seeing has occurred without the
    enactment of market altering legislation. Our membership
    opposes any bill that would restrict their ability to market
    cattle in the most profitable and effective manner. We call
    upon Congress to respect their wishes.
        While price environment for cattle has drastically improved
    over the past 2 years, the recovery has been bittersweet. Herd
    contraction, largely spurred by drought across most of cattle
    country, has resulted in a year over year beef cattle inventory
    reduction of nearly four percent, the lowest in 61 years. Make
    no mistake, even amid a recovering cattle market, producers
    still face a myriad of challenges. And this is by no means a
    comprehensive list, but I want to address three specific areas.
        First, animal disease preparedness. NCBA calls on Congress
    to fully fund three critical animal health components in the
    farm bill, the National Animal Vaccine and Veterinary
    Countermeasures Bank, the National Animal Disease Preparedness
    and Responsive Program, and the National Animal Health
    Laboratory Network, collectively referred to as the three-
    legged stool. The U.S. must be prepared to deal with disasters
    like a foot-and-mouth disease outbreak, as economic
    consequences would be in the tens of billions of dollars. We
    simply cannot afford to do nothing. In this case, an ounce of
    prevention is truly worth more than a pound of cure, and NCBA
    calls on Congress to robustly fund the three-legged stool.
        Second, USDA's proposed forthcoming Packers and Stockyards
    rules. Yet again USDA is attempting to unilaterally expand its
    authority under the Packers and Stockyards Act. We have seen
    this same playbook employed by USDA several times over the past
    15 years. If finalized, these rules would upend decades of
    innovation in livestock marketing agreements and open the door
    to frivolous lawsuits. Put simply, the rules empower trial
    lawyers to impose regulation by litigation. This is precisely
    why NCBA, and the vast majority of livestock and poultry
    groups, have opposed, and continue to oppose, these misguided
    regulations.
        Finally, the beef check-off. The beef check-off is one of
    the most important marketing tools available for today's cattle
    producers. Unfortunately, it appears some have bought into
    misinformation about commodity check-offs and introduced a
    deceptively titled ``Opportunities for Fairness in Farming,''
    or OFF Act (H.R. 1249/S. 557). Let me be clear, the OFF Act is
    nothing more than a thinly veiled attempt by radical animal
    rights activists and their allies to eradicate the most popular
    and longstanding beef promotion effort in history. Contrary to
    the claims of the bill's proponents, check-off dollars are not
    used to influence public policy or disparage other commodities,
    period. There are ample safeguards, audits, and accountability
    protocols already in place both at USDA and internally to
    ensure compliance of the law. Cattle producers overwhelmingly
    support the beef check-off, and we urge Congress to continue to
    do the same. I have highlighted more issues in my written
    testimony, and I refer those to you.
        In closing, Mr. Chairman, many of you have said it before,
    and I wholeheartedly agree, food security is national security.
    Working together, we can ensure the long-term success and the
    viability of those on the front line providing critical food
    security. We owe it to the next generation, and the generations
    beyond, to get this right. Thank you, Mr. Chairman, and I will
    now stand for questions.
        [The prepared statement of Mr. Wilkinson follows:]

     Prepared Statement of Todd Wilkinson, President, National Cattlemen's
                         Beef Association, De Smet, SD
    Introduction
        Chairman Mann, Ranking Member Costa, and Members of the
    Subcommittee. On behalf of America's cattle producers, thank you for
    inviting me to provide an update on the state of the U.S. cattle
    industry.
        My name is Todd Wilkinson, and I currently serve as President of
    the National Cattlemen's Beef Association. I am a second-generation
    rancher and live in De Smet, SD. I own and operate a cow-calf and
    cattle backgrounding operation with my son, who is the third generation
    of our family to work the ranch. Additionally, I run a small cattle
    feeding facility and maintain a law practice, where I assist other
    farmers and ranchers with estate planning and other agricultural law
    issues.
        I am testifying today on behalf of the National Cattlemen's Beef
    Association (NCBA), the trusted leader and definitive voice of the U.S.
    cattle and beef industry. Initiated in 1898, NCBA is the American
    cattle and beef industry's oldest and largest national trade
    association. In addition to our nearly 26,000 direct members, NCBA
    represents forty-four state cattlemen's associations with collective
    memberships numbering some 178,000 cattle producers. It is important to
    note that well over 90% of those members are, like myself, family-owned
    business entities involved in the cow-calf, stocker/backgrounder, and
    feeding sectors of the supply chain. Each of those members has a voice
    in our organization's century-old policymaking process, and it is from
    the resolutions and directives resulting from this process that NCBA
    takes positions on legislation and proposed regulations.
    The State of the Cattle Industry
        When last I appeared before this Committee in October 2021, my
    report to Congress was bleak. Market-ready cattle were oversupplied and
    beef packing capacity--despite operating at or near maximum
    throughput--was insufficient to meet the immense processing demand. As
    a result, prices were low and cattle were substantially backlogged
    across the supply chain. While that underlying supply-demand dynamic
    was cyclically appropriate, and mostly anticipated, the unprecedented
    market shocks brought on by the COVID-19 pandemic drastically
    exacerbated the adverse effects of that phase of the long-term cattle
    cycle. Countless family farmers and ranchers struggled to remain
    profitable as cattle prices slogged.
    I. Current Cattle Market Conditions
        Today, I am pleased to report that the state of the cattle industry
    has greatly improved. As we have further transitioned into a new phase
    of the cattle cycle, prices have significantly increased--and done so
    in a relatively short amount of time. Just last month, we set a record
    high spot futures price for Live Cattle, with the April 2023 contract
    hitting $175.50/cwt. For context, when I last testified on October 7,
    2021, spot Live Cattle closed the day at $125.27. This upward pricing
    trend has been true across marketing methods (i.e., negotiated cash,
    formula, etc.) and classes of cattle (i.e., calves, feeders, finished
    steers and heifers, etc.). So far this month, USDA's Livestock
    Mandatory Reporting (LMR) program showed a weighted average fed cattle
    cash price of $173.93/cwt. Again, in October 2021, that figure was
    closer to $122.55/cwt.
        While the price environment for cattle has drastically improved
    over the past 2 years, the recovery has been bittersweet. The naturally
    occurring contraction phase of the cattle cycle, which we are currently
    experiencing, has been accelerated by severe drought experienced across
    the country. In fact, herd contraction has resulted in a year-over-year
    beef cattle inventory reduction of nearly 4% as of January 2023.\1\
    There are currently about 89.27 million head of cattle in the U.S.--the
    lowest inventory in 61 years.\2\ Make no mistake: even amid a
    recovering market, cattle producers still face a myriad of challenges.
    ---------------------------------------------------------------------------
        \1\ Cattle Report. USDA-NASS: 2023.
        \2\ Beef Cow Numbers Decline. American Society of Animal Science:
    2023.
    ---------------------------------------------------------------------------
        I would be remiss if I did not underscore that the entirety of the
    price improvement we are currently seeing has occurred without the
    enactment of market-altering legislation. Claims suggesting cattle
    market conditions would never again favor producers unless Congress
    intervened with massive government programs have been undeniably proven
    false. The market has unequivocally demonstrated it functions best when
    free from interference by Federal planners--when cattle producers are
    at liberty to make economic decisions in the best interests of their
    unique businesses. To that end, NCBA has been clearly directed by its
    membership to maintain opposition to any bills which would limit their
    ability to market cattle in the way they see fit, and we call upon
    Congress to continue respecting their wishes.
    II. Insufficient Forage Availability
        Cattle producers are also experiencing substantially reduced access
    to forage. From persistent drought in the Midwest to record spring
    precipitation in parts of the Great Basin, grazing land is either mud
    or dust, and feed is more difficult to come by across most of cattle
    country. Tight land and hay supplies even further exacerbate forage
    costs and lease rates. While weather events cannot be controlled, the
    tools which producers utilize to respond to its effects can be. As I
    will explain later in my testimony, access to risk management tools and
    disaster indemnity programs is crucial to ensuring the strength of the
    livestock sector.
    III. Rising Interest Rates
        Economic headwinds, such as higher interest rates, continue to
    undermine producer profitability and the economic sustainability of
    rural America. Cattle producers rely on consistent, dependable access
    to credit to cover many different needs, from budgeted operating costs
    to unexpected events like emergency veterinary costs or rebuilding
    fence after a disaster. To cover these costs, many producers take out
    loans that are repaid after their cattle are sold. Unfortunately, for
    most of the year cattle operations define cash flow as money leaving
    the business instead of coming into the business. Access to credit
    allows cattle producers to purchase goods and services in their local
    market and support local businesses. While news of higher cattle prices
    is welcome, we are also the recipients of higher interest rates that
    result in larger loan payments, smaller profit margins for producers
    and less business activity for local economies. This is a situation
    that most producers know all too well.
    IV. Surging Input Costs
        The meteoric rise in input costs--despite strong and strengthening
    cattle prices--remains an immense barrier to producer profitability.
    Inflationary pressures continue to erode bottom lines on family farms
    and ranches across the country. Fuel, fertilizer, fencing materials,
    animal health supplies, and equipment prices are sharply higher across
    the board, and many of these cost categories have increased at a faster
    rate than cattle prices. Congress must seriously evaluate the extent to
    which Federal policies have contributed to this unsustainable situation
    and, where appropriate, take the necessary steps to remedy it. Any
    solutions must be rooted in sound monetary policy and in accordance
    with the free-market principles which define the American economy.
    V. Burdensome Regulations
        Overly burdensome Federal regulations also complicate producers'
    ability to be profitable, undermining their ability to maximize their
    investments in all facets of sustainable operation. Whether it is
    uncertainty resulting from arduous livestock transportation
    requirements, compliance costs associated with the Biden
    Administration's Waters of the United States (WOTUS) Rule, or land
    management restrictions resulting from unscientific influences in
    implementation of the National Environmental Policy Act (NEPA) and
    Endangered Species Act (ESA), cattle producers end up being saddled
    with the bill more often than not. Further compounding this problem is
    the unserious manner in which Federal agencies calculate stakeholder
    compliance costs in their rulemaking analyses, often grossly
    underestimating financial burdens. At a time of great geopolitical
    uncertainty, the U.S. simply cannot afford to further burden food
    producers with massive costs and rules crafted by those farthest from
    the ground. As elaborated later in my testimony, over-regulation must
    be addressed. Food security is national security, and the current
    regulatory environment jeopardizes the continued success of America's
    farmers and ranchers--those on the front lines providing that food
    security.
    VI. Summary
        To recap, though challenges remain, I am optimistic about the state
    of the cattle industry. While cattle prices are reaching record highs,
    many producers are not able to fully take advantage of this welcome
    development due to increased input costs, climbing interest rates, and
    a web of regulatory red tape. In fact, several producers are analyzing
    these very risk factors and opting out while the going is good rather
    than investing with confidence in the growth of our industry. Going
    into a farm bill year and a new Congress, lawmakers can help those
    producers share my optimism by addressing several key issues.
    NCBA Priorities for the 118th Congress
        As the Committee seeks to address a host of challenges during the
    118th Congress, NCBA urges lawmakers to consider several key areas of
    importance to cattle producers. While the following is by no means an
    exhaustive list, these are the areas of most immediate concern to
    farmers and ranchers.
    I. Pass the 2023 Farm Bill
        An important priority for cattle producers this Congress is timely
    passage of a robust farm bill. The farm bill authorizes several
    important U.S. Department of Agriculture (USDA) programs ranging in
    mission from conservation to risk management, and trade promotion to
    animal disease preparedness. Farmers and ranchers rely on efficient
    implementation of these programs to ensure stability across the
    agricultural sector.
        Specifically, NCBA urges the following as the 2023 Farm Bill is
    considered:

       Protect Animal Health

          Animal disease poses one of the greatest threats to the U.S.
            livestock industry. Since passage of the 2018 Farm Bill, highly
            pathogenic avian influenza has wreaked havoc upon the domestic
            poultry industry, African swine fever has spread closer to U.S.
            shores, and foot-and-mouth disease continues to run rampant
            across the globe. These diseases, and others like them, will
            cause tremendous economic devastation if not properly responded
            to in a timely manner. Simply put, Congress cannot afford to
            cut corners on animal disease prevention and preparedness
            programs.
          Therefore, NCBA calls on Congress to strongly support three
            critical animal health components in the farm bill. First,
            provide mandatory funding to the National Animal Vaccine and
            Veterinary Countermeasures Bank (NAVVCB) at $153 million per
            year. This level of support will significantly ramp up the
            cattle industry's ability to respond to and eradicate animal
            disease outbreaks through a robust vaccine bank. Second, NCBA
            requests $70 million per year in mandatory funding for the
            National Animal Disease Preparedness and Response Program
            (NADPRP) at USDA's Animal and Plant Health Inspection Service
            (APHIS). This crucial program allows USDA to collaborate with
            interested stakeholders nationwide to better prepare for and
            remedy animal health emergencies. Third and finally, NCBA urges
            lawmakers to provide $10 million per year in mandatory funding
            for the National Animal Health Laboratory Network (NAHLN), with
            an additional authorization for appropriations of $45 million
            per year. This program conducts critical animal disease
            surveillance and diagnostic work which is instrumental to rapid
            response in the event of an outbreak. Collectively, the
            [NAVVCB], NADPRP, and NAHLN are colloquially referred to as the
            ``Three-Legged Stool,'' and NCBA reiterates the importance of
            adequately supporting all three elements within APHIS.

       Promote Voluntary Conservation Programs

          Cattle producers graze on more than 660 million acres in the
            United States, nearly \1/3\ of the nation's continental land
            mass. Encouraging and incentivizing voluntary conservation
            practices is an essential part of the equation when it comes to
            managing across the portion of those acres that are privately
            owned. NCBA strongly supports a number Title II conservation
            programs in the farm bill, as many cattle producers' only nexus
            with the Federal Government is through their local Natural
            Resources Conservation Service (NRCS) or Farm Service Agency
            (FSA) office.
          Working lands programs such as the EQIP and Conservation
            Stewardship Program (CSP)--in tandem with Conservation
            Technical Assistance--provide the most direct, on-the-ground
            support for cattle producers. The 2018 Farm Bill maintained a
            50% carve-out for livestock-related practices under EQIP, but
            this set-aside was removed in the Inflation Reduction Act.\3\
            NCBA urges Congress to reestablish the set-aside; CSP funding
            goes primarily to crop producers, and the EQIP set-aside will
            ensure an equitable distribution of programmatic funding and
            maximize impact across all working lands.
    ---------------------------------------------------------------------------
        \3\ Pub. L. 117-169.
    ---------------------------------------------------------------------------
          The Conservation Reserve Program (CRP) can be a valuable tool for
            cattle producers, both for conservation purposes and for income
            diversification. However, the current terms and parameters of
            CRP leases discourage many producers from enrolling. NCBA
            encourages Congress to allow grazing as a mid-contract
            management tool, as a more climate-friendly alternative to
            chemical use or controlled burning. We also urge Congress to
            open CRP acreage for emergency haying and grazing. Certain CRP
            practices lose emergency haying and grazing access when
            counties quality for the Livestock Forage Disaster Program
            (LFP). Not only does this limit grazing access when forage
            supply is most limited, but the distribution of payments to all
            producers in a county creates inflation within the industry and
            pushes hay prices up.
          Finally, NCBA requests that lawmakers direct USDA to allow
            producers to graze cover crops planted as part of voluntary
            conservation programs without a reduction in payment. Again,
            grazing is a low-impact, nimble tool that can be highly
            beneficial in place of burning, tilling, or chemical treatment.

       Reinforce Disaster Programs

          Natural disasters, livestock predation, and other unforeseen
            events can have catastrophic consequences for cattle producers.
            Disaster programs, such as the Livestock Indemnity Program
            (LIP) and Livestock Forage Program (LFP) ensure farmers and
            ranchers can easily recover from weather events or other causes
            of death loss. Congress should continue to support such
            programs in the upcoming farm bill and avoid changes that would
            make programs less accessible or restrictive.

       Support Risk Management Programs

          Risk management is a major component of a successful and solvent
            cattle operation. Cattle producers utilize a myriad of
            insurance tools, production practices, and futures products to
            better protect themselves from market volatility. While the
            Federal crop insurance system is primarily geared toward crop
            production, historically, those few products designed for
            livestock producers have not been workable for the majority of
            the cattle industry--particularly smaller, cow-calf operators.
            However, recent administrative changes to programs like the
            Livestock Risk Protection (LRP) and Pasture, Rangeland, Forage
            (PRF) programs have resulted in record-breaking enrollment in
            both programs. The Federal Crop Insurance Board and USDA's Risk
            Management Agency (RMA) have taken feedback from the livestock
            sector and improved upon their suite of products to ensure
            efficacy and viability. In addition, new tools continue to come
            to market which could help cattle producers better weather the
            price swings inherent to commodity production. Congress should
            continue to support RMA's crop insurance programs, including
            LRP and PRF, in the farm bill and resist any attempts to roll
            back support for these critical resources.

       Oppose a Standalone Livestock Title

          The cattle industry focuses on a handful of specific programs in
            the farm bill, but a standalone livestock title is not
            necessary to accomplish our purposes. However well-intended,
            such action would open the door to harmful mandates or poison
            pills--such as Mandatory Country-of-Origin Labeling--during
            conference negotiations. We respectfully request Congress
            advance a bill void of a livestock title.
    II. Nullify USDA's Harmful Packers & Stockyards Rules
        In July 2021, Agriculture Secretary Tom Vilsack announced that USDA
    would begin work to, ``strengthen enforcement of the Packers and
    Stockyards Act.'' \4\ Since then, the USDA's Agricultural Marketing
    Service (AMS) has promulgated three rules in furtherance of this
    objective: ``Transparency in Poultry Grower Contracting Tournaments,''
    \5\ ``Poultry Growing Tournament Systems: Fairness and Related
    Concerns,'' \6\ and ``Inclusive Competition and Market Integrity Under
    the Packers and Stockyards Act.'' \7\ Additionally, NCBA anticipates at
    least one additional rule which, as of this writing, has not been
    proposed but is identified in the Fall 2022 Unified Regulatory Agenda
    as, ``Unfair Practices, Undue Preferences, and Harm to Competition
    Under the Packers and Stockyards Act.'' \8\
    ---------------------------------------------------------------------------
        \4\ USDA Press Release No. 0130.21.
        \5\ 87 Fed. Reg. 34980.
        \6\ 87 Fed. Reg. 34814.
        \7\ 87 Fed. Reg. 60010.
        \8\ Docket No.: AMS-FTPP-21-0046.
    ---------------------------------------------------------------------------
        This suite of regulations is the latest in a series of rulemaking
    efforts dating back to the 2008 Farm Bill. That legislation directed
    the Secretary of Agriculture to, ``promulgate regulations pursuant to
    the Packers and Stockyards Act of 1921 to establish criteria that the
    Secretary will consider in determining whether an undue or unreasonable
    preference or advantage has occurred in violation of such Act.'' \9\
    USDA has attempted rulemaking in accordance with this Congressional
    mandate three times: once in 2010,\10\ again in 2016,\11\ and finally
    in 2020. The 2010 and 2016 rules were met with overwhelming opposition
    from NCBA and the vast majority of livestock and poultry industry
    representatives. As a result, the 2010 rule was defunded through the
    appropriations process beginning in Fiscal Year 2012,\12\ and the 2016
    rule was withdrawn by the Agency.\13\ The 2020 rule, which NCBA
    reluctantly supported, was finalized and took effect in January 2021,
    satisfying the Congressional directive outlined in the 2008 Farm
    Bill.\14\ USDA bears no statutory obligation to continue promulgating
    regulations under Sections 202(a) and 202(b) of the Packers and
    Stockyards Act. Despite this fact, USDA is proceeding with the
    aforementioned regulations and NCBA once again opposes these misguided
    rules which, if enacted, would have devastating effects on the cattle
    market.
    ---------------------------------------------------------------------------
        \9\ Pub. L. 110-234 [Sec. 11006]; 7 U.S.C.  228.
        \10\ 75 Fed. Reg. 35338.
        \11\ 81 Fed. Reg. 92703.
        \12\ Pub. L. 112-55; Division A, Title VII, Section 721.
        \13\ 82 Fed. Reg. 48603.
        \14\ 85 Fed. Reg. 79779.
    ---------------------------------------------------------------------------
        Though not the sole source of our concerns with these rules, chief
    among them is USDA's position regarding Harm to Competition, a crucial
    legal precedent which has been upheld in Federal circuit court each of
    the eight times it has been tried.\15\ In his 2021 announcement,
    Secretary Vilsack indicated that USDA, ``will re-propose a rule to
    clarify that parties do not need to demonstrate harm to competition in
    order to bring an action under (the Packers and Stockyards Act).'' If
    USDA is successful in this attempt, standard business practices
    developed by cattle producers would be subjected to immense litigation
    and Federal scrutiny by Washington bureaucrats. This would set the
    industry back decades in terms of innovation and profitability, and
    cost cattle producers billions in legal costs.\16\
    ---------------------------------------------------------------------------
        \15\ Terry v. Tyson Farms, Inc., 604 F.3d 272, 277-79 (6th Cir.
    2010) (stating, ``All told, seven circuits--the Fourth, Fifth, Seventh,
    Eighth, Ninth, Tenth, and Eleventh Circuits--have now weighed in on
    this issue, with unanimous results.'')
        \16\ An Estimate of the Economic Impact of GIPSA's Proposed Rules.
    Informa Economics: 2010.
    ---------------------------------------------------------------------------
        To date, USDA has demonstrated little interest in seriously
    engaging with livestock and poultry producers to address our concerns
    with these regulations, and NCBA expects the proposed rules will
    finalize with few significant amendments. As such, we urge Congress to
    once again reign in USDA's egregious breach of both Congressional
    intent and judicial precedent by taking action to bar the rules from
    taking full force and effect.
    III. Defend the Beef Check-off
        Commodity research and promotion boards, authorized by individual
    statute or the Commodity Promotion, Research, and Information Act,\17\
    are indelible in promoting U.S. agriculture- and natural resource-based
    commodities both at home and abroad. Earlier this year, H.R. 1249, the
    so-called Opportunities for Fairness in Farming (OFF) Act, was
    introduced in the House of Representatives. Despite purporting to be a
    vehicle to modernize these critical tools, this bill is a blatant
    attack on all commodity research and promotion boards (also known as
    ``Check-off'' programs) which, if enacted, would substantially
    undermine producers' ability to market their products and stymie
    critical research, including in the field of human nutrition.
    ---------------------------------------------------------------------------
        \17\ Pub. L. 104-127.
    ---------------------------------------------------------------------------
        The Beef Check-off, for example, was established by statute in 1985
    and ratified by 79% of cattle producers in a national referendum 3
    years later. The Beef Check-off collects $1 per head from the receipts
    of cattle sold and uses these pooled resources to conduct research and
    market U.S. beef to both domestic consumers and foreign importers.
    According to USDA estimates, cattle producers realize $11.91 in return
    for every $1 invested in the Beef Check-off assessments.\18\
    ---------------------------------------------------------------------------
        \18\ Cattlemen's Beef Board. U.S. Department of Agriculture.
    ---------------------------------------------------------------------------
        Research and promotion boards, including the Beef Check-off, exist
    to develop new markets and strengthen existing channels for specific
    commodities while conducting important research and promotional
    activities (e.g., the immensely successful Beef. It's What's For
    Dinner. campaign). They also work to educate consumers on behalf of a
    particular commodity to expand total demand to the benefit of all
    producers. Contrary to claims made by proponents of the OFF Act, check-
    offs are prohibited from influencing public policy and disparaging
    other commodity products. As such, they are currently subjected to
    rigorous compliance protocols, both internally and by USDA.\19\
    ---------------------------------------------------------------------------
        \17\ Guidelines for AMS Oversight of Commodity Research and
    Promotion Programs. U.S. Department of Agriculture: 2020.
    ---------------------------------------------------------------------------
        The Beef Check-off has measurably improved beef demand since its
    inception. Without check-off programs, demand and education outreach
    efforts would be adversely impacted to an immense degree. NCBA urges
    Congress to defend the Beef Check-off and vehemently oppose the OFF
    Act.
    IV. Promote Animal Health and Disease Preparedness
        As previously noted, one of the biggest threats to cattle producers
    is animal disease. Established by Congress in 2003 as an amendment to
    the Food, Drug, and Cosmetics Act,\20\ the Animal Drug User Fee Act
    (ADUFA) authorizes the Food and Drug Administration (FDA) to collect
    fees from animal health companies to enable FDA's Center for Veterinary
    Medicine to meet performance standards for the timely approval of new
    animal drugs.\21\ NCBA urges swift reauthorization of the ADUFA program
    with no post-market amendments before September 30, 2023. An efficient
    new animal drug review process is essential to the approval of safe and
    effective new animal drugs that protect animal and public health.
    ---------------------------------------------------------------------------
        \20\ Pub. L. 75-717.
        \21\ Pub. L. 108-130.
    ---------------------------------------------------------------------------
        Equally as important, in January 2023, USDA-APHIS announced a
    proposed rule to require electronic identification (EID) for interstate
    movement of certain cattle. NCBA recognizes that animal disease
    traceability (ADT) is an essential component of protecting the U.S.
    cattle herd during an animal disease outbreak. While NCBA would have
    preferred industry take the lead on this issue rather than APHIS, we
    support the development and implementation of a nationally significant
    ADT system. An official ADT program rule from USDA should include
    parameters that ensure strict data integrity throughout the system,
    limit the cost passed onto producers, and operate at the speed of
    commerce. Additionally, in order to ensure a smooth transition to
    compliance with the proposed rule and robust participation in ADT
    programs, Congress should provide APHIS sufficient funding to purchase
    official EID tags and related infrastructure to be made available to
    cattle producers impacted by the rule. This is not unprecedented, as
    APHIS has previously used the Animal Health Technical Services line for
    this purpose when EID was a voluntary form of official identification.
        Without a national traceability system in place, the already
    significant impacts of a foreign animal disease outbreak would be
    magnified. For example, a foot-and-mouth disease (FMD) outbreak in the
    United States would lead to an immediate stop of all livestock movement
    for at least 72 hours. Most major export markets would close to U.S.
    beef and the estimated economic impact would be in the tens of billions
    of dollars. A traceability system would support a quick return to
    normal operations for cattle producers following a disease outbreak.
    Traceability data would allow producers in low-risk areas to resume
    transporting cattle, while helping animal health officials stop the
    spread of disease in high-risk areas. A traceability program would also
    help expedite the return to an FMD-free designation, which is
    beneficial for trading relationships and consumer trust in beef.
    V. Correct the Record on Cattle's Climate and Conservation Benefits
        The United States is home to the most sustainable beef production
    system in the world, thanks to decades of and continual improvement by
    American farmers and ranchers. Thanks to investments in cattle
    genetics, technologies, and management practices, the same nutritious
    protein today takes significantly less land, water, and feed to
    produce. Our emissions per pound of beef have decreased nearly 40%
    since 1960, and direct emissions from beef account for only 2% of our
    nation's overall greenhouse gas emissions.
        Cattle play an integral role in the carbon cycle on our nation's
    grasslands, landscapes that have always existed in harmony with grazing
    animals. Within 10 years, 90% of that methane combines with oxygen in
    the atmosphere and converts to carbon dioxide. Carbon dioxide is
    absorbed by grasses during photosynthesis, cattle graze the grass, and
    the cycle begins anew. The methane emitted by cattle reenters the
    carbon cycle; it does not remain in the atmosphere in perpetuity.
        Thanks to the natural topography of the continent, cattle are able
    to graze our vast landscapes without deforestation. Cattle spend most
    of their lives grazing on pasture, oftentimes on ground that is
    unsuitable for producing crops. Between their consumption of otherwise
    inedible forage and the use of other food byproducts in cattle feed,
    90% of what cattle consume is inedible to humans. This makes them
    incredibly efficient upcyclers, turning forage and foodstuffs that
    would otherwise end up in a landfill into nutritious, high-quality
    protein that feeds consumers at home and around the world.
        The livestock industry holds an unmatched capability to influence
    land management in the United States for the better, and a strong track
    record of sustainable stewardship. Forty-seven percent of all U.S.
    private land is grazed by livestock, comprised of diverse range,
    pasture, and forest ecosystems.\22\ On Federal lands, cattle and sheep
    ranchers hold more than 22,000 Federal permits to graze on lands
    administered by the Bureau of Land Management (BLM) and U.S. Forest
    Service (USFS) on behalf of the American people. These ranchers
    undergird the rural economy across much of the western United States,
    contributing an estimated $1.5 billion each year to communities across
    the region.
    ---------------------------------------------------------------------------
        \22\ Natural Resources Conservation Service. National Range and
    Pasture Handbook. U.S. Department of Agriculture: 1997.
    ---------------------------------------------------------------------------
        Additionally, Federal grazing permittees make invests in the land
    that benefit our natural resources, the Federal agencies tasked with
    management, and the taxpaying Americans that treasure these iconic
    landscapes. Grazing is an effective tool to manage a wide variety of
    forage, encouraging the growth of perennial native grasses and curbing
    the spread of invasive species like cheatgrass. Grazing makes
    significant contributions to soil health, through both added organic
    matter and mechanical hoof action, both of which improve the soil's
    ability to store carbon. Last year, wildfires burned more than 7.5
    million acres across the West.\23\ To state the obvious, the need to
    reduce fuel loads and lower the risk of catastrophic wildfire is
    critical. According to the National Interagency Fire Center, this work
    costs Federal agencies on average $150/acre--livestock grazing can
    accomplish the same task at no cost to taxpayers. Cattle grazing play a
    critical role in fire suppression and creating resiliency on the land.
    Grazing is also nimble and scalable, meaning it can be applied in
    precise locations and patterns to create fuel breaks where other tools
    like chemical treatments or prescribed burns may not be possible or
    advisable.
    ---------------------------------------------------------------------------
        \23\ National Interagency Coordination Center Wildland Fire Summary
    and Statistics Annual Report. National Interagency Fire Center: 2022.
    ---------------------------------------------------------------------------
        On both private and public lands, cattle ranchers' conservation
    work supports some of our nation's most iconic wildlife species,
    generates billions of dollars through recreation and tourism, and keeps
    millions of acres healthy, green, and free of development sprawl. NCBA
    urges Congress to continue to incentivize voluntary conservation work
    on private lands, encourage cross-boundary collaboration on private and
    public lands, and reduce the regulatory burden on ranchers so that they
    can continue stewarding our nation's open landscapes.
    VI. Develop New and Existing Export Markets for U.S. Beef
        Trade is vital to the success of the U.S. cattle and beef industry.
    Every effort should be made to expand export opportunities for U.S.
    beef by removing tariff and non-tariff barriers through trade
    agreements and other terms of market access. NCBA strongly supports
    market-driven and science-based trade policy that removes restrictive
    tariffs and arbitrary measures that punish U.S. cattle producers and
    our global customers. NCBA's trade goals include reauthorizing Trade
    Promotion Authority and prioritizing trade with our allies, especially
    the United Kingdom. Effective trade policy will empower the entire
    production chain--from cattle producer to retailer--to capitalize on
    consumer demand and benefit from exports and imports of live cattle and
    beef.
        Trade agreements have been instrumental in removing tariff and non-
    tariff trade barriers--resulting in record-setting export sales for
    U.S. beef. In 2022, exports added $448 per head by selling certain cuts
    like tongues and short plate at stronger prices overseas.\24\ Imported
    lean beef trimmings are used in combination with our fat cattle
    trimmings to make the leaner ground beef American consumers are
    demanding. The volume of cattle involved in cross-border cattle trade
    is small in comparison to overall U.S. cattle production, and Congress
    should continue to support trade initiatives that include provisions
    beneficial to cattle producers.
    ---------------------------------------------------------------------------
        \24\ 2022 Beef Exports Set Annual Records. U.S. Meat Export
    Federation: 2023.
    ---------------------------------------------------------------------------
        The U.S. has some of the highest food safety and animal health
    standards in the world, and for a foreign country to gain access to our
    market it must demonstrate safety equivalence to these rigid standards.
    U.S. beef consumers demand well-marbled steaks and lean ground beef--
    two products which are not derived from the same animal. To meet lean
    beef demand, we import approximately 11% of beef consumed domestically.
    Of that, \3/4\ is lean trim for blending. One of the leading import
    sources for lean trimmings is Brazil. Unfortunately, the government of
    that country has repeatedly shown they are unwilling or unable to
    report outbreaks of animal disease in a timely manner as prescribed by
    the World Organization for Animal Health. NCBA has repeatedly raised
    these concerns with USDA and Secretary Vilsack, and strongly encourages
    the U.S. government to hold Brazil accountable and ensure protection of
    U.S. beef producers and consumers.
    VII. Reduce Regulatory Burdens for Cattle Producers
        Cattle producers navigate an immensely bloated body of regulations
    each day in the course of running their businesses and caring for the
    land. One of the most impactful and burdensome regulations, on both
    private- and public-land operators, is the Endangered Species Act
    (ESA). The well-meaning law was intended to create a framework for
    identifying at-risk species, evaluating status, listing, recovery, and
    delisting when goals are met. In the half-century since its inception,
    only 2% of listed species have ever met the recovery and delisting
    thresholds; improvements are urgently needed.
        NCBA urges Congress to work with cattle producers, not against
    them, in their efforts to voluntarily conserve species habitat. Many
    species of note, such as the lesser-prairie chicken, rely almost
    entirely on private landowners for their habitat. Moving away from
    overly punitive, restrictive, and prescriptive listings and encouraging
    voluntary conservation work will benefit both producers and species at
    risk. One fix to expand flexibility would be to pass legislation
    allowing for the creation of a 4(d) rule under the ESA for species
    listed as ``endangered,'' not just ``threatened.''
        Additionally, we ask Congress to close ESA loopholes that have
    allowed frivolous litigation to bog down the U.S. Fish and Wildlife
    Service (USFWS) and other agencies for decades. Radical environmental
    activists have perfected the art of using the ESA to target industries
    they oppose, such as farming and ranching. Lawsuits that force USFWS to
    jump through legal and administrative hoops bog down the agency, push
    them to regulate by popular opinion rather than sound science, and
    divert resources from the species that are truly in peril.
        Finally, NCBA urges Congress to support efforts to de-list species
    in a prompt and timely manner when recovery goals have been met. When
    enacted, part of Congress' clear intent in the ESA was to measure
    success, demonstrate recovery goals had been met, and de-list the
    species. Litigation and constantly shifting definitions of recovery
    have made delisting very rare. This opaque process has resulted in
    species like the gray wolf, which has met recovery goals many times
    over, to remain on the list, undermining public confidence and trust in
    USFWS.
        On Federal lands, the greatest regulatory burden facing cattle
    producers is the National Environmental Policy Act (NEPA). NEPA
    assesses nearly every activity on public lands, including grazing
    permits. Cattle ranchers understand and support Federal land management
    agencies making decisions based on the best available science. However,
    NEPA has evolved from a decision-guiding tool into a barrier that is
    exploited to obstruct projects. In 2018, the White House Council on
    Environmental Quality estimated that it took the Bureau of Land
    Management (BLM) and U.S. Forest Service (USFS) an average of 4.5 years
    to complete a NEPA Environmental Impact Statement. Some ranchers have
    waited years or even decades to complete simple tasks like renewing a
    grazing permit, installing a water feature that will benefit livestock
    and wildlife, or reducing fuel loads in wildfire-prone areas.
        In its current form, the NEPA administrative process is completely
    unable to keep pace with the needs of the livestock industry,
    infrastructure projects, renewable and conventional energy development,
    and overdue environmental management actions. NCBA urges Congress to
    expand agencies' ability to use Categorical Exclusions for grazing
    permit renewals and wildfire mitigation actions. We also request that
    Congress require agencies to consider the full impacts of a proposed
    action, including socioeconomic factors, in addition to environmental
    criteria.
    VIII. Reauthorize Livestock Mandatory Reporting
        LMR is the most accessible and important market transparency tool
    available to cattle producers today. Since its inception over twenty
    years ago, cattle producers have benefited from consistent, timely, and
    accurate reporting of market information by USDA-AMS. In addition to
    using this information to make informed business decisions, LMR
    information is often used in cattle pricing agreements. It is a trusted
    source which has been wildly successful and popular throughout its
    history.
        LMR must be reauthorized by Congress every 5 years, and most
    recently expired at the conclusion of Fiscal Year 2020. Though its
    authority has been temporarily extended through the appropriations
    process since then, cattle producers need the certainty and
    dependability that only a full and complete reauthorization can
    provide. As such, NCBA once again urges Congress to reauthorize this
    critical program before September 30, 2023.
    IX. Expand Beef Processing Capacity
        NCBA is generally supportive of USDA's investments to expand meat
    and poultry processing capacity. Increased hook space will further
    improve producer leverage in cattle negotiations, increase resiliency
    in the beef supply chain, and provide producers more options for
    packing services. Programs such as the Meat and Poultry Processing
    Expansion Program, which has awarded over $130 million in grants to
    eligible processors to expand their capacity, is a significant tool
    which will help strengthen the supply chain. NCBA appreciates USDA's
    attention to this very important issue and looks forward to continuing
    to work together to make sure investments go where they are needed
    most, and processors can access the funds they need.
        In addition to capital assistance, NCBA supports removing
    regulatory barriers for smaller, regional beef processors where
    practicable. However, we remain opposed to legislation that rolls back
    longstanding food safety protocols and could unintentionally erode
    consumer confidence in the security of beef. For example, the
    Processing Revival and Intrastate Meat Exemption (PRIME) Act would pave
    the way for uninspected meat and poultry products to be sold in retail
    channels.\25\ While well-intended, this bill would cause consumers to
    question U.S. beef's superb safety reputation, ultimately resulting in
    a decline in beef demand which only harms cattle producers. Supply side
    market shocks, such as the disruptions caused by COVID-19, are
    comparatively easier to recover from than demand side market shocks
    (i.e., reduced consumer confidence in the safety of meat and poultry
    products). Consequently, NCBA has supported, and continues to support,
    legislative proposals like the Direct Interstate Retail Exemption for
    Certain Transactions (DIRECT) Act which would increase access to
    marketing channels for state-inspected meat and poultry processors.\26\
    We have also supported the Amplifying Processing of Livestock in the
    United States (A-PLUS) Act, which would modernize regulations to allow
    auction markets to invest in local beef processing.\27\ These bills
    address key barriers for smaller processors while also accommodating
    the food safety measures which consumers trust.
    ---------------------------------------------------------------------------
        \25\ H.R. 2814.
        \26\ H.R. 547, 117th Cong.
        \27\ H.R. 530.
    ---------------------------------------------------------------------------
    Conclusion
        To summarize, Mr. Chairman, it has been said many times before and
    will certainly be said again in the future: cattle producers are
    resilient. Overcoming adversity, and sometimes the odds, we will
    continue to produce the best beef on earth in the most sustainable way
    in the world.
        Thank you for inviting me to testify on these important issues. I
    look forward to answering any questions.
                Respectfully Submitted,

    Todd Wilkinson,
    President,
    National Cattlemen's Beef Association.

        The Chairman. Thank you. Mr. Hays, please begin your
    testimony when you are ready.

      STATEMENT OF SCOTT HAYS, PRESIDENT, NATIONAL PORK PRODUCERS
                    COUNCIL; MEMBER, MISSOURI PORK
                      ASSOCIATION, MONROE CITY, MO

        Mr. Hays. Chairman Mann, Ranking Member Costa, and Members
    of the Subcommittee, my name is Scott Hays, and I serve as
    President of the National Pork Producers Council. I am a fifth
    generation producer, and owner of Two Mile Pork in northeast
    Missouri. The U.S. pork industry serves as a major contributor
    to both agriculture and the overall U.S. economy. In 2021, U.S.
    pork producers marketed more than 140 million hogs, valued at
    over $28 billion, while supporting more than 610,000 U.S. jobs,
    and supplying consumers with nutritious products that are
    raised safely and humanely. To produce those hogs, pork
    producers use roughly 1.6 billion bushels of corn, the meal
    from 433 million bushels of soybeans, and purchase more than
    1.6 billion in other feed ingredients annually.
        While the successes in our industry are particularly
    impressive, given the challenges our farmers have faced, today
    is a tough time in the U.S. pork industry, where producers are
    losing an average of $40 per head on hogs marketed so far in
    2023. Current losses are largely due to record high production
    costs that have increased about 50 percent from 2020. This is
    putting a pinch on the pork industry, and could drive
    consolidation at the farm level, as producers may be forced to
    exit the industry due to this economic reality.
        On top of this, the Supreme Court released a disappointing
    decision on California's Prop 12 last week. The implications of
    that decision will go far beyond the farm. We are committed to
    ensuring our consumers have food on the table, our pork
    producers and family farms are strong, and to working with our
    champions to address the issues this decision raised. With
    higher costs and fewer choices, every American will be impacted
    by this decision. We stand behind the rights of farmers and
    consumers across this country. As Congress drafts the next farm
    bill, it must look to ensure not only--consider the needs and
    economic conditions of today, but provide tools needed for the
    next 5 years.
        A growing threat of foreign animal disease, and
    specifically African Swine Fever, is of particular concern, and
    farmers need tools to prevent and rapidly respond to an
    outbreak should one ever occur. The three-legged stool of
    animal health that was laid out in the 2018 Farm Bill has set
    the course for what pork producers need in the upcoming farm
    bill. The outbreak of foreign animal disease would devastate
    not just hog farmers, but also cattle, sheep, and feed grain
    producers, and result in the loss of thousands of jobs through
    disruptions in domestic production, and the loss of export
    markets.
        Outside of disease concerns and threats, Livestock
    Mandatory Reporting remains a critical issue, and we cannot
    allow this vital program to lapse. Market reporting is a
    meaningful price discovery, and critical to pork producers'
    ability to accurately market their livestock. Declaring
    mandatory price reporting an essential service and improving
    transparency and utility of the reported information are
    critical and needed enhancements. Changes in the way hogs are
    marketed over the past 3 years have made it necessary to re-
    evaluate our priorities for full authorization.
        While NPPC believes that we can make meaningful changes to
    price reporting that would give producers greater transparency
    in marketing their livestock, we are also concerned about
    current efforts that would stifle innovation, reduce
    competition, and introduce significant legal and regulatory
    uncertainty. For these reasons, NPPC opposes the changes
    proposed under the Packers and Stockyards Act and ask that USDA
    work with the industry to find meaningful reforms that provide
    greater transparency for pork producers.
        Public policy should also reflect the tremendous value of
    exports, and the benefits that would come from expanding
    foreign markets for U.S. agricultural products. Comprehensive
    free trade agreements are vital to the industry's continued
    success. Additionally, the Market Access Program, Foreign
    Market Development Program, are critical to building commercial
    export markets for U.S. agriculture. The value of pork exports
    equals $61 per every hog marketed. NPPC is therefore a strong
    advocate for increase in funding for these programs through the
    farm bill. In addition to export markets, U.S. pork producers
    face challenges at home too, including an ongoing labor
    shortage impacting much of the agricultural sector, and
    threatening the food supply. Despite significant wage increases
    and competitive benefits, pork farm employment has declined
    since 2021.
        Thank you for the opportunity to speak to you today. I am
    happy to answer questions.
        [The prepared statement of Mr. Hays follows:]

     Prepared Statement of Scott Hays, President, National Pork Producers
          Council; Member, Missouri Pork Association, Monroe City, MO
    Introduction
        The National Pork Producers Council (NPPC), representing 42
    affiliated state associations, works to ensure the U.S. pork industry
    remains a consistent and responsible supplier of high-quality pork to
    domestic and international markets. Through public policy outreach,
    NPPC fights for reasonable legislation and regulations, develops
    revenue and market opportunities, and protects the livelihoods of
    America's more than 66,000 pork producers.
        The U.S. pork industry serves as a major contributor to both the
    agricultural and overall U.S. economy. In 2021, U.S. pork producers
    marketed more than 140 million hogs valued at over $28 billion, while
    supporting more than 610,000 U.S. jobs and supplying consumers with
    nutritional products that are raised safely and humanely. The U.S. is
    also a global supplier of pork, with exports accounting for nearly a
    quarter of annual pork production and supporting more than 155,000 U.S.
    jobs.
        To produce those hogs, pork producers used roughly 1.6 billion
    bushels of corn and the soybean meal from 433 million bushels of
    soybeans in 2022. They also used roughly 5 million tons of distillers
    dried grains with solubles (DDGS), a major byproduct of corn ethanol
    production.
        The successes seen in our industry are particularly impressive
    given the challenges our farmers face. From trade retaliation, supply
    chain issues exacerbated by the COVID-19 pandemic, labor shortages, and
    looming threats of foreign animal diseases, pig farmers have prevailed
    in difficult times to put safe and accessible food on American tables.
        It remains a challenging time for the U.S. pork industry, with hog
    producers losing on average $40 per head of hogs marketed. While
    current markets are within the range typically seen at this point in
    the marketing year, input costs have risen by some 50 percent in the
    past year. This is putting a pinch on the pork industry and will lead
    to greater consolidation as producers may be forced to exit the
    industry due to this economic reality. This only adds to the
    uncertainty that exists with the credit market and the presence of
    African Swine Fever in the western hemisphere.
        On top of this, the Supreme Court released its very disappointing
    decision on California's Proposition 12 last week. The implications of
    the decision will go far beyond the farm. With higher costs and fewer
    choices, every American will be impacted by this decision. We stand
    behind the right of farmers everywhere and consumers across the
    country--and we look forward to working constructively to find a
    reasonable solution.
        NPPC is hopeful the 2023 Farm Bill fully funds programs vital to
    ensuring animal health across species. The growing threat of foreign
    animal disease is of particular concern, and farmers need tools to
    prevent and rapidly respond to an outbreak.
    Foreign Animal Disease (FAD) Prevention
        Pork producers are facing an increasing threat from foreign animal
    diseases (FADs), such as African swine fever (ASF). To combat this,
    U.S. farmers collaborate with the U.S. Department of Agriculture's
    (USDA) Animal and Plant Health Inspection Service (APHIS), state animal
    health officials, and other stakeholders. They work to maintain early
    detection, prevention, and rapid response tools to address any
    outbreak, including a strong laboratory capacity for surveillance, and
    a stockpile of vaccines to quickly respond to high-consequence
    diseases. If an FAD, like foot-and-mouth disease (FMD), were to occur,
    it would devastate not only hog farmers but also cattle, sheep, and
    feed grain producers. It would lead to significant job losses due to
    disruptions in domestic production and the loss of export markets.
        The 2018 Farm Bill funded Animal Disease Prevention and Management
    actions to address FAD risks, and NPPC urges continued funding for
    these critically important programs, specifically:

       National Animal Vaccine and Veterinary Countermeasures Bank
            (NAVVCB): Established in the 2018 Farm Bill, this U.S.-only
            vaccine bank allows USDA to stockpile animal vaccines and
            related products to use in the event of an outbreak of FMD or
            other high-impact FADs. The bank ensures vaccines are available
            for rapid response in the case of an outbreak. It is also
            imperative that the NAVVCB is well funded in the event that
            vaccines for other high-consequence FADs, such as ASF, become
            viable.

       National Animal Health Laboratory Network (NAHLN): The NAHLN
            is a network of over 60 laboratories that collaborates with the
            National Veterinary Services Laboratories (NVSL) on disease
            monitoring. Should FAD strike, diagnosing and detecting the
            extent of the outbreak as rapidly as possible plays a key role
            in responding to a disease and limiting the impact on
            producers. The laboratory capacity of the NAHLN is critical to
            ensuring the United States can rapidly and effectively respond
            to an outbreak. Enhancing animal health diagnostic testing for
            both endemic and high-consequence pathogens in the nation's
            livestock and poultry is vital to protecting animal health,
            public health, and the nation's food supply.

       National Animal Disease Preparedness and Response Program
            (NADPRP): This program allows APHIS to collaborate with animal
            health partners nationwide to implement high-value projects
            that enhance prevention, preparedness, detection, and response
            to the most damaging and emerging FADs that threaten U.S.
            agriculture. Cooperative or interagency agreements between
            APHIS and states, universities, livestock producer
            organizations, Tribal organizations, land-grant universities,
            and other eligible entities are vital to addressing the risk of
            animal pests and diseases.

       National Veterinary Stockpile (NVS): The NVS provides
            veterinary countermeasures (animal vaccines, antivirals, or
            therapeutic products, supplies, equipment, and response support
            services) that states, Tribes, and Territories need to respond
            to animal disease outbreaks. Depopulation is a key component of
            any FAD control effort, and adequate euthanasia equipment is
            critical to its success. Also essential is sampling and
            vaccination equipment. The NVS should be well-supplied to step
            in if a large-scale outbreak requires resources beyond what
            states, Tribes, or Territories may have.

        Several other measures to prevent foreign animal diseases from
    entering the United States have been enormously successful, and farmers
    would benefit from them being continued if not expanded.
        The Feral Swine Eradication and Control Pilot Program (FSCP), for
    instance, is a joint effort between USDA's Natural Resources
    Conservation Service (NRCS) and Animal and Plant Health Inspection
    Service (APHIS). Originally included in the 2018 Farm Bill, FSCP
    addresses the threat of feral swine pose on agriculture, ecosystems,
    and animal health. Given feral swine's role in the worldwide ASF
    pandemic, funding for this program should be increased to reduce the
    risk of the potential spread of FADs, including ASF, in the United
    States.
        The Agricultural Quarantine and Inspection (AQI) Services User Fees
    Program, jointly administered by the USDA and U.S. Customs and Border
    Protection, is crucial to keeping invasive plant and animal pests and
    diseases out of the United States. This critical program is funded
    through user fees collected by APHIS from international travelers and
    commercial traffic.
        Unfortunately, in September of last year, APHIS lost its 30 year
    authority to collect a surcharge through certain fees because of a
    District of Columbia Circuit Court ruling. The loss of this
    longstanding authority to collect reserve funds destabilizes AQI
    funding and threatens the effectiveness of its programs. NPPC urges
    Congress to restore this fundamental user fee authority to APHIS
    through the 2023 Farm Bill.
        To prevent the introduction of ASF and other FADs into the United
    States, the Secretary of Agriculture has used discretionary authority
    to operate the National Detector Dog Training Center. The center is the
    primary training facility for the so-called ``Beagle Brigade'' of the
    AQI program and other agricultural canine teams that help protect
    America's natural resources and agriculture producers from foreign
    animal and plant diseases and pests. The Beagle Brigade is crucial to
    securing the country against ASF, as the disease has gained a foothold
    in the Western Hemisphere for the first time in 40 years. We are
    therefore imploring Congress to include the Beagle Brigade Act (H.R.
    1480/S. 759) in the farm bill.
    Livestock Marketing and Transparency
        Livestock Mandatory Reporting (LMR) remains a critical issue for
    pork farmers today, and we cannot allow this vital program to lapse.
    Market Reporting and meaningful price discovery are critical to pork
    producers' ability to accurately market their livestock. In 2020,
    producers identified several priorities to include in the
    reauthorization of LMR. While we consider the declaration of mandatory
    price reporting as an essential service and improving the transparency
    and usefulness of reported information for producers to be crucial and
    necessary improvements, changes in the marketing of hogs over the past
    3 years have prompted our industry to reevaluate its priorities for
    full reauthorization. Therefore, NPPC has convened a task force and is
    seeking a 1 year LMR authorization to allow additional time for
    stakeholders to work collaboratively to develop specific
    recommendations.
        While NPPC believes that we can make meaningful changes to price
    reporting that would give hog producers greater transparency in
    marketing their livestock, we are also concerned about current efforts
    that would stifle innovation, reduce competition, and introduce
    significant legal and regulatory uncertainty. In January 2020, the USDA
    proposed rules outlining criteria to determine if a preference or
    advantage given to a producer can be justified based on market
    conditions and reasonable business decisions. USDA also made clear in
    the rule that to prevail in the Packers and Stockyards Act (PSA)
    challenges, a plaintiff must show a preference or advantage that is
    likely to harm competition in the marketplace. The new rules were
    finalized in December 2020 and took effect on January 11, 2021.
        In 2021, USDA announced it would propose a series of three new
    rules to strengthen the Packers and Stockyards Act, two of which have
    been proposed. The first rule, proposed in June 2022, focused on the
    poultry industry. A second proposed rule, published in October 2022,
    would create a new class of producers called ``market vulnerable
    individuals'' and names a broad list of conduct retaliatory. Rather
    than promoting competition, the rule would create uncertainty,
    confusion, and needless litigation in the pork industry without
    addressing any specific existing issue. A third rule covering the scope
    of the PSA is expected sometime in 2023, meaning that the industry has
    not had the opportunity to assess the potentially overlapping impacts
    of this series of rulemaking. NPPC opposes the implementation of these
    rules and believes that hog producers must have the freedom to enter
    contracts that best fit their operations.
    Expanding Market Access
        Trade is vital to America's pork producers, who annually export
    about \1/4\ of their total production to more than 100 countries. The
    pork industry exported $7.68 billion of pork in 2022. Those exports
    contributed more than $61 to the average price received for each hog
    marketed, supported 155,000 American jobs, and contributed more than
    $14.5 billion to the U.S. economy, according to Iowa State University
    economists.
        Despite numerous challenges, a strong U.S. dollar, ongoing supply
    chain issues and trade retaliation from some of its top foreign
    markets, the U.S. pork industry continues to export a significant
    amount of pork. In fact, as of February this year, American pork
    producers had already exported products worth $1.2 billion to foreign
    destinations. This represents an increase of nearly 123 percent
    compared to the same period last year when exports were valued at about
    $1.1 billion.
        The biggest reason for U.S. pork export growth over the past 2
    decades has been through trade initiatives, whether free trade
    agreements (FTAs), less-formal trade and investment framework
    agreements (TIFAs) or one-off market access deals. Through such
    initiatives, the United States moved from a net importer to a net
    exporter of pork in 1995.
        As a result of trade agreements, U.S. pork exports have increased
    more than 1,850 percent in value and more than 1,560 percent in volume
    since 1989, the year the United States implemented its FTA with Canada
    and started opening international markets for value-added agriculture
    products.
        Since 2000, pork exports to FTA countries have increased 913
    percent, and in countries where the United States has negotiated
    preferential market access and where tariffs were slashed, pork exports
    increased tremendously.
        In addition to comprehensive trade agreements granting better
    market access for U.S. pork, the pacts are usually the best avenue for
    U.S. agricultural science-based standards to be accepted and for
    broader non-tariff market access issues to be resolved.
        Policies that foster the free flow of goods and expand export
    markets--mostly through trade agreements--are critical to the continued
    success of America's pork producers, U.S. agriculture and the overall
    American economy. The bottom line: The United States needs more
    comprehensive trade agreements that eliminate or significantly reduce
    tariffs on and non-tariff barriers to U.S. exports.
    Other Priorities for Hog Farmers
        As noted above, exports are critical to the U.S. pork industry. We
    believe there are two opportunities that should be prioritized to
    promote market access. The first is the Indo-Pacific Economic Framework
    for Prosperity (IPEF), a U.S.-led initiative developed to forge closer
    relationships among nations in the Asia-Pacific region. Pork producers
    encourage negotiators to include tariff elimination and agricultural
    market access among member nations. NPPC agrees it is important to
    negotiate a level playing field for agricultural sanitary and
    regulatory standards. However, the biggest disadvantage facing our
    industry is high tariffs as competitors have negotiated and entered
    into agreements such as the Comprehensive and Progressive Agreement for
    Trans-Pacific Partnership (CPTPP) that eliminate tariffs and quotas for
    pork and pork products.
        Another opportunity is the U.S.-Taiwan Initiative on 21st-Century
    Trade, which was launched in June 2022 to develop concrete ways to
    deepen the countries' economic and trade relationship. NPPC welcomes
    these negotiations and hopes that market access issues for U.S. pork
    will finally be addressed. Until recently, when new barriers to trade
    were enacted, Taiwan had been a growing market for U.S. pork products.
    U.S. pork exports peaked in 2020 at $53.9 million but fell to $16
    million in 2021. Meanwhile, exports from competing countries increased
    by over 70 percent in 2021. The initiative is a timely opportunity to
    negotiate eliminating Taiwan's unjustified restrictions on U.S. pork.
        U.S. pork producers face challenges at home too. Chief among them
    is an ongoing labor shortage impacting much of the agriculture sector
    and threatening the food supply. Despite significant wage increases and
    competitive benefits, pig farm employment has declined since 2021.
    Historically low unemployment rates, changing demographics, and
    declining populations in rural communities indicate that the domestic
    labor force will not be able to offset the pork industry's worker
    shortage. As a result, pig farmers are increasingly dependent on non-
    domestic workers, and current visa programs fail to meet our workforce
    needs. Improving and updating the antiquated H-2A visa program by
    granting access to year-round agriculture industries would solve this
    problem and address the needs of non-seasonal farming.
    Conclusion
        While the industry is facing many challenges, hog farmers, like me,
    and our industry allies are committed to working together to maintain
    the strength of the U.S. pork industry. We are proud of the work we do
    and appreciate the opportunity to help feed America's families.
        NPPC and our members are thankful to Chairman Mann, Ranking Member
    Costa, and Members of the Subcommittee for their leadership and
    consideration of these important issues.

        The Chairman. Thank you. Next we will hear from Mr.
    Zimmerman. Please begin when you are ready.

      STATEMENT OF JOHN ZIMMERMAN, VICE CHAIRMAN, NATIONAL TURKEY
                       FEDERATION, NORTHFIELD, MN

        Mr. Zimmerman. Good morning, Chairman Mann, Ranking Member
    Costa, Members of the Subcommittee, and thank you for the
    opportunity to be here today. My name is John Zimmerman, and I
    am a turkey grower from Northfield, Minnesota, where I also
    grow corn and soybeans. I also serve as the Vice Chairman of
    the National Turkey Federation, which represents every segment
    of the turkey industry, from growers like me to processors,
    breeders, and their allied companies. Last year the turkey
    industry raised more than 216 million turkeys and produced 5.2
    billion pounds of ready to cook turkey meat. We are coming off
    an especially challenging year, but the industry is determined
    to stay competitive and meet consumer demand in a crowded
    protein field.
        Since the current Avian Influenza outbreak began in early
    2022 there have been 227 cases in commercial turkey flocks,
    resulting in the loss of ten million turkeys. Minnesota was
    hardest hit, with over 40 percent of the national total. NTF
    appreciates USDA's coordinated response to the outbreak,
    including the indemnification program, that has been an
    economic lifeline to growers, processors in rural America. We
    also deeply appreciate the strong support from Congress.
    Working together, we have come a long way from the last major
    outbreak in 2015. Though viral loads in the wild bird
    population have been much higher this time, and the current
    strain of the virus is resistant to warm weather, USDA reports
    far fewer instances of farm to farm transmission of the virus.
    Biosecurity enhancements implemented during the last 7 years
    are working. The speed with which USDA deployed a coordinated
    response was impressive, and trade disruptions have been
    reduced. But we still have more to do.
        The outbreak has put tremendous strain on USDA's APHIS. The
    agency has been understaffed for some time and needs at least
    150 full time employees to return to normal strength, and
    ensure we are able to depopulate infected barns as quickly as
    possible. Results from APHIS's Wild Bird Surveillance Program
    provide a vital early warning system that helps the turkey
    industry take timely action to slow the introduction and spread
    of the virus, and we need Congress's continued support.
        An effective vaccine could be an important tool for
    eradication, but outdated trade agreements create enormous
    trade ramifications. NTF has repeatedly stated that we are not
    seeking to vaccinate commercial poultry if it would severely
    damage export opportunities for any poultry or egg product, but
    we must work together to identify a potential vaccine and to
    modernize our trade agreements. No one should be afraid of
    sound science, scientific research, and open negotiation with
    our trading partners.
        Indemnity payments have been a vital tool in this battle.
    It does not cover all grower losses, but they provide a vital
    economic lifeline. APHIS has begun paying higher indemnities
    for breeders and organic turkeys, and we hope Congress will
    support expanding this approach to other special categories,
    including no antibiotics ever turkeys, and grandparent and
    great-grandparent breeder stock. The up and coming farm bill
    can play an important role in battling HPAI. The 2018 Farm Bill
    created a strong program to combat foreign animal diseases by
    establishing a three-tier animal disease program with mandatory
    funding, and legislation is being introduced in the House and
    Senate this week to highlight the three-tiered program, and we
    urge everyone here to cosponsor the bill, and we look forward
    to continuing our work together on the upcoming farm bill.
        These are not our only challenges, and I would like to
    touch on a few more. CO2 is essential in turkey
    production as a stunning agent, and as a way to safely cool
    products in our plants. But CO2 prices have soared,
    and suppliers have invoked force majeure numerous times because
    of CO2 shortages. Almost every turkey plant has
    experienced at least one force majeure, and the industry has
    lost over 500 days collectively to shortages. Initial
    disruptions were driven by maintenance at CO2
    processing plants, but the looming doubling of the Sec. 45Q tax
    credit for carbon sequestration in the Inflation Reduction Act
    (Pub. L. 117-169) is sure to exacerbate the problem.
        The turkey industry's commitment to food safety will always
    be our top priority, and NTF welcomes the exploration of new
    approaches to controlling Salmonella, so long as the new
    policies are science and data-driven, and likely to improve
    public health. In April USDA's FSIS released a proposed rule to
    declare Salmonella an adulterant in a raw chicken product. The
    agency also is conducting two risk assessments related to
    Salmonella in poultry and preparing to draft a new Salmonella
    policy for poultry plants. The risk assessment will provide
    valuable data, and new policy proposals may lead to advances in
    food safety regulation, but new regulations should not be
    proposed before the risk assessments are complete.
        USDA has also recently issued two proposed rules seeking to
    address what the Department says are flaws in the current
    poultry production contracting process. The first rule dealt
    with contract transparency, and the second is designed to
    ensure inclusiveness in the poultry contracting. The first rule
    lacks a clear understanding of turkey production, and as a
    turkey grower, I can tell you this proposal does not benefit
    me, or any of my neighbors. The second rule is far too
    ambiguous, clearly invites litigation, and will make it much
    more difficult for processors and growers to conduct business.
    We urge USDA to withdraw the rule.
        And finally, our industry continues to suffer from a lack
    of access to workers. Most turkey plants are located in rural,
    low unemployment areas, and to fully staff our plants, our
    processors need outside labor, including immigrant labor.
    Guestworker programs target only seasonal, on-farm labor and
    non-agricultural manufacturing. The turkey industry supports
    immigration reform that will maximize benefits to the industry
    and ensure a strong immigration system that meets the needs of
    the U.S. economy.
        Once again, thank you for the opportunity to testify today
    on the state of the U.S. turkey industry and the issues
    impacting our businesses, and I would be happy to answer any
    questions.
        [The prepared statement of Mr. Zimmerman follows:]

     Prepared Statement of John Zimmerman, Vice Chairman, National Turkey
                           Federation, Northfield, MN
        Good morning, Chairman Mann, Ranking Member Costa[, and] Members of
    the Subcommittee. Thank you for the opportunity to share the turkey
    industry's perspective today.
        My name is John Zimmerman, and I'm a second-generation turkey
    grower from Northfield, Minnesota. On my farm, we raise about 100,000
    turkeys annually that produce roughly 4 million pounds of turkey meat
    each year. We also grow corn and soybeans as well. For me, raising
    turkeys is a family business. I've been around the industry my entire
    life. My father raised turkeys before me, and I took over the family
    business. I won't say it's easy work. But I do what I love.
        I also serve as the Vice Chairman of the National Turkey
    Federation, which represents every segment of the U.S. turkey
    industry--from growers like me to processors, breeders and the allied
    companies that produce the goods and services we use to bring turkeys
    from the farm to tables in this country and around the world.
        Last year, more than 216 million turkeys were raised in the United
    States, and USDA's latest data projects that turkey meat production
    will exceed last year's 5.2 billion pounds of ready to cook turkey
    meat. As the industry continues to work through challenges and
    ultimately recover from the current highly-pathogenic avian influenza
    (HPAI) outbreak, we are also working to find more ways to remain
    competitive and meet consumer demands in a crowded protein field.
    Turkey may have its big day on Thanksgiving, but it's also a great
    year-round protein source. While HPAI has dealt the industry a severe
    blow, our history indicates a tremendous resilience in our industry
    that translates into growth opportunities in the near future.
        Disease isn't the only challenge we face. We need common-sense
    policies from our leaders in Washington that protect food safety,
    animal welfare and the environment without undermining our ability to
    produce safe, wholesome and nutritious products affordable to Americans
    of all income levels. We need your help, and we look forward to working
    with Congress, and this Committee, to address these issues.
    Highly-Pathogenic Avian Influenza
        Since the HPAI outbreak began in early February of 2022, there have
    been 227 cases in commercial turkey or turkey breeder flocks, resulting
    in the loss of slightly more than ten million turkeys. Across all
    commercial poultry and egg producing operations, almost 57 million
    birds have been lost to the disease. The H5N1 strain has been found in
    commercial and backyard flocks in 47 states, taking a huge toll on
    farmers and the communities in which they operate.
        NTF appreciates USDA's coordinated response to the outbreak,
    including the indemnification program that has been an economic
    lifeline to growers, processors and rural America. We also deeply
    appreciate the strong Congressional support as we manage through this
    crisis. That support will be critical in the months ahead as we seek to
    put this outbreak behind us and reduce the chances of another outbreak
    in the future.
        Working together, we have come a long way from the 2015 outbreak.
    The viral loads in the wild-bird population have been significantly
    higher this time than they were in 2015, and the current strain of the
    virus is more heat resistant, meaning the virus did not die out with
    the arrival of summer. Nonetheless, we have scored some important
    victories on which we can build. USDA reports far fewer instances of
    farm-to-farm transmission of the virus, meaning the biosecurity
    enhancements implemented across the last 7 years are working. The speed
    with which USDA deployed a coordinated response was impressive. Trade
    disruptions have been reduced.
        We still have important work yet to be completed. We would like to
    outline some of the most important challenges that lie ahead.
        Readiness: While the Federal response has been impressive, dealing
    with a large multi-state outbreak has put tremendous strain on USDA's
    Animal and Plant Health Inspection Service (APHIS). The agency has been
    understaffed for some time and needs at least 150 full-time employees
    (FTEs) to return to normal strength and provide maximum assistance with
    all aspects of this outbreak. Time is of the essence when dealing with
    a positive flock to reduce the shedding of additional virus into the
    environment. Addressing the staffing shortage will ensure the speediest
    possible depopulation and disposal times, which are essential to fully
    that save money and avoid unnecessary flock mortality. We encourage
    Congress to provide the funds that will allow APHIS to compete with the
    private sector and hire and train the 150+ FTEs the agency so badly
    needs. It not only will help speed the end of this outbreak; it will
    allow for the type of effective, rapid response that will be needed in
    any future outbreak.
        In addition to providing APHIS with the necessary financial
    resources, Congress should empower the agency to pursue other creative
    solutions such as developing cooperative agreements to train state, or
    even industry employees, so they can be called upon during animal
    health emergencies. In addition, there should be an effort made to
    explore options to incentivize veterinarians to enter Federal service.
    Potential programs could include a debt forgiveness package along with
    a more robust vet school intern program.
        Continue Funding APHIS Wild Bird Surveillance: Timely reporting of
    results from APHIS' wild bird surveillance program provide a vital
    early warning system about the potential introduction and distribution
    of avian influenza viruses in the United States. Routine sampling of
    wild birds in all four major flyways--Atlantic, Mississippi, Central
    and Pacific--allows for APHIS and the turkey industry to take timely
    and enhanced actions to reduce the introduction and spread to our
    commercial flocks. This program must continue to be fully funded in the
    future.
        Vaccination: Vaccination could be an effective tool for eradicating
    an outbreak but trade agreements based on outdated science create
    enormous obstacles to vaccination, even if an effective vaccine is
    developed to combat the current strain. For this reason, NTF has
    repeatedly and emphatically stated we are not asking for USDA to
    approve vaccination of commercial poultry if it would severely damage
    the export opportunities for any poultry or egg product. USDA also has
    made it clear it would not authorize vaccination if it would decimate
    trade. With the Federal Government and all poultry and egg trade
    associations in complete agreement on this important issue, there
    should be no cause for alarm in any quarter of the poultry and egg
    industry. All of which makes it baffling to NTF that some continue to
    generate fearmongering communications about vaccination. So, we will
    try once again to state clearly and unequivocally the turkey industry's
    position on vaccination.
        NTF and its members are calling for federally supported research to
    determine if an effective vaccine can be developed to treat the current
    HPAI strain. A verifiable program also must be in place to
    differentiate between vaccinated birds and birds that have been
    infected with HPAI (also known as a DIVA program). Any vaccine that
    meets these requirements should be used only to end an active outbreak,
    not as an open-ended control measure. We also are urging the Federal
    Government to begin discussions with our trading partners to see if new
    agreements can be reached that would permit vaccination without harm to
    trade. We appreciate that Secretary Vilsack and the USDA team recognize
    that this strategy currently is being pursued in Europe and likely will
    be pursued by other poultry producing countries as well, creating the
    very real possibility that other countries will gain a competitive edge
    over the U.S. Those that do not support a judicious, constructive
    approach to vaccination--one that moves as fast as science and
    diplomacy allow--are fundamentally pursuing an America Last policy.
        This obviously is a complicated challenging process, and it is
    impossible to predict exactly how long it will take. That is why we are
    gratified USDA has begun to take some preliminary steps. It still is
    unclear how the international community will respond, we are encouraged
    by the fact that the European Union is exploring vaccination
    strategies, and we hope others will follow suit.
        Our industry remains strongly supportive of the process of
    developing a vaccination strategy through sound scientific research and
    critical conversations with our trading partners. The U.S. needs to
    pursue this regardless of whether the current outbreak remains active
    or not to better prevent further impacts on the poultry industry.
        Indemnity to Mitigate the Impact of HPAI: Indemnity payments are
    made when the Federal Government orders the depopulation of a flock to
    control or eradicate HPAI and other animal diseases. While indemnity
    values traditionally reflected the costs associated with conventional
    commercial turkey meat production, APHIS (utilizing a limited NTF
    survey) during this outbreak has created turkey production
    subcategories of premium value, including turkey breeders and organic
    turkeys. Additional funding and Congressional direction to update
    indemnity values for all current subcategories on a yearly basis to
    reflect current costs associated is necessary and to include missing
    subcategories, such as no antibiotic ever (NAE) production as well as
    grandparent and great-grandparent breeder stock.
    2023 Farm Bill
        The current HPAI outbreak is a prime example of how important the
    farm bill is to our industry and the animal agriculture community.
    Foreign animal diseases have the ability to cripple the entire
    agricultural sector and have long-lasting ramifications for the
    economic viability of U.S. livestock and poultry production. It is
    critical that the new farm bill continue to address these risks to
    animal health while likewise bolstering the long-term ability of U.S.
    animal agriculture to be competitive in the global marketplace and
    provide consumers around the world safe, wholesome, affordable food
    produced in a sustainable manner.
        The 2018 Farm Bill established a three-tiered animal disease
    program with mandatory funding to ensure the sufficient development and
    timely deployment of all measures necessary to prevent, identify and
    mitigate the potential catastrophic impacts that an animal disease
    outbreak would have on our country's food security, export markets and
    overall economic stability. With Congress on the brink of writing a new
    farm bill, NTF and its coalition partners are asking for these programs
    to be renewed and remain robustly funded for the life of the next bill.
        The three-tiers include:

       The National Animal Disease Preparedness and Response
            Program (NADPrep), which allows APHIS to collaborate with
            farmers, ranchers and animal health companies to develop
            programs that help prevent and eliminate the most serious
            animal disease threats.

       The National Animal Disease Vaccine and Veterinary
            Countermeasures Bank (Vaccine Bank), which helps fund the
            stockpiling of vaccines and diagnostic tests that may be needed
            to prevent or control disease outbreaks.

       The National Animal Health Monitoring System (NAHMS)
            Laboratory Network, which is comprised of more than 60 Federal,
            state and university veterinary diagnostic labs. The NAHMS
            network has been critical in the effort to rapidly detect and
            diagnose HPAI cases.

        We are extremely grateful for the support Congress has shown to our
    industry through this challenging time of HPAI. We look forward to
    continuing our work together in the upcoming farm bill.
    Carbon Dioxide (CO2) Supply Disruptions
        Carbon Dioxide (CO2) is essential to turkey production.
    It is a highly effective stunning agent for turkeys that are about to
    be processed, it is used to help cool the chillers that are a critical
    component of plants' food safety systems and it is utilized in other
    facets of turkey production. During the last year, CO2
    prices have soared, and suppliers have invoked force majeure numerous
    times because of increasing CO2 shortages. This has created
    new chaos in a supply chain that had just begun to recover from the
    [COVID]-19 pandemic, has disrupted production and processing schedules
    and created new levels of uncertainty for an industry already reeling
    from the HPAI outbreaks. Many of these initial shortages have been
    caused initially by disruptions at CO2 processing plants,
    but the looming tax incentives for carbon sequestration, passed as part
    of the Inflation Reduction Act, are sure to exacerbate the problem.
        As background, we associate carbon dioxide with global warming and
    climate change. It's easy to assume that a carbon dioxide shortage
    would be a good thing, but in recent years the depletion of this gas
    has caused an onslaught of issues for the industries that rely on it
    for key elements of their supply chain. There simply isn't enough of it
    in the right places to satisfy the myriad uses of this atmospheric gas.
    With global shortages on this rise, there is no clear solution to the
    CO2 shortage and disruptions in the food and beverage space
    at the current time.
        As stated, the food and beverage industry has been the most
    affected by the carbon dioxide shortage. From the carbonation of beer
    and soda to food chilling and packaging applications, CO2 is
    an essential component of the supply chain for our industries.
    Furthermore, the turkey industry has a specific and critical use of
    CO2 in the stunning of birds at the start of processing. All
    of this has led to what is now being categorized as a potential food
    and drink crisis.
        CO2's importance to many food and beverage production
    systems was most obvious during the supply chain challenges at the
    beginning of the pandemic. However, as most supply chain challenges
    have improved, CO2 has continued to be a source of
    significant challenges and it is no better observed than during high
    demand season--especially in the summer when many plants that produce
    CO2 shut down for maintenance.
        Now we are beginning to learn that these shortages have caused
    almost everyone, across all sectors, to ration or prioritize products
    to some degree, but over the past 12 months the turkey industry alone
    has witnessed a cumulative of 505 days of lost processing because of
    not enough CO2 available for a day's production. That does
    not even include turkey plants that had to reduce daily capacity
    because of rationing. This is leading to significant price increases,
    so we ask a couple of critical questions. Other concerning developments
    since 2020 is the ever-increasing use of the Force Majeure clauses to
    limit supply as all turkey companies have indicated the use, at least
    once in the past 12 months, of this and one company indicated its use
    as many as 18 times. The exponential uptick in the use of this clause
    should be one that Congress should more closely monitor and evaluate to
    reduce disruptions and efficiencies. All totaled these actions have
    resulted in increased costs to all turkey companies with a range of
    mid-six figured to low seven-figures across the board.
        This all creates questions that we think Congress should more
    closely review to ensure the Federal Government policy that is now law
    is not a driving factor of this realized tax. First, minus true
    oversight of the CO2 utilization market, can any Federal
    department or agency have the ability to assist in predicting or better
    forecasting when CO2 supplies will truly respond to the
    market and correct itself thus curbing this increased cost or tax? With
    annual shutdowns of CO2 production facilities for
    maintenance causing supply chain disruptions, could the Federal
    Government assist in managing this commodity to improve the
    predictability of the markets? Finally, there is significant concern
    for those of us that need CO2 on a daily basis to make the
    food and beverages that the Inflation Reduction Act's (doubling of the
    45Q tax credit has prioritized carbon capture over other important and
    necessary uses. I recognize the realities of what this tax incentive
    was meant to do but Congress overlooked an important sector of the
    economy that is harmed by increasing the tax credit.
        A coalition of like-minded industries including a broad swath of
    food and beverage producers has begun asking these questions. Without
    exception, Members of Congress, their staff and Committee staff all
    have indicated they did not take into account the signals this
    legislation sent to the market. We recognize this Committee does not
    have jurisdiction over these provisions; however, you do have the
    ability to shine a spotlight on the impact this legislation has had on
    the industries you do oversee.
    Food Safety
        The turkey industry's commitment to food safety is widely
    recognized by a wide range of stakeholders. It always will be our top
    priority. NTF is supportive of new approaches or technological
    advancements that enhance control of Salmonella and other foodborne
    pathogens. However, any new policies should be founded in science, data
    driven and highly likely to impact public health.
        On April 25 USDA's Food Safety and Inspection Service (FSIS)
    released a proposed rule to declare Salmonella an adulterant in breaded
    stuffed raw chicken products when the chicken component tests. While
    this proposed rule does not impact the regulatory process for turkey
    products, this is the first time FSIS has declared Salmonella an
    adulterant in raw poultry and represents a substantial shift in the
    agency's position.
        Additionally, FSIS is currently conducting two risks assessments
    related to Salmonella in poultry. Ultimately, the risk assessments will
    be released for public comment and review from industry and all other
    stakeholders before being updated and finalized. Simultaneously, FSIS
    has indicated it will be drafting new Salmonella policy for
    establishments producing turkey and chicken products and anticipates
    publishing a proposed rule this summer. A proposed rule ultimately may
    lead to important advances in food safety regulation, but the timing is
    troubling. New regulations should not be proposed before the risk
    assessments are complete.
        We also are concerned that FSIS engagement with stakeholders since
    the proposed framework was issued has been limited. Additional data
    input would be incredibly valuable to the risk assessments, however,
    due to the policy timeline posed, the collection period was short. That
    is why, NTF along with the National Chicken Council and the North
    American Meat Institute have officially asked for an additional 120 day
    extension to that review process given the significance of the impacts
    this could have on all parties involved. Unfortunately, on Friday, May
    12th the agency granted only a 30 day extension. Given the magnitude of
    this proposed determination, we ask that the Committee also support us
    by seeking an additional extension.
    Packers and Stockyards Act Contracting Rules
        USDA so far has issued two proposed rules in the last year seeking
    to address what the department says are flaws in the current poultry
    production contracting process. The first rule dealt with contract
    transparency and indicated a surprising lack of understanding about
    turkey production. In the preamble to rule, USDA acknowledged that it
    based most of the rule based on information it had gathered about the
    chicken industry. It shows. It sought to require provisions that
    fundamentally already exist in turkey contracts but that now may need
    to be rewritten to comply with a rule designed for another industry. As
    a turkey grower, I can tell you this does not benefit me, and it does
    not benefit most of my neighbors. We have urged USDA to withdraw the
    rule. If it must move forward with a new rule, it should gather
    additional input to better reflect unique differences between the
    various species it is attempting to regulate.
        The second proposed rule, ``Inclusive Competition and Market
    Integrity Under the Packers and Stockyards Act,'' is even more
    concerning. NTF has urged the agency to withdraw and repropose the rule
    because the current version is far too ambiguous regarding what
    activities are prohibited. It will lead to increased legal and
    regulatory uncertainty, clearly invites increased litigation, and will
    make it far more difficult for processors and growers to conduct
    business. In addition, the proposed rule targets conduct that is
    already clearly prohibited by provisions of the Packers and Stockyards
    Act, creating redundant, duplicitous red tape.
    Labor
        As I mentioned a few years ago during my testimony before this
    Committee, our industry continues to suffer from a lack of access to
    workers. The turkey industry supports immigration reform that includes
    policies and provisions that will maximize benefits to the industry and
    ensure a strong and durable immigration system that meets the needs of
    the U.S. economy.
        Most turkey plants are located in rural, low-unemployment areas. To
    fully staff these plants, producers must recruit from outside of their
    local areas and in many instances must rely on immigrant labor.
    Existing guestworker programs target only seasonal, on-farm labor and
    non-agricultural manufacturing. We need workers in our plants year-
    round, and we stand ready to work with all parties to achieve a
    workable system. The turkey industry hopes that Washington can put the
    rhetoric aside and find a solution.
        Once again, thank you for the opportunity to testify today on the
    state of the U.S. turkey industry and the issues impacting our
    businesses. I will be happy to answer any questions.

        The Chairman. Thank you. Mr. Burns, please begin when you
    are ready.

          STATEMENT OF BYRAN BURNS, J.D., VICE PRESIDENT AND
       ASSOCIATE GENERAL COUNSEL, NORTH AMERICAN MEAT INSTITUTE,
                            WASHINGTON, D.C.

        Mr. Burns. Chairman Mann, Ranking Member Costa, and Members
    of the Subcommittee, thank you for the opportunity to testify
    today on behalf of NAMI, the North American Meat Institute. I
    am Bryan Burns, VP and Associate General Counsel at NAMI. Prior
    to my time at the institute I worked 20 years in the industry,
    both as legal counsel, and head of environment health and
    safety at two different meat and poultry packing companies.
    NAMI is the oldest and largest trade association representing
    meat and poultry packers, both large and small. More than half
    of our members have fewer than 100 employees.
        Make no mistake, our industry is facing headwinds, both due
    to economic factors and due to recent court decisions, proposed
    regulations, and laws that will negatively impact our industry,
    and thus the consumers and customers we serve. On the economic
    front, fed cattle prices are at record highs. Our pork
    processor members are facing declining wholesale pork prices,
    and some of our larger members have seen reduced earnings, have
    been forced to lay off employees, and have closed facilities.
    These market dynamics have unfolded exactly as four member
    company CEOs testified would happen before the full Committee a
    little over a year ago. And just this week The Wall Street
    Journal ran an article on these dynamics entitled, The Big Meat
    Conspiracy Theory Unravels, and thank you to Chairman Thompson
    for inserting that into the record today.
        However, I want to emphasize that the industry is
    incredibly resilient, despite claims to the contrary. Against
    challenges such as COVID, supply chain disruptions, labor
    availability, and the impact of drought, beef production set
    new records for 4 consecutive years, from 2019 through 2022.
    Pork production has seen similar 4 year totals over the same
    period.
        The industry faces challenges on the judiciary,
    legislative, and regulatory fronts. The U.S. Supreme Court
    recently issued a fragmented decision to uphold California
    Proposition 12. That decision will trigger similar regulations
    in Massachusetts under their Ballot Initiative 3. It will also
    embolden anti-animal ag groups to pursue burdensome laws
    elsewhere, and it will open the door to chaos of interstate
    commerce through state by state trade barriers. Not just for
    meat and poultry products, but for any products not meeting the
    standards set by another state. Industry needs certainty, but
    any Federal or legislative solution to this requires careful
    drafting to ensure it is legally sufficient to address the
    problem, but not vulnerable to legal challenges in court.
        USDA's recent round of proposed rules under the Packers and
    Stockyards Act is also a threat, both to packers and producers.
    The Department should withdraw its entire suite of
    interconnected rules and publish them together, if they are
    going to publish them at all, with a sufficient comment period
    to allow stakeholders and Congress to consider the overlapping
    impact of the intertwined rules. The piecemeal approach that
    USDA has chosen in promulgating these rules is deliberate
    regulatory obfuscation.
        Courts have repeatedly held that the Packers and Stockyards
    Act, like other anti-trust laws, is a competition statute.
    These laws exist to protect the marketplace, and not to address
    individual grievances that could be decided in state courts.
    Eight Federal Circuit Courts of Appeals have held that a
    Plaintiff must show harm, or likely harm, to competition to
    prevail in a case brought under the Packers and Stockyards Act,
    yet USDA seeks to circumvent the court decisions, and
    Congressional intent, and rewrite the Packers and Stockyards
    Act by regulation as a Federal tort claim statute.
        The Administration claims the proposals are needed because
    the injury to competition standard is an insurmountable bar for
    Plaintiffs and eliminating it will help rein in the big
    companies. However, the small family-owned poultry company I
    once worked for suffered a $14\1/2\ million verdict in a
    Packers and Stockyards case that was decided under the injury
    to competition standard. That amount was large enough to drive
    that company to the verge of bankruptcy, and the result was
    that that company is now owned by an owner outside the United
    States. Small and medium companies stand much to lose from
    large verdicts in these cases.
        The most pressing day to day need for the meat industry
    continues to be access to a reliable, stable workforce. We are
    pleased that Chairman Thompson plans to establish an
    Agricultural Workforce Working Group within the House
    Agriculture Committee. We urge the working group to consider
    the workforce needs of our industry as it deliberates. We
    aren't eligible currently for the H-2A Program, even though we
    are the hardest stage of the agricultural process, and we are
    essential to the food supply. We would welcome the opportunity
    to be a part of the discussion so that a solution can be found
    that works for all of agriculture.
        Another key priority is reauthorization of LMR. Since 2020
    Congress has extended LMR's 5 year authorizations through the
    appropriation process. NAMI has, since 2019, and continues to
    support, a clean 5 year reauthorization of LMR. The meat and
    poultry industry is a critical part of the agriculture
    industry. It provides an essential, nutritious component of
    Americans' diets. Thank you for the opportunity to testify
    today, and I look forward to answering your questions.
        [The prepared statement of Mr. Burns follows:]

     Prepared Statement of Byran Burns, J.D., Vice President and Associate
        General Counsel, North American Meat Institute, Washington, D.C.
        Chairman Mann, Ranking Member Costa, and Members of the Committee,
    thank you for the opportunity to present testimony today on behalf of
    the North American Meat Institute (NAMI or the Meat Institute).
        The Meat Institute is the United States' oldest and largest trade
    association representing packers and processors of beef, pork, lamb,
    veal, poultry, and processed meat products. The Meat Institute has 330
    general members, operating more than 800 facilities subject to daily
    Federal inspection by the U.S. Department of Agriculture's (USDA) Food
    Safety and Inspection Service. Of those members, more than half have
    fewer than 100 employees. NAMI also has 200 supplier members, which
    provide a broad range of products and services ranging from large
    processing equipment to laboratory testing for food safety to
    packaging, all to help ensure Americans enjoy a safe and abundant
    supply of meat and poultry products. The U.S. meat and poultry
    processing industry produces nutrient-dense foods that play a unique
    role in healthy diets and are driving solutions for the environment,
    farmers' livelihoods, animal care, and more.
        The North American Meat Institute and our partners in the Protein
    PACT for the People, Animals & Climate of Tomorrow are committed to
    accelerating progress and building momentum for public commitments in
    each of five focus areas: the environment, animal care, food safety,
    nutrition, and our workforce. Protein PACT is a commitment to
    continuous improvement toward a common set of ambitious goals across
    the industry. It empowers the animal protein industry to proactively
    meet the needs of its customers and consumers by accelerating
    continuous improvement across animal agriculture, transparently
    verifying progress toward ambitious targets, and proactively
    communicating that progress. Protein PACT unites partners committed to
    sustaining healthy people, healthy animals, healthy communities, and a
    healthy environment.
        To achieve its Protein PACT targets, the Meat Institute pioneered
    creating a sector-wide dataset and published in October 2022 the first-
    ever data report measuring baselines and providing a snapshot of
    achievements to date. In its first year, the Meat Institute's data
    collection effort covered an estimated 90% (by volume) of meat sold in
    the United States. By 2030, 100% of Meat Institute members will report
    on all metrics.
        Other Protein PACT targets include:

       By 2025, the Meat Institute will help measure and fill the
            ``protein gap''--the difference between the high-quality meat
            and dairy products needed by families facing hunger and what
            food banks and charities can provide. In 2022 alone, Meat
            Institute members announced more than $12.9 million in food
            security contributions, including building and expanding
            infrastructure needed to safely receive, store, and distribute
            fresh meat and milk.

       By 2030, 100% of Meat Institute members will have emissions
            reductions targets approved by the independent Science-Based
            Targets Initiative (SBTI). Today, 12 of the sector's leaders
            have set or committed to setting an SBTI, and 84% of facilities
            reporting data are covered by a company commitment to reduce
            emissions.

        On May 1, the Meat Institute opened the second Protein PACT data
    reporting period, which will run through July 31. The Meat Institute
    and our Protein PACT partners look forward to sharing the animal
    agriculture industry's proactive improvement over the coming years.
        The Meat Institute's member companies operate in what has become
    one of the toughest, most competitive, and certainly one of the most
    scrutinized sectors of our economy: meat packing and processing. The
    industry is very efficient, highly complex, extremely capital
    intensive, and heavily regulated. Beyond live animals, the packing and
    processing industry requires labor, capital, and technology, as well as
    other inputs to produce the products consumers enjoy and expect.
        The most recent data from the U.S. Census Bureau shows meat and
    poultry processing is a $266.99 billion industry employing 526,849
    people directly and supporting many more jobs up and down stream in the
    value chain across both rural and urban communities. Of course, packers
    and processors depend on livestock and poultry producers. Likewise,
    they support these farmers' livelihoods. According to the U.S.
    Department of Agriculture, animal agriculture represents 47 percent of
    total U.S. farm cash receipts.
        Meat packers and processors compete, sometimes struggle, and mostly
    thrive in a volatile industry. They must continually adapt to changing
    market conditions and innovate to remain competitive and viable. And in
    times like these, they must maintain the capital to withstand negative
    margins in periodic down cycles. Indeed, the industry currently is
    facing economic headwinds due to a variety of factors, from higher
    production costs to consumers' concerns over economic uncertainty, and
    global economic forces. For the record, this is exactly what four beef
    company CEOs predicted would happen in testimony before the full
    Committee a little more than a year ago. Supply and demand fundamentals
    are at work.
        USDA's most recent forecast, and the first look at 2024, projects
    total red meat and poultry production will decrease, which would be the
    first year-over-year decrease in a decade. On the beef side, a rapid
    decline in the beef cattle herd has resulted in record cattle prices,
    similar to 2014 when the cattle herd size was at its smallest since
    1952. Moreover, USDA projects cattle prices in 2024 to increase further
    from today's records. On the pork side, building inventories, declining
    wholesale pork prices, and increased production costs are weighing on
    the industry.
        Additionally, the pork and hog sectors now face the costs and
    uncertainty of California's Proposition 12 (Prop 12), which was
    recently upheld by the U.S. Supreme Court. Proposition 12, a 2018
    ballot initiative, will effectively regulate sow housing, not only in
    California, but nationally by banning the sale in California of whole
    pork meat derived from sows--or the pigs they produce--unless they were
    housed with 24 square feet or more of floorspace.
        The Prop 12 decision will embolden anti-animal agriculture groups
    to pursue ballot measures in other states and localities. The decision
    opens the door to chaos in interstate commerce through state-by-state
    trade barriers, not just for meat and poultry products, but for any
    agricultural or manufactured products not meeting standards set by
    another state. No industry can operate when facing 50 different
    standards. It is worth noting that with the Court's decision, similar
    restrictions will be allowed to go into effect in Massachusetts under
    that state's ballot initiative, Question 3. It is estimated that
    California represents about 13 to 15 percent of U.S. pork consumption.
    Based on the population in Massachusetts, it can be assumed that an
    additional two percent or more of U.S. pork consumption would be
    subject to these rules.
        Our industry, like any other, needs certainty. But any Federal
    solution requires deliberation and careful drafting to ensure it is
    legally sufficient.
    Beef and Pork Industry Market Overview
        Despite the economic pressures facing the meat and poultry industry
    and its employees, consumers, and producer suppliers, it is important
    to highlight the industry's resiliency, especially over the past few
    years.
    Cattle Market Fundamentals at Work
        Faced with the many challenges--COVID, supply chain disruptions,
    labor availability, and impact of drought on the cattle supply--since
    2020, the U.S. beef packing sector has proven resilient. Beef
    production has set historical records for the past 4 consecutive years.
    In short, since the pre-COVID year of 2019, beef production has
    increased 3.9 percent, and is up a remarkable 9.2 percent over the 20
    year average from 2000 to 2019.
    U.S. Beef Production Annual

              Source: USDA ERS.

        Cattle markets are driven by the fundamentals of supply and demand.
    After a 5 year expansion cycle in the cattle herd size, inventories
    reached a peak in January 2020. Two and a half months later COVID hit,
    which created a shock to the demand for cattle as packers were
    temporarily unable to operate at full capacity. That shock created a
    backlog of cattle, negatively affecting cattle prices. Ultimately,
    packers worked their way through the bottleneck, and exceptionally
    strong consumer demand for beef in 2021 led to improving cattle prices
    and further increases in 2022.
        Total receipts for cattle in 2022 reached a record $86.8 billion,
    compared to the previous record of $81 billion in 2014, the only other
    year in which total producer receipts topped $80 billion.
    Cattle Market Fundamentals at Work

              Source: USDA AMS.

        In 2022, liquidation of cattle off farms and ranches led to record
    monthly inventories of cattle on feed in 9 of the 12 months of the
    year. But U.S. beef packers, having generally recovered from labor
    shortages and supply chain disruptions faced in 2020 and through much
    of 2021, were able to harvest and process all these cattle. As a result
    of packers' demand, cattle prices rose dramatically.
        In December 2022, fed cattle prices hit their highest level for
    that month since 2014, when the overall cattle herd was at its smallest
    since 1952 (during the Truman Administration), and in January 2023
    reached the highest January prices since 2015. So far in 2023, cattle
    prices have hit record levels--exceeding those of 2014 and 2015.
    Weekly Fed Cattle Prices
    Current Versus 2014-2015 Record Highs

              Source: USDA AMS.

        Looking ahead for the rest of the year, USDA projects record fed
    cattle prices to continue. The May World Agricultural Supply and Demand
    Estimates (WASDE) report forecast cattle prices to maintain an annual
    average of $166 per hundredweight. That is $12 per hundredweight, or
    7.6 percent higher, than the previous record. USDA's forecast for 2024
    projects another 5.4 percent increase over this year's historical
    record.
    Annual Average Fed Cattle Prices

              Source: USDA AMS.
    Consumer Demand & Beef Quality
        Consumer demand for beef has been extremely strong. Consumption has
    grown by more than 5 pounds per capita since 2015.
    Beef Per Capita Consumption

              Source: USDA ERS.

        Importantly, beef quality over that time has improved hand-in-hand
    with per capita consumer demand because packers and producers have both
    focused on what consumers demand. From 2020 to 2022 beef production at
    the two highest quality grades, Prime and Choice, has averaged 84.8
    percent. That compares to 76 percent for the same quality grades in
    2014 and 2015.
    Percent of Beef Grading Prime and Choice

              Source: USDA ERS.
    Hog Market Fundamentals at Work
        Pork production faced the same challenges from COVID and the
    ongoing disruptions, which came on the heels of unprecedented global
    pressures resulting from the outbreak of African swine fever in China,
    which maintains nearly half of the world's swine herd. U.S. pork
    packers also showed their resiliency through all this volatility. Pork
    production hit a record in 2020 at 28.3 billion pounds. Although pork
    production was down in 2022 to 26.995 billion pounds, it remained a
    staggering 19.5 percent above the 20 year average from 2000 to 2019.
    U.S. Pork Production Annual

              Source: USDA ERS.

        Like cattle, hog prices are driven by the fundamentals of supply
    and demand. After a 6 year expansion cycle driven by tight global
    supplies and record export demand, the December inventory of hogs and
    pigs hit its peak in 2019. Three and a half months later COVID hit,
    which created a shock to the demand for market hogs and feeder pigs as
    packers were temporarily unable to operate at full volume.
        Total receipts for hogs in 2022 reached a record $29.375 billion,
    compared to the previous record of $28.03 billion in 2021--the only
    other year in which total producer receipts topped $27 billion.
    Hog Market Fundamentals at Work

              Source: USDA AMS.

        USDA is projecting an increase in pork production in 2023 of 1.4
    percent. That would bring total output to 27.4 billion pounds--the
    fourth time that pork production has exceeded 27 billion pounds, and
    all since 2019.
    Red Meat Outlook
        With exceptionally strong meat demand in 2021, inflation was an
    issue that year despite a record volume of 55.9 billion pounds of red
    meat production. In 2022, however, meat prices lagged far behind the
    general food inflation index. Red meat and poultry still lag behind the
    general consumer price index inflation rate, but consumers are faced
    with a great deal of economic uncertainty.
    Food Inflation 2022

              Source: Bureau of Labor Statistics.

        With rising cattle prices in 2022, cattle producers saw their share
    of the consumer beef dollar rise from 39 percent to 45 percent. The
    packers' share ended 2022 at eight percent, remaining the smallest
    share of the consumer dollar it has been in the 640 months since
    records started in January 1970, with the exception of May 2020 at the
    height of the COVID disruptions to the packing sector.
    2022 Share of Retail Beef Dollar

              Source: USDA ERS.

        So far, for the first quarter of 2023, based on cattle and beef
    prices to date, the producers' share has averaged 46 percent, one
    percent higher than the retailers' share, and above the packers' share
    of nine percent.
    2023 Q1: Share of the Consumer Beef Dollar
    USDA Meat Price Spreads data

              Source: USDA ERS.

        In 2022, the producers' and packers' share of the retail pork
    dollar came under pressure late in the year as the retailer share
    increased.
    2022 Share of Retail Pork Dollar

              Source: USDA ERS.

        So far in the first quarter of 2023, that situation has continued.
    2023 Q1: Share of the Consumer Pork Dollar
    USDA Meat Price Spreads Data

              Source: USDA ERS.
    Public Policy Issues
    Rulemaking Under the Packers and Stockyards Act
        First announced in July 2021, USDA is in the midst of proposing a
    ``suite of major actions'' to alter the structure of the meat and
    poultry industry through regulatory changes under the Packers and
    Stockyards Act (PSA). Last year, USDA's Agricultural Marketing Service
    (AMS) published a proposed rule and Advance Notice of Proposed
    Rulemaking to alter the poultry growing system, followed by a proposed
    rule titled, ``Inclusive Competition and Market Integrity Under the
    Packers and Stockyards Act'' (Inclusive Competition Proposed Rule) that
    would change the marketing of all species. Finally, USDA has stated it
    plans to publish a third proposed rule to limit the harm to competition
    standard under the PSA.
        As a threshold matter, the Department should withdraw all the PSA
    proposals and publish the entire ``suite'' of interconnected proposals
    together, with a comment period sufficient to allow stakeholders and
    Congress to consider the authority undergirding the proposals, the
    overlapping impact of the proposals, and so stakeholders can provide
    comments with a comprehensive understanding of USDA's agenda. The
    piecemeal approach USDA has chosen is deliberate regulatory
    obfuscation.
        For example, the Inclusive Competition Proposed Rule itself makes
    no reference to longstanding court precedent that a plaintiff in a PSA
    section 202 case must show injury, or likelihood of injury, to
    competition to prevail. The proposal's preamble, however, is a
    different story and is littered with statements to the contrary. In at
    least seven locations, AMS asserts an individual need not ``show
    market-wide harm to secure relief under the Act,'' which suggests the
    agency believes simply saying something enough times is sufficient to
    overturn the precedent established by eight Federal appellate circuits.
        As the United States Court of Appeals for the Fifth Circuit
    correctly explained, Congress enacted the PSA ``to combat restraints on
    trade'' and to ``promote healthy competition'' in the livestock
    industry.\1\ In enacting the statute, Congress ``incorporate[d] the
    basic antitrust blueprint of the Sherman Act and other pre-existing
    antitrust legislation.'' \2\ Congress intended the PSA to be a
    competition law, not a law creating individual rights of action. Under
    the settled principle of antitrust law, a plaintiff must show antitrust
    injury--a harm that the antitrust laws were designed to prevent.\3\ To
    prove an antitrust injury, it is not enough for the plaintiff to show
    it was harmed by the defendant's conduct; rather, the plaintiff must
    prove that competition was harmed or likely to be harmed by the
    defendant's conduct.\4\
    ---------------------------------------------------------------------------
        \1\ Wheeler v. Pilgrim's Pride Corp. 591 F.3d 355, 361 (5th Cir.
    2009) (en banc); see H.R. Rep. No. 85-1048, at 1 (1957) (Act's purpose
    was to ``assure fair competition and fair trade practices in livestock
    marketing and in the meatpacking industry'').
        \2\ De Jong Packing Co. v. United States Dep't of Agric., 618 F.2d
    1329, 1335 n. 7. (9th Cir. 1980), cert. denied, 449 U.S. 1061 (1980).
        \3\ See Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477,
    489 (1977).
        \4\ See, e.g., Race Tires Am., Inc. v. Hoosier Racing Tire Corp.,
    614 F.3d 57, 83 (3d Cir. 2010); see also Brunswick, 429 U.S. at 488
    (``[A]ntitrust laws . . . were enacted for `the protection of
    competition not competitors.' '').
    ---------------------------------------------------------------------------
        In an en banc decision, the Fifth Circuit stated succinctly:

              Once more a Federal court is called to say that the purpose
            of the Packers and Stockyards Act of 1921 is to protect
            competition and, therefore, only those practices that will
            likely affect competition adversely violate the Act. That is
            this holding.\5\
    ---------------------------------------------------------------------------
        \5\ Wheeler 591 F3d at 357.

        And the most recent appellate court to address this issue said it
    ---------------------------------------------------------------------------
    best:

              The tide has now become a tidal wave, with the recent
            issuance of the Fifth Circuit Court of Appeals' en banc
            decision in Wheeler v. Pilgrim's Pride Corp., 591 F.3d 355 (5th
            Cir. 2009) (en banc), in which that court joined the ranks of
            all other Federal appellate courts that have addressed this
            precise issue when it held that ``the purpose of the Packers
            and Stockyards Act of 1921 is to protect competition and,
            therefore, only those practices that will likely affect
            competition adversely violate the Act.'' Wheeler, 591 F.3d at
            357. All told, seven circuits--the Fourth, Fifth, Seventh,
            Eighth, Ninth, Tenth, and Eleventh Circuits--have now weighed
            in on this issue, with unanimous results.\6\ (Emphasis added.)
    ---------------------------------------------------------------------------
        \6\ Terry v. Tyson Farms, Inc., 604 F.3d 272, 277 (6th Cir. 2010).

        USDA's attempt to circumvent the courts and Congress to impose a
    new interpretation of the harm to competition standard brings to mind
    the Supreme Court's recent decision in West Virginia v. EPA.\7\ In that
    decision the Supreme Court invoked explicitly the ``major questions
    doctrine,'' which requires Congress to speak clearly when authorizing
    agency action in certain cases.
    ---------------------------------------------------------------------------
        \7\ West Virginia v. EPA, 142 S. Ct. 2587 (2022); see also NFIB v.
    OSHA, 142 S. Ct. 661 (2022) (per curiam); Alabama Association of
    Realtors v. HHS, 141 S. Ct. 2485 (2021).
    ---------------------------------------------------------------------------
        The ``major questions doctrine'' turns on several considerations,
    including whether: the agency discovered in a ``long-extant statute an
    unheralded power'' that significantly expands or even ``transform[s]''
    its regulatory authority; the claimed authority derives from an
    ``ancillary,'' ``gap-filler,'' or otherwise ``rarely used'' provision
    of the statute; or the agency adopted a regulatory program Congress had
    ``conspicuously and repeatedly declined to enact itself.'' \8\ The
    Court is skeptical where an agency seeks to promulgate a rule ``that
    Congress has conspicuously and repeatedly declined to enact itself.''
    \9\
    ---------------------------------------------------------------------------
        \8\ West Virginia v. EPA.
        \9\ West Virginia v. EPA at 2610.
    ---------------------------------------------------------------------------
        Where an agency has long administered a statute, the ``lack of
    historical precedent, coupled with the breadth of authority that the
    [agency] now claims, is a telling indication that the mandate extends
    beyond the agency's legitimate reach.'' \10\ Section 202 of the PSA can
    hardly be called an ancillary or rarely used provision of the statute
    and given Congress has amended section 202 multiple times over the
    decades, when it considered amending the statute to articulate the
    legal standard AMS promotes, Congress declined to do so.
    ---------------------------------------------------------------------------
        \10\ NFIB, 142 S. Ct. at 666 (quotation marks omitted).
    ---------------------------------------------------------------------------
        Indeed, Congress has ``conspicuously and repeatedly'' declined to
    alter the harm to competition standard. In the 2008 Farm Bill that led
    to this rulemaking, Congress considered and rejected a proposal to
    amend section 202(a) to state that a business practice can be found to
    be ``unfair, unjustly discriminatory or deceptive'' ``regardless of
    whether the practice or device causes a competitive injury or otherwise
    adversely affects competition and regardless of any alleged business
    justification for the practice or device.'' \11\ Senator Tom Harkin,
    who was then the Chairman of the Senate Committee on Agriculture,
    Nutrition, and Forestry, explained that his legislation would overturn
    court rulings that ``producers need to prove an impact on competition
    in the market in order to prevail'' in cases alleging that packers or
    dealers engaged in ``unfair'' or ``unjustly discriminatory''
    practices.\12\ Not only did the legislation not pass either the House
    or Senate, but Sen. Harkin did not include it in the Senate farm bill
    he introduced.\13\ Congress's decision not to amend section 202 ``after
    years of judicial interpretation supports adherence to the traditional
    view'' that a finding of harm or likely harm to competition is
    required.\14\
    ---------------------------------------------------------------------------
        \11\ See Competitive and Fair Agricultural Markets Act of 2007, S.
    622, 110th Cong.  202 (2007); see also H.R. 2135, 110th Cong.  202
    (same).
        \12\ 153 Cong. Rec. S2053 (daily ed. Feb. 15, 2007).
        \13\ S. 2302, 110th Cong.
        \14\ Wheeler, 591 F.3d at 362 (quoting Gen. Dynamics v. Cline, 540
    U.S. 581, 593-94 (2004)).
    ---------------------------------------------------------------------------
        And the 2008 Farm Bill was not the only instance Congress kept the
    harm to competition standard. Between 1921 and 2002, Congress amended
    section 202 of the PSA seven times, but it never disrupted the courts
    of appeals' statutory interpretation.\15\ Congressional inaction in the
    face of the decisions of the appellate courts suggests that it has
    accepted that settled understanding.
    ---------------------------------------------------------------------------
        \15\ See Wheeler, 591 F.3d at 361-62; see also General Dynamics
    Land Sys., Inc. v. Cline, 594, 599 (2004) explaining that
    ``Congressional silence'' in the face of ``years of judicial
    interpretation'' suggests that Congress has accepted the judicial
    consensus.
    ---------------------------------------------------------------------------
        But Congress has also affirmatively acted to stop changes to the
    harm to competition standard. AMS's statements regarding harm to
    competition embedded in the Inclusive Competition Proposed Rule's
    preamble are not the first time the agency has taken this position. In
    a 2010 failed rulemaking the agency stated a violation of sections
    202(a) or (b) of the PSA ``can be proven without proof of predatory
    intent, competitive injury, or likelihood of injury.'' \16\
    ---------------------------------------------------------------------------
        \16\ 75 Fed. Reg. 35338, 35340 (June 22, 2010).
    ---------------------------------------------------------------------------
        The 2010 proposal failed when Congress, on a broad, bipartisan
    basis, prohibited USDA from moving forward with the rulemaking.
    Proposed section 201.3(c) of the failed 2010 rulemaking would have
    attempted to overrule the harm to competition standard established by
    the courts. However, Congress intervened and the appropriations bills
    for each of Fiscal Years 2012 through 2015 included language
    prohibiting the agency from expending any funds to ``publish a final or
    interim final rule in furtherance of, or otherwise implement'' proposed
    section 201.3(c), among other sections of the 2010 proposed rule.
        The appropriations language Congress passed four times prohibiting
    USDA from finalizing the proposed rule supports the conclusion that the
    standard set by the appellate courts is the proper one. Congress spoke
    directly to the issue and stopped USDA from changing the harm to
    competition standard. Yet, once again, in the Inclusive Competition
    Proposed Rule and the announcement of a future proposal also related to
    the harm to competition standard, USDA is attempting to circumvent both
    Congress and the courts, directly contravening Congressional intent and
    exceeding the authority granted by the PSA.
        The Inclusive Competition Proposed Rule's faults related to the
    harm to competition standard are compounded by the proposal's other
    provisions. The proposal would broaden the basis of liability under the
    PSA in a way that will fundamentally alter the operations of protein
    markets in the United States to the detriment of producers, packers,
    and consumers.
        First, the agency proposal prohibits unequal treatment of a
    ``market vulnerable individual,'' which AMS would define as a

              person who is a member, or who a regulated entity perceives
            to be a member, of a group whose members have been subjected
            to, or are at heightened risk of, adverse treatment because of
            their identity as a member or perceived member of the group
            without regard to their individual qualities. A market
            vulnerable individual includes a company or organization where
            one or more of the principal owners, executives, or members
            would otherwise be a market vulnerable individual.\17\
    ---------------------------------------------------------------------------
        \17\ 87 Fed. Reg. 60054, proposed section 201.302.

        This definition is so vague, and the preamble discussion associated
    with it so wide ranging, a regulated entity could not begin to know
    what actions to take or policies to implement to even attempt to ensure
    compliance. The proposed rule would subject packers and poultry
    integrators to untold litigation risks and force the industry toward a
    one-size fits all, lowest common denominator approach to procurement
    and contracting practices.
        The proposal would also prohibit certain actions the agency
    characterizes as retaliation or deception. As the courts have required
    showing harm or likely harm to competition in cases brought under PSA
    section 202, the courts have consistently rejected claims that the PSA
    makes a Federal offense out of breaches of contract or retaliatory
    actions that have no adverse effect on competition. In London v.
    Fieldale Farms the Eleventh Circuit found no section 202 violation
    based on allegations that a poultry dealer committed a breach of
    contract and terminated a grower's contract in retaliation for the
    grower's testimony against the dealer in a separate lawsuit.\18\
    Likewise, the Sixth Circuit rejected claims that an alleged retaliatory
    act by a poultry dealer violates the PSA absent harm, or likelihood of
    harm, to competition.\19\
    ---------------------------------------------------------------------------
        \18\ London v. Fieldale Farms Corp., 410 F.3d 1295, 1303 (11th Cir.
    2005).
        \19\ Terry v. Tyson Farms, Inc., 604 F.3d at 279.
    ---------------------------------------------------------------------------
        Under the Inclusive Competition Proposed Rule, a regulated entity
    could be subject to liability under the Act for simply terminating, or
    refusing to renew a contract, with any covered producer that has
    ``communicated with a government agency with respect to any matter
    related to livestock, meats, meat food products, livestock products in
    unmanufactured form, or live poultry.'' In creating such broad
    liability, the proposed rule will increase litigation costs for
    processors, which will likely be passed on, in some measure, to
    consumers.
        Covered entities seeking to reduce litigation risk will be
    incentivized to reduce the variety of contracts, and instead offer
    standardized contracts to producers, reducing producers' ability to
    reap the rewards of value-added production practices. USDA has
    advocated the need for increasing environmentally sustainable
    agricultural production practices. Ironically, the Inclusive
    Competition Proposed Rule will disincentivize packers from contracting
    with producers to provide premiums for innovative sustainability
    practices.
        USDA's Inclusive Competition Proposed Rule also attempts to
    transform a Federal competition law into a Federal tort claim statute.
    Producers have significant protections under state laws for the
    grievances USDA would turn into Federal cases. Allowing individual
    claims to be brought under the PSA would trigger spurious litigation,
    reduce efficiency and inject added costs throughout the supply chain,
    resulting in higher costs and less innovative products available to
    consumers and limiting producers' ability to collect premiums for value
    added production practices. The Meat Institute urges Congress to once
    again step in and stop USDA's regulatory overreach.
    Livestock Mandatory Reporting Reauthorization
        Despite claims to the contrary, there is robust price discovery in
    the cattle and beef markets. Congress established, and USDA
    administers, the Livestock Mandatory Reporting Act (LMR) program to
    facilitate open, transparent price discovery and provide all market
    participants, both large and small, with comparable levels of market
    information for slaughter cattle and beef, hogs and pork, and sheep and
    lamb. Despite the desires of some, LMR is not a tool to direct market
    changes.
        Under LMR regulations, packers must report to AMS daily the prices
    they pay to procure cattle, and other information, including slaughter
    data for cattle harvested during a specified period and with net
    prices, actual weights, dressing percentages, percent of beef grading
    Choice, and price ranges, and then AMS publishes the anonymized data.
        AMS publishes 24 daily and 20 weekly cattle reports each week,
    starting Monday afternoon and ending the next Monday morning. These
    reports cover time periods, regions, and activities and the data
    include actual cattle prices. Further, packers report all original sale
    beef transactions in both volume and price through the Daily Boxed Beef
    Report. This data is reported twice daily, at 11:00 a.m. and at 3:00
    p.m. Central Time. The morning report covers market activity since 1:30
    p.m. of the prior business day until 9:30 a.m. of the current business
    day. The afternoon report is cumulative, including all market activity
    in the morning plus all additional transactions between 9:30 a.m. and
    1:30 p.m., and is on the USDA DataMart website. The boxed beef report
    covers both individual beef item sales and beef cutout values and
    current volumes, both of which are derived from the individual beef
    item sales data.
        AMS also publishes 20 daily and two weekly hog reports each week
    covering similar time periods, regions and activities. Further, AMS
    reports four daily and eight weekly reports covering prices and
    quantities of all wholesale pork sold. Packers are required to report
    this information twice daily as well.
        Few, if any, other industries have this degree of transparency via
    government mandated reporting of detailed price and product data on an
    on-going, daily basis, published for all other market participants--
    including up-stream sellers, downstream buyers, and direct
    competitors--to view, analyze, and use strategically. Given these
    regulatory mandates on packers, the most critical component of the
    program is confidentiality. Without the firewall of confidentiality,
    each entity in the supply chain from producer to retail and food
    service will know exactly what the other entities are doing at a given
    time.
        When LMR was established, Congress smartly established a 5 year
    authorization period such that the program was decoupled from the 5
    year farm bill authorization. Keeping LMR decoupled from the farm bill
    is critical: LMR requires highly technical knowledge of procurement and
    sales in the complex livestock and meat markets. Well intended changes
    to LMR enacted as part of broader farm bill policy negotiations and
    compromises could drive unintended market responses. By keeping LMR
    separate from farm bill policy deliberations, stakeholder groups can
    negotiate the technical changes to LMR they seek, reach consensus over
    any changes, and provide Congress with the technical changes upon which
    stakeholders agree. This consensus-driven approach has allowed LMR to
    be reauthorized without acrimony or market-disrupting changes.
        The Livestock Mandatory Reporting program's 5 year authorization
    was scheduled to sunset in 2020, but Congress has extended its
    authorization annually in appropriations legislation. Since 2019, the
    North American Meat Institute has supported a clean, 5 year
    reauthorization of LMR, and NAMI continues to hold that position today.
        Meat Institute member companies worked closely with the livestock
    producer community, AMS, and other interested stakeholders when this
    reporting program first came into being and on every reauthorization
    effort since. This iteration of reauthorization must be no different.
    In that regard, the Meat Institute is committed to working with its
    membership and with livestock producer groups, to find consensus on
    reauthorizing the Livestock Mandatory Reporting Act and I hope we
    continue this partnership free of controversy. I am confident we can
    achieve this goal in a manner that makes the program more effective and
    efficient without increasing costs or regulatory burdens.
    Labor Availability
        Access to a reliable, stable workforce continues to be the most
    pressing day-to-day challenge facing the meat industry--this was the
    case before the pandemic, and it has only become more acute. Meat
    packers and processors have significantly raised salaries and benefits,
    with starting salaries in many beef slaughter operations starting at
    more than $22 an hour, plus benefits.
        The Meat Institute was pleased to hear Committee Chairman Glenn
    Thompson's plan to establish an agricultural workforce working group
    within the House Agriculture Committee. We appreciate the Chairman's
    leadership and innovative thinking in creating the working group, and
    are pleased the Committee will bring its expertise on agricultural
    issues to the agricultural workforce discussion.
        As Committee Members know, meat packing and processing facilities
    are not eligible to employ workers under the agricultural guestworker
    visa (H-2A) program. However, meat packers and processors are quite
    simply the harvest stage of the livestock industry--they are essential
    to the livestock industry and food supply. The Meat Institute urges the
    working group to consider the workforce needs of the packing and
    processing community as it deliberates, and we would welcome the
    opportunity to be part of the task force's discussions so a solution
    can be found that works for all of agriculture.
    International Trade
        Last year, 2022, was a strong year for U.S. meat exports. U.S. pork
    exports were the third highest on record, totaling more than 5.89
    billion pounds and valued at $7.68 billion. Beef exports set records in
    both volume and value in 2022, at nearly 3.25 billion pounds and a
    value of $11.68 billion. According to the U.S. Meat Export Federation
    (USMEF), pork exports equated to $61.26 per head slaughtered,
    representing 27.5 percent of pork production, while beef exports
    equated to a record $447.58 per head of fed cattle slaughtered in 2022,
    and 15.2 percent of total beef production.
        For the first quarter of 2023, beef exports are down, based on a
    smaller cattle herd and reduced production, from the record levels of
    2022. Pork exports, however, are strong. Exports of U.S. pork through
    March 2023 are up 17 percent over March 2022 by volume and 18 percent
    by value. The month of March 2023 was the ninth largest month on record
    for pork exports in both volume and value, according to USMEF.
        It is clear international trade is vital to the long-term strength
    of the U.S. meat and poultry industry, supports thousands of jobs along
    the supply chain, particularly in rural communities, and improves
    livelihoods of American producers, farmers, and ranchers. However, the
    U.S. meat and poultry industry's export potential remains limited by
    unjustified sanitary barriers, prohibitive tariffs and tariff rate
    quotas, and onerous registration and approval requirements for
    exporting facilities. These challenges are further exacerbated by the
    lack of new, comprehensive U.S. free trade agreements (FTAs).
        Preserving and enforcing existing U.S. trade agreements and
    frameworks, while indispensable, will not alone guarantee export growth
    or the economic benefits it confers. This assertion is especially true
    as China, the European Union (EU), and other competitors forcefully,
    and swiftly, negotiate FTAs that shirk internationally-recognized
    standards and undermine U.S. access to growing and mature markets,
    alike. Rather, the U.S. would be prudent to negotiate additional access
    with existing trading partners, while also pursuing new markets to
    compete effectively, for example, with China's Regional Comprehensive
    Economic Partnership and the EU's mounting list of ratified FTAs and
    ongoing negotiations in Asia and the Americas.
        Although the Meat Institute supports the Administration's
    initiatives to deepen collaboration, trade, and economic ties with the
    Indo Pacific region and in the Americas through the Indo-Pacific
    Economic Framework (IPEF) and the Americas Partnership for Economic
    Prosperity (APEP), respectively, these initiatives, as currently
    envisioned, will not create an equal playing field for American workers
    and businesses, especially small- and medium-sized businesses, without
    addressing both tariff and non-tariff barriers inhibiting U.S. export
    trade. With the proliferation of FTAs in the Indo-Pacific, in
    particular, U.S. exporters face a substantial, and growing, tariff
    disadvantage compared to countries in the European Union and China, for
    example.
        Therefore, NAMI continues to encourage the Biden Administration to
    prioritize improved market access through tariff reductions and non-
    tariff barrier elimination in IPEF and APEP negotiations. Existing
    tariff disadvantages facing U.S. agriculture in the Indo-Pacific
    drastically reduce the export potential of U.S. meat and poultry in the
    region. Even if non-tariff barriers are addressed through IPEF, APEP,
    and other similar initiatives, access will be severely impeded by
    prohibitive tariffs, leading customers in key markets to source product
    from alternate suppliers outside the U.S. This not only weakens U.S.
    export value, but also detrimentally affects American meat and poultry
    companies and the workers and communities they sustain.
        In exercising its oversight and consultative authority on trade,
    Congress is well positioned to advance, in outreach to the
    Administration, the importance for American workers and the U.S.
    economy of addressing barriers--both tariff and non-tariff--that
    preclude U.S. exports from reaching strategically-significant global
    markets.
        In addition to encouraging a more comprehensive, robust trade
    policy, Congress has an opportunity to support and promote U.S.
    agricultural exports by funding the successful USDA Market Access
    Program (MAP) and Foreign Market Development Program (FMD). According
    to USDA, between 1977 and 2019, every dollar invested in these proven
    export promotion programs returned on average $24.50 in annual export
    value. During the same period, these programs increased U.S. export
    revenue by $9.6 billion annually and added $12.2 billion to farm cash
    receipts. In an increasingly competitive global trade environment,
    where 95 percent of consumers reside outside the U.S., these export
    promotion programs provide critical investments that help level the
    playing field for American agricultural products in markets around the
    world, increase consumer awareness about the quality and safety of U.S.
    agricultural exports, and return value to American businesses and
    workers.
    Xylazine
        We have all watched with horror the death, trauma, and pain that
    fentanyl has inflicted across the country. Now, xylazine, a drug
    approved by the U.S. Food and Drug Administration for use in animals as
    a sedative, is being added to fentanyl to create what is sometimes
    called ``tranq'' or the ``zombie drug,'' which is cheaper to produce
    and sell than pure fentanyl. Xylazine is not an opioid and so does not
    respond to naloxone, further complicating the challenges for first
    responders to treat overdoses.
        Xylazine is used legally and safely by beef packers and others in
    the animal agriculture industry. For beef packers, xylazine is used to
    quickly and humanely sedate sick or injured cattle before euthanization
    in a manner that can safely and effectively be administered by workers.
    Beef packers using xylazine follow strict protocols, including keeping
    it locked in a safe with access limited to a small group of specially
    trained personnel, and maintaining meticulous records of all
    administration and doses.
        As Congress examined ways to address the human crisis related to
    xylazine, the Meat Institute worked closely with the bipartisan
    sponsors of the Combating Illicit Xylazine Act (H.R. 1839). The
    legislation gives the Drug Enforcement Agency (DEA) the power to stop
    the flow of xylazine to humans, while allowing its continued access for
    veterinary purposes. Thus, veterinary use of xylazine may continue,
    while the DEA and other law enforcement officials can go after
    criminals manufacturing and selling xylazine to humans.
        The Meat Institute supports the Combating Illicit Xylazine Act and
    appreciates the deliberative approach the bill's sponsors took to
    ensure that xylazine would remain available for approved veterinary
    use. If you have not already, please consider cosponsoring the bill.
    The Meat Institute urges Congress to quickly pass the legislation to
    give DEA the tools it needs to go after xylazine traffickers.
    Rural Development Opportunities: Public-Private Partnerships
        NAMI member companies are vital contributors to the predominantly
    rural areas in which they operate. Not only are they major employers
    and economic drivers, but also stewards of their communities. NAMI has
    several members providing free community college and other educational
    opportunities for their team members, cost-share, and in some cases
    free childcare in childcare deserts, and affordable housing in areas
    needing more infrastructure to support economic growth.
        Our member companies are making substantial investments to improve
    rural communities, investments that stand to cost-effectively benefit
    even more rural Americans should a mechanism exist within Rural
    Development to foster public-private partnerships. The upcoming farm
    bill reauthorization presents a real opportunity to better leverage
    private company investments into a more prosperous rural America.
    Conclusion
        Thank you for the opportunity to testify before the Subcommittee.
    The meat and poultry industry is a critical part of the agriculture
    industry, and it provides an essential component of Americans' diets. I
    look forward to answering any questions.

        The Chairman. Thank you. Next up, Ms. Hubbard. Please begin
    when you are ready.

            STATEMENT OF LAURIE HUBBARD, REGION I DIRECTOR,
               EXECUTIVE BOARD, AMERICAN SHEEP INDUSTRY
                       ASSOCIATION, NEW PARIS, PA

        Ms. Hubbard. Chairman Mann, Ranking Member Costa, Members
    of the Subcommittee, thank you for the opportunity to speak
    with you today on the priorities of America's sheep producers.
    I raise sheep in Pennsylvania and speak today from my
    experience as a livestock producer, but also as a
    representative to 100,000 family farms and ranches raising
    sheep across the country. For the majority of sheep operations,
    this year continues to be a struggle. The cost of feed and
    literally every input on our farm is dramatically higher, which
    stretches our ability to cover our production expenses. I
    believe we are still working through the disruption caused by
    the pandemic.
        As a former Director on the Board overseeing the American
    Lamb Check-off, I share firsthand the critical piece of our
    market that restaurants, particularly fine dining, represent.
    This customer all but disappeared in 2020, and sadly, many of
    those businesses have yet to return: 40 percent of our lamb
    went to fine dining before 2020, and today it is possibly only
    at 25 percent. We are pressing hard in our promotions at retail
    grocery, as well as direct marketing of American lamb, to
    strengthen demand. Last month we completed the single largest
    marketing season of the year for lamb, with Easter, Passover,
    and Ramadan holidays. While demand improved over 2022, it was
    not back to pre-pandemic levels. The commercial lamb feeding
    sector has been unprofitable for 13 consecutive months. Some
    feedlots were empty this winter as operators could not pencil
    their cost of gain for profit, despite the lowest feeder lamb
    prices in a decade.
        We are fortunate that two lamb slaughter plants began
    operations in late 2020 and early 2021, following the
    bankruptcy of the second largest processor. These companies
    promote more competition for our lambs, yet, due to their
    structure, we remain lacking in price reporting. We fully urge
    the reauthorization of Livestock Mandatory Price Reporting and
    provide suggested changes to enhance the program's
    effectiveness. The first recommendation is to change or replace
    the 3/70/20 confidentiality guideline. The current guideline is
    not required by statute, and current market prices have a
    relatively short-term relevance.
        Additionally, we support Congressional and Administration
    efforts to expand livestock processing facilities. To my
    knowledge, neither of our new companies were able to avail
    themselves of the existing programs, however, I can attest from
    my part of the world that processing is very tight. Producers
    often need to book their lamb processing as far as a year in
    advance. Before leaving the topic of the lamb market, I want to
    thank you for supporting our American check-off programs, and
    let you know that we are here to help you protect the programs
    in Congress. We have approved our check-off twice through
    national referendums by wide margins of both producers and
    production.
        Regarding the wool market, unfortunately, we find the same
    volatility in demand as with lamb. As you can imagine, the
    demand for wool suits, sports coats, and slacks has dropped
    dramatically with the remote work of recent years. This created
    a huge backlog of unsold wool in storage around the world, and
    our markets reflect that oversupply. The American Sheep
    Industry Association is the cooperator with USDA Foreign
    Agricultural Service, and aggressively uses the export programs
    to market to the world's textile industry. Thank you for your
    support of the USDA export programs, and we strongly encourage
    increased funding in the next farm bill.
        I also ask your support to reauthorize the Wool Marketing
    Loan. The program is designed to kick in when markets fall
    apart. After nearly a decade of no payments nationwide, when
    the wool market collapsed in 2020, the program reacted. For
    some producers, it is the only revenue available for wool this
    year. I do ask for your full consideration of updating the loan
    rate to the Wool Marketing Loan Program in the farm bill. The
    program was created in 2002, and currently reflects wool prices
    from 2 decades ago.
        As relayed in my written testimony, I share three final
    priorities for the farm bill. We join our colleagues today with
    strong support of the animal disease prevention and management
    programs, established in the 2018 Farm Bill. The Wool
    Manufacturers' Trust Fund of the 2018 bill is critical to our
    industry and the customers for American wool. And, finally, the
    Sheep Production and Marketing Grant Program proved invaluable
    to our industry, replacing the lamb processing plant lost in
    2020, and the commercial wool testing laboratory, and we fully
    support reauthorization. Thank you very much.
        [The prepared statement of Ms. Hubbard follows:]

      Prepared Statement of Laurie Hubbard, Region I Director, Executive
           Board, American Sheep Industry Association, New Paris, PA
    Introduction
        Chairman Thompson, Ranking Member Scott, and Members of the
    Committee, thank you for the opportunity to speak with you today. I am
    Laurie Hubbard, a sheep producer from Pennsylvania and a director on
    the 13-member Executive Board of the American Sheep Industry
    Association (ASI). ASI is the national trade association for the United
    States sheep industry, representing the nation's 100,000 lamb and wool
    producers. I appreciate the opportunity to present the state of the
    sheep industry and our industry's perspective across several
    priorities.
    State of the American Lamb and Wool Industries
        Price inflation, labor challenges, lamb imports and ongoing
    economic uncertainty are pressuring the American lamb and wool
    businesses. These are in turn impacting the sustainability of the sheep
    industry. There is some optimism as consumer interest in sustainability
    has become more mainstream and is providing opportunities for our
    industry as wool is being recognized as a natural regenerative fiber
    for performance wear, and the vast environmental benefits of targeted
    grazing with sheep, are being recognized by private and public land
    managers and solar developers across the country.
        We are fortunate to have an American Lamb check-off program which
    proved invaluable during the disruptions of the recent years. According
    to the American Lamb Board, the [COVID] pandemic caused huge losses
    within lamb's fundamental fine dining market but created opportunities
    for retail sales and at-home consumption. While consumers are buying
    lamb, elevated price levels have made it difficult for lamb to compete
    with other proteins. More product is coming from imports, usually with
    a significant price advantage over American lamb. The non-traditional
    or ethnic market, with demand for smaller carcasses, has grown and
    cultural preferences are creating new opportunities for our industry.
    The pandemic led to the loss of a major lamb processor in 2020, yet
    smaller processors are emerging and being embraced by a society seeking
    a more local supply structure. High production costs have made it more
    costly to get lamb to the consumer and the inflationary environment has
    impacted consumer's willingness to purchase American lamb. Producer and
    lamb feeder profit margins have been pressured as lamb prices have not
    kept pace with higher input costs and feed prices.
        I would note that commercial lamb feeders have been unprofitable
    for 13 consecutive months.
        The American wool industry continues to endure several challenges
    which are adversely impacting American wool producers. The American
    wool market is heavily dependent on the export market. Over the last
    decade, approximately 67% of American wool is exported, with 72% of
    those exports destined for China. The ensuing global pandemic resulted
    in the closure of key international markets and drastically altered
    consumer demand for apparel products. The Chinese trade tariffs and the
    lost markets for American wool, drove wool prices down and large
    supplies of wool into storage. We have classes of wool today that bring
    only pennies per pound to producers and the impending closure of the
    Mid-States Wool Cooperative headquartered in Ohio is a major concern
    for Midwest and Eastern sheep producers.
    Farm Bill Priorities
        The American Sheep Industry strongly supports reauthorization of
    the Agricultural Improvement Act of 2018 (Farm Bill). The farm bill
    should provide producers with a reasonable safety net for market risk,
    encourage rural growth, and support the production of food and fiber.
    Risk Management
        The 2018 Farm Bill authorized nonrecourse marketing assistance
    loans (MALs) and loan deficiency payments (LDPs) for wool to eligible
    producers who grow and shear wool. This safety net needs to be
    drastically improved to address current market conditions including
    inflation and supply chain disruptions. Illustrative of how little
    support the wool commodity program provides, our records indicate over
    the life of the 2018 Farm Bill, specifically the 2019-2022 crop years,
    the commodity program supporting wool has only expended approximately
    $12.5 million. The national loan rates for graded and ungraded wool
    were established in 2002 and have not been adjusted since to keep pace
    with the market and producer costs. The outdated rates creating an
    ineffective support program, coupled with the recent low levels of
    producer income, is why ASI is supporting a re-examination of the wool
    loan rate and an adjustment so that sheep producers have one effective
    risk management tool.
        The American lamb industry is currently without a market-based risk
    management program. As the lamb industry continues to face market
    challenges due to pandemic related market disturbances, lamb producers
    and feeders do not have the tools to address higher feed and input
    prices, price instability and increased market risk. The increase in
    interest rates is also going to impact sheep producers and lamb feeders
    needing to secure capital to sustain their operations. The data gaps in
    Livestock Mandatory Price Reporting resulting in the corresponding lack
    of published prices led the industry to support USDA's withdrawal of
    Livestock Risk Protection--Lamb (LRP-Lamb) in 2021. LRP-Lamb was a
    Federal lamb price insurance product and the only risk protection
    product available to lamb producers and feeders to hedge their risk.
    Animal Disease Prevention and Management
        An outbreak of Foot-and-Mouth Disease (FMD) in the United States
    would have a devastating impact on the sheep and wool industry. That is
    why the American Sheep Industry is supporting several efforts aimed at
    safeguarding sheep production and promoting business continuity in the
    face of a foreign animal disease outbreak. ASI strongly supports
    continued funding of the animal disease prevention and management
    programs established in the 2018 Farm Bill. These programs include the
    National Annual Vaccine and Veterinary Countermeasures Bank (NAVVCB)
    which is the only vaccine bank that allows USDA to stockpile animal
    vaccines and related products to use in the event of an outbreak of FMD
    or other high-impact foreign animal diseases, the National Animal
    Disease Preparedness and Response Program (NADPRP), the National Animal
    Health Laboratory Network (NAHLN), and the National Veterinary
    Stockpile (NVS). All these programs are vital to protecting the United
    States livestock industry against a foreign animal disease outbreak.
    Minor Use Minor Species Animal Drug Program
        America's sheep producers have limited means to protect and prevent
    disease in their animals as animal health and welfare are critical
    aspects for ensuring a sustainable sheep industry. The cost to bring a
    new animal drug to market is rising and many pharmaceutical companies
    are not investing in developing products for sheep. USDA established
    the Minor Use Animal Drug Program to address the shortage of animal
    drugs for minor species and uses by funding and overseeing the
    efficacy, animal safety, and human food safety research and
    environmental assessment required for Food and Drug Administration
    (FDA) drug approval. Funding for this program ceased in 2016, and a
    result the program lacks the staff and expertise to meet its mission of
    increasing the number of therapeutic drugs approved for minor animal
    species. To remedy this, ASI supports an annual allocation to USDA's
    National Institute of Food and Agriculture (NIFA) Minor Use Animal Drug
    Program (MUADP) of $5 million to fund research and development to
    support the approval of new drug products for sheep.
    Mandatory Price Reporting
        Ensuring there is not a lapse in Livestock Mandatory Price
    Reporting (LMR) is critical to the United States sheep industry.
    Unfortunately for sheep producers, LMR has not adjusted to changes in
    the lamb industry. Of particular concern is the implementation of the
    current LMR confidentiality guideline which restricts market
    information available to sheep producers. In 2011, there were 13
    reports under mandatory price reporting for lamb. Today, there are only
    five reports available, all of which are national reports released on a
    weekly basis. Of these five reports, the amount of information provided
    in the slaughter lamb report has increasingly diminished over the years
    with the data on formula traded lambs not being reported since 2020.
        The American Sheep Industry Association has proposed several
    potential changes to LMR that we believe would enhance the program's
    effectiveness for lamb producers while protecting the interests of
    everyone in the supply chain. The first recommendation is to change or
    replace the 3/70/20 Confidentiality Guideline. This guideline is not
    required by statute and current market prices have a relatively short-
    term relevance. By the time prices are reported, they only reflect past
    transactions. Prices and market activity can be reported without
    sacrificing confidentiality and the current confidentiality guideline
    by USDA is stifling the information lamb producers need to make
    accurate marketing decisions. Additionally, ASI has recommended that
    USDA amend LMR, so it reflects the unique nature of today's lamb
    industry and is in discussions on developing a lamb contracts library
    pilot program based on the recent program for cattle. ASI believes
    these changes would greatly enhance the program for all users.
    Trade
        The lamb market in the United States is heavily influenced by
    imported lamb, particularly from Australia and New Zealand, which make
    up over 50% of total lamb sales. The American Sheep Industry
    Association in response has asked successive Administrations to
    prioritize lamb export opportunities for United States producers before
    allowing additional imports. Our industry still cannot access
    potentially lucrative markets like China, the European Union, and the
    United Kingdom; this despite the opening of our market in 2021 to
    imported lamb from the United Kingdom. The domestic industry's ability
    to withstand additional import pressure at this challenging time, and
    the United Kingdom's tremendous potential for significant lamb exports
    in the wake of their departure from the European Union is a concern for
    United States lamb producers. A cautious and deliberative approach is
    necessary to ensure that while trade may be free, it is fair.
        Wool trade too remains a challenge. While we have seen an increase
    in wool shipments to China, numbers are still significantly lower than
    they were prior to the tariff retaliation. Additionally, shipping
    challenges continue to mount. The same holds true for the export of
    pelts. Prior to the implementation of tariffs, 72 percent of American
    raw wool exports and 80 percent of sheep skins were sent to China.
    Continuing to build strength in the international marketing of lamb and
    wool requires a commitment to the promotion and export of United States
    wool to export markets through strong USDA Foreign Agricultural Service
    (FAS) Program funding. ASI supports increased funding for FAS programs
    including the Market Access Program, the Foreign Market Development
    Program, and the Quality Samples Program. These programs are vital for
    providing value to America's wool producers through expanding export
    markets for American wool and sheepskins.
    H-2A Temporary Agricultural Workers
        The American Sheep Industry has a decades long history of a
    reliable, consistent, and legal workforce. Sheep ranchers depend on the
    H-2A sheepherder program to help care for and protect more than \1/3\
    of the ewes and lambs in the United States. To meet those needs, the
    industry has participated in temporary visa programs (in various forms)
    since the 1950s. As a result, sheep producers employ a legal labor
    force with an estimated eight American jobs created/supported by each
    foreign worker employed. A workable temporary foreign labor program is
    essential for the sheep industry including the special procedures for
    herding in future legislation involving immigration reform.
    Access to Animal Drugs
        With five million head of sheep, animal drug manufacturers often
    find that securing FDA approval for new, innovative, and even older
    products is not cost effective for this market. While the Minor Use and
    Minor Species Animal Health Act of 2004 (MUMS Act) is intended to make
    more products legally available for minor animal species, the current
    FDA animal drug-approval process is unworkable for the sheep industry.
    It is prohibitively expensive, which is discouraging the development of
    products for the prevention and treatment of sheep diseases in the
    United States. The lack of access to these products which are used by
    our competitors in other countries, places the United States sheep
    producers at a disadvantage, not to mention limiting their ability to
    ensure the welfare of their animals and the safety of the national food
    supply. While imported lamb may be treated with a product that has a
    USDA/Food Safety Inspection Service accepted residue level, that same
    product often is not approved for use in the United States by the FDA.
    ASI is requesting a study by the [Government] Accountability Office
    (GAO) on the MUMS Act to evaluate if the objectives set forth are being
    met with respect to sheep, the effectiveness of the incentives to
    address the high development costs, the cost and duration to bring a
    new animal drug product to market versus other countries, and to review
    the number of products for sheep in the United States relative to the
    those available in our competing markets.
    Predation
        Coyotes, mountain lions, wolves, and bears kill tens of thousands
    of lambs each year. Livestock losses attributed to these predators cost
    producers more than $232 million annually. American sheep producers
    rely on USDA/Wildlife Services, state, and county programs to
    effectively control and manage predation by state managed and federally
    protected predatory species. The Livestock protection program is
    majority funded by industry and local cooperators. Sheep producers have
    adopted many techniques to reduce predation, including the wide-spread
    use of livestock protection dogs, but access to lethal and non-lethal
    predator control methods must be maintained. We add our support for
    Congressional action to provide us more options to address avian
    predators primarily the black vulture which is expanding its range and
    increasingly the primary predator in areas of the U.S.
        Thank you for your support of the livestock industry and for
    allowing me to visit with you about our priorities.

        The Chairman. Thank you. Next, Ms. Scott, please begin when
    you are ready.

    STATEMENT OF KELSEY R. SCOTT, DIRECTOR OF PROGRAMS, INTERTRIBAL
                  AGRICULTURE COUNCIL, EAGLE BUTTE, SD

        Ms. Scott. Hihhahni waste and Wophila, Chairman Mann,
    Ranking Member Costa, and Members of the Subcommittee. My name
    is Kelsey Scott, and I am here in two capacities, as a rancher
    and direct to consumer grass-fed beef business owner, and as
    the Director of Programs for the Intertribal Agriculture
    Council, an organization that has worked with Tribal producers
    that have family operations much like mine for over 35 years.
    Home for me is on the Cheyenne River Sioux Indian Reservation
    located in the Northern Great Plains. Our family operation
    allows us the privilege to engage with local consumers amidst a
    USDA-defined food desert. Like many rural family-run
    operations, we aim to be good stewards of the land and our
    community.
        While running a cow-calf operation consists of grueling
    work, accompanied by risk of plenty, it offers fulfillment
    beyond what many have the chance to ever experience. This way
    of life, passed on to me by my family, is one that I hope to
    pass on to my own son. It is this very hope, one that I share
    with many other livestock operations, that brings me here
    today. An alarming 89 percent of agricultural producers
    nationwide must supplement their operational income with off-
    farm income in order to survive. While these folks have learned
    to be profoundly resilient, this Congress has the opportunity
    to make improvements that will provide a greater chance of
    viability for these small family livestock operations.
        To do this, Congress must understand that the set of
    solutions often proposed by large-scale animal agriculture
    stakeholder groups is an entirely separate set of solutions
    than those needed by the small family agricultural operations,
    a segment of which constitutes many of the historically
    underserved, including Tribal producers, whom I have set out to
    represent today. I urge Congress to consider the following
    solutions tailored to the needs of smaller family operations.
        Enhanced USDA services, and a cooperatorship that
    reimagines farm loans, conservation support, and disaster
    responsive programming to better serve family operations.
    Livestock operations should have the same options as crop
    growers, including market assistance, price loss support, and
    on-farm storage facility loans that crop producers have had
    access to for generations. There should be more realistic
    values attributed to livestock losses in disaster programs.
    Solutions must encompass cost-shared risk mitigation and price
    guarantee tools that are affordable and enhance a family
    operation's management, ensuring that the value received at the
    farm gate is proportional to the retail price enjoyed later on
    in the supply chain.
        Further, unrestricted and quality access to fair credit
    that models a greater appreciation for family operations as the
    multi-generational businesses they truly are will be vital to
    the future of small, family-sized farms. A lack of access to
    credit is exacerbated by the lack of financial investments in
    the operational infrastructure that otherwise ensures family
    operations can continue to steward our most important
    ecosystems.
        We must urgently address just how powerless family
    livestock operations are when there are no diversified market
    opportunities, and a lack of transparency in the marketplace.
    Livestock producers become victims to the demands of
    homogeneity and uniformity preferences that offer them nominal
    value but demand tremendous investment. Increasing market
    options and practicing rigorous, unbiased scrutiny of the
    industry monopolies that currently amass wealth at the expense
    of our livelihoods and sanity is long overdue. The
    decentralization of our food system demands scalable food
    safety regulatory requirements and increased remote meat
    inspection utilization. Keep in mind, this utilization does
    demand up front capital, and will require investment to support
    value-added production and retail market access.
        Finally, the actions this Congress takes to support smaller
    family livestock operations will require accountability when it
    comes to implementation. USDA cooperators will prove vital to
    informing agency discretion to best serve family operations.
    These priorities, if addressed, will not only strengthen this
    country's food security, but they will uplift rural economies
    by supporting living wages for family operators. I invite
    Congress to reach out to small family operators like myself to
    continue to inform how your decisions can enhance or impede our
    ability to stay in business. And I have faith that together we
    can build a future where my son enjoys a ranching livelihood
    where his take-home pay is no longer best measured in
    Meadowlark songs, sunsets on the prairie, and ``it will get
    better'' promises. Wophila for the chance to be here to testify
    today.
        [The prepared statement of Ms. Scott follows:]

         Prepared Statement of Kelsey R. Scott, Director of Programs,
                Intertribal Agriculture Council, Eagle Butte, SD
        Hihhahni waste (good morning) and Wophila, (thank you) Chairman
    Mann, Ranking Member Costa, and Members of the Subcommittee on
    Livestock, Dairy, and Poultry, for the opportunity to appear before you
    today to discuss animal agriculture stakeholder priorities.
    Introduction
        My name is Kelsey Scott, and I am here today in two capacities--as
    a rancher and direct-to-consumer grass-fed beef business owner, and as
    the Director of Programs for the Intertribal Agriculture Council (IAC);
    an organization headquartered in Billings, Montana, that has, for 35
    years, worked alongside Tribal producers throughout the United States
    to help develop their agriculture resources. As recent as the 2017
    Agriculture Census, despite Tribal producers' agriculture operations
    accounting for more than six percent of U.S. farmland, our agriculture
    operations account for less than one percent of U.S. agriculture
    sales.\1\ IAC works with Tribal producers in navigating and accessing
    USDA programs that are not necessarily tailored to meet the needs of
    Tribal producers, and the majority of agriculture producers, generally.
    ---------------------------------------------------------------------------
        \1\ USDA NASS, 2017 Census of Agriculture, Highlights, American
    Indian/Alaska Native Producers (October 2019), https://
    www.nass.usda.gov/Publications/Highlights/2019/2017Census_
    AmericanIndianAlaskaNative_Producers.pdf.
    ---------------------------------------------------------------------------
        Home for me is on the Cheyenne River Sioux Indian Reservation,
    located in the Northern Great Plains of South Dakota; a vast landscape
    which many of my Lakota ancestors deserve credit for stewarding into
    the robust, resilient prairie ecosystem that is now home to 5.3% of the
    United States' beef cow inventory--the fifth highest in the country.\2\
    Our family operation allows us the privilege to engage with local
    consumers amidst a USDA defined ``food desert''. Our unofficial ranch
    motto is ``to be good stewards of the land and our community.''
    ---------------------------------------------------------------------------
        \2\ South Dakota Governor's Office of Economic Dev., Livestock
    Development (2023) https://sdgoed.com/key-industries/livestock-
    development/.
    ---------------------------------------------------------------------------
        As a fourth-generation rancher on lands that include my great-
    grandfather's original allotment on the Cheyenne River Sioux
    Reservation, land stewardship and animal husbandry have been ingrained
    in me since birth. While running a cow-calf operation consists of
    grueling work, accompanied by risk of plenty, it offers fulfillment
    beyond what many have the chance to experience. It is a way of life
    that was passed on to me by my family, and it is one I hope to pass to
    my children. It is for this reason, as well as for the many other
    livestock producers who hope for the same opportunity, I am here with
    you today. I hope that in sharing how profoundly resilient one must be
    to carry out this way of life, you will appreciate the ways in which
    you can make improvements that will provide a greater chance of
    viability for the livestock producers who see the least help when the
    unforeseen and unplanned circumstances occur; detrimentally impacting
    their livelihood, stifling rural economies, and jeopardizing this
    Country's own food security.
        Family operations are the cornerstone of rural communities
    throughout the United States. It is family operations that are
    responsible for stewarding what remains of this country's topsoil; the
    very lifeblood of our agricultural industry. We sequester carbon at
    rates unrealized in any other sector of the industry. We maintain safe
    haven landscapes where wildlife fauna can complete their mating rituals
    each spring so that the gamesmen and -women can enjoy their annual
    hunts each winter. We offer our own reputation as the face of
    agriculture while we fortify rural economies; conducting our business
    in Small Town America. Serving on school boards, volunteering at the
    polling stations, and joining in county-wide trash clean up days, we
    find ways to model quality U.S. citizenship, and we so rightly deserve
    a more meaningful representation in Congressional action as a response
    to the contributions we make to this country.
        But to date, Congress has failed to respond to the very real needs
    of the majority of family operators in ways that will guard against
    farm and ranch closures and financial ruin. With nearly a decade of
    experience providing technical assistance as a USDA Cooperator, it is
    urgent that the realities endured by the majority of family farmers and
    ranchers guide Congress's actions in agriculture-related legislation.
    Identifying Gaps in USDA Services to Small Family Operations
        Recently, USDA's Economic Research Service published data on
    Farming and Farm Income, which noted that ``[f]amily farms (where most
    of the business is owned by the operator and individuals related to the
    operator) of various types together accounted for nearly 98 percent of
    U.S. farms in 2021[, and] [s]mall family farms (less than $350,000 in
    GCFI) accounted for 89 percent of all U.S. farms.'' \3\ A significant
    reality that has yet to guide meaningful legislation in recent years is
    that the approximately 89 percent of U.S. farms that constitute small
    family operations represent households that must ``typically rely on
    off-farm sources for the majority of their household income. In
    contrast, the median household of operating large-scale farms earned
    $486,475 in 2021, and most of that came from farming.'' \4\
    ---------------------------------------------------------------------------
        \3\ USDA ERS, Farming and Farm Income (last updated March 14,
    2023), https://www.ers.usda.gov/data-products/ag-and-food-statistics-
    charting-the-essentials/farming-and-farm-income/.
        \4\ Id.
    ---------------------------------------------------------------------------
        The most meaningful takeaway that the Subcommittee can have from my
    testimony is that the set of solutions often proposed by large scale
    animal agriculture stakeholder groups is an entirely separate set of
    solutions than those needed by the family agriculture operations that
    account for 89% of producers in the United States. If Members of
    Congress want to meaningfully and adequately represent constituents who
    have family operations in their districts, all while addressing the
    consolidation and homogenization of our food system, then I would
    encourage Congress to prioritize the design of a solutions toolbox
    tailored also to the needs of smaller family operations. This toolbox
    would include:

      1.  Enhanced USDA Services & Programmings Customized for Family
                Operations

      2.  Cost-shared Risk Mitigation and Price Guarantee Tools

      3.  Unrestricted and Quality Access to Fair Credit

      4.  Meaningful Financial Investment in Infrastructure

      5.  Diversified Market Opportunities & Transparency in the
                Marketplace

      6.  Scalable Food Safety Regulatory Requirements & Increased Remote
                Meat Inspection Utilization

      7.  Investment in Value Added Production & Retail Market Access

      8.  Receptivity to Feedback on 2023 Farm Bill Implementation Process
    Solutions Tailored to the Needs of Family Operations and Historically
            Underserved Producers
    Enhanced USDA Services & Programmings Customized for Family Operations
        Enhanced county-level USDA services are critical to family
    operations. Among these enhanced services is the need for inclusive,
    renovated farm lending offerings, updated farm programming and
    conservation resources, and more flexible and responsive disaster
    assistance. Coupled with elevated investment in USDA cooperatorship,
    Congress can ensure dynamic accommodation and representation of the
    specific producer needs which tend to vary drastically from one county
    to the next. While the farm bill presents us with a unique opportunity
    to establish national efforts to support our agricultural and food
    systems, many aspects of implementation at the county level encompass
    efforts towards exclusion, rather than inclusion. This can be largely
    attributed to a mindset still practiced today in many USDA offices that
    producers should not need, or should not qualify for, the support
    initially intended by farm bill programming.
        Disaster programming available to livestock producers does not
    carry the same weight in support as appreciated in other sectors of the
    industry. Each producer's livestock valuation is based on an
    institutionalized pricing index that is updated (at best) annually by
    the USDA. This pricing valuation is not inclusive of speciality
    production practices and voids appreciation for a producer's uniquely
    specific genetic pool they've curated to match their environment over
    generations. Additionally, this pricing index only compensates
    producers for a singular unit of production lost, rather than
    appreciating that when a livestock animal dies or loses their
    offspring, the entire production unit falls out of the operation. This
    displaces future income potential for the producer and also results in
    a significant loss of investment that had been placed in the production
    unit. Livestock producers therefore realize a financial hardship across
    several production seasons but can only find compensation for a short
    term income disruption through current USDA disaster programs.
        Smaller family operations are often home to several operators who
    are reliant upon the pooling of resources in order to accommodate
    production demands. Certain disaster programming payment schedules do
    not account for this form of enterprise diversification. Further, many
    programs are absent of appreciation for the elevated livestock care
    apparent on family operations; this contributes to further disparity in
    disaster assistance programming valuation realized by family operators.
        In addition to these programmatic variances from real-world
    experiences of family farmers and ranchers, these producers must
    navigate confusing application processes, limited and unaccommodating
    sign-up periods, and county office scrutiny that ultimately dissuades
    producers from applying. Not only does USDA disaster programming need
    to be expanded upon for family livestock operations, but the services
    provided to these individuals at a county level could stand to be
    enhanced as well. In other words, as Federal assistance programs are
    updated to more adequately address the needs of family livestock
    operations, we need to ensure County Office services to these
    stakeholders adopt a mindset of enhanced, expanded, and inclusive
    outreach and programmatic access for our producers who are laboring
    day-in and day-out to provide for their families, communities, and this
    country.
    Cost-shared Risk Mitigation and Price Guarantee Tools
        Cost-shared risk mitigation and price guarantee tools must be
    created to do more for the livestock producer than hedge prices in the
    existing Cattle Market Exchange; these tools need to be affordable and
    must enhance--not prohibit--a manager's ability to adapt.
        Accessing the current risk mitigation and price guarantee tools
    require time and financial resources that the majority of family
    operations do not have the liberty to expend. We operate at a level
    where economies of scale do not yet come into play. Each animal, acre,
    or unit of production that we are able to attain in our operation's
    expansion comes with a direct cost increase that offsets potential
    profit from expansion.
        With this limited ability to expand production, family operators
    are under extreme pressure to elevate income derived per production
    unit. One common way family operations can attain this increase in
    income per unit, is by differentiating their product into a specialty
    commodity. The underlying goal in this diversification is to have a net
    gain realized in the valuation of your livestock in comparison to the
    industry standard. By growing an animal that better withstands the
    climate, raises a larger calf, or presents more desirable traits,
    family producers claw ahead incrementally with each elevated investment
    (often in the form of time, money, and expertise). However, current
    risk mitigation and price guarantee tools do not accommodate an
    awareness of this investment. Family producers that have made the
    effort to create an above industry standard animal through strategic
    management approaches have limited ability to protect this investment.
    And, in the instance there is a coverage tool that can offer such
    protection, the producers are often too overextended financially to
    take up the offering. For this reason, cost-share support for family
    operations to be able to access risk mitigation and price guarantee
    tools proves invaluable.
    Unrestricted and Quality Access to Fair Credit
        Family operations deserve unrestricted and quality access to fair
    credit that models a greater appreciation for family operations as the
    multi-generational businesses they truly are. We must abolish the
    suggestion that family operations have to be subsidized by off-farm
    incomes, we need to prioritize lowering the average age of producers,
    and we must focus on increasing equity for the smaller family farms
    that are the foundations for rural communities. With a credit system
    that is so intentionally tailored to the needs of corporate entities,
    family farms are reliant upon the Federal Government to lead this
    massive undertaking. The result? The next generations of family farmers
    assume the debt of their predecessors, oftentimes beginning at a
    deficit.
        Like most family operations, in order to stay in business, I seek
    an off-farm income to subsidize the nominal profits that our on-farm
    enterprises can achieve. This is a reality endured by most family
    operations. In my work with the IAC, I've been able to get to know
    hundreds of family operations, and I have yet to meet a single producer
    not reliant on some form of an off-farm income.
        When family operations get to enjoy profit margins in our
    businesses, it is because the weather patterns, market trends, and
    inflation rates were in our favor that production season. And when we
    do not see profit margins, we are told we are bad managers, when the
    truth of the matter is that the system is not designed for us to amass
    profits as a family operation. Even in the best years, though, most
    financial institutions do not allow for us to account for a livable
    wage in our cash flow. In fact, my local FSA loan officer once told me
    that ``producer wages'' are merely ``owner's withdrawal'' and that my
    cash flow could withstand a quicker repayment plan once we remove that
    expenditure.
        I suggested to the loan officer that without producer wages, I
    would need an operating loan to accommodate the following production
    year's cash flow. Laughably, they suggested that using my off-farm
    income to cover on-farm operating expenses would be a better route,
    given I wouldn't have the interest costs to worry about that fall.
    Unsurprisingly, the next year I found myself in a similar situation as
    most other family operations--floating my annual operating expenses on
    credit cards, after the local bank that my family has been loyal
    customers to for three generations was not able to ``find enough
    collateral to extend credit,'' since I didn't have my calf crop on the
    ground yet.
        With a credit system that does not equitably serve us as
    generational businesses that span across multiple lifetimes, we
    continually overextend ourselves on our balance sheets just to
    accommodate a banking system that better serves the large scale
    producers. This is a reality that needs to be addressed, or young and
    beginning farmers and ranchers will never be able to step in as the
    next generation of producers, and the family operations will go
    extinct.
    Meaningful Financial Investment in Infrastructure
        Meaningful financial investment in livestock infrastructure is
    necessary to withstand extreme weather conditions, adopt climate-smart
    practices, and update decades old land management developments.
    Infrastructure investment will help keep family operations stewarding
    our most important ecosystems that prop up this country's agriculture
    economies.
        Like most family operations in rural America, we must navigate
    expansive landscapes void of the necessary infrastructure conducive to
    withstanding extreme weather. For example, our closest gas station is
    25 miles away, and the grocery store we frequent is 50 miles further.
    When we sell our calves, we ship them 98 miles to a livestock auction
    barn with the slogan, ``An Oasis on the Prairie.'' While traffic does
    not usually burn up our time, the vast distances we have to travel for
    basic accommodations, do. Our extreme rural existence also drives the
    prices of basic living expenses higher, and demands a forward thinking
    resourcefulness when it comes to how we extend our investments into
    infrastructure on the landscape.
        Production at this scale embraces tradition and culture that is
    rooted deeply in the ``help thy neighbor'' teaching. This friendly
    rural value system may currently be why family operations are able to
    remain in business. At present, this teaching results in the sharing of
    dilapidated infrastructure resources well beyond their useful lifespan.
    For instance, a watering location shared by several herds, loading
    corrals frequented by multiple producers, an irrigation line that is no
    longer efficiently distributing water, and beyond. Producers can be
    found sharing because they can't afford not to. When this exchange
    works, it's great. However, an over extended resource can quickly serve
    as a point of contention for neighbors. Overwhelmed by the lack of
    support they are receiving by the industry, producers have no choice
    but to ``blame thy neighbor'' for a lack of functional infrastructure
    that is limiting their ability to manage.
        Approaching the investment in infrastructure must accommodate an
    awareness of individual operation demands. Present USDA infrastructure
    support does not adequately account for the supply-chain disruptions,
    inflated costs of materials and present-day labor shortages.
        Additionally, most infrastructure support is funded through
    competitive ranking processes and family operations often do not score
    high enough to receive the financial support necessary for otherwise
    critical infrastructure. This shortfall is especially true for many
    family operations that are so small they are currently sharing
    infrastructure access with their neighbors.
        Unique to producers on Tribal lands, is a reality where livestock
    producers function in a quasi-shared leasing management system. The
    functionality and responsiveness of Bureau of Indian Affairs and Tribal
    Land Offices adds in an additional layer of complexity that oftentimes
    results in the expense of a producer's timely eligibility for current
    infrastructure support.
        A heavy infrastructure cost-share offering must be extended to
    family operations, perhaps offering a prioritization of support to
    efforts of producers cooperating amongst one another and operating on
    Tribal lands.
    Diversified Market Opportunities & Transparency in the Marketplace
        Family operations are reliant upon extremely limited market
    opportunities; many, like myself, rely upon access to a couple feasible
    entry points. Lack of market entry points for my livestock results in
    an undervalued commodity product. Within each of these limited market
    opportunities, exists demand for homogeneity and uniformity in my
    livestock herd. Penalized for lack of uniformity; the same uniformity
    undermines our ability to withstand nature's woes.
        Conforming to this demand benefits industry monopolies, vastly
    undermines resiliency offerings of diversified livestock herds, and is
    reliant solely on my own investment. Greater scrutiny of industry
    monopolies (such as aggregators and corporations) that amass wealth at
    the expense of our livelihoods and sanity is one of several steps
    needed to enhance market opportunities and transparency in the
    marketplace.
    Scalable Food Safety Regulatory Requirements & Increased Remote Meat
            Inspection Utilization
        Livestock producers hoping to contribute to their local food system
    will benefit greatly from scalable food safety regulatory requirements
    that acknowledge small scale processing immensely reduces potential for
    cross contamination. Further, embracing today's technology to increase
    remote meat inspection capabilities will significantly increase the
    prevalence of local meat purchasing options.
        DX Beef is my family's direct-to-consumer grass fed beef business.
    Our livestock leave the ranch for the first time ever when we load them
    in the 26 horse trailer on slaughter day. We drive them 45 minutes to
    a mom and pop butcher shop in a town of less than 700 people. Upon
    arrival, we unload them into a facility that will only be occupied by
    livestock from a handful of operations throughout the entire week.
    Eventually, I'll pick up the product and we will typically feed a
    maximum of 15-20 households per month, all within the state of South
    Dakota (most often, within the tri county area).
        Demand for this butcher's services and access to the limited state
    certified meat inspection is so high that my slaughter dates are
    scheduled anywhere from 12-18 months in advance. When the weather does
    not accommodate a slaughter delivery date, we are simply out an entire
    month's product, as our butcher is not able to easily reschedule with
    the inspector without further disrupting his clientele base.
        In addition to restrictive inspection access, production at my
    scale is further encumbered by out of line food safety regulatory
    requirements. I'm required to meet similar food safety regulation
    standards of slaughter plants that process hundreds of animals per 12
    hour shift. I've had instances in which the state lab testing timelines
    have impeded my delivery schedules by nearly 2 weeks. I do not
    highlight these realities to merely complain about the system. Rather,
    I hope to demonstrate how nationally enforced regulatory requirements
    intended to keep the masses safe actually create a disadvantage to
    family livestock operations that would otherwise love to contribute to
    local meat production efforts.
        An increase in market opportunity and value-added production
    potential for the producer can be matched by a localization of food
    dollars that will have a net positive income on the communities that
    the current food system most significantly exploits. Ultimately, this
    can contribute to the decentralization of our meat supply chain. The
    result would be a more informed consumer, as local meat offerings will
    once again connect consumers with their farmers.
    Investment in Value-Added Production & Retail Market Access
        Continued investment in value-added production and retail market
    access to fortify prevalence of local meat purchasing options available
    to consumers.
        Enhanced local market entry is not feasible until the underlying
    issues with access to credit are first addressed. With each
    diversification we pursue in an attempt to increase our ability to feed
    our communities, we have to stand up an entirely new enterprise on-
    farm. We have to do this enterprise development from the profits, or
    lack thereof, from our already existing cash flows.
    Receptivity to Feedback on 2023 Farm Bill Implementation Process
        Congressional intent advanced through the farm bill is not always
    matched in agency implementation. The actions this Congress takes in
    the upcoming farm bill require agency accountability through
    implementation to ensure that improvements to the animal agricultural
    sector for operations of all sizes are actually achieved.
        I can't, in good faith, use this opportunity to directly speak to
    many of the issues presented by my fellow panelists before you today
    without highlighting the glaring differences in the reality of their
    stakeholders, and that of ours. The current livestock industry has been
    systematically designed to exploit family operations. The reality is
    that few of the 12% of producers who do not have to seek income outside
    of their agriculture operations to make a liveable wage represent the
    historically underserved at USDA. The missing piece for the
    historically underserved producers, and their fellow producers in the
    89 percent is not hard work. Rather, it is laws and policies that
    create barriers to agriculture production providing a respectable,
    living wage for the majority of this nation's producers.
        I have hopes that these stories will shed light in a way that
    inspires longer conversations that span far beyond this farm bill
    season. This country's small family farmers and ranchers--especially
    our historically underserved stakeholders who are working zealously to
    hang on to operations passed down to them or working to bring new lands
    into production--are the strongest neighbors, partners, and
    cornerstones for the Tribes, counties, states, and regions from which
    we come. I respectfully ask this Subcommittee to in turn be good
    partners for small family farms, historically underserved producers,
    and the 89 percent who, despite their best efforts, cannot live off
    their agriculture operations alone. This type of partnership will only
    serve to enhance this nation's food security and food economies.
    Conclusion
        I want to conclude by thanking the Subcommittee for inviting me
    here today to share with you the priorities of the stakeholders that
    include small family operations, Tribal producers like myself, and more
    broadly, historically underserved producers. Our commitment to the
    land, our families, our rural communities, and this nation's food
    systems is unparalleled. These priorities, if addressed, will not only
    strengthen this country's food security, they will uplift rural
    economies by supporting living wages for producers. I hope that this
    Subcommittee, and the Agriculture Committee as a whole, will continue
    to reach out to smaller family operators like myself to inform how your
    decisions can enhance or impede our livelihoods. And I have faith that
    together, we can build a future where my son enjoys a ranching
    livelihood where his take home pay is no longer best measured in
    Meadowlark songs, sunsets on the prairie, and ``it'll get better''
    promises.

        The Chairman. Thank you all for your important testimony,
    and for joining us this morning. At this time, Members will be
    recognized for questions in order of seniority, alternating
    between Majority and Minority Members, and in order of arrival
    for those who joined us after the hearing convened. You will be
    recognized for 5 minutes each in order to allow us to get to as
    many questions as possible. First, I recognize myself for 5
    minutes.
        I am concerned with the Biden Administration's rulemaking
    under the Packers and Stockyards Act, including their proposed
    rules on transparency, inclusive competition, and market
    integrity. USDA has stated that its intent is to clarify that
    parties do not need to demonstrate harm to competition in order
    to bring an action under Section 202(a) and 202(b) of the
    Packers and Stockyards Act. These rules, if finalized, would
    profoundly alter the operation of American protein markets, and
    have devastating impacts on the quality, efficiency, and
    innovation of America's animal agriculture.
        Producers would lose the ability to reap the financial
    rewards of their superior performance and product, and
    customers would be saddled with higher costs for lower quality
    goods. These rules are an egregious example of regulatory
    overreach that will harm producers and consumers alike.
        First question for you, Mr. Burns, and I know you talked
    about this a little bit in your testimony, but if finalized,
    what effect do you think these rules will have on the quality
    of animal protein available to consumers? You talked about the
    financial impact, but what do you see so far as the quality
    impact for producers, and also consumers?
        Mr. Burns. Thank you, Chairman Mann, for the question, and
    we certainly agree with all of the statements you made within
    the question. I think the impact, both on quality--would be
    significant and on the price that consumers pay would be
    significant. Adding costs to the industry will result in higher
    food cost, and we are trying to recover from a period of
    historic food inflation, so adding transactional cost to the
    industry at this time would be a mistake for American
    consumers.
        And quality will suffer. If the industry cannot reward
    producers of the highest quality, or niche, or specialized
    products, there will be no economic incentive for producers to
    produce those products for us to be able to supply to our
    customers and consumers.
        The Chairman. Okay. Thank you. The next question will be
    for you, Mr. Wilkinson. On January 19, 2023 USDA APHIS proposed
    a rule that would require electronic ID, or EID, tags for
    purposes of animal disease traceability and as a requisite for
    official interstate movement of certain cattle and bison. While
    I understand the goals here, it would obviously come at an
    added cost for producers in my district and across the country.
    In the past APHIS has provided free EID tags and financial
    assistance for related infrastructure to comply with the
    regulation. Mr. Wilkinson, do you believe Congress should
    bolster USDA animal traceability efforts to further promote
    ongoing disease prevention, including mitigating the cost to
    producers, and other entities like sale barns for compliance
    with the EID rule?
        Mr. Wilkinson. Mr. Chairman, I believe that if Congress
    doesn't proceed in that fashion, we are exposing the American
    beef herd to greater and greater risk. All we have to do is
    look to poultry and pork and see the risks that they are
    facing, and what is offshore. The foot-and-mouth disease has
    spread across literally 70 percent of the cattle area in the
    world, and unless we have an effective system of tracing
    potential outbreaks, we run a serious risk of exposing our beef
    herd to disastrous consequences.
        America's cattle producers would welcome the ability of
    having assistance on the tagging, but the mood shift over the
    last 15 years in our industry has been remarkable. We have seen
    cattle producers say absolutely no way am I going to tag my
    cattle to yes, I understand the importance of protecting the
    herd. The ability to do that is going to come through an
    electronic means. And not only do we think that it needs to get
    into the breeding herd, we feel, on a goal, it needs to get
    into all of the cattle sector. And that is not going to come
    without cost to the producers.
        They are willing to shoulder the burden on a lot of that,
    but we need some assistance. But yes, Mr. Chairman, it is
    critically important.
        The Chairman. All right. Thank you. Last question, with the
    minute I have remaining, Mr. Hays, we heard in Mr. Burns'
    testimony today that Proposition 12 ruling will embolden anti-
    animal agriculture groups to pursue ballot measures in other
    states and localities, which would open the door to chaos for
    not only meat products, but many other agricultural
    manufactured products as well. Can you elaborate on how this
    decision sets a dangerous precedent for interstate commerce and
    its impact on your industry?
        Mr. Hays. Thank you for the question, sir. Yes, what
    California used was the way some production practices don't
    meet their moral standard. They had to pull the language on
    animal welfare, they had to pull the language on public safety,
    because those were just not true. And so all they were left
    with was their moral standard. So this opens the door for
    anyone in any state to say something doesn't meet their moral
    standard, and they can start restricting it from coming from
    another state.
        The Chairman. Yes. Thank you. I see my time has expired.
    Next I recognize the gentleman from California, Mr. Costa, for
    5 minutes.
        Mr. Costa. Thank you. I was interested to hear your
    reactions to the Supreme Court's decision regarding Prop 12 in
    California. It has been a challenge, in California, to adjust
    to it, and there are a lot of decisions the Supreme Court makes
    that I don't support or agree with. I guess I am wondering what
    your solution or alternative is. In California, we--for better
    or worse--have to live with it and adjust to it. But, it has
    been a challenge. But I want to move on.
        Mr. Burns, over the past 6 months or so, supply chain
    issues have improved, but what lessons have the meat packers
    taken from the supply chain crisis that, I don't assume that we
    are over with pandemics. I think that this is something that we
    need to be better prepared for in the future. So what lessons
    are there to learn from this?
        Mr. Burns. Well, I think that we have to be careful, in
    terms of setting long-term policy based on black swan events.
    We do have to be prepared; but, we have to be mindful of the
    fact that some of the dynamics that played into that were
    actually expected. From 2015 through 2020 the cattle herd
    expansion happened. We actually happened to roll into the
    pandemic with a very, very large record cattle herd. And that
    is not something that I know--that I think could have been
    predicted, or at this point.
        Mr. Costa. But--no, I know--I understand, but I have family
    in the cattle business, and I think you have to be prepared for
    the unexpected. I mean, we have had pandemics, historically,
    throughout world history. I think when we talk about
    perishables and supply chains, cold chains, I think we--those
    are areas that we can look to the future to better protect
    ourselves, don't you think?
        Mr. Burns. Well, one of the issues we ran into was
    processing capacity. We really, as an industry, can't afford to
    overbuild and have excess capacity that sits idle outside of
    these unique events. That would be underutilized capacity, and
    it is just not a cost, as an industry, we can absorb. So yes,
    there are opportunities throughout the supply chain to be
    better, but we need to be mindful of economic reality----
        Mr. Costa. I mean, there were all sorts of impacts. I mean,
    we have had our export ability--and I want to thank you for
    making reference to the Market Access Program, and others that
    have been very important, but we have products that we can
    compete in, and ship in to foreign markets, and we can't get
    consignment on containers--ships, and that has been a problem.
        Mr. Burns. Yes.
        Mr. Costa. And we have had internal problems with our
    domestic supply chain issues that relate to our freight
    capacity.
        Ms. Scott, there have been numerous USDA programs that have
    been rolled out that bring more processing online. Have you
    seen any benefit to these programs in your area?
        Ms. Scott. Absolutely. I think that, especially in the
    communities where we have seen these most recent offerings, the
    extra capacity is realized as a community service. There is now
    access to local processing opportunities. Producers are able to
    diversify their income streams.
        Mr. Costa. Do you think we can improve on that in the farm
    bill?
        Ms. Scott. Absolutely. I think further investment in this
    space, as well as expanded accommodation for identifying where
    current processing capacity exists and being able to more
    robustly----
        Mr. Costa. Yes. And I think, for all of the witnesses, part
    of the struggle I am having--I think many of us on the
    Committee here, as we reauthorize the farm bill, is that many
    of the titles here where we have popular programs, whether it
    is with EQIP, or whether it is market access, or whether it is
    NRCS, are oversubscribed. And how our producers around the
    country are utilizing them. As we look in the farm bill to
    provide opportunities for those successes to continue, any
    comments?
        Mr. Wilkinson. Who were you addressing the comment to, sir?
        Mr. Costa. To whoever would like to respond.
        Mr. Wilkinson. Well, the utilization of EQIP, and other
    programs that you just mentioned, are critical to the cattle--
    --
        Mr. Costa. Yes. The problem is they are oversubscribed, and
    so how do we deal with that in the farm bill?
        Mr. Wilkinson. Well, it--I guess that would depend upon the
    definition of oversubscribed.
        Mr. Costa. They are popular. A lot of people want to
    utilize them.
        Mr. Wilkinson. Well, sometimes having a popular product is
    a good thing, and----
        Mr. Costa. No, I know, so how do you create more
    opportunities?
        Mr. Wilkinson. Well, I think as long as you offer a
    reasonable rate of return on a voluntary basis for that
    producer to participate, what--let us go with the programs.
        Mr. Costa. Yes. Well, I am just figuring how we create more
    opportunities. My time has expired. I was very interested in
    talking about the comments, the sea change on tagging. Having
    been from the dairy industry, obviously we identify our cattle
    all the time, but I think it is important that we continue to
    work on this. Thank you.
        The Chairman. I now recognize the gentleman from
    Pennsylvania, the Chairman of the full Committee, Chairman
    Thompson.
        Mr. Thompson. Thank you, and in response to my friend from
    California, I would say promoting the SUSTAINS Act--or SUSTAINS
    Law, which allows us to expand funding for conservation using
    private-sector dollars. And there is a lot of interest out
    there.
        Ms. Hubbard, thank you again for being here. Can you
    elaborate on how consumer interest in sustainability is
    benefitting the sheep industry?
        Ms. Hubbard. Sure. That is a great question, and
    sustainability is key for the sheep industry. We have such a
    great story to tell, from our animal stewardship, the
    conservation, the passion that we put into raising of our
    products, both meat and wool. The industry is currently working
    on supporting further research so we can fine tune those
    messaging that we can get out to the consumer.
        Mr. Thompson. That is great. From what I am understanding,
    the sheep industry is struggling with access to animal drugs.
    Is the Federal Government responsive to those concerns?
        Ms. Hubbard. Right now drug manufacturers--it is just not
    profitable for them to produce for our industry, being so
    small. There is a lack of access to products used by our
    competitors, all of the imported lamb coming in, and it really
    puts our industry at a significant disadvantage. We are asking
    the Committee to mandate a study on barriers of minor-use
    animal drugs to work toward bioequivalent approval through
    USDA.
        Mr. Thompson. Very good. Well, thank you. Mr. Wilkinson, as
    you pointed out in your written testimony, Livestock Mandatory
    Reporting, or LMR, is a critical tool for cattle producers, but
    as you also know, in the wake of the pandemic, there were a
    variety of obstacles and competing legislative priorities that
    thus far prevented a formal multi-year LMR reauthorization by
    Congress. In your opinion, have the concerns surrounding those
    obstacles been addressed, and is it now time to return focus to
    a longer-term extension effort to provide more certainty to
    producers?
        Mr. Wilkinson. Mr. Chairman, absolutely. This is way past
    overdue. I know that there has been a lot of bills undertaken
    by Congress, and a lot of discussion, but a full
    reauthorization of LMR is critical.
        Mr. Thompson. Are there any of the other witnesses wish to
    weigh in on that?
        Mr. Burns. Just one comment. We support, and have supported
    since 2019, a full reauthorization. We would ask that it be
    freestanding legislation, not tied to other pieces of
    legislation. We think it is a successful program, and important
    enough that it needs its own freestanding bill.
        Mr. Thompson. Thanks, Mr. Burns. Any others? If not, I will
    move on to my next question, for Mr. Hays. As you know, in
    March the Department of Agriculture announced an extension of
    their time-limited trial allowing eligible New Swine Slaughter
    Inspection System, or NSIS, pork packing plants to operate at
    higher speeds through the end of November as the Department
    continues to collect a variety of data that relates to worker
    safety. From a producer perspective, can you talk about the
    importance of this trial, and the need for a permanent
    solution?
        Mr. Hays. Yes, Mr. Chairman. The line speed issues are very
    critical to pork producers. We run very close on capacity when
    it comes to getting pigs harvested, so any change in the amount
    of pigs we can harvest per day has a great impact on the market
    price of pigs. We don't have a real long shelf life. When a pig
    is ready to be marketed, it needs to move. So, we have been
    testing this for a number of years. It has been proven safe for
    workers, safe for human health, and we would certainly like to
    see the line speeds--the new rules that were proposed a number
    of years ago in place permanently on line speeds. But we do
    appreciate the pilot program, we appreciate that they are
    continuing the line speeds as they continue to study it, but we
    would appreciate a permanent solution.
        Mr. Thompson. Absolutely. Yes. And, Mr. Zimmerman, the
    ongoing Highly-Pathogenic Avian Influenza outbreak has been
    devastating the poultry producers in the U.S. More than 58
    million birds have been affected--ducks, turkeys, poultry--
    across 47 states, including Pennsylvania. Can you walk us
    through how your organization has been working with USDA to
    address the outbreaks, educate producers and consumers, and
    enact protocols that will help prevent spread and future
    outbreaks?
        Mr. Zimmerman. Thank you. As I said in my testimony,
    compared to the 2015 outbreak, we are doing much better, and we
    have had a lot of--great lessons have been learned. The virus
    this time has a little bit of--it has had some changes. It is
    more heat resistant. The wild bird population has a much higher
    viral load, but you could see there was much less farm to farm
    spread, and that is definitely because of our increase in
    biosecurity. And our state and national organizations, along
    with APHIS and USDA, have been great in educating both the
    producers and the processors on how best we can manage our
    biosecurity practices to limit that farm to farm spread.
        So I think we have come a long way in eliminating that
    spread. We have to look at other options in the future, and
    that is why we are open to talking about vaccines, and other
    things such as that.
        Mr. Thompson. Very good. Thank you, Mr. Chairman. My time
    has expired.
        The Chairman. Thank you. I now recognize the gentlewoman
    from Colorado for 5 minutes.
        Ms. Caraveo. Thank you. And thank you to you, Chairman
    Mann, and Ranking Member Costa, for hosting our hearing this
    morning, and to all of our panelists. Thank you so much for
    taking the time to provide your testimony today. It is
    difficult to overstate the importance of livestock in Colorado:
    66 percent of the states's over $7 billion in agricultural cash
    receipts can be attributed to livestock, so I am very grateful
    to hear from you all this morning on your stakeholder
    priorities.
        While our number one agricultural commodity is cattle,
    Colorado's market share of sheep and lambs rank second in the
    nation, and Colorado wool production ranks fourth. In recent
    years the lamb industry, like others--farmers and ranchers have
    faced unprecedented volatility and drastic price swings.
    However, American lamb producers do not have a futures market,
    or active insurance products, to help hedge against these price
    swings. So, Ms. Hubbard, you go into this somewhat in your
    testimony, but what would you recommend that risk management in
    the lamb industry look like to provide a stronger safety net
    for our producers and our wool growers?
        Ms. Hubbard. It is really crucial, when we are talking
    about risk management, that we work on that mandatory price
    reporting. That is where all of our formula prices, our
    contract prices--we have a growing non-traditional market
    across the country, especially in the East, but it is growing
    across the country. And that, unfortunately, isn't captured
    within that price reporting, so we are at a huge disadvantage
    there, not being able to capture those numbers. And as I did
    mention in my verbal testimony, we really need some significant
    changes to that confidentiality, the 3/70/20 rule. So that
    would help us significantly.
        Ms. Caraveo. Thank you, Ms. Hubbard. And, even though we
    have had a very good winter, in terms of snowpack in Colorado,
    drought continues to be a significant issue in the West. So for
    Ms. Scott and Mr. Wilkinson, you touched on disaster assistance
    in your testimonies. How would you recommend we improve our
    existing programs to ensure that our livestock producers,
    especially small producers, are getting timely, adequate
    assistance with extreme weather events, such as drought?
        Mr. Hays. I am sorry, I thought you were addressing Ms.
    Scott. With--on--yes, I--in the pig industry, drought affects,
    obviously, the feedgrain production, and so--we did have some
    drought issues this winter, but hopefully we have a better
    growing season this summer. We rely on our grain producing
    partners for that, not so much for forage crop production. So I
    will give back my time.
        Ms. Caraveo. Yes, and I am sorry, I apologize, I said Scott
    rather than Hays. Mr. Wilkinson, any thoughts?
        Mr. Wilkinson. Yes. Thank you for the question, because it
    is critical, both on the forage side and on the grazing side,
    the total rainfall. And having those programs there have really
    benefitted cattle producers the past 4 or 5 years. And I have
    to give hats off to Congress, because there were some programs
    that you put in place for cattle producers that have really
    been helpful. And continuing those programs, and adequately
    funding those programs, our Livestock Risk Protection Program,
    is critical. So thank you. We don't get to say thank you a lot,
    and in this case, from America's cattle producers, please
    continue that program.
        Ms. Caraveo. That is always great to hear. Switching topics
    again, for Mr. Burns this time, your testimony touches on how
    member companies contribute to educational opportunities,
    affordable housing and childcare within rural communities in
    which they operate. I know that that is a big part of what one
    of our producers in Greeley does. How can we better leverage
    private company investments in order to support, develop, and
    invest in our rural communities?
        Mr. Burns. Well, thank you for the comment on that. What we
    are seeking is more public-private partnerships on that. Our
    companies have made significant private investment. They care
    about the rural communities in which they operate, and most of
    our companies' plants are in rural communities. So perhaps the
    farm bill is an opportunity to look at increased funding to
    develop those educational opportunities, clinics, health
    clinics. Anything that can improve the quality of life in our
    rural communities, we would certainly be in favor of more
    funding for.
        Ms. Caraveo. Those are things that are very much
    appreciated in rural communities like the ones that I
    represent, and so I am definitely interested in working on
    that.
        Mr. Burns. Thank you.
        Ms. Caraveo. With that, I yield back my time.
        The Chairman. Thank you. I now recognize the gentleman from
    Tennessee for 5 minutes.
        Mr. DesJarlais. Thank you, Mr. Chairman. In just over 3
    years President Biden's Environmental Protection Agency has
    released a slew of overly burdensome regulations that
    disproportionately impact rural communities and our nation's
    producers. For example, we have seen yet another expansive
    WOTUS rule, a proposed emission reporting requirement for on-
    farm animal waste, crippling natural gas power plant emission
    standards that will further increase farm and ranch input
    costs, and increased oversight over thousands of animal feeding
    operations in the Chesapeake Bay Watershed, setting a dangerous
    national precedent.
        Mr. Wilkinson, or any witness interested in weighing in,
    can you speak to the detrimental effects these type of onerous
    rules have on livestock producers, and how uncertainty and
    compliance costs trickle down to the American consumer?
        Mr. Wilkinson. Yes. Thank you for the question. The WOTUS
    field, and the whole EPA approach on this, has been troubling
    for America's ranchers and farmers. We go from the Obama
    Administration, with a series of rules, to the Trump
    Administration, with a series of rules, to the Biden
    Administration, with a series of rules. And, unfortunately,
    America's producer is left out there, trying to figure out
    which way to go. And we can't be dealing with these constantly
    changing rules from the EPA. We feel like we are being
    attacked.
        And to try and make our operations go forward, we need one
    set of rules. You can't keep changing the rules. It is like
    playing a football game and tying your hand behind your back.
    So we need to move forward with one set of rules, and we ask
    that Congress consistently apply the rules, and don't give us a
    mixed signal constantly.
        Mr. DesJarlais. Well, certainly that would be helpful. Any
    other witnesses like to comment on this?
        Mr. Burns. Just a brief comment. We support everything Mr.
    Wilkinson says with regard to the WOTUS rule, and the
    uncertainty that has existed on that front. And we too have
    felt somewhat under attack by EPA. They are currently engaged
    in a process to revise effluent limitation guidelines for meat
    and poultry processing facilities that are going to impose
    tremendous costs on those facilities that we don't think the
    agency has factored in. That is a big concern.
        And the recent change to the national drinking water
    standard involving PFAS chemicals we believe can have
    unintended consequences, in terms of other agencies that tie
    their regulations to the national drinking water standards. We
    don't believe that EPA has adequately sought input from those
    other agencies or has adequately sought input from industry.
        And, finally, I will mention we now have a second
    environmental agency, in that the SEC issued climate guidelines
    that impose all sorts of environmental requirements. Too deep
    to go into today, but we would suggest that the SEC stay in its
    lane, and not try to become a second Environmental Protection
    Agency, and withdraw those rules.
        Mr. DesJarlais. Yes. Well, I appreciate your thoughts.
    Anyone else like to comment?
        Mr. Hays. Yes. The pig industry is proud of our record on
    climate and sustainability and the environment, and we would
    just like for Congress to recognize that manure from a pig farm
    is a very valuable resource. It is not a waste, and we apply it
    that way, especially with prices of fertilizer today. Pig
    farmers rely on that storage of manure to fertilize the next
    crop, and we use it very judiciously, and we don't need rules
    that restrict our ability to use it properly.
        Mr. DesJarlais. Anyone else?
        Ms. Scott. Thank you for the question. I would like to
    share, just an underscore of the fact, that we are not only
    meat, protein producers for the country, but landscape
    stewards. A lot of times, when regulatory enactment takes
    place, there isn't also the offering of opportunity to be able
    to update our resources, such as infrastructure, on family
    operations to be able to accommodate.
        One of the things that I am really excited and hopeful for
    is the diversification of how conservation efforts are able to
    reach our producers, through cooperatorship and through
    identifying more flexible, regionally adaptive conservation
    efforts to support our family operators.
        Mr. DesJarlais. Okay. That is it? All right. Well, I hope
    the Administration, the EPA, is listening to your important
    thoughts, and I yield back.
        The Chairman. I now recognize the gentleman from North
    Carolina for 5 minutes.
        Mr. Davis of North Carolina. Thank you so much, Mr.
    Chairman, and to the Ranking Member. Thanks for bringing us
    together today, and to all the witnesses who are here. Good
    morning, and thank you for all that you do in particular to
    help us not only feed and clothe eastern North Carolinians, but
    Americans. I am proud to support bipartisan common sense
    priorities for stakeholders here today, including the Beagle
    Brigade, as well as combating illicit Xylazine.
        Eastern North Carolina producers desperately need farm
    labor, in terms of the workforce. And, given the ongoing
    population loss, in particular in the eastern North Carolina,
    and often many rural parts of America, and yet the growing
    workforce needs, I am just curious to hear from any of the
    witnesses today on your thoughts on how we can update an
    outdated H-2A program, in particular to ensure that our
    producers have a steady labor supply.
        Mr. Zimmerman. Well, thank you for the question. We have
    been struggling with this issue for quite a number of years,
    but we need a visa program that recognizes that our meat
    processing plants are year-round operations. The current
    programs are for seasonal workers, and we just don't fit into
    that mold. So we need some sort of visa program that recognizes
    that we need that labor force year-round, would be the greatest
    change we could have. And I know it is a very contentious
    issue, but all our plants are struggling with 15 to 20 percent
    shortages in labor right now, and that affects me on the farm,
    all the way through the processing plant. It took 3 years to
    find help for my farm, and I finally did find a person, but we
    can't operate successfully with this shortage of labor.
        Mr. Davis of North Carolina. Okay.
        Mr. Hays. Yes, sir, the pig industry has the same issue
    with labor. The pig farms are year-round, so we need a visa
    program that provides year-round labor. In the rural areas,
    where pig farms are at, unemployment is at three percent or
    less. And coupled with that is an aging population, and a
    shrinking family size. So it is just--the labor is just not
    available. We pay very competitive wages, we provide good
    benefits. The people just aren't there. So we need a visa
    program that works for our industry the way it works.
        Mr. Davis of North Carolina. Okay.
        Mr. Hays. And reform to the H-2A Program seems to be a
    common sense approach to fixing that.
        Mr. Davis of North Carolina. Let me ask, what other
    potential reforms would you consider putting on the table that
    goes beyond just the year-round program?
        Mr. Hays. Well, one of the programs that has been
    successful for us is the TN (Trade NAFTA) Visa Program through
    the--and an improvement in that would--currently a TN visa
    worker can bring their family up with them, but the family
    members are not allowed to work. So it would certainly help our
    rural areas if those family members could take some type of job
    in our rural community. Maybe it is not on the farm. Maybe it
    is helping in our schools, or working in our restaurants, or
    whatever part time work. Just be able to do some work in our
    small communities that would free up labor for the farms.
    Because our rural communities are hurting for labor across the
    board.
        We are seeing reduced services in our communities, and
    obviously seeing technology, we have to order our own
    cheeseburger now like everybody else.
        Mr. Wilkinson. At least you are ordering a cheeseburger.
        Mr. Hays. With bacon.
        Mr. Burns. If I could, just briefly, I would like to echo
    everything my colleague said, but remind everyone that the same
    issues apply within the plants, and the processing capacity is
    essential. We need year-round workers.
        Mr. Davis of North Carolina. Yes. Well, I do appreciate
    those comments today. I am very concerned and interested in how
    we deal with workforce. So thank you for that. And we are
    getting close, Mr. Chairman, to lunchtime, and a cheeseburger
    sounds pretty good. Therefore I yield back.
        The Chairman. With bacon. Yes, bring me one, please. Thank
    you. I now recognize the gentleman from Mississippi for 5
    minutes.
        Mr. Kelly. I am all about cheeseburgers. Mr. Wilkinson, in
    your testimony you mentioned how CSP funding primarily goes to
    row crop producers. However, in my home State of Mississippi,
    we have seen a tremendous amount of interest and contract
    enrollment by our livestock producers, in particular our beef
    cattle producers. That is why I have authored a bill to restore
    CSP back to the 2014 Farm Bill level of $9 billion, as opposed
    to the 2018 authorized levels of $3.9 billion. My proposal
    increases CSP by repurposing dollars in the Inflation Reduction
    Act for conservation programs and reduces the burdensome
    environmental CSPRA barriers to entry for producers created by
    the Biden Administration. Can I get a commitment from you to
    work with me and my staff to look at this bill, and can you
    also elaborate on the value and the importance of voluntary,
    incentive-based conservation programs, such as CSP, in the farm
    bill?
        Mr. Wilkinson. Congressman, I think your last part of your
    question hits the nail on the head. Voluntary program is the
    solution, and absolutely the cattle industry is behind moving
    that idea forward. The idea of producers getting to select what
    they want to get involved in, and then getting behind it with
    both feet, that is why you get things accomplished. Not a
    mandate, but a voluntary basis, and I absolutely harken to your
    comment.
        Mr. Kelly. Thank you, Mr. Wilkinson. To any of our producer
    witnesses, the Inflation Reduction Act authorized $8 billion
    for EQIP, however, the law removed the existing requirement
    that at least 50 percent of EQIP funding support livestock
    producers. How does this impact livestock producers' fair
    consideration for receiving contracts through the funding?
        Mr. Wilkinson. Well, I will take that first. I believe in
    the 2018 there was a direct set-aside for a portion of that
    funding, and that was removed, and we believe that that needs
    to be restored so that there is a direct allocation to at least
    the beef industry.
        Ms. Scott. I might add, I believe the EQIP funding supports
    livestock infrastructure development that other USDA offerings
    leaves livestock producers out of, and so I think it is
    critical to be able to have a set-aside specific to animal
    agriculture to utilize the tools that offer greater
    opportunity, expanded practices eligibility, as well as
    allowable participation. There are some programs right now
    that, after a certain amount of years within the contract, you
    are no longer eligible to qualify for those practices as a
    livestock producer, and I don't think that is fair when you
    compare against some of the crop producers' access to
    programming year after year.
        Mr. Kelly. Thank you, and I now yield the balance of my
    time to Mr. Bacon.
        Mr. Bacon. Thank you. First of all, I appreciate Mr.
    Wilkinson's comments on WOTUS. The farmers and ranchers are
    angry as can be in Nebraska about this new change in the rule.
    I think whatever support the Administration had in our farmer
    and ranch land has been undermined. I also appreciate the
    comments on foot-and-mouth disease. That was an initiative I
    brought forward in the last farm bill. I am so proud of the
    progress that we have made.
        And I have one question for Mr. Hays. What is the status of
    the African Swine Fever? Are you seeing the risks and threats
    going up, or are we making progress? Thank you.
        Mr. Hays. Yes, the status is--it continues to move around
    the world. The only place that we have it in the Western
    Hemisphere is the Dominican Republic and Haiti, with really no
    hopes of cleaning it up, at least in Haiti. So it is going to
    be a threat there for a long time, and that is just too close
    to our shores.
        So, our first priority is prevention, and we have made some
    great strides in prevention, closing some loopholes. I think
    you have the Healthy Dog Importation Act (H.R. 1184) ahead of
    you. That was one of the glaring loopholes that we had no idea
    about until we got to studying the problems.
        Mr. Bacon. Yes.
        Mr. Hays. That--made some big strides identifying how long
    the virus can live, and products that come to us from positive
    countries. And now we are storing those products at the coast
    for that period of time, before they even move in to where the
    livestock is at.
        But, beyond prevention--and the Beagle Brigade is huge for
    prevention. We are so proud of that program, and what they are
    doing, and any expansion of that would be great, because an
    accidental introduction of disease is probably the most likely
    course that it would come in. We need to do some work on feral
    swine. But after prevention, preparedness is huge. If we do get
    the disease in this country, then we have to get our arms
    around it quickly. We have to get it stamped out. If it moves
    across this country, especially if it gets in the feral swine
    herd, it would be very, very difficult to ever clean up.
        Mr. Bacon. Thank you. I appreciate your feedback, and, Mr.
    Chairman, thank you.
        The Chairman. Thank you, Mr. Bacon, for your questions to
    the pork industry. Seems fitting. We will now----
        Mr. Bacon. I was asked today what my favorite steak is.
    Bacon wrapped steak.
        The Chairman. There you go. Next I will recognize the
    gentlewoman from Hawaii for 5 minutes.
        Ms. Tokuda. Thank you very much. Obviously we are all very
    hungry and looking forward to lunch now. Thank you to the panel
    for being here. I just returned recently from a trip back home,
    to our Second Congressional District in Hawaii. There I flew to
    five islands in 5 days, and met with agriculture ranchers,
    farmers, producers, stakeholders, in some of our most rural and
    remote communities in our country.
        During a very candid roundtable with our Hawaii Cattlemen's
    Council, they shared with me the real struggles and harsh
    realities that they face. Some spoke openly about the ability
    for them to maintain a way of life that goes back generations
    for them, being able to pass that on to their children, and how
    hopes were harsh as to that potential reality. Access to water,
    labor shortages, a lack of local processing capacity and
    inspectors, transportation costs.
        We ship and fly cows, as some of you know, thousands of
    miles away to be finished and processed in the Continental
    United States. There is actually a plane that sits at the Kona
    Airport that only flies cows for finishing. And having more
    than 90 percent of cattle from Hawaii sent to the Continent for
    processing, only to come back to our islands more expensive
    than mainland or foreign beef for local consumption, is not
    sustainable, from a food security, business, or environmental
    perspective. Furthermore, because of the limited processing
    capacity in Hawaii, processing fees can be more than four times
    what they may be in the Continental United States.
        Ms. Scott, how can we increase access to mobile processing
    and small-scale processors in rural and remote communities
    through USDA programs, and what steps can the USDA take to
    improve access to inspection services for producers in remote
    communities, and how can we encourage scalable food safety
    regulatory requirements that may assist in smaller scaling
    processing?
        Ms. Scott. Thank you very much for the question, and I
    empathize with what the producers that you met with shared. The
    rural communities of Indian Country face similar challenges.
    There are estimations that the meat in some of our grocery
    stores that could have been raised right out the back door
    actually has traveled 1,200 miles in order to be in our grocery
    store shelves available for purchase by our Tribal members.
        I think that one of the things as small operators--we
    maintain predominantly closed cattle herds. We are able to
    utilize NRCS EQIP cost-sharing for cross-fences so we don't
    have cross-contamination. We have all of these opportunities to
    mitigate potential for food-borne illnesses on farm. And if we
    had a more direct access to processing capacity right there
    locally, there would be regulatory concerns that wouldn't
    necessarily have to encumber in the development of that more
    localized food system offering.
        In order for us, as an operation, to be able to produce at
    that direct to consumer scale, though we had to plan out 12 to
    24 months in advance to get on the books, so an increase
    processing capacity is essential. There is also the need for
    improved infrastructure, to be able to enter in and diversify,
    and it takes up-front capital. We were investing our off-farm
    income into the standing up of this food business, and there
    was generally a lack of guidance or support in the form of
    technical assistance that could be extended to us. So I think
    if we can really, as a group, identify support to all of those
    buckets, it makes it that much more viable for us to diversify
    in enterprise development, and provide that community service
    of feeding our communities.
        Ms. Tokuda. Thank you, and I would absolutely agree with
    you. Infrastructure, lacking just the up-front capital. So hard
    for many of our smaller producers to really come up with. And
    technical assistance in ways that people can understand. Even
    broadband access sometimes is hard for people to get in remote
    areas. It is really important.
        Ms. Scott, I also want to just take a look at some of your
    testimony that you provided, talking about USDA disaster
    assistance and how it can be more responsive.
        Ms. Scott. Yes.
        Ms. Tokuda. Do existing programs adequately meet the needs
    of small producers, and can you talk a bit more about what
    changes could be made at the USDA to tailor the programs to
    family farmers and ranchers? In particular I am looking at the
    pricing index, and how it does not fully compensate for
    production loss, and cash flow issues many small family farms
    may face as they wait for assistance to arrive.
        Ms. Scott. Thank you very much for that question. I think
    one of the glaring realities is that the pricing index for my
    cow's calf is based on that cow's--or that calf's age or
    evaluation at the time of loss. Only if it is above an
    allowable expectation for loss within my herd will I qualify
    for compensation. The issue being that my cow then falls out of
    production, so it is not just the loss of that production, it
    is the entire reproducing unit that my business has taken a hit
    on.
        And while that calf may have been born at that age, there
    has been investment up through the entire gestation of that
    animal is carrying of that offspring, and so that investment
    has already been made, but I am not able to realize the value
    in being able to grow that calf all the way to the sale. And so
    figuring out how we can increase and access a more equitable
    valuation is crucial.
        Ms. Tokuda. Thank you very much. And, as you know, this
    becomes a go/no go situation for many of our farmers and
    ranchers. Thank you, Mr. Chairman. I yield back my time.
        The Chairman. Thank you. I now recognize the gentleman from
    Alabama for 5 minutes.
        Mr. Moore. Thank you, Mr. Chairman, and thank you to our
    panel of witnesses for being here today. In Alabama's Second
    District, we represent cattlemen and broad swaths of the
    poultry industry, so disease outbreaks, over-regulation of the
    industry, obviously labor shortages, and supply chain
    bottlenecks make it difficult for my districts to survive
    sometimes, and to do business necessarily profitable.
        So--we also have a lot of birds, Mr. Zimmerman, and so--and
    I don't know if you know I am an animal--I am actually a
    Poultry Science major from Auburn, so I understand some of this
    industry pretty well, but I am a little rusty, it has been a
    few years. But, if you could, would you please explain the need
    for research and investment in the poultry industry to combat
    this high-path avian influenza we hear about?
        Mr. Zimmerman. I am sorry, the research investment?
        Mr. Moore. Yes. Just kind of--just explain the need for
    that, if you will.
        Mr. Zimmerman. Well, it has been a coordinated effort
    between the state organizations, our national organizations,
    USDA, APHIS. And we have learned by experience, obviously. The
    2015 outbreak has taught us tremendously, and the
    epidemiological studies that USDA did in the 2015 outbreak
    showed us what we needed to improve on, and that was
    biosecurity. And we did that, and we saw the results of that
    with a very much decreased farm to farm spread in the 2022
    outbreak that we are currently going through.
        Unfortunately, we are dealing with viruses, and they tend
    to mutate, so we are constantly learning, and constantly have
    to change our strategy, and how to deal with this. I think we
    have come a long way with biosecurity, but we need to look at
    other things. And, right now, with the high viral load in the
    wild bird population, a lot of studying needs to occur to
    figure out why do these birds have a higher viral load, and why
    are they living while our domestic birds are dying from this
    virus, and what can we do to live with a wild bird population
    that seems to have endemic High-Path Avian Influenza in their
    system?
        In the future we talk about vaccines. And, as I said in my
    testimony, we want to make sure--I think all the poultry groups
    are in agreement on this that we will not pursue a vaccine
    until the trade issues are taken care of, and that our trade--
    there are no--there will be no damage to our trade partners,
    our trade agreements, if we start to vaccinate.
        So research needs to occur on a vaccine. Hopefully we can
    differentiate between a wild strain and the domestic vaccinated
    strain, and then just how we would go about vaccinating the
    birds, whether it be small areas to stamp out an outbreak, or a
    wider vaccination strategy. So I think vaccination is our
    primary research goal for the near future.
        Mr. Moore. Thank you. I didn't realize that it was in the
    wild populations. I had no idea that it was pretty prevalent
    there.
        Mr. Zimmerman. It is incredibly prevalent. I mean, the
    water fowl, the ducks and the geese, are our primary enemies.
    If I take my 8 year old son to Disney World, we will cross to
    the other side of the street if Donald Duck comes down the
    road. We do not want to go anywhere near----
        Mr. Moore. That is also a good excuse to go duck hunting,
    too, though, Mr. Zimmerman.
        Mr. Zimmerman. No.
        Mr. Moore. No?
        Mr. Zimmerman. No.
        Mr. Moore. Okay. So I am going to change gears a little
    bit, and--Mr. Wilkinson, Mr. Hays, and Mr. Zimmerman, I am
    going to kind of ask you guys to address this. Could you all
    describe how the USDA's proposed Packers and Stockyards rules
    will impact your members? And what, if any, role do you think
    Congress needs to play in that? Mr. Wilkinson?
        Mr. Wilkinson. Thank you, and I am glad you brought that
    up. The change that--the proposed change to the harm--the
    competition is really--it is really frustrating to a cattle
    producer, because you work all your life to improve your cattle
    herd, to make yours a little bit better. That is what you are
    trying to work for. And now suddenly, because I am getting a
    deal from Packer A that recognizes my improved genetics, we are
    going to have my neighbor be able to sue that packer? That is
    going to totally defeat the increase in the market, and we are
    going to go back to commodity cattle. We are going to be back
    to the 1970s. Let us not go back to the 1970s.
        Mr. Moore. Mr. Hays?
        Mr. Hays. We have some serious concerns about lawsuits, the
    door this opens to just a number of lawsuits to increase our
    production costs. And we believe that this system in place
    today, with the DOJ and USDA, provides the protection that
    producers need. We don't think we need another police force
    looking over our shoulders that is out looking for violations.
        Mr. Moore. Mr. Zimmerman, I have 38 seconds.
        Mr. Zimmerman. We have serious concerns about the rules.
    Number one, it appears that USDA does not differentiate between
    different species of poultry, and the turkey industry is vastly
    different than the chicken industry. We have many different
    styles of contracts in the turkey industry. We have no idea--
    many of our processors are cooperatives, grower-owned
    cooperatives, and we don't understand how this rule would
    affect a grower cooperative.
        And the second part of the rule, dealing with inclusivity,
    it is so vague that we are not really sure who a market-
    disadvantaged individual would be. I am not sure. I am a small
    grower. Am I market-disadvantaged individual? We just don't
    know. So, it just seems like fertile ground for trial lawyers
    to set up and sue people.
        Mr. Moore. Got you. Thank you for your time. Mr. Chairman,
    I will yield back.
        The Chairman. Thank you. I now recognize the gentleman from
    Florida for 5 minutes.
        Mr. Soto. Thank you, Mr. Chairman. Proud to represent
    central Florida, home to the largest cattle herd in the nation.
    Look it up, if you want to double check on that. We do our cow-
    calf operations throughout the region. Not only do we have
    cattle country, but citrus, blueberries, strawberries, and
    more. And proud that we preserve millions of acres for
    ranching, hunting leases, and environmental leases throughout
    the region, even as we were experiencing a lot of high growth.
        Mr. Wilkinson, Florida cattlemen have asked about more
    regional beef processors, and some finally are on their way.
    What do you think the proper balance is for competition between
    large and regional beef processors so that we can have access
    for the whole country?
        Mr. Wilkinson. Yes. And, first of all, hats off for the
    Florida cattlemen. It is a great bunch of people down there,
    and they are doing a wonderful job with production down there.
    The level, I don't know if there is a magic number one way or
    another, but I will tell you, greater regional competition
    gives us more competition in the market, and that is always a
    good thing. The concern we have is are they going to have the
    staying capacity when the market conditions turn, and that has
    to be part of the equation. So The cattle industry is all for
    greater regional competition, because that means money in our
    pocket.
        Mr. Soto. Thank you. And how critical is this upcoming farm
    bill to the long-term prosperity of ranchers and of consumers?
        Mr. Wilkinson. Well, it is critical. Ranchers--and I am not
    going to disparage the row crop operators, but ranchers don't
    look for subsidies. We want to operate without a great deal of
    regulation, and where we need protection in particular is in
    that animal disease arena, and we need Congress to adequately
    fund that three-legged stool to make sure that we can reduce
    the risk to our producers.
        Mr. Soto. So the vaccine bank is a critical part, through
    the farm bill, to make sure to fight off future diseases?
        Mr. Wilkinson. Absolutely.
        Mr. Soto. Mr. Burns, would you say that the SNAP Program is
    a key market for our meat producers?
        Mr. Burns. Absolutely. I believe that all the government
    programs are important markets for our producers.
        Mr. Soto. Do you think there has any way we can improve
    access for local ranchers and other beef producers to be able
    to participate in SNAP within their states?
        Mr. Burns. We are happy to work with our producer partners.
    They may have ideas on that as well, but we stand ready to work
    with them on anything that improves access.
        Mr. Soto. We have seen a limit on immigration, because of
    COVID, over the last couple years in the farm workforce
    program. I realize that poultry, and beef, and others don't use
    as much farm workers as row crops, but has that been a source
    of barriers? Has that been a problem for our meat producers, a
    lack of labor?
        Mr. Burns. I would say, prior to the pandemic, lack of
    labor was our biggest day to day issue. During the pandemic it
    got worse, and it has not really fully rebounded. Access to
    stable, reliable workforce is our biggest issue, and one of the
    biggest problems is the current H-2A Program, and the
    seasonality aspect of it, when we are the harvest stage of an
    agricultural process, and we run year-round. So that program
    definitely needs to be expanded, and we would be happy to work
    with you to find solutions that address all of agriculture.
        Mr. Soto. And I am glad you mention that year-round issue,
    because I hear a lot from our local cattlemen that it is not a
    row crop that comes out, and then you don't--and you need
    people for next year, and--which is why we had worked together
    on the Farm Workforce Modernization Act (H.R. 1603, 117th
    Congress), to create these 5 year visas where people can go and
    come back. Obviously, lawful immigration, so something I am
    happy to continue to work on.
        And, Ms. Scott, in past farm bills, were there any gaps in
    what Tribal producers were able to benefit from, and ways we
    might be able to improve in this farm bill to increase
    agriculture in Tribal country?
        Ms. Scott. Yes, absolutely. Thank you for the question. I
    think it comes down to offering of opportunities. What can
    livestock producers in Indian Country actually qualify for, or
    what programs are designed specifically to reach their unique
    set of needs? Which is often different. It often is needing to
    access some of the programming that was accessed by their non-
    Tribal counterparts decades ago. But that programming has since
    come and gone.
        And so more locality, and being able to diversify the
    offerings, as it relates to conservation, and other Rural
    Development support investment would be really helpful. In
    addition, continued enhanced quality of service, and
    understanding of how to speak to some of the Tribal specific
    needs. And I think that cooperators and local expertise within
    those county offices that represents the folks who are trying
    to serve in Indian Country is really meaningful to that end.
        Mr. Soto. Thanks, and my time has expired.
        The Chairman. Thank you. I now recognize the gentleman from
    Iowa for 5 minutes.
        Mr. Feenstra. Thank you, Chairman Mann. Thank you for
    holding this hearing. I want to thank each of our witnesses. It
    was incredible to hear and read your testimonies. I am from one
    of the largest ag districts in the country, and I got hit
    severely with, really, Prop 12, and this is what I want to talk
    about. The Prop 12 ruling, I would say, it--was a poor opinion,
    in my opinion, simply my opinion, allowing a single state to
    impose rules on the rest of America. Obviously, for my state,
    and for my district, it imposes rules on the number one hog
    producing area in the country, along with the number one ag
    producing district in the country.
        This, to me, is a direct attack, direct attack on our
    producers. I want to be very clear, our producers treat our
    animals very well. They really do. I watch it every day. My in-
    laws are part of the livestock industry, and we take care of
    our animals. So this rule, really, to me, is very
    counterintuitive. The ruling, to me, opens the floodgates for a
    lot more laws coming down the pipe. I mean, what is next? What
    does New York want to do, what does Illinois want to do? All of
    a sudden you have these different rulings from different
    states, and now all of a sudden the producers--the bread basket
    to the world--have to follow each and every state.
        So my question, Mr. Hays, how do you look at this, as we
    move forward with Prop 12, and do you have concerns about what
    the future could look like, and the uncertainty for our
    producers, especially when it comes to the unknown? I mean, we
    really don't know what is unknown out there.
        Mr. Hays. Yes, we have a lot of concerns about the unknowns
    of--implications of Proposition 12. Right now we are trying to
    protect consumers in California. We are trying to ensure that
    they have product, even though it is going to cost them a lot
    more for the same product. And we are trying to protect
    producers' freedom to operate, but we do have concerns moving
    forward. Like I said, these rules are--it is not about the pork
    industry. It is about everyone who produces something.
        So--and then it is also about being able to comply with so
    many different rules. I mean, I guess, in theory, we could have
    50 different markets in this country, if each state adopts its
    own rules, and that would just be devastating to every
    industry, as far as being able to produce for those small
    markets, and then segregate the product to go into them.
        Mr. Feenstra. Yes. And that is what I am afraid of. I mean,
    you literally could have 50 different rules for every producer.
    And it blows me away that we have interstate commerce, and yet
    the Supreme Court went down this path. And, being the number
    one producer of hogs and eggs, now all of a sudden it is going
    to cost millions of dollars for each producer to retrofit, to
    get this done. And it concerns me not only with hogs and
    cattle--or hogs and eggs, but where does it go from here? I
    mean, cattle, you name it.
        And it is all touchy feel-good stuff. Let that chicken walk
    around a little. Let that pig--they have no idea. They have
    never spent time on a farm, I guarantee it. We, as farmers, as
    producers, we understand what it means to take care of an
    animal, we really do. And it just slays me to have California
    saying, Iowa, this is what you have to do, and we know best.
    And you know what? They don't grow hogs in California, or even
    eggs. They don't have eggs. Why? Because they are so
    burdensome. It is just a frustration point for me.
        I want to talk a little bit about the export market.
    Obviously we want to grow our export market, and,
    unfortunately, our Administration is doing a very poor job. It
    is like pushing a rope. I mean, we haven't had any free trade
    agreements in the last several years under this Administration.
    But that is not what I want to talk about. I want to talk about
    cold chain storage.
        Again, when you start talking about pork, when you start
    talking about other commodities that have to be refrigerated,
    to get into the export space, especially in developing
    countries, we need more cold chain storage. Mr. Hays, sorry to
    hit you again, but can you talk about the importance of
    developing infrastructure like cold chain storage, and what
    that would mean to grow our pork exports and other ag exports?
        Mr. Hays. So obviously we need adequate storage to be able
    to put together orders to ship out of the country. I am not
    sure I am the best to speak on this, but I know the amount of
    product across the board in the meat industry is growing in
    storage, and the storage capacity certainly could be an issue.
        Mr. Feenstra. Absolutely. Thanks for the comments. I just
    want to--I have 12 seconds left. I just want to quickly note
    this. You think about Prop 12, you think about Waters of the
    U.S., you think about the lack of exports. I mean, this is just
    crushing our producers in the bread basket to our nation, to
    the world, and it is all because of this Administration. Thank
    you, I yield back.
        The Chairman. And I now recognize the gentleman from
    Connecticut for 5 minutes.
        Mrs. Hayes of Connecticut. I am a lady.
        The Chairman. Gentlelady from Connecticut for 5----
        Mrs. Hayes of Connecticut. Thank you, Mr. Chairman, and
    thank you, Ranking Member Costa, for holding this hearing, and
    to the witnesses today. Thank you so much for being here. In
    Connecticut, dairy cows make up most of the animal agriculture.
    As of January 2023 there were 18,500 cows in the state,
    compared to just 4,500 beef cattle, and 2,800 hogs. In the
    Fifth District, 94 percent of operations are family farms, and
    92 percent have less than $100,000 in sales value.
        Ms. Scott, in your testimony you highlighted the ways in
    which agriculture policy often overlooks small farms. South
    Dakota and Connecticut are very different, but our small family
    farms face similar challenges. Producers in my district know
    how important it is to keep operations resilient. They are the
    leaders in climate resilience. But the assistance offered by
    the farm bill is often depleted before they have a chance to
    access it.
        My question to you, Ms. Scott--in your testimony you spoke
    about your ancestors' stewardship of a robust, resilient
    prairie ecosystem. How does climate change threaten those
    generations of work, and what support can this farm bill
    provide to ensure that small family farms can survive the
    worsening impacts of climate change?
        Ms. Scott. Thank you very much for the question. I want to
    underscore some of the reasons why I believe that there is a
    shortage of young folks coming up in, and this growing age gap
    relates back to how hard it is for family operations to grow
    their own children into being the next generation of farmers
    and ranchers to help to steward these landscapes. And I think
    we need to address that, so that we can stop seeing that
    disruption, so that it is feasible for our own children to
    imagine themselves making a livable career operating on the
    land.
        As it relates to adapting with the climate, and--I think
    that our livestock growers, especially those that are
    practicing regenerative grazing efforts, who are adapting with
    what is presented to them as natural disasters, or weather
    events surface, really do a tremendous job of practicing that
    resilience and that tenacity, accommodating the woes that come
    their way.
        But if we could offer risk mitigation support to those
    individuals, such as accessing opportunity for Price Loss
    Coverage, or farm storage capacity--or, sorry, infrastructure
    support that would accommodate their ability to withstand the
    climate shifts, they can then have less disruption in their day
    to day management and stewardship that helps with stewarding
    these ecosystems to be more resilient to change, and to
    offering the niche ecosystem offerings that our lands are
    intended to offer.
        Mrs. Hayes of Connecticut. Thank you. Two things you
    reminded me of, because I have seen many of our generational
    farming families where the children now are choosing different
    careers, and leaving the family farm.
        Ms. Scott. Yes.
        Mrs. Hayes of Connecticut. So I am a strong advocate for
    vo-ag training programs so that young people can see the many
    opportunities that are available in this industry, and really
    recognize how it applies to the talents and the gifts that they
    already have. And the second thing, many of my small farmers in
    Connecticut I have seen make voluntary shifts, where they are
    on their own deciding that it is good for their economic
    forward prospects if they make these--address these climate
    issues. The thing that they are telling me, that the up-front
    costs are astronomical, so they are really looking for ways to
    mitigate some of those things. But the decision to make those
    shifts has been made voluntarily by most of these small
    farmers, because they recognize that it just makes good
    business sense.
        You also spoke about building a diverse and robust food
    system. The pandemic revealed how fragile our food systems and
    food supply chains are. The consolidation of production and
    processing presents serious risks. I am particularly interested
    in your work serving a food desert in your community. The
    USDA's Meat and Poultry Processing Expansion Programs can
    increase capacity to support small farmers, and create more
    resilient local food systems. How can limited processing
    capacity threaten food security, and what are your
    recommendations for this farm bill to strengthen local
    processing?
        Ms. Scott. Yes. Well, cold storage facility has been
    mentioned several times. My small family business had to save
    up for several years before we could afford a storage facility
    that would enhance our ability to serve more of our local
    consumers. And, in filling that storage facility, we are
    waiting months in advance with booking out our processing, and
    if we have a normal South Dakota weather event in the winter,
    we missed that gap, and our inventory supply is disrupted
    because there is not an adequate access for meat inspection at
    that facility, and so we are just out for that month's
    production. So I think that being able to enhance and expand
    upon these areas is critical.
        Mrs. Hayes of Connecticut. I am sorry, my time has expired.
    Thank you. And anyone on the panel who has any thoughts on how
    we could improve SNAP feeding people, anything we can do for
    food security, I welcome your thoughts. Please reach out to my
    office.* I am sorry, I yield back.
    ---------------------------------------------------------------------------
        * Editor's note: the responses to the information referred to are
    located: for Mr. Wilkinson, on p. 87; Mr. Hays, on p. 87; Mr.
    Zimmerman, on p. 88; Mr. Burns, on p. 88; Ms. Hubbard, on p. 89; Ms.
    Scott, on p. 89.
    ---------------------------------------------------------------------------
        The Chairman. Thank you. And I recognize the gentleman from
    Texas for 5 minutes.
        Mr. Jackson of Texas. Thank you, Mr. Chairman, Mr.
    Wilkinson, I know that some of this was covered in your opening
    statement, so I appreciate that, but I just want to make a
    statement here. America's animal agriculture industry has been
    extremely fortunate that the U.S. has kept out many foreign
    animal diseases that have devastated producers throughout the
    world. If and when a foreign animal disease outbreak occurs in
    the U.S., the effects are devastating.
        African Swine Fever, which has been detected in the
    Dominican Republic and Haiti, is projected to cost the U.S.
    swine industry $50 billion. A foot-and-mouth disease outbreak
    is projected to lead to $57 million a day losses. I repeat, $57
    million a day in losses. We have already seen the devastating
    consequences of the High-Path Avian Influenza, where the USDA
    has spent over $800 million in indemnity payments.
        Mr. Hays, could you please expand on the importance of the
    National Animal Vaccine and Veterinarian Countermeasures Bank,
    the National Animal Disease Preparedness and Response Program,
    and the National Animal Health Lab Network, and how additional
    funding in the upcoming farm bill will help protect producers
    from the effects of a foreign animal disease outbreak?
        Mr. Hays. Yes, sir. Thank you for the question. We refer to
    that as our three-legged stool for foreign animal disease. The
    vaccine bank is important, not only to the pig industry, but
    all--or several of the industries because of the foot-and-mouth
    vaccine. When it comes to African Swine Fever, there is no
    vaccine that is viable, so preparedness, and then having the
    ability to prevent it first, and then prepare to deal with it
    if it does get here is really our only resources.
        So, it is critical that we have the funding for these
    programs. It is critical too, for the Beagle Brigade, for the
    vaccine bank, for all of these programs, so that we are
    prepared, and we can prevent it.
        Mr. Jackson of Texas. Thank you, sir. Mr. Wilkinson or Mr.
    Zimmerman, do you have any additional insight into the
    significance of these programs, and the need for additional
    funding?
        Mr. Wilkinson. Yes, I would just--I don't know if everybody
    is aware of what happens if we get a foot-and-mouth outbreak in
    the United States. First thing that is going to happen is there
    is no movement of cattle for 72 hours. Everything goes to all
    stop. You think we have an issue with a plant fire at Holcomb,
    magnify it hundreds of times over by what happens if we get a
    foot-and-mouth outbreak.
        The other thing that is going to happen is all of our trade
    partners are going to immediately shut us off. So we are going
    to lose China, we are going to lose Korea, we are going to lost
    Japan. Just ding, ding, ding. BSE is going to be a cakewalk
    compared to what is going to happen with a foot-and-mouth
    outbreak. It is going to spread north to south, and east to
    west, in a matter of days. We have to be prepared.
        Mr. Jackson of Texas. Yes, sir. Thank you. Mr. Zimmerman?
        Mr. Zimmerman. We have been through this. The last thing I
    want to have happen is that my colleagues over here have to go
    through what we have been through. You know how devastating
    this outbreak has been for the poultry industry. If we were to
    get foot-and-mouth or African Swine Flu at the same time as the
    High-Path outbreak, I don't know what would happen. I mentioned
    in my testimony APHIS is 150 full-time equivalent short. We
    need to be prepared for these outbreaks now, before they
    happen.
        And, it is a combination of the three-legged stool being
    prepared, and then working on containment, and then also what
    the future is, whether that be vaccination or whatever. So the
    importance of this three-legged, or three-tiered, program is
    essential, as we have seen in our industry, to protect my
    colleagues to both sides of me in the future if we have any
    more outbreaks.
        Mr. Jackson of Texas. Thank you, sir, I appreciate it. And
    a lot of what you have all said here, and what we know to be
    true, and we have heard here today, in other statements about
    the animal disease prevention program and management, I
    encourage all of my colleagues to support my Foreign Animal
    Disease Prevention, Surveillance, and Rapid Response Act (H.R.
    3419), which we will work to include in this year's farm bill,
    so thank you.
        Real quickly, I have one real quick question. One of the
    things that we have heard today is that, even when market
    conditions are favorable, the cumulative weight of misguided
    Federal regulation is one of the quickest ways to put cattle
    producers out of business. One of the heaviest bricks in that
    pile is the Endangered Species Act. I hope to support Chairman
    Mann's Congressional Review Act to oppose the overreaching,
    burdensome listing of the Lesser Prairie Chicken that will
    disrupt cattle production and devastate producers in my
    district. Mr. Wilkinson, can you please give us some more
    information on the impact this Endangered Species Act listing
    will have on cattle producers?
        Mr. Wilkinson. Yes, and I appreciate the comment, and I
    will be quick. When we go to the Endangered Species Act, and
    produce--and particularly with the Prairie Chicken issue, 90
    percent of that is on private land. If you want to put cattle
    producers out of business, you try and regulate them out of
    business. And I guess if that is what is intended, that is what
    you are going to succeed with, if it still proceeds in that
    fashion. You have to let the best conservationists in the world
    do their job, and they will get the production because they
    want their rangeland to produce, and that way you are going to
    have the best habitat for the Prairie Chicken.
        Mr. Jackson of Texas. Yes, sir. Thank you. I am out of
    time. Thank you.
        The Chairman. Thank you. And I recognize the gentleman from
    Missouri for 5 minutes.
        Mr. Alford. Thank you, Mr. Chairman. Good to be here. Thank
    you to all of our panelists and guests today, witnesses. Mr.
    Wilkinson, in your written testimony you talk about NCBA's
    objection to the PRIME Act, but also state that you support
    removing regulatory barriers for small and regional meat
    packing plants. Specifically, you identified the DIRECT Act,
    and our bill, the A-PLUS Act, as more viable means of achieving
    the same objective without jeopardizing consumer confidence in
    the safety of beef. Can you elaborate as to why the A-PLUS Act,
    and acts like that, are more tenable solutions than the PRIME
    Act?
        Mr. Wilkinson. Thank you for the question. And while I
    think the PRIME Act is well intended, the consequences of
    having uninspected meat going into commerce could be disastrous
    for the reputation of the cattle industry. The producer out
    there expects that their meat is going to be inspected, it is
    going to be wholesome, and a hearty product, and we have spent
    decades building that reputation. The advantage of your Act, or
    the DIRECT Act, the A-PLUS Act still maintains that inspection
    process and gives us the best of both worlds. So I appreciate
    you bringing a product forward that allows us to get the meat
    into the commerce stream, but doesn't subject our consumers to
    any risk of uninspected meat.
        Mr. Alford. Well, hopefully we can get through Congress. I
    appreciate your support on that. I know you talked about foot-
    and-mouth disease, and you were very impassioned about that. I
    want to delve in a little bit deeper now on the trade
    implications of that, should there be an outbreak. How programs
    like the Vaccine Bank, how would it impact our restoration time
    for foreign markets? How devastating could this be in foreign
    trade?
        Mr. Wilkinson. Well, just look at BSE. There's a classic
    example. How long did it take us to get back into those Asian
    markets? It took years. We can't wait years. We just came
    through some pretty difficult times in the beef industry for
    the cow-calf sector, and if we lose those markets, we don't
    have the ability to sit on the sidelines and just deal with all
    of that meat coming just in the United States.
        Contrary to some people out there, we need exports, and our
    exports are phenomenal right now. And the ability to export is
    putting hundreds of dollars on that paycheck when it comes back
    to me as a feeder. If you cut that off, if you cut off those
    export markets, you are going to cut off hundreds of dollars
    that goes to the producers, and it is going to take years for
    us to get back into that. We don't have that time.
        Mr. Alford. Thank you, sir. Let us go from beef to pork.
    Mr. Hays, I want to talk a little bit more about Prop 12. I
    know we have talked ad nauseum. I have been in other committee
    meetings, so some of this may have been covered, but I was very
    interested to hear what you had to say in your opening remarks.
    So I want you to put on your pork prognostication hat right
    here a little bit. What happens if restrictions like Prop 12
    continue to be propagated across our country? What happens to
    the pork industry?
        Mr. Hays. It would be a real challenge for the pork
    industry. As I said earlier, we could have as many as 50
    different markets to raise pigs for, and they very easily could
    be conflicting where you would have to pick a market. So I may
    be in a market that is profitable, while my neighbor is in a
    market that is not profitable. But the real shame of that whole
    thing is the cost. So the consumer has to bear the cost of all
    that, upgrades at the farm, segregating the meat.
        And one of the challenges with--we don't eat all of the pig
    in this country. That is what exports do for, we eat all the
    bacon, we eat all of the ribs, but everything else, a portion
    of it gets shipped overseas. So the Californians are going to
    find out pretty quick, they have to bear all of the cost of
    Prop 12 on the small percentage of the pig that they eat.
        Mr. Alford. Thank you so much, once again, to everyone for
    being here today. This is a very important hearing as we put
    together the farm bill, and I yield back.
        The Chairman. Thank you. I now recognize the gentleman from
    Wisconsin for 5 minutes.
        Mr. Van Orden. Thank you, Mr. Chairman. I have to tell you,
    I have to continue along these lines of Mr. Alford and Mr.
    Feenstra in reference to Prop 12. I do not think that the State
    of California should be able to control interstate commerce for
    the entire United States of America. I think that is an absurd
    proposition. And I just got back from California, and it just
    reinforced that. Sorry, John.
        So, Mr. Burns, what is the actual--do you think the actual
    monetary impact that is going to happen? Because we are talking
    about 13 to 17 percent of the consumption of pork going out to
    California, additional potentially two percent--this is from
    your testimony--with Massachusetts if they do something like
    that. So, in hard dollars, do have an estimate what that would
    cost your industry?
        Mr. Burns. I don't have a hard number for that yet. We are
    still working on assessing the impact of that, so I can't
    answer that directly, but I can tell you it is going to be very
    significant. And I would echo the concerns raised by our
    producer community, and also I would mention that I think
    Chairman Mann captured the concern really well in the
    agriculture community a few days ago when he said today it is
    the pig pen, and tomorrow it is the whole barnyard.
        Mr. Van Orden. Yes.
        Mr. Burns. We need to be concerned not just about the
    financial impact on the pork industry, but also other species,
    and, in fact, other manufacturing enterprises.
        Mr. Van Orden. Thank you for that. Mr. Hays, are we
    importing hogs from countries that are at risk, or have been
    shown to have African Swine Fever?
        Mr. Hays. So we don't import live animals from countries
    that would have ASF. There are some meat products that come in,
    but we recognize regionalization and we ask other countries to
    recognize our regionalization plan as well.
        Mr. Van Orden. Okay.
        Mr. Hays. So there is a little bit of product that comes
    in, mostly from Poland, but it is from a region that would be
    ASF free.
        Mr. Van Orden. Okay. For now. That is my concern. So right
    now Poland doesn't have ASF, but what are their types of
    controls that are put in place so that, if it is introduced
    into Poland, and then we bring it here to the United States? Do
    you have any visibility on how they are inspecting their hogs,
    and how they are getting things into their country before it
    comes to ours?
        Mr. Hays. Yes. USDA's spent a significant amount of time
    over there understanding their system, and is satisfied that
    their system will protect our hog industry.
        Mr. Van Orden. Okay. Outstanding. And, Ms. Scott, I had the
    opportunity to work on Shiprock Reservation in New Mexico, a
    Navajo Reservation, and I just had a woman from my district--I
    represent the Third Congressional District of Wisconsin, and
    our indigenous folks are Ho-Chunk. And she is--your testimony
    is fascinating, because we are trying to figure this out right
    now. And she raises small specialty crops, and how to get them
    into the rez, and teach people on the rez how to farm so that
    they can have a sustainable ecosystem within the reservation,
    and Indian Country, as you said. So I just want you to know
    that we are working on this from my office, and I appreciate
    all of your efforts. With that, sir, I yield back.
        The Chairman. Thank you. I now recognize the gentleman from
    California for 5 minutes.
        Mr. Duarte. Thank you, Mr. Chairman. In the Supreme Court
    arguments on Prop 12 just a few days ago--well, the ruling was
    a few days ago, the arguments were a few months ago--the
    arguments supporting it centered around morality. It is immoral
    to keep a pig in too tight a pig pen, it is immoral--not an
    animal welfare issue, not a human health issue. Those were all
    presented in Prop 12 during the balloting, but they weren't
    argued in the Supreme Court. It was a moral issue. So I will
    ask any of the panel that would like to chime, please compare,
    if you will, the morality of your pork production processes
    to--take your pick. I suggest cobalt mines of 9 year olds
    swimming in toxic water in Africa, producing lithium ion
    batteries for green energy fantasies. I will invite any of you
    to jump in.
        Mr. Hays. If I could, I would like to go first. I am a
    fifth generation pork producer. My great-grandfather bought our
    farm in 1918, and we have been known as pig people for five
    generations, and now the sixth generation is raising pigs. I
    have seen it done several different ways. When I was a kid, all
    the pigs were outside. Sows are bullies. That is what they are.
    We changed our production practices--my dad, my grandpa changed
    the production practices to protect the animals from one
    another.
        And what Prop 12 requires us to do is to put those animals
    back together, basically have pig fights every day on our farm.
    There are farms that make it work, and they can make it work
    well, but that is not how we choose to humanely take care of
    our pigs. We think our pigs need to--we prefer them in
    individual pens. So I would encourage you to get on a modern
    pig farm, look at it, and see what you think.
        The other--as far as production practices, one of the
    things--in the 1980s, the consumers demanded that we get pigs
    leaner, pork leaner, and we have done that. Pigs today have
    about \1/2\" of back fat. When I was a kid, they had 2" of back
    fat.
        Mr. Duarte. That tasted really good.
        Mr. Hays. It did.
        Mr. Duarte. I remember those pork chops.
        Mr. Hays. It tasted really good. But what we did is we took
    their coat away from them. We took their protection away from
    them. So the pigs I raise today are--and we also bred pigs to
    be more docile. When I was a kid, you didn't mess with baby
    pigs with a mama sow.
        Mr. Duarte. Yes.
        Mr. Hays. Today, we can do whatever we want.
        Mr. Duarte. So please do--I mean, you are doing great, but
    I am just--so I represent a district in California. It is a big
    agricultural district. I am a farmer myself, so I like to take
    pride in the sustainability and the humanity of what we do.
    Compare the morality of this bill, and those like it--chickens
    have to spread their wings, and everything else nowadays--to
    the working families in my district.
        I have the--I think the 17th highest poverty rate in my
    district. Working families are facing food inflation, the water
    has been taken off their farms, they are having trouble making
    ends meet. They can't go to work. It is a lot, lot of hardship
    in my district right now. And somebody, I call them Bobos in
    Paradise sometimes, are deciding that they have to pay a little
    more for their pork, and that would be just fine, from a moral
    framing. So I will take comments on that also, please.
        Mr. Hays. Well, if we go backwards in production standards,
    it is going to cost more to raise pigs, no doubt about it, and
    the consumer has to pay that. And, and pig farming today is
    very sustainable. We have reduced the amount of land it takes
    to produce a pound of pork by 75 percent, the amount of water
    by 25 percent. Our carbon footprint is smaller than ever
    before, because we just keep doing a better job at what we do.
        Mr. Duarte. Would any of you on the panel agree that there
    is a moral problem with our animal husbandry production systems
    in America today?
        Mr. Wilkinson. I would agree that there has a problem with
    some state imposing their moral judgment on the rest of the
    country. I can't relate to pigs, because I don't raise pigs, I
    raise cattle. But for somebody to say that they know better how
    to raise my cattle than I do, I challenge them to come out to
    South Dakota when it is ^25 and tell me that they know how to
    raise cattle.
        Mr. Duarte. Do you doubt that they are cattle ranchers
    themselves?
        Mr. Wilkinson. Pardon me?
        Mr. Duarte. Do you doubt that they are cattle ranchers
    themselves?
        Mr. Wilkinson. Yes, I doubt that they are cattle ranchers
    themselves, correct.
        Mr. Duarte. Very well. Thank you very much. I yield back.
        The Chairman. Thank you. And I recognize the gentleman from
    New York for 5 minutes.
        Mr. Molinaro. Thank you, Mr. Chairman. I am so glad I came
    in at that very moment. They are neither hat nor cowboy those
    folks, I suppose. Although I do look forward to coming to your
    part of the country. How cold was it?
        Mr. Chairman, I have served 20 years in--the last 20 years
    in local elected office in the State of New York, and time and
    time again Upstate New York farms, which are somewhat unique,
    smaller, obviously more family driven, have all talked about,
    and raised concern regarding access to meat processing. Beyond
    the dangerous implications on supply chain, there are also real
    challenges associated with costs for rural communities
    throughout my district. In particular, Upstate New York's lack
    of meat processing closes our opportunity to take advantage of
    New York City as a marketplace opportunity.
        Now, we do know the USDA and New York State did create
    programs that expand local processing capacity, however, from
    what I know, and, of course, the farmers I represent know,
    these programs dedicate a lot of capital to the problem, which
    is important, but they don't address some of the more nuanced
    problems, and I suspect it continues the conversation that was
    just had.
        Mr. Wilkinson, as you have mentioned in your testimony, you
    talk about those regulatory barriers, and I would like to ask
    my first question of you. Like many states, New York in
    particular does not have its own meat and poultry inspection
    service, and therefore relies on a very small number of USDA
    inspectors. And so, beyond access and capital, many small and
    custom processors don't wish to become USDA inspected
    facilities due to lack of technical assistance, et cetera. Have
    you seen any progress in eliminating some of these barriers by
    the USDA, and are any of the USDA's recent efforts producing
    expanded local processing capacity?
        Mr. Wilkinson. Yes, we actually have, and if anything came
    out of COVID that was a positive, it was the spotlight that got
    shone on how our system cannot handle everything that just has
    to go through a major packing facility. And the regional and
    the small butcher shops, the local processor--I would harken
    back to the comments about having to wait months and months, if
    not up to a year, to get a slot to be able to process animals.
        It has become readily apparent that we can market our
    cattle, in many respects, through that local processing
    facility more quickly, and at a better rate of return for me,
    as a cattle operator. So we have seen some improvements, and I
    believe that that is going to continue. But I would also tell
    you that just simply throwing money at everything, which seems
    to be the course out here, isn't the answer to everything.
        Mr. Molinaro. Yes, this government, and I would say,
    respectfully, this Administration, thinks it is their money. It
    is not. It is the taxpayers'. So, to continue that, though,
    what would be the one thing that would move the needle a bit
    more to accessing processing capacity in--and I will say, in
    smaller farm regions like my own.
        Mr. Wilkinson. Well, I think the DIRECT Act, the A-PLUS
    Act, are both really good starts at that, and I think that that
    would help a lot. But, again, building the facility is not just
    the issue. It is the capital to run the facility, and the labor
    to work in the facility. And having those things handled--
    everybody wants to put up brick and mortar, but you have to run
    the thing once you have it up, and that is what we need to deal
    with.
        Mr. Molinaro. Yes. And I actually appreciate that, only
    because it segues to what I know has been a topic of
    conversation today, in your testimony, and certainly we
    understand it nationally, and that is the lack of access to
    labor force, workforce. And so in--just outside my district is
    the State of New York University Cobleskill, Cobleskill, New
    York. It offers training available to the public to offer
    hands-on courses for those interested in meat processing. It is
    a great program, however, it needs to be scaled.
        And so to any of you on the panel, is there a method, or a
    solution, to scaling this kind of college level--I would say
    non-credited training capacity nationally? And anyone, in my
    last 30 seconds, feel free to take the lead on that.
        Ms. Scott. I think that that effort has been modeled in
    utilizing some of the federally supported initiatives, such as
    the federally recognized Travel Extension Program, right? Like,
    the community extension efforts, which cooperate with land-
    grant institutions, as well as Tribal colleges, historically
    underserved colleges, to increase access to that knowledge
    base, and to that curriculum. And we can look back at what has
    been successful, and try to ensure that we model that pilot
    with this particular subject area.
        Mr. Molinaro. Mr. Chairman, without extending my welcome, I
    just would say the issue we--that challenges us is the
    connection between K-12 to that experience. We have the
    capacity, but we need to bridge the divide to encourage young
    people to do it. Thank you, Mr. Chairman.
        The Chairman. Thank you. I now recognize the gentleman from
    Ohio for 5 minutes. You have been very patient.
        Mr. Miller of Ohio. Thank you, Mr. Chairman. Thank you to
    all our witnesses, and I usually go last, so it is normal. But
    thank you again. Ohio is one of the country's leading producers
    of livestock, which represents about half of all Ohio
    agricultural production. Ohio farmers and ranchers raise more
    than 2.95 million hogs each year, 296,000 cows, and there are
    about 2,200 dairy farms in Ohio.
        Means to safeguard the nation's food supply against threats
    from foreign animal disease, fostering foreign markets for
    United States agricultural products, voluntary incentive-based
    conservation tools, and risk management are among the key farm
    bill priorities I am hearing from our Ohio livestock producers.
    Among these, I wanted to call attention to the fact that, if a
    foreign animal disease outbreak were to occur, it could
    immediately impact the agricultural sector, stifle needed food
    supplies, and curtail critical U.S. exports. As such, farm bill
    disease prevention programs are vital.
        Finally, as we work to meet tomorrow's livestock
    challenges, I would like to mention the work of Ohio State
    University's Agricultural Technical Institute training
    facility, which provides literally hands-on training in beef,
    cattle, dairy, and swine production, as well as the state of
    the art skills to educate livestock leaders of the future. And
    I had a lot of questions regarding animal disease. I am not
    going to ask them now because our colleagues did such a great
    job in their tact, and you gave us great answers on those.
        But, to Mr. Wilkinson, Ohio ranks 12th in the nation in
    number of cattle operations, supporting more than 12,300 jobs
    in Ohio. As you mentioned in your testimony, the farm bill
    authorizes several important USDA programs, ranging from animal
    health to conservation, risk management, and trade promotion.
    Can you expand on these priorities, including conservation,
    beef check-off, and reinforcement disaster programs?
        Mr. Wilkinson. Yes, and I would start first with the beef
    check-off. The beef check-off is a classic example of something
    that works. It was voted in by producers, it gives you almost a
    12 to 1 rate of return for every dollar invested, and that
    doesn't happen very often. You actually put something in place
    where you can generate a 12 to 1 rate of return, and out of
    that comes some of the things that you are talking about. The
    research, the education programs that come out of there, the
    trade promotion issues. And yet we continue to have Members of
    Congress that want to take a shot at it that are directly based
    on, what I believe, are animal activists that want to put us
    out of business.
        Mr. Miller of Ohio. Yes.
        Mr. Wilkinson. And, to put in something that would defund a
    program that has been so successful is just ridiculous to me.
    And I don't understand how animal rights activists can get a
    Member of Congress to substantiate that argument and to put it
    forward, because all it does is prove that there is an ignorant
    population out there that doesn't know what they are talking
    about when they are trying to defund the check-off.
        Mr. Miller of Ohio. Yes. Well--and regarding the other
    ones, but what some of our colleagues do is they tie emotion
    into messaging, and that is how they fall into that, because
    when you get into being emotional, you lose logic and reason,
    and you are more reactionary, and it is hard to disassociate a
    business decision as to how you feel personally. And that is a
    lot of what I see here when you talk about activism, right? And
    we see a lot of that with our colleagues here, and it is
    cutting through that, and it is really representing the
    American people at its core.
        And that is why I am glad and proud to be here today, and
    every time we have one of these hearings, and even for the full
    Committee, so the American people can see what it is that our
    farmers are going through, and the struggle throughout our
    country, and the regulatory policies that have been put in
    place by this Administration, and how they are inhibiting
    growth through farming.
        Food is national security. People say that all the time. I
    feel as if when they say that it is cute fodder. They truly
    don't understand where we are within this country, and the
    regulatory policies that have been implemented on you all, and
    you are the ones dealing with it every single day. So I thank
    you for your time, I truly appreciate all of you being here.
    Mr. Chairman, I yield back. Thank you.
        The Chairman. Thank you. Today's hearing has been a perfect
    example of why the livestock sector is so important. As I
    mentioned earlier, agriculture is all in this together. Our
    commodity producers greatly benefit from a strong livestock
    sector, as livestock consumes grain. The livestock industry
    benefits from the biofuels industry, as that industry relies on
    them as an important feed source. Agriculture is incredibly
    interconnected.
        To our witnesses, thank you for being here today. Those of
    us in Congress have heard you loud and clear. From lessening
    the burden of unfunded mandates on producers, like the
    electronic identification tag rule, to pushing pack on the
    UDSA's unnecessary Packers and Stockyards rules, from
    supporting the three-legged stool to strengthening the markets
    for American protein exports and pushing back on the
    regulations that continue to threaten our industry as we know
    it, we have our work cut out for us. I look forward to working
    with you all on the livestock issues that are so important to
    America as we reauthorize the strongest farm bill yet.
        Under the Rules of the Committee, the record of today's
    hearing will remain open for 10 calendar days to receive
    additional material and supplementary written responses from
    the witnesses to any question posed by a Member. I hope
    everyone enjoys their lunch today, which is grown by an
    American ag producer. This hearing of the Subcommittee on
    Livestock, Dairy, and Poultry is adjourned.
        [Whereupon, at 12:20 p.m., the Subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
    Supplementary Material Submitted by Todd Wilkinson, President, National
                          Cattlemen's Beef Association
    Insert
              Mrs. Hayes of Connecticut. I am sorry, my time has expired.
            Thank you. And anyone on the panel who has any thoughts on how
            we could improve SNAP feeding people, anything we can do for
            food security, I welcome your thoughts. Please reach out to my
            office. I am sorry, I yield back.

        Farmers and ranchers are committed to providing wholesome,
    nutritious beef to all Americans at every stage of life, in rural and
    urban communities, and within all socioeconomic populations in the
    United States. Ensuring food and specifically nutrition security for
    all Americans is increasingly important for effectively improving
    public health. America's beef producers are predominantly found in
    rural communities across our country. Limitations or lack of healthcare
    and nutritious foods in rural areas has led to food deserts in many of
    these areas. Beef producers are part of the foundation of local food
    systems, helping to sustain rural communities. Additionally, many beef
    producers work at a local level to enrich farm to school nutrition
    programs, agricultural education, and assist local foodbanks and hunger
    organizations.
        In addition, there's a growing need to balance people's plates with
    nutrient-dense foods that they enjoy eating, such as beef, to address
    consumer behavior barriers and meet Americans' needs for delicious,
    safe, wholesome, convenient, and affordable food. Beef nourishes
    Americans with its unique combination of high-quality protein, iron,
    zinc, choline, and B vitamins. In fact, no other protein food source
    delivers the same nutrient-rich package as beef. Research continues to
    demonstrate that eating high-quality protein, like beef, as part of a
    healthy dietary pattern can help Americans meet their protein needs,
    improve satiety (or feelings of fullness) and preserve lean muscle
    mass, which is increasingly important given current overweight and
    obesity rates in America.
        Lack of availability, affordability, and access to protein is a
    struggle in many parts of the world, including America's urban food
    deserts. In the past few years, many Americans gained a greater
    understanding and appreciation of supply chains and our vulnerabilities
    as consumers. The Biden Administration's focus on building more
    resilient supply chains is a goal we can all support, but we must make
    sure that we are expanding our supply chains through robust, market-
    based, and science-based trade agreements with our allies. The Biden
    Administration's current approach of abstaining from market access
    negotiations is not helpful for American consumers who need greater
    access to food. Trade frameworks that do not remove tariff barriers
    will result in higher food prices for U.S. consumers and less export
    opportunities for U.S. producers. Many American consumers have year-
    round access to safe and affordable food, and we need trade policy that
    extends that opportunity to all Americans.
                                     ______

      Supplementary Material Submitted by Scott Hays, President, National
           Pork Producers Council; Member, Missouri Pork Association
    Insert
              Mrs. Hayes of Connecticut. I am sorry, my time has expired.
            Thank you. And anyone on the panel who has any thoughts on how
            we could improve SNAP feeding people, anything we can do for
            food security, I welcome your thoughts. Please reach out to my
            office. I am sorry, I yield back.

        I appreciate the opportunity to respond to the question. Our
    industry is deeply concerned with food security, both domestically and
    globally, and that is a critical piece of this equation. We work hard
    every day to ensure that we can produce a steady supply of readily
    available, affordable, nutritious and safe products. And the SNAP
    Program plays a critical role in reducing food insecurity across the
    country by providing millions of Americans the ability to purchase
    high-quality protein like pork.
        While we look for ways to improve [] SNAP, we also must ensure that
    there is food available to purchase. That is why it is also important
    to make sure that we have the tools in place to protect against and
    prepare for an outbreak of a major foreign animal disease (FAD), such
    as African Swine Fever (ASF) or Foot-and-Mouth Disease (FMD). In
    addition to the impact on animal health and welfare, and the
    livelihoods of farmers, one of these diseases could also devastate
    domestic production at a time when global protein production is already
    under strain, driving prices dramatically higher. The latest estimate
    our industry has is that the economic impact of FMD alone would be in
    excess of $240 billion over 10 years, including impacts to the pork,
    beef, and lamb industries as well as feed grain and other producers.
        The U.S. is one of the only major livestock producing countries in
    the world that are free of these diseases. The farm bill provides many
    of the robust tools, like the ``three-legged stool'' of animal health
    (H.R. 3419), that help ensure that we can stay free of these diseases
    or, in a worst-case scenario, respond to them rapidly if they arrive on
    our shores. While the price of preparation may be high, it is not
    nearly as high as the cost of one of these FADs. I think we can all
    agree that protecting our food supply is critical to addressing food
    security, and our industry looks forward to working with Congress on
    this.
                                     ______

      Supplementary Material Submitted by John Zimmerman, Vice Chairman,
                           National Turkey Federation
    Insert
              Mrs. Hayes of Connecticut. I am sorry, my time has expired.
            Thank you. And anyone on the panel who has any thoughts on how
            we could improve SNAP feeding people, anything we can do for
            food security, I welcome your thoughts. Please reach out to my
            office. I am sorry, I yield back.

        Mrs. Hayes, Thank you for your question. The National Turkey
    Federation' members recognize the important role the SNAP program has
    played in ensuring Americans of all income levels have access to turkey
    and other nutritious foods. A 3 oz. (or approximately 100 g) of roast
    turkey breast provides 25-30 g of high biological value (HBV) protein
    while only contributing 140-160 calories and 3-4 g of fat (most of
    which (2.6 g) are unsaturated fats), according to USDA Foods Fact Sheet
    \1\ and other online nutrition data analyzer tools.\2\ Turkey also
    provides important B vitamins and several important minerals including
    iron, zinc, and selenium. While I obviously have a strong bias toward
    this particular nutrient-dense lean meat, NTF believes an important
    component of food security is ensuring SNAP recipients have access to a
    wide variety of food choices. Shopping options can vary greatly, so
    excessive restrictions on food choices can be unnecessarily limiting to
    those recipients. The turkey industry will continue to work closely
    with others in the food supply chain to maintain turkey's availability
    for all those seeking to enjoy this nutrient-dense lean meat regardless
    of socioeconomic conditions.
    ---------------------------------------------------------------------------
        \1\ U.S. Department of Agriculture. Household USDA Foods Fact
    Sheet. Turkey, Roast, Frozen. July 2012.
        \2\ SELFNutritionData. Turkey, all classes, light meat, cooked,
    roasted; Nutrient data for this listing was provided by USDA SR-21.
    2014. Accessed at: http://nutritiondata.self.com/facts/poultry-
    products/825/2.
    ---------------------------------------------------------------------------
                                     ______

     Supplementary Material Submitted by Byran Burns, J.D., Vice President
          and Associate General Counsel, North American Meat Institute
    Insert
              Mrs. Hayes of Connecticut. I am sorry, my time has expired.
            Thank you. And anyone on the panel who has any thoughts on how
            we could improve SNAP feeding people, anything we can do for
            food security, I welcome your thoughts. Please reach out to my
            office. I am sorry, I yield back.

        Meat and poultry are essential staples of the Supplemental
    Nutrition Assistance Program, and these nutrient-dense products play a
    critical role in improving nutrition and ending hunger in the United
    States. Meat and poultry products provide a convenient, direct, and
    balanced dietary source of all essential amino acids. These products
    are important sources of micronutrients, such as iron, zinc, potassium,
    selenium, and vitamins B12, B6, thiamin,
    riboflavin and niacin. The iron and zinc in beef, pork, lamb, poultry,
    and fish are also more bioavailable than from other sources, meaning
    these minerals are more easily absorbed and utilized by the body.
        The Meat Institute supports maintaining customer choice within
    SNAP, rather than limiting products eligible for purchase under SNAP to
    only those products government officials deem nutritious. Directing the
    government to define foods as ``in'' or ``out'' means a bureaucratic
    approach to picking winners and losers on retailers' shelves,
    increasing bureaucratic influence over private enterprise and making
    decisions about what Americans can buy. SNAP restrictions would create
    a new bureaucracy built around establishing and maintaining a list of
    foods eligible for SNAP; a list that would change with each new
    Administration. Identifying, evaluating, and tracking the nutritional
    profile of every food available would be a substantial undertaking, in
    addition to implementation and enforcement. This expanded bureaucracy
    would mean increased, not decreased, administrative costs. With
    thousands of new food items introduced on the market each year, the
    bureaucracy's work would be ongoing and immense.
        SNAP is characterized by its efficiency--providing targeted
    populations with resources to purchase food in the normal channels of
    commerce. Congress should embrace that efficiency and reject
    bureaucratic and burdensome SNAP restrictions.
        The meat and poultry industry provides a wide variety of products
    that meet a large range of individual nutrient and lifestyle needs and
    preferences. SNAP should continue to respect the dignity, autonomy, and
    choice of participants and provide benefits and purchasing
    flexibility--including online purchasing--adequate to ensure
    participants can purchase the nutrient-dense meat and poultry products
    their families want and need.
        According to Feeding America, for every meal the Feeding America
    network provides, SNAP provides nine meals. SNAP and food banks work in
    combination to ensure food security. Meat and poultry are some of the
    most needed foods for food banks, but most food banks have extremely
    limited capacity to safely store, pack, and distribute meat and poultry
    products. Thus, improving cold storage and distribution infrastructure
    are critical to ensuring nutrient-dense animal protein products are
    available to those in need. Investments in food donation infrastructure
    complement SNAP and help ensure food security.
                                     ______

    Supplementary Material Submitted by Laurie Hubbard, Region I Director,
              Executive Board, American Sheep Industry Association
    Insert
              Mrs. Hayes of Connecticut. I am sorry, my time has expired.
            Thank you. And anyone on the panel who has any thoughts on how
            we could improve SNAP feeding people, anything we can do for
            food security, I welcome your thoughts. Please reach out to my
            office. I am sorry, I yield back.

        Seeing as how the question is targeted towards SNAP, which does not
    necessarily fit into ASI's farm bill requests/priorities, we do not
    have any qualified response for the question.
                                     ______

       Supplementary Material Submitted by Kelsey R. Scott, Director of
                   Programs, Intertribal Agriculture Council
    Insert
              Mrs. Hayes of Connecticut. I am sorry, my time has expired.
            Thank you. And anyone on the panel who has any thoughts on how
            we could improve SNAP feeding people, anything we can do for
            food security, I welcome your thoughts. Please reach out to my
            office. I am sorry, I yield back.

        Much of the discussion around SNAP often centers around fraud in
    connection with the program, with little attention as to how the
    program can be improved in a way that enhances food security by
    providing nutritious food options to eligible households, while
    simultaneously securing a market for smaller producers to provide their
    products direct-to-consumer. With the recommended improvements outlined
    below, Congress would strengthen SNAP for both consumers and producers
    by securing a market that better supports regional food systems and
    economies. Specifically, Congress can improve SNAP by:

       Enhancing the products available to eligible households by
            incentivizing SNAP participation among small family operations
            with products that are eligible for direct-to-market purchase
            by:

        1.  Improving technical assistance available to small family
                agriculture oper-
                  ations around SNAP participation;

        2.  Scaling producer participation requirements by the size of the
                agriculture
                  operation and authorizing alternative electronic payment
                methods that re-
                  move cost barriers to small family agriculture
                operations;

        3.  Removing the policing burden from small family agriculture
                operations that
                  accept SNAP benefits for the purpose of feeding members
                of their commu-
                  nities;

        4.  Incentivizing participation by small family agriculture
                operations.

       Promoting effectiveness and efficiency of SNAP
            administration in Tribal communities by:

        1.  Authorizing the dual use of SNAP and the Food Distribution
                Program on
                  Indian Reservations (FDPIR); and

        2.  Authorizing Tribal administration of SNAP through 638
                contracts.
    Enhancing the products available to eligible households by
            incentivizing SNAP participation among small family operations
            with products that are eligible for direct-to-market purchase
        While the Agricultural Act of 2014 authorized ``agricultural
    producers who market agricultural product directly to consumers'' as
    ``retail food stores'' for the purpose of accepting EBT,\1\ * the
    framework of SNAP--in its current form--undermines the participation of
    small family agriculture operations \2\ ** as retail food stores, and
    instead favors large-scale producers and retailers that may not have a
    presence in rural or remote communities where many small family
    operations do. The application process and rules are onerous for small
    family operators, which often have limited staff and income,\3\ to make
    the process worthwhile from a business standpoint. Indeed, in its
    current form, SNAP can wind up costing a small family operation more
    than they make from accepting EBT due to the one-size-fits-all
    requirements employed by USDA in implementing SNAP. The consequence is
    that the small family agriculture operations that are the backbone of
    local and regional food system security forgo participation, and local
    economies, alongside eligible households that cannot access local
    agriculture products, suffer.
    ---------------------------------------------------------------------------
        \1\ Agricultural Act of 2014, Pub. L. 113-79, 128 Stat. 793,
    4012 (codified as 7 U.S.C.  2012(o)(4)) (``(o) `Retail food store'
    means--(4) any private nonprofit cooperative food purchasing venture,
    including those in which the members pay for food purchased prior to
    the receipt of such food, or agricultural producers who market
    agricultural products directly to consumers;'') (emphasis added).
        ** Editor's note: due to references to multiple sections, Pub. L.
    113-79, in its entirety, is retained in Committee file
        \2\ See generally U.S. Dept. of Agriculture, National Agricultural
    Statistics Services, 2017 Census of Agriculture Highlights: Family
    Farms (2021), https://www.nass.usda.gov/Publications/Highlights/2021/
    census-typology.pdf (USDA defines a small family farm as one with a
    gross cash farm income (GCFI)--producer's sales of crops and livestock,
    fees for delivering commodities under production contracts, government
    payments, and farm-related income-less than $350,000. Further,
    ``[s]mall family farms account for 88% of all U.S. farms, 46% of land
    in farms, and 19% of the value of all agricultural products sold.'').
        ** Editor's note: references annotated with  are retained in
    Committee file.
        \3\ Id. (``92% of small family farms have two or fewer producers .
    . . .'').
    ---------------------------------------------------------------------------
    1. Improving technical assistance available to small family agriculture
            operations around SNAP participation and the application
            process
        According to USDA, ``[a]pplying to the Supplemental Nutrition
    Assistance Program (SNAP) as a retailer is a simple, online process
    that costs you nothing. You can complete an online application in as
    little as 15 minutes.'' \4\ Step 1 of this online process is
    registering for a USDA eAuthentication account, which requires a
    producer to select one of the three following user types: Customer;
    USDA Employee/Contractor; or Other Federal Employee/Contractor. From
    the outset, no explanation is provided as to how a direct-to-market
    producer interested in being a SNAP ``retail food store'' fits within
    any of these user types. Thus, a producer must then proceed with
    hunting down guidance as to what constitutes a specific user type,
    decreasing the likelihood that the producer will complete the
    application in 15 minutes. Couple this with the fact that the
    overwhelming majority of small family agriculture operations have two
    or fewer producers,\5\ a less than intuitive application--from the
    first step--becomes a barrier to many small family producers wishing to
    accept EBT for their direct-to-market products.
    ---------------------------------------------------------------------------
        \4\ U.S. Dept. of Agriculture, How to Apply and Accept SNAP
    Benefits (Dec. 18, 2017), https://fns-prod.azureedge.us/sites/default/
    files/snap/SNAP-application-educational-notice.pdf.
        \5\ U.S. Dept. of Agriculture, Supra note 3.
    ---------------------------------------------------------------------------
        At a minimum, technical assistance and guidance specific to small
    family agriculture operations offering direct-to-consumer products
    should be readily available to small family operators. These
    agriculture operations are more likely to navigate this process on
    their own, while larger-scale operations and retailers have greater
    flexibility to hire or direct staff to understand and complete this
    process. Considering that small family agriculture operations represent
    just under half of all agriculture lands in the United States,\6\
    failing to actively engage these producers around SNAP EBT reflects a
    significant gap in strengthening food security within the very
    communities where these producers live and operate.
    ---------------------------------------------------------------------------
        \6\ U.S. Dept. of Agriculture, Supra note 2.
    ---------------------------------------------------------------------------
    2. Scaling producer participation requirements by the size of the
            agriculture operation and authorizing alternative electronic
            payment methods that remove cost barriers to small family
            agriculture operations
        The implementation of SNAP EBT is not designed, much less scaled,
    to accommodate small agriculture producers offering direct-to-market
    products. To participate as a retail food store, small agriculture
    producers with direct-to-market products must navigate the same
    regulatory process as other, larger and/or more traditional retail food
    stores. While this process may represent a common interaction for
    larger business entities, such as retail chains that have the legal and
    technical guidance of executive-level employees capable of navigating
    these processes, that is not the case for small family operations. In
    these instances, the agricultural producer themselves is sitting down
    to the computer to navigate this process; typically without any prior
    experience or legal insight guiding them. Requirements that present
    confusion for small agricultural operations include SNAP EBT
    application's reference to a permanent storefront, stringent
    requirements around necessary equipment for processing benefits without
    reference to how to procure such technology, and pointed directives
    around the need to police the use of benefits or face repercussions
    with the Federal Government. This process is less than user-friendly
    and serves to discourage small family producers from participating as a
    ``retail food store'' with their own products, thereby removing a
    community food source that could otherwise be available. Because small
    agriculture operations are not reflected in the regulations that
    implement SNAP EBT, these same operations may deem their retail
    business unfit to become certified as a SNAP EBT vendor (retailer).
        As an example, after being approved as a SNAP EBT vendor
    (retailer), I--a small family agriculture producer--had to procure the
    software that allows me to accept SNAP EBT payments. USDA did not
    provide any guidance to me as to where to procure these services. Even
    so, within 6 hours of receiving my SNAP EBT vendor authorization
    notification, private companies were soliciting my business. Thus, they
    had access to my information as an approved SNAP EBT vendor, but I did
    not have the same, easy access to resources that would support me in
    making an informed decision about the software and company that would
    be right for my business. After a week of my own, independent
    research--which was a confusing and convoluted process--I decided to
    procure the services of TotilPay. This particular platform required an
    up-front cost of a couple hundred dollars, an annual subscription and
    monthly platform fee, as well as a per transaction processing cost.
    From my vantage point, TotilPay does not offer a unique technology
    beyond that which other small business purchasing platforms, such as
    Square Up, do, yet the processing costs are much more exorbitant. USDA
    should reduce or eliminate this barrier to ensure that small family
    agricultural operations are able to process SNAP EBT payments without
    hidden or inflated fees.
        It seems the 2014 Farm Bill attempted to address some of the
    hurdles small family agricultural operations offering direct-to-market
    products encounter, but these provisions have not been made readily
    accessible at USDA. In addition to authorizing agricultural producers
    who market agricultural products directly to consumers to accept EBT,
    the 2014 Farm Bill also ``require[s] participating retail food
    stores . . . to pay 100 percent of the costs of acquiring, and arrange
    for the implementation of, electronic benefit transfer point-of-sale
    equipment and supplies, including related services.'' \7\ Importantly,
    however, the subsequent section authorizes the Secretary--at their
    discretion--to exempt ``farmers' markets and other direct-to-consumer
    markets'' from paying the 100 percent of costs associated with EBT
    equipment, supplies and services.\8\ Even so, it remains unclear, if
    not altogether elusive, as to how this exemption might be obtained
    today. Without clear guidance, this keeps many small family agriculture
    operations from accepting EBT due to the costs associated with doing
    so. The House Conference Report that accompanied what would become the
    2014 Farm Bill noted that, while these provisions were intended to
    reduce fraud, the House also deemed it ``imperative that the Secretary
    work with SNAP-approved retailers to ensure there are no additional
    costs or burdens that are duplicative or inconsistent with common
    commercial practices'' and ``acknowledge[d] that many small businesses
    and direct-to-consumer retailers continue to face challenges related to
    the cost of utilizing EBT and advanced technologies.'' \9\ These same
    challenges remain today, to the detriment of small family agriculture
    producers, local and rural economies, and this nation's overall food
    security.
    ---------------------------------------------------------------------------
        \7\ Agricultural Act of 2014,  4002(b)(2)(A) (codified as 7 U.S.C.
     2016(f)(2)(A)).
        \8\ Id. at  4002(b)(2)(B) (codified as 7 U.S.C.  2016(f)(2)(B)).
        \9\ H.R. Rep. No. 113-333 (2014) (Conf. Rep.).
    ---------------------------------------------------------------------------
        Improving SNAP to work better at feeding people and shoring up food
    security cannot occur without addressing the source of food and
    providing options around food. Small family agricultural operations are
    the heart of food production, and the process for direct-to-market
    producers to participate as vendors (retailers) in SNAP EBT must
    reflect this to support greater participation among small agricultural
    operations. And the laws governing SNAP must do the same. This can be
    accomplished, in part, by modernizing the application process to be
    more directly inclusive of the ways that a small family operation sells
    to their community; embracing reference to vendor locations such as pop
    up shops, market stands, farm stands, seasonal sales venues, etc., as
    the point of sales for small family operations often needs to be
    mobile. Additionally, the mobile nature of small agricultural producers
    offering direct-to-market products has worked against their
    participation as SNAP EBT vendors. SNAP vendors are required to produce
    a printed receipt for the customer, which requires internet connection
    and electrical access beyond what most of the typical sales locations
    for small operations can accommodate. Typically, the majority of
    customers I serve do not want a receipt, especially with their ability
    to login to their account online and verify their balance. Outdated
    requirements like these not only prohibit family operations from
    pursuing/maintaining SNAP vendor certification, they limit economic
    opportunities in remote locations that do not have the same level of
    access to technology and services required by this program.
    3. Removing the policing burden from small family agriculture
            operations that accept SNAP EBT for the purpose of feeding
            members of their communities
        Rules for maintaining SNAP eligibility can be especially
    intimidating for smaller family operations that are offering direct-to-
    market products. In addition to the inputs required for producing a
    market-ready product, smaller producers accepting SNAP EBT are also
    required to navigate SNAP policing requirements--often among their own
    community members. This creates a stigma with consequences that include
    eligible households avoiding transactions with small family operations
    and producers having to turn people away from nutritious, locally-
    produced food when their benefits do not align with the producer's
    product. Smaller producers in more remote communities often accept SNAP
    as a means to try and help feed their own communities, but the current
    framework creates barriers for local producers and SNAP-eligible
    households alike.
    4. Incentivize participation by small family agriculture operations
        Another route for improving the function of SNAP and overall food
    security is to incentivize small family agriculture operations to
    participate in SNAP by offering incentives that, at a minimum, minimize
    the out-of-pocket costs they incur in order to participate. This could
    be accomplished through a set-aside fund for grants to small family
    agriculture operations that are authorized to accept SNAP EBT; allowing
    SNAP EBT vendors access to a greater number of Small Business
    Administration loan portfolio offerings; and increasing the funding
    towards farmers' market SNAP Support Grants, while simultaneously
    eliminating purchasing requirements inflicted upon SNAP recipients.
    Influencing how a SNAP recipient purchases foods should not be the
    program's primary focus, especially when the foods the recipient is
    trying to procure are fresh, local, and grown by a family operation in
    their community.
    Promoting effectiveness and efficiency of SNAP administration in Tribal
            communities
        As a member of the Cheyenne River Sioux Tribe who lives and ranches
    within the reservation boundaries of my Tribe, food security issues are
    always present. Tribal members across Indian Country live in the most
    remote regions of the United States. This presents significant food
    access challenges when Tribal members, both food program recipients and
    producers, are expected to access resources in the same manner as those
    with easier access to more readily available options. There are common
    sense proposals that would not only serve to better address food
    security, but would also improve the efficiency of SNAP in Tribal
    communities.
    1. Authorizing the dual use of SNAP and FDPIR
        In a 2022 report, the Native Farm Bill Coalition outlined an
    opportunity to improve food security among Tribal members by removing
    the prohibition currently in place that bars qualifying Tribal members
    from utilizing the Food Distribution Program on Indian Reservations
    (FDPIR) and SNAP in the same month.\10\ As reported in Gaining Ground:
    ---------------------------------------------------------------------------
        \10\ Parker, Erin, and Griffith Hotvedt, Carly, et al., Gaining
    Ground: A Report on the 2018 Farm Bill Successes for Indian Country and
    Opportunities for 2023 50 (Sept. 2022), https://
    www.nativefarmbill.com/_files/ugd/
    8b3589_763e8879ac2842c0baa45c586ddfd83a.pdf.

              This creates an administrative headache for certification of
            anyone who chooses to move between programs. It also is not
            representative of any other food program combination.
            Individuals who qualify for both TEFAP and SNAP may use both,
            or WIC and SNAP, and on and on. Removing this statutory
            prohibition would improve food access and opportunities for
            Tribal citizens to feed their families. If enacted in
            combination with Tribal administration of SNAP, this provision
            could also be a powerful tool to not only improve food access
            in Indian Country but also provide market opportunities for
            Native-produced foods. It is important to note, however, that
            both FDPIR and SNAP remain vital parts of the food security
            landscape for Indian Country and Tribal citizens. Removing this
            barrier does not indicate that the need for either program has
            ended.\11\
    ---------------------------------------------------------------------------
        \11\ Id.

        In a modern and mobile society, there are Tribal members who may
    spend time in more urban areas for job and educational opportunities,
    while going back to their homes on the reservation in between. The
    current prohibition against using FDPIR and SNAP within the same month
    forces people to choose a program that means they may not have access
    to food at another point in time within the same month.
    2. Authorizing Tribal administration of SNAP through 638 contracts
        Government programs administered at the local level are best suited
    to be responsive to the needs of local community members and more
    effective in identifying eligible participants. The same is true for
    SNAP and supports the need for Congress to authorize federally
    recognized Tribes to administer SNAP pursuant to the Indian Self
    Determination and Education Assistance Act of 1975 (ISDEAA), Pub. L.
    93-638--more commonly referenced as ``638'' contracts.
        The Native Farm Bill Coalition, in Gaining Ground, notes:
    ``Expanding `638' authority to the SNAP program would allow for a more
    robust Tribal option than programmatic administration and be a
    significant acknowledgment of Tribal sovereignty in food systems. `638'
    has been shown to reduce programmatic costs and produce cost-savings in
    other arenas and could do so here as well.'' \12\
    ---------------------------------------------------------------------------
        \12\ Id.
    ---------------------------------------------------------------------------
        In the 2018 Farm Bill, Congress authorized a 638 pilot program for
    Tribal authority over the procurement of food for the Food Distribution
    Program on Indian Reservations (FDPIR). Participating Tribes
    administered the programs within their communities with great success--
    providing fresher, locally procured food items, while building Tribal
    economies. While every Tribe may not choose to exercise 638 authority,
    for those that do, it is an option--within SNAP and FDPIR--to build
    food security and local economies.

                                      [all]