[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.
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    \1\ Cattle Report. USDA-NASS: 2023.
    \2\ Beef Cow Numbers Decline. American Society of Animal Science: 
2023.
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    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.
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    \3\ Pub. L. 117-169.
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      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\
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    \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.
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    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.
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    \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.
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    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\
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    \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.
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    \17\ Pub. L. 104-127.
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    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\
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    \18\ Cattlemen's Beef Board. U.S. Department of Agriculture.
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    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\
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    \17\ Guidelines for AMS Oversight of Commodity Research and 
Promotion Programs. U.S. Department of Agriculture: 2020.
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    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.
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    \20\ Pub. L. 75-717.
    \21\ Pub. L. 108-130.
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    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.
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    \22\ Natural Resources Conservation Service. National Range and 
Pasture Handbook. U.S. Department of Agriculture: 1997.
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    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.
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    \23\ National Interagency Coordination Center Wildland Fire Summary 
and Statistics Annual Report. National Interagency Fire Center: 2022.
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    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.
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    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.
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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.
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    * 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.
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    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.
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    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.
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    \6\ U.S. Dept. of Agriculture, Supra note 2.
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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.
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    \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.).
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    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\
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    \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\
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    \12\ Id.
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    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.

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