Pork Producers Facing Challenges and Opportunities in 2015Mon, 01 Dec 2014 18:15:11 CST
The next two years could make for interesting times for hog producers. While there will be a new Congress starting in January, President Barack Obama is wrapping up his final two years in the Oval Office. Oklahoma Pork Council Executive Director Roy Lee Lindsey said like past Presidents, Obama has a lot of goals in his final years in office and he anticipates the President will issue a lot of things by executive rule and order.
"I don't know if this is a lot different than what happened eight years ago, but we don't remember what happened eight years ago, so we kind of set that aside and we start ranting and raving about what's going on now," Lindsey said. "But there is no question that this administration has long believed that they have had more executive authority and more executive power than most prior and they're not afraid to use it."
Lindsey said one example is the Environmental Protection Agency's 'Waters of the US' proposed rule. He said the rule clearly goes beyond what Congress intended in the Clean Water Act. Lindsey anticipates the Obama administration will release the proposal and the policy will ultimately end up in court to be decided by the judicial system.
Radio Oklahoma Network Farm Director Ron Hays interviewed Lindsey. Click or tap on the LISTEN BAR below to listen to the full interview.
In the near future Lindsey looks for menu labeling to become more widespread. Many quick serve establishments and restaurants have offered calorie counts for items. As the latest rule becomes finalized, Lindsey looks for menu labeling to be expanded to cover everything from food to drinks, including adult beverages. Lindsey isn't sure how much this helps the health of Americans, but he knows it does increase costs for businesses.
Another area that has increased the amount of documentation and regulation for food is the nation's Country of Origin Labeling policy. The US filed an appeal Friday to the World Trade Organization's recent ruling against the nation's COOL law. The WTO ruled in October that Washington failed to bring into compliance with international trade law a revised version of the meat labeling law. Lindsey said that means Congress will have to find a way to fix the situation.
In looking ahead, Lindsey is anticipating a glut of new regulations coming out from the Obama Administration. He said that's problematic because the commodity market hates regulatory uncertainty. With concern for a huge number of regulations to be released, Lindsey said that will not be favorable for agriculture for the nation's economy as a whole.
Look ahead to 2015 the pork industry will continue to monitor the price of corn and the reoccurrence of Porcine Epidemic Diarrhea Virus (PEDv). Farmers are wrapping harvest of their 2014 corn crop and all indications are showing record corn production. In 2015 PEDv will continue to be a concern. Lindsey said no one knows how much the virus will impact the nation's baby pig population but many believe the impact of PEDv will be less in 2015 than in 2014. With low corn prices, higher pork production due to fewer pigs dying from PEDv, along with hogs being fed to heavier weights, Lindsey predicts higher pork production for the 2015. He said the biggest unknown is the outlook for exports.
"Are we going to be able to export that product and help hold prices up or are we going to get too much product out there and prices are going to have to come down and cause hog prices to come down," Lindsey said.
In talking with economists, Lindsey said most are optimistic for a good year into second and third quarters of 2015, but beyond that into 2016 remains to be a wild card. He said it is hard to determine if there will have been enough expansion taking place.
The pork industry will also keep its eyes on the cattle/beef industry. Lindsey said there is clear indication that the record prices for beef are pushing more people to eat more pork and poultry as a less expensive alternative. As beef production ramps up he is concerned about a perfect storm situation with higher beef and pork production in 2016 that could lower prices and in turn farm income.
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