The outlook for the livestock industry is improving, but there still remain challenges ahead.
That was the message from the United States Department of Agriculture chief economist Joseph Glauber at the House Agriculture Livestock Subcommittee’s recent hearing on the “State of the Livestock Industry.”
Glauber said the livestock sector would normally be taking advantage of strong livestock prices and falling grain prices, but the beef and pork sectors ability to expand production “will be limited by non-feed cost factors” such as cattle inventory, drought, and porcine epidemic diarrhea virus (PEDV).
Red meat production will remain constrained in the near term and 2014 will be the lowest since 2010. Livestock and poultry prices are estimated to be higher this year due to overall meat supplies and increased demand.
The National Pork Producers Council (NPPC) testified on the affects that PEDV and COOL were having on the pork industry. According to NPPC, PEDV has killed approximately 7 million pigs in 30 states since April of 2013 and these losses will likely reduce slaughter this summer by more than 10%. This will increase U.S. hog prices by 15 to 25% and force consumer pork prices higher.
NPPC said that if Canada and Mexico are successful in their WTO case concerning COOL that pork producers could see “prices fall by roughly $2 per hundred pounds of carcass weight” if tariffs are imposed. This would reduce producer revenues by $400 million per year. COOL was a major issue in the hearing with a number of Congressional members stating their concerns and opposition to COOL.
Congressman Jim Costa (D-CA) said, “This program has added nothing but costs to the industry.”
Congressman Kurt Schrader (D-OR) reminded the committee that if Canada and Mexico win their WTO case the retaliatory tariffs on U.S. exports “could be devastating.”
Roger Johnson, President of the National Farmers Union (NFU) defended COOL by saying COOL is “working as intended.” He also said, “Now is not the time to deny consumers vital information that will allow them to make informed buying decisions and to remain confident in the integrity of our food supply.”
However, a number of the witnesses said that consumers say they want to know where their food comes from but are not willing to pay extra for it. The National Cattlemen’s Beef Association (NCBA) testified that the Kansas State University study on COOL found that the vast majority of consumers “don’t even look at the COOL label when buying beef” and “don’t consider COOL in their purchasing decision.”
USDA found according to survey data that the labeling has little impact on consumer meat choices.