Turkey industry firms have adjusted to extreme volatility in feed costs and severe economic recession in the past two years, and the industry’s economic recovery could gain momentum in 2010. Industry profitability is far from certain, though, and a number of federal policy decisions in coming months could have a major impact on the industry’s profitability.
Environment
With environmental activism on the rise, challenges involving climate change, air emissions and water quality face the industry.
Though the odds of Congress passing climate change legislation in 2010 appear to be waning, EPA’s recent determination that greenhouse gases (GHG) are a “danger to public health” indicates that the administration will move forward regardless of what happens on Capitol Hill.
In the short term, whatever EPA and Congress do will have limited on-farm impact. Dry litter operations are unlikely to exceed the GHG thresholds currently under consideration, but the industry could be affected by new regulations on energy providers and transportation services.
GHGs aren’t the only emissions under fire. The Bush administration had granted most poultry and livestock producers exemption from reporting certain air emissions because there was no evidence of a public health threat and because reporting would have been unnecessarily cumbersome on government and poultry and livestock producers. Now some environmental activists have sued EPA challenging the exemption, and the case could come to resolution in 2010.
Meanwhile, the Chesapeake Bay Initiative is another battle that could potentially be used as a national model to address nutrient and sediment impacts in the Mississippi River Basin and other regions. There are also congressional efforts to expand EPA’s authority over the Chesapeake Bay, setting an important precedent by taking a command-and-control approach to regulating watersheds and establishing punitive consequences for industries and states that do not meet nutrient reduction benchmarks.
Food safety
Congress appears likely to pass major food safety legislation in 2010, and though it would apply strictly to FDA inspection, it likely would set precedents that could be applied to USDA inspection in the future. That’s why the poultry and meat industries remain focused on trying to address the most troublesome aspects of the bill.
For example, Congress at this point appears intent on giving FDA mandatory recall and civil penalty authorities. The bill also would seek to create new user fees and give FDA the authority to dictate specific aspects of a plant’s food safety system. Some future Congress could ask the question, ‘If FDA has these authorities, why shouldn’t USDA?’ There are good reasons – discussed many times before in this space – why none of these authorities should apply to USDA.
Renewable fuels
Though corn production has risen significantly since passage of the Renewable Fuel Standard (RFS) in 2005, essentially all of that new production has gone to ethanol, which now consumes nearly a third (32%) of the corn crop. More disturbing is the fact that we now are consuming more corn in this country than we are producing. At some point, this trend could lead to catastrophe, but few in the government seem to be seriously taking into consideration the implications of a crop shortage.
Even if Congress is not prepared politically to act, EPA should take the current trends into consideration as it considers a new rule to govern the RFS and as it decides whether to act on the ethanol industry’s petition to increase from 10% to 15% the allowable mix of ethanol in most gasoline blends.
The industry faces a wide variety of political, legislative, regulatory, economic and marketing challenges simultaneously. NTF and others in the poultry industry will need to continue to push for a thorough examination of proposed legislation and regulation to ensure that the industry and American consumers are not left with an unnecessary economic burden.
