The dynamics in Washington changed dramatically last month when the new Congress met with Republicans in charge of the House of Representatives and in a stronger position in the Senate.
Although the makeup of the new Congress gives the business community more tools to work with, we cannot expect the Congress to stop all of the regulations that lie ahead during the next two years of the Obama Administration. Many of the regulators at the National Labor Relations Board, Occupational Safety and Health Administration, Environmental Protection Agency and other federal agencies are not business-friendly. They will use the next two years to try to put their agenda in place. The Congress can do only so much to hold back the regulatory tide that threatens to erode an increasingly positive economic climate.
In the meantime, here’s where a few key issues stand:
USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) has proposed a rule on livestock and poultry production and marketing that we think will be a very bad deal for the poultry industry (and the livestock industry as well). USDA is considering the thousands of comments filed for and against the proposed rule and reviewing its cost-benefit analysis.
In our view, and the view of others in industry, the rule would have significant economic impact. Technically, that’s a continuing impact of $100 million or more per year. I believe that a fair cost-benefit analysis would validate this point. Even if the rule is not considered economically significant, Congress has an important role to play in oversight by making sure USDA is playing by the rules in attempting to finalize this sweeping regulation. This battle will continue for some months.
Animal health and antibiotics
The Food and Drug Administration is in favor of phasing out low-level uses of antibiotics in food animals while still allowing preventive or therapeutic uses. FDA feels that all “low-level” use is for economic reasons, that is, weight gain and feed efficiency. But that isn’t true in our industry. Antibiotics can be used at low levels to protect animal health and to prevent a disease problem from taking hold in a flock. We will continue to work with the agency on this issue, and we may well see some action this year.
When your only tool is a hammer, every problem looks like a nail, as the old saying goes. USDA’s Food Safety and Inspection Service seems to think that its Salmonella standards are the most – if not only – effective approach to food safety. The agency is proposing to reduce its benchmark for Salmonella to 7.5 percent. That is, no more than 7.5 percent of a plant’s regulatory samples could be positive for any kind of Salmonella, or the plant would be in trouble. While most plants are already meeting this proposed standard, it’s a fact of life that a plant can do everything right, be in compliance for months or years, and suddenly have a failure. There is also no real indication that industry compliance with Salmonella standards actually has an impact on public health. The number of known salmonellosis cases in the country has been around 40,000 for years, even as the standards have been tightened.
We hope FSIS will take a broader view of the challenge of food safety and recognize that simply piling more obligations on the broiler industry is not the best use of its resources.
I would also like to note that this is my last column for WATT PoultryUSA since I am retiring from the National Chicken Council at the end of March. I appreciate the opportunity this column has given me to share my views with members of the industry and to hear from many of them in turn. This is a great industry, and I am proud to have served it since 1972.