Letter to the Hon. Tom Vilsack, Secretary of Agriculture - Grassley, Colleagues Send Letter To USDA, DOJ On Harmful Court Ruling To Hog Farmers

Letter

Dear Secretary Vilsack,

We are writing to direct your attention to a recent U.S. district court decision which vacated a
portion of the Department of Agriculture ("USDA") New Swine Inspection System ("NSIS")
rule relating to line speeds at NSIS packing plants. By removing this provision six plants will be
forced to reduce their output, and by extension, their purchase of hogs.

While the economic impact to these packers will be significant, it is the nation's small and
medium-sized hog farmers who will suffer the greatest harm from upstream impacts. It is
imperative that USDA act quickly, and pursue all available options, to prevent this reduction in
packing capacity which is set to take place at the end of June.

Although NSIS is relatively new, it is based upon a pilot program that operated successfully for
decades. Its predecessor, the Hazard Analysis and Critical Control Point ("HACCP") Inspection
Models Project ("HIMP") program was developed during the Clinton administration and ran
continuously through 2019. As a result of HIMP's success, USDA began consideration of a
permanent program during your first term as Secretary under the Obama administration and
finalized the program during the Trump administration.

The order to vacate the NSIS line speed provisions was due to the rulemaking process. The court
determined the agency failed to satisfy the Administrative Procedure Act ("APA"), claiming it
did not address certain comments raising worker safety concerns. Adherence to the APA is
crucial to preserve sound and reasoned rulemaking by federal agencies. However, there is
compelling data about the safety of workers in NSIS. Specifically, FSIS data between 2002 and
2010 shows fewer worker injuries in NSIS program facilities over time and fewer injuries at
NSIS plants when compared to their non-NSIS counterparts.

If USDA fails to act, American hog farmers will face significant harm. Research from Dr.
Dermot Hayes at Iowa State University indicates that the decision would reduce national packing
capacity by 2.5% which will create a surplus of hogs on the market--dropping prices by
$10.70/cwt or roughly $23.22 per animal. The total economic loss of this decision on U.S. hog
farmers is estimated at $80 million in 2021.

As the hog production cycle spans nearly a year, hogs set to enter this reduced-capacity market
are already being raised. Farmers have little ability to alter their supply in the next year. Many
farmers supplying these NSIS plants will need to find alternative destinations for their hogs.
The resulting surplus and reduced demand in a concentrated geographic region will shift
economic power to pork processing companies. The culmination of economic losses from the
producers selling their operation. By failing to act, USDA will drive consolidation in the pork
industry.

To avoid these consequences, the Department must defend the NSIS program through all
available channels while the court-ordered 90 day stay is in place. Failure to do so will leave our
nation's hog producers to bear the brunt of the consequences due to no fault of their own. Thank
you for your consideration.