The National Pork Producers Council urges the Biden Administration to appeal a court ruling that reduces U.S. pork processing capacity. 
The Biden Administration has until the end of August to appeal a federal district court ruling that took effect June 29, which strikes down pork harvest facility line speeds allowed under the USDA’s New Swine Inspection System. 
NPPC spokesperson Jim Monroe said hog farmers ask for a longer stay of the court order or waivers to allow impacted plants to continue operating at NSIS line speeds until they can establish a long-term solution. Unfortunately, this is going to have a very negative effect on U.S. hog farmers. 
It will reduce packing plant capacity by 2.5 percent overall in the United States, impacting six plants reducing their capacity by as much as 25 percent. 
“Again, unfortunately, that’s going to lead to concentration in the industry, more packing plant market power, lost revenue, and additional expenses for U.S. hog farmers. It’s going to impact competition in the industry negatively, and that’s never good. Competition drives innovation and is good for consumers. 
As far as the impact on harvest facility operations, the impacted plants will lose up to 25 percent of their capacity. Those plants will need more hogs available than they have space to process, so that could lead to cancelling contracts with, in particular, smaller producers. 
Those hogs will then sell on the spot market, where they will likely receive less value.

In addition, producers will face additional expenses because they have to transport their hogs to more distant planets with available capacity. 
Monroe said an analysis by Iowa State University Economist Dr. Dermot Hayes projects pork producers will lose 80 million dollars in revenue opportunities due to the ruling this year alone. 
Dr. Steve Meyer, an economist with Partners for Production Agriculture said the court-ordered rollback would force the construction of new processing plants rather than allow increased capacity through improved efficiency. 
Dr. Meyers said the ruling had cut the capacity of five U.S. processing plants, four of which had been part of a 20-year pilot project, from about 13 hundred 50 hogs per hour to about 11 hundred per hour. 
“If we look at that in total it costs us about two and a half percent of our slaughter capacity in the United States or about 85 thousand head per week. So the danger there, of course is if they get high hog numbers, you might run into that slaughter capacity constraint.” 
Last summer, the industry had about 2.768 million pigs per week on a 5.4 workday week, which is the standard he used. This would take the numbers back to about 2.683 million head and, based on the March Hogs and Pigs report there is some risk of running into that slaughter capacity constraint. However, the June Hogs and Pigs report with its three percent lower March-May pig crop had pulled those numbers back. 
“I don’t think there’s an immediate threat to the capacity even with these lower chain speeds. But longer-term it takes away some capacity and it’s the easy capacity to add if you play by the rules and do the things that USDA found; during the long pilot project.” 
Still troubling even though, given the projected fourth-quarter slaughter, he doesn’t think it will be a big problem this year. 
Dr. Meyer said the ruling sets a precedent for the future that says that a company may have to build a new plant to get more capacity. The easiest way to add capacity is to run the existing a little harder. •
— By Harry Siemens