USDA Chief Sees Mexico Relationship Vital, Seeks Livestock Industry Improvements

Oct 22, 2021  | 8 min  | Ep4710

Paul Yeager: Secretary Vilsack, you're here in Iowa, you're playing tour guide a little bit. Why is it important to have a good relationship with Mexico?

Sec. Tom Vilsack, USDA: “Well, it's important to have a good relationship first and foremost with my counterpart in Mexico, because you have to have the ability to pick up the phone or visit face to face and have Frank and trusted conversation. So that relationship becomes important to build. I actually have a relationship with Secretary Villalobos for some time. So it's been a little bit as you it's important for the US - Mexico relationship, because so much of what we trade so much of what we what we sell overseas, if you will, in our export. One of our number, top three markets is Mexico for many of our products, in some cases is our number one market. So it's important, obviously, to make sure that we continue to have a good relationship. We continue to address identify the problem areas in the relationship and try to work through them.

Paul Yeager: USMCA was, you were familiar with NAFTA from your previous time USMCA comes along? That was a big goal of the previous administration. How have you sorted through some of those changes and conversations you've had with Mexico and you can throw in your Canadian counterparts, too?

Sec. Tom Vilsack, USDA: Well, I think the conversation with Mexico has been a little bit easier as it relates to USMCA because the problems we have there, I think we can work through for example, while it is accurate that Mexico has taken a pretty hard line in terms of genetically engineered crops that are grown in Mexico, it has not prevented that country from continuing to import into the country corn that's grown here in the US using GMO technology. Our friends and candidates a little different situation. One of the principal reasons why Congress voted in favor of the USMCA from an agricultural perspective, was the belief that Canada would in fact open up its market for us dairy, we are still having conversations with our Canadian friends about that. And we've actually triggered the consultation process or began the consultation process that is provided for the USMCA when you have a difficulty or a disagreement that's not getting worked, work through. So that's one of the benefits of USMCA that there's actually a mechanism for putting something on the table when you have a disagreement with your trading partner. That's really important.

Paul Yeager: The American worker in the food system right now has gone through many different changes in the last year and a half since COVID. The meatpacking industry has said they can't get enough workers in trucking industry. We don't have enough drivers, manufacturing plants, we don't have enough worker, is this anything to do with NAFTA offshoots from years ago? Is this a worker training issue? What do we see come to a head other than simple supply and demand?

Sec. Tom Vilsack, USDA: Well, I think there was a major disruption for the pandemic, I mean, look at it, we shut down a substantial portion of the economy of the country. As a result of pandemic, we've, unfortunately, tragically lost. Hundreds of 1000s of our fellow citizens and millions of them have been sick, there has been a major disruption. And it causes, I think, a lot of soul searching on the part of a lot of folks. And there may very well be people that were contemplating retirement or contemplating a change in opportunity before the pandemic, and maybe this basically accelerated their timeline. At the end of the day, what you have to do in a disruption is you basically have to figure out strategies to cope into and to deal with a disruption until you get to a more stable and secure place. I think it does emphasize the need in this country, to continue to look for ways in which we can honor those who not only work with their head, but also with their hands. And if there's any long term issue here, I think it's the fact that for far too long, we didn't understand or appreciate all those folks who, who work with their hands.

Paul Yeager: Last week you were in Congress, talking about the Meatpacking industry, is there a stomach politically to try to break up big companies? You talk about competition earlier at the event? There's been programs to help smaller processors, is this administration looking at more of that help, or more of a break up of these large players?

Sec. Tom Vilsack, USDA: Our focus right now is on capacity and competition. And I think they go hand in hand. If you expand capacity, you're also going to expand competition. How do you do that? Well, the first thing you do is to take a look at your existing processing capacity, existing processing plants and ask the question, Are there ways in which you've been expanded? Are there ways in which you can create new market opportunities? The answer is yes. And yes. So we're providing resources in the form of grants and loans to be able to expand to change market opportunities to expand market opportunities. Is there a way of reducing the cost for existing facilities so they stay in business? Answer Yes, we're providing research To reduce the cost of inspection, but is there also a way in which we can use resources to expand new capacity or to build on significantly to existing capacity? And the answer to those questions is yes. And we're doing all of that. And I think we want to see how that works. And I believe that over the course of the next year or so, you're going to begin to see investments being made processing being expanded. And what this is going to do is it creates competition, that it also creates resiliency. And part of the challenge here that we found with having too few processing facilities, when one shuts down, it creates chaos in the market disrupts the market, we've got to have more, more capacity, we have to have the ability to shift, because this is the last disruption that we're going to be faced with. It may be drought, it may be fire, it may be COVID, it may be something else, but but we know that these disruptions don't occur. So the focus now is on not just great efficiency and productivity, but also on on resiliency. And with resiliency, it means expanding capacity. And we're investing in expanding capacity, we're also making sure that we strengthen the rules and laws governing the relationship between the producers and the packers, right. There may be circumstances and situations in some industries, where, where the playing fields, not quite level. And that's why we get into the packers and stockyards act. It may also be that we need to have better discovery, we bet better understanding what the price actually is there. So, so few cash transactions, that it's sometimes you begin to wonder whether or not the price that you're being quoted is really the price it should be quoted. So more price discovery, so a variety of things that need to be done and are being done.

Paul Yeager: If only another two days, we'd get into price discovery for the rest of the conversation. Secretary Vilsack, thank you so much for the time. Thank you.

Tuesday's MTM podcast will include the Secretary's comments on China infrastructure and the UAW strike against John Deere.


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