Pork Industry Seeks Clarity on Trade Deals, Labor Policy and Processed Food Definition

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[Yeager] Details. It's all in the details. For many trying to make sense of Trump policies right now. There's been lots of talk and pushing. We might get a deal here. We have a deal here. But it's the details that have been kind of holding back some of the next steps, specifically in the pork industry. We're going to talk with the president of the board of directors of the National Pork Producers Council, and that's Duane Stateler. He is from McComb, Ohio. He has a seat at many meetings where they are trying to figure out what's next. How do we find out what exactly is going to impact us on Prop 12? What's going to happen with labor? What's going to happen with trade? But the first discussion is about what came out of the merger report about making America healthy, what is being done and what is being classified, one of the core products of this industry. And it's a big hurdle to climb for pork producers across the United States. We'll talk about that with Duane Stateler from Ohio right now. But we start with where he had a conversation with the head of the USDA and it was at the Iowa State Fair. I'm Paul Yeager. This is the MToM podcast. New episodes come out each and every Tuesday. Now let's get to our discussion with Duane. 

[Yeager] Duane, did you get a second pass to come to Iowa? I mean, you already did the World Pork Expo, and then you actually came to the Iowa State Fair. What was with that?

[Duane Stateler] Well, I was out in Iowa or the Iowa State Fair to see my good friend Pat Mcgonegle. And we were there to have a meeting with Secretary Rollins.

[Yeager] I think Pat's friends with everybody. He certainly knows a lot of people in the industry. So you did have a conversation with the secretary? I guess we could just jump straight in then, what's your what's your words to the secretary of Agriculture right now?

[Stateler] Well words with the secretary of Agriculture is we've got, you know, concerns on Prop 12, and then we're also got concerns on the labor, and then we're just got a few concerns about some of the things in MAHA, you know, just wanting some actual answers rather than some, you know, copies of drafts that might be intended for use or not intended for use. Just what is the going to be the examples that we're going to, you know, guidelines? We're going to go by.

[Yeager] And you'd like to see the details because then you can plan. Are you of that mindset?

[Stateler] Yes. We need the details. We've got two big concerns. The details is in the classifications of processed, ultra-processed and whatever they seem to leave out the process. Step and go. They're putting everything into ultra-processed and, I just have a problem with that myself. And so does the industry that when you're talking about ultra-processed, I don't consider, sausage and ground pork, that has had some salt and pepper added to it to be sold as ultra processed. But when you only have the one classification they're either talking about, you know, they're just talking about processed, that's where it could fall into, well, is it or isn't it. You know, there's no clarification on it. I mean, that's a real problem if it is because then that takes out. Not only does that take out just, you know, plain sausage, but that, takes out, you know, then he's talking, you know, the hot dogs, bratwurst, you know, go right on down the line and that will be a problem for us that that is all considered in ultra processed.

[Yeager] And this is specifically you are talking about in the MAHA report. That's where the processed, ultra processed part is.

[Stateler] Yeah. Because there's really been never been a definition, Paul, of anything. There's one it was sort of floated out there from Brazil. You have processed your regular meat, you have you processed your ultra processed, then you have a super, ultra processed. And it's just sort of a thing that people have went by. There's no one, no real definition. And that's what we're trying to get to is what's the definition? Because, you know, protein, especially dense protein like pork that really shouldn't be thrown into an ultra processed if you're just adding some salt and pepper to it and calling it sausage.

[Yeager] It sounds pretty simple, but it's I'm guessing from what you're telling me, it's not been. And, is there going to have to be changes in definition, changes in product? I mean, what? Well, only a couple of these hypotheticals of what you're talking through.

[Stateler] Yeah. We supplied, you know, a definition trying to get it from because no one really has done that. So, our staff, along with dietary, you know, dietitians across everywhere, you know, they've put together a plan. And we turned it in. But we see nothing in the drafts that have come out to. Where did they listen, you know, is there anything with it? Because it's just a pretty bland statement, you know, on the ultra processed. Well, we don't know anything about defining you, and we don't even know there was a there's a story in New York or there was a story here today that don't pay attention to those two draft because anything leaked, you shouldn't trust. So where are we? Is that the truth? Is the August 4th and the August 11th, you know, versions that are out there, are there really anything to them or not?

[Yeager] Do you know what the room is and where you can be in it to help in that conversation?

[Stateler] Well, we were invited in just the same as what the crop people were. Everybody was invited into the White House there some time ago. We expressed those concerns. We have turned in, you know, our you know, we were asked for more information. So our staff put together, you know, some ideas on, you know, coming up with the process. You know, what is processed, what is ultra processed. You know, let's try to protect, you know, dense protein. You know, that is good protein. And but we haven't heard back. You know, we'll hear everything on August the 12th. Well here we are. What the 18th, 19th. And we're still you know, we've seen a couple of drafts that have come out and but they're pretty vague, you know, a little bit more detail than what was in the first one. But you know, in the second part, you know, according to the classification of the meat is also on what you're using for scientific information. You know, they're disregarding everything we've always done. You know, of course, the pork board is separate from us, as you know, national pork producers, that's the checkoff side. Well, and that's run by producers and it's producer money. But we've always used that producer money to get third parties. Iowa State, Ohio State, Purdue, whoever they could get to run research to check out the antibiotics and the check out, you know, feed additives that we use and how's our corn and our soybean? How is that soybean meal from a Roundup Ready being, you know, does it have any effect on our feet or will have any effect or feed? Well, this, Robert Kennedy Jr, he sort of likes the approach of, you know, not going with that type of information because he thinks it's bought and paid for. Yeah. It was bought and paid for, but it was bought with producer money and decided by producers. You know what we wanted to try to find out rather than they're looking at, oh, I believe what they call, risk based information. And basically that's 1 or 2 people that have got an opinion on this is probably bad for you, and maybe they've got one research paper that backs it up, but it hasn't been done by, you know, a group of people trying to really get into, you know, looking at all areas. So those are the two concerns we've had from the very beginning with this, Paul.

[Yeager] Duane, I'm guessing when you took as, when you ascended to president, you've got to be in that vice chair or vice president role. Was this even something that you were concerned about at that point, when 2 or 3 years ago, when you started up the leadership chain?

[Stateler] No, no, I had no idea that this where this would come, you know, you know, it's it's it's just, you know, will tell us, you know, I would I would be the first one to. You've probably known the history. I would not be the first one that has had little second thoughts of Robert Kennedy Jr. After some of the comments he's made about pork producers in the past and pigs in the past, there was some concern there. But, you know, I have always known President Trump to be able to sort through things, and I haven't seen him do too many things wrong. I mean, in his decision making when it comes to a final decision. So it's a wait and see. But yet on the same token, we're not seeing what the actual process is going to be. And I don't know whether there'll be much time for us to speak after, you know, the thing comes down. But believe me, we will speak to protect the industry.

[Yeager] You were probably thinking the majority of your term is going to be spent on Prop 12.

[Stateler] And it has been my first year on the board. We made the decision to go, you know, Prop, you know, to go to the Supreme Court. I mean, and the whole plan was we're going to, you know, go to California, we're going to lose. We're going to go to the Ninth Circuit, where hopefully we're going to lose. So we get to the Supreme Court. And we knew before we ever made that decision as a as a board, Paul, that we had producers that at that point in time they were all upset that we didn't do enough to try to stop this. Well, we didn't have $25 million to throw at that campaign. And if we did through 25, they did come back with 35. We don't have the deep pockets that they did.

 you know, of course we made it to the Supreme Court. And I think in reality, I think the Supreme Court got it right. I think that it should be legislated. You know, the Commerce Clause just tried to for them to pick on this. You know, I think it was right for a legislature to try to find, you know, how are we going to settle this? Because it's been vague. We're not. The first case went with the Commerce Clause, have been several others. But, you know, it was all jumbled up. So we got that opinion. And we knew when we went down that avenue, Paul, that we were going to have producers that were upset with us, you know, not getting a stop in California, but some of those same producers were going to be willing to spend money to try to chase, because there were 13 to 14% of our domestic pork goes to that state. So we were going to have it. And that's what they wanted with this. The activists wanted to divide the, you know, the producers, and they did because we've got those now that have went to Prop 12, which is fine, because they're even with what we do. On stopping this, you know, of carrying on to the other states, if people in California want to have Prop 12 type meat, those producers should be getting a premium for that. But we cannot have a patchwork of this because we saw from the very beginning that a patchwork when you go to where my times used to be consistent on delivering hogs to the packer we loaded every day, you know, from 6 to 8 p.m. in the evening. Well, now, because they've got to have this slot for Prop 12, we find ourselves loading our hogs anywhere from 6 p.m. to 6 a.m., you know, because they better fit the time slot. Well, now they're having to have a time slot so they can separate these pigs at the Packer. Now, the packer takes and cuts that meat and sends it out to a retail place or a distribution center. Now the distribution center has an aisle that is Prop 12 and an aisle that is non-Prop 12, taking up twice the amount of space, twice as many SKUs to run through the computer system. What does that resulted in. Anywhere from a 20 to 40% increase in Prop 12 pork to California, who does that hurt? It hurts the consumer. And what have they done? Yes, they've divided the industry a little bit because, you know, and I have nothing against those that were chasing the premium, you know, for the Prop 12, because we have people there that need something to eat, but we've got to try to stand firm because we can't have a patchwork of this. So, you know, both GT's and the Hinson bi ll to save our bacon. It does nothing to do to strip the right of the California people to, you know, have their Prop 12. But it stops us from being a patchwork that there will be no more of this across the country.

[Yeager] Do you get the sense that that bill, the bacon bill that you're referring to, has a better chance of passing than getting some of the language into a farm bill and on a larger package.

[Stateler] I will take either way, we can get it across the line. Paul. I think there's I think there's a chance for one or the other. I don't know whether I wish, I can't give, I can't be hard on GT Thompson because he said, we're going to get a, you know, we're going to get this done and reconciliation. A lot of people didn't think that was going to happen. You know, as far as, you know, what we did get out of the farm bill, and we got everything we asked for in the farm bill for our herd health. And you know, everything to protect the industry. And so kudos to him. And he is still you know, he is adamant. I talked with him just two weeks ago that we are going to get a 2.0 or skinny farm bill across the line. And if he does that, we're in. If we don't get that, if this thing would get something passed through the House, either one of those two could maybe get attached to something at the end of the year that would get us there. So we're still we've got people talking. I know Pat corn was down and he had a you know, he was at a hearing that GTI had on Prop 12 here a couple of weeks ago. And you know, there were some people that I received some phone calls on, people that were upset with, what came from, the representative from Minnesota. You know, when she made her opening remarks that, you know, she said, you know, there's some pluses and minuses, and she listed some pluses to Prop 12, and she listed some negatives to Prop 12. And, you know, she didn't want to, you know, come out. Well, she's never listed the negatives Prop 12 publicly before. And I thought that was a win. I told people I said you have to remember she is speaking. You know, Representative Craig is speaking on behalf of the Democratic Party. She's the ranking member in that she has to sort of, you know, have a little bit of a tone. But I said a year ago you would have never heard her say there was anything about Prop 12 that was negative. So we're gaining that ground because they see with the price of pork, they see with everything is that, you know, we're getting we're getting traction. So I think we can get it across if we just find an avenue to get it out.

[Yeager] Well, that's actually a good point. Do you feel that you have, a better opportunity with the Democrats in the House and in the Senate to make progress, to get them convinced of your viewpoints and what you need? Or do you feel like you're fighting within the Republican Party? That's not all on board now.

[Stateler] We've got a we're very good at and I think in the Republican Party, you know, on in the House side. And I think we can get it. We can get bipartisan coming out of committee from GT Committee because we did it before. I mean, stop and think. We've had two presidents. We've had both President Biden and President Trump that have made public statements on this is bad for the country. We can't have this throughout. We've had Secretary Vilsack and we've had Secretary Ross both make statements. So this is bipartisan as it can get, you know, for leadership, you know, so that's something that we can grasp hold of the Senate.

[Yeager] Because traditionally, Duayne, the farm bills have been bipartisan efforts, especially in committees. But that but and I asked Secretary Naig of Iowa this last week, it it just doesn't seem to be the same. The Food Coalition and the Nutrition Coalition haven't been able to find that common ground. And I'm guessing that's kind of where something's going to have to happen in order to help you on this issue of Prop 12.

[Stateler] Right. That's what's going to have to happen. I think we've got a tougher lift in the Senate because of the 60 votes. I think we've got a couple, you know, of Democrats that can get us there. But I don't know if we can get there on the, the other issue, I with some of them, we still need a few more.

[Yeager] Well, let's talk about the price of pork, because, again, I'll reference my conversation with Secretary Naig. We talked about livestock prices, specifically beef. Beef has been on this huge rocket ship for a while. Has pork been benefiting or not benefiting from that run up in higher beef prices right now?

[Stateler] We have seen a benefit. I mean, the numbers are starting to show that our ground pork is picking up, and that has been a real win for us because now the price point, I mean, and it's one of those things that I think a lot of people have never turned to ground pork before, just plain old ground pork, just like ground beef, you know, no salt and pepper added to it. I know we had class reunion here, and I had a pre class reunion thing out here, and I had some brisket and I had some wine and I had what people thought were hamburgers. And they said, how did you get this flavor in this hamburger? And I said, because that's the real hamburger. I said, you just eat a pork burger. And they said, oh my gosh, I never had that before. And it tasted, you know, it was wonderful. And I said, that's all I eat is, you know, is the ground pork. We don't we don't cook the hamburgers anymore. I mean, and the flavors there. And I've been watching the Tyson has now moved into the ground pork has been at our local Walmart and I watch that used to stay there and it was enough there that when you started coming to the end of the date, you know where you see packages on there. You know, save 30%. You know, if you buy this today, well, it's not there anymore for those because the doggone case is empty. They're not they're not keeping it up. And I'm hearing that from others that are watching it too. And we're seeing that in our in our SKUs coming from the pork board that yes, the pork is moving better.

[Yeager] Is it moving well domestically versus internationally specifically as we talk trade.

[Stateler] I think we're picking up domestically. Trade is, you know, a real issue for us. You know, all the trade deals are, you know, not exactly defined yet. And they're still getting wrote. We you know, we're on top of that I think, where there's going to be some openings, but, you know, thank goodness China has gotten another, you know, 80 days to go now, you know, on that because,  problem with, you know, our export system is a lot of the places we export to are taking things that we as Americans don't eat. The all fall, you know, the white all fall is it is that basically is where the profit for the producer. Is that because if we're not able to get rid of that, you know, that's where the margin is that what we get to keep? And if we don't get rid of that, it's just a waste product here. And packers, rather than getting anything for are going to pay to get rid of it.

[Yeager] Therefore the packer margin changes again. And we already know about the beef packer margin. The pork packer margin is  always a discussion. Do you I guess it's almost back, Duane, to the very first thing we talked about margins are you've, or details in, in these plans. How long can you hold out for details on some of these trade deals that will help pork producers across the U.S.?

[Stateler] Well, I, a little bit of a history lesson, Paul, is normally when you did the trade deals the old fashioned way, that took up to two years before you did it. This is on a fast track now. They said they will never get 90 deals in 90 days. And that's proven true. We're trying to get this stuff down. There's two problems with what we're trying to do. It's a lot of information that they have to get put forth in these trade deals. I mean, you're talking not only our products, but everybody else's products. I mean automobiles, tools, you name it, you know, you're going with. And the other problem of it is, is this is a on a piece of paper, just like an executive order. You can see just as the Phase One in Trump's first administration, China followed that until President Trump wasn't there anymore when he left. And they didn't, they never completed the rest of the Phase One. Did you even get the phase two in China? It it just sit there. Now that was a trade deal. Like what we're working with all these countries now. It wasn't officially done by legislative action. And then we have a few people, a few Republicans in the, you know, on the Hill that think that maybe we shouldn't be part of the WTO anymore. Well, hold back, boys, because if we're not part of the WTO and if someone just comes in and reverses all these executive orders that this president has wrote for these trade deals, then we're going to revert back to our old trade deals that we've had. And if we're not a member of the WTO, we won't have any reciprocal action to go back to try to get us to that part. If we're not a member of the WTO, we'll have, you know, our old legislative things will not be of existence. So, yes, we do still need to take be a member of that so that if something happens with these trade deals, we still preserve everything that has been legislatively passed and these agreements with countries in the past that would still have some teeth to them.

[Yeager] It's been a hard slog. And, and I've talked to people who've been through those negotiations and they say, yes, 45 weeks. We've done these things or two years, like you were saying, and it just can't be done. Because frankly, Duane, it's the top line that some people want. It's those fine details when you talked about the off products from the pig, and if those aren't mentioned, that's a huge deal for you. But it might not be a huge deal for someone else. So I'm guessing that's a little bit of frustration that I'm hearing come from you.

[Stateler] Well, it's not only that, but it's the non-tariff barriers for non-trade barriers. Those are the biggest sticking point. You know. You know, what do you do? You know, what's this drug. Do you know we're we're just don't what this because you had this drug used in the US. We're not going to take any meat from you. You know that has been a problem with the EU for years. I mean, I sort of I hate to pick on the beef people, but I sort of laughed at the EU when they made their agreement there. They got the first agreement out before we ever got anything in it. Okay, we're going to buy 13 million metric ton of U.S. beef, but you're going to have to buy a 13 million metric ton of our European beef, which was a trade one for one. And oh, by the way, you have to still meet all the non-tariff barriers. Well, if they've got X number of drugs on there, that rules out a lot of a lot of the beef that just opens up a small more part of your market that's going to be able to take advantage of that. And I thought and we were asked if we were willing to do that. And I said, no, if we can't get every producer the opportunity to sell his pork to the European Union, we don't want a deal like that. You know, that's, you know, it's either all or none. You know, I still feel as though anything that comes out of this country with the USDA stamp of approval on it, bar none, tops. Anything, any place else. We have the best processing, we have the best science, we have the best inspections of meats. You know, here in the United States compared to anywhere. And I would hold that up against anyone. Just like our corn is better than corn grown in Brazil. You know, beans, you know, because of the protein content. So I think that should be good enough.

[Yeager] As long as Duane, you don't start saying that Illinois corn is better than Ohio or Iowa or Minnesota, then I think, you know, the fighting words and the gloves will come off. Let's close with this. If we could labor. What's the labor situation? We've had farms that have had, in packing plants that have had labor removed from this country.

[Yeager] Where are we standing? What's the NPPCs thoughts right now on what has come down with labor?

[Stateler] Well, as you know, you're always sure a time when you speak to people. And there's normally one thing that you don't get the chance to ask. And I wanted a definition of what President Trump said a couple of weeks ago of what is touchback. I think you probably heard that that was mentioned, and it sort of raised some errors, and then you haven't heard much about it. But we've had we in Ohio have had several producers that have had some that had come in pre during this Biden administration. They went back, they got their time because they weren't here. They came in through the Obama administration. Matter of fact, to go back. And they were going to go first and then they were going to come back and they would let some other people go and they would keep preserving the farm. You know, the worked on the farm. And then we could we could maybe get by with 1 or 2 of you being gone, you know, and everybody else pick up the weight. Well, they've done that. But how do they get back? They can't get back to let someone else take that thousand dollars ticket to go down and come back the way it is, because there's nothing in place for the ones left to come back. And the sad part of it is, is the people that have got a job that are working here like it. And by the way, they're probably sending 50 to 60% of that money back to the rest of their family in another country. That's making them better off, you know, than what they are. But we need the labor, because in rural America, I don't care whether you're in Ohio, Indiana, Iowa, in rural America, we do not have the extra people out here to fill the jobs and the needs that we have in the barns. It's just a plain, simple fact. When you're on a cell farm, it's different from what it is from me being a contract grower just on the, you know, on the finished side. But if you're managing a small farm, if you're managing a dairy, if you're managing a cow calf for there, you need more labor. Just that's the bottom line.

[Yeager] There's around the clock labor depending on the size of the operation. Yes.

[Stateler] Yeah, yeah yeah. There's just not enough family members to go round in that kind of a situation. So you need to depend on labor, you know, to do it. And the labor is not here in rural America.

[Yeager] All right, Duane, your final months of your presidency here, what are you trying to accomplish?

[Stateler] Well, I just hope we get some definitions to some of the problems we've discussed here. So, you know, once we know what the definition is, then maybe you can try to work at solving the problem. And hopefully everybody is open, you know, to solving I know everybody right now. Thanks. Because it was a broad as far as on the crop side that, you know, maybe with what they've heard that maybe round up and, you know, actors aren't as much of a target as what it was, you know, four months ago. But until we see the actual details, we just don't know. And that's what we got to look for. And I'm hoping we get some answers so we can try to get some producers around to where we can try to keep, you know, the industry going forward and supplying people with good nutrition. Pork.

[Yeager] Duane, I thank you for your answers to my questions today. And by the way, when you were at the Iowa State Fair, did you eat? What did you have?

[Stateler] Well, I was at the pork tent, of course I had. Did you have the pork? I had the pork chop on the stick. I did not try the Hawaiian because I'm not into the sugar. And you know, and stuff with, you know that I like to. So I did not try, but it looked really good. There were a lot of people try it.

[Yeager] Well, Pat's group there came up with, and I love their coleslaw. Always have love the coleslaw at the pork producers. That's always been great. And then when they put it together with the loin, the line was always busy. So was the pork belly on a stick. That one also floats around. Actually, you know what? I don't see that one often because people eat that in about one bite and it's gone.

[Stateler] Yes it is.

[Yeager] All right, Duane, thank you so much.

[Stateler] Thank you Paul.

[Yeager] Thank you, Duane, for your conversation. And we will talk to you next time, next Tuesday when new episodes come out in both audio and video form. Thanks for following along. Share this with a friend so you too can have something to talk about. We'll see you next time.