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Vol. 11, No. 53 / March 19, 2013
Word has it that USDA’s Foreign Agricultural Service will yields are closer to 15.5 pounds/bushel. How much is exported is also
today publish notice of a final rule that adds pork products to the a bit of a mystery since the only data available are monthly and DDG
Export Sales Reporting (ESR) program. This is the system under is included in brewers and distillers grain with no differentiation from
which weekly shipments of grain, oilseed, cotton, beef and cattle hides other sources. DDG users had sought more timely information on
have been reported. exports in order to know more about short-term feed supplies—a situ-
The grain reporting dates back to 1975 when the United ation that could become quite important this summer. Obviously, no
States implemented the system to insure that exporters did not work in DDG export data will be available by then.
an information vacuum such as existed when Russia made simultane- Adding pork to the system is good news but just how good
ous, large grain purchases in the summer of 1972. The resulting re- remains to be seen. This product-weight reporting by FAS will be in
duction in domestic supplies caused wheat prices to triple over the addition to information provided by the Agricultural Marketing Service
ensuing 12 months and the prices of corn and soybeans to double by as part of the mandatory wholesale pork price reporting system which
the end of 1972. Cattle, hog and broiler prices rose by 55, 102 and just went into effect in January. That system will eventually provide
153 percent by the beginning of 1973. (The Russian Wheat Deal — weekly export to a) NAFTA partners and b) other markets. Compara-
Hidsight vs. Foresight, Clifton B. Luttrell, Federal Reserve of St. Louis, ble beef data are now published in “loads” as part of each week’s
October 1973). Comprehensive Beef Cutout Report (LM_XB463). For instance, Mon-
Pork was added to the system as part of the reauthorization day’s report for last week showed 171 loads as NAFTA exports nd
of mandatory price reporting in 2010. Beef was included in 1999 985 loads going overseas.
when the original Livestock Mandatory Reporting Act was passed. In addition, it will be interesting to see if these new weekly
Many pork industry participants believed then that publishing immedi- data for pork will agree with the “official” monthly export data that origi-
ate information on pork volumes would benefit U.S. export competitors nates with the Customs Service and is published by FAS. Recall that
more than it would benefit domestic exporters. At that time the U.S. those data series for beef have not agreed well in the past.
was not nearly the world leader in pork exporting, trailing several Eu- And by the way — that 1973 paper by Luttrell is VERY IN-
ropean countries (since shipments within the EU were then counted TERESTING reading. It might be especially so for those of us who
as “exports”) and leading Canada only slightly. In fact, U.S. pork ex- weren’t actively involved in the markets at that time. Just google
ports would not regularly surpass those of Canada until 2004 and did “Great Russian Train Robbery” to find it.
not exceed those of the EU-27 until 2005. Further, pork is pretty much The impact of “sequestration” on meat inspection ser-
pork in international trade where U.S. beef was at that time rather vices has been a hot topic in recent weeks. In spite of claims to
unique. Only Canada competed in the market for grain fed beef then. the contrary, there seems to be little doubt that the administration at
Whether any of these reasons were, in retrospect, sufficient is beside USDA has zeroed in on the issue as one of the best ways to scare
the point now. Bottom line is that pork was omitted back in 1999. people about these budget cuts that Congress imposed upon itself.
This rule was proposed in June 2012 and included adding USDA and the press have focused on “shortages” that may be caused
distillers dried grain (DDG) as well as pork. Comments were received by idling packing capacity. We are much more concerned about the
and it appeared the products would be added soon when a procedural increase in meat/poultry output that could be caused by slowing the
snafu caused FAS to have to retrace its steps and withdraw the rule. flow of animals through harvest. Put a pencil to the impact on weights
Since comments were received at that time, FAS is making the rule of backing up fed cattle and pigs for 11 days. Adding 30-40 pounds to
final as of today’s publication in the Federal Register. steers and heifers and 13-17 pounds to barrows and gilts may have
The pork provision is simple. “Pork-fresh, chilled or frozen just a bit of price impact, don’t you think? Obviously, not all of the
muscle cuts/whether or not boxed” is added to the list of covered prod- animals would be delayed by 11 days but the supply impacts are defi-
ucts. They will be reported in metric tons. nitely not trivial!
What is noteworthy about today’s rule, though, is that DDG Some help may be on the way, though. Senators Blunt
are NOT included. USDA received five comments about including (MO), Risch (ID), Hoeven (ND), Wicker (MS) Johanns (NE), Enzi (WY)
DDG, three in favor and two opposed. USDA now says that adding and Fischer (NE) have proposed legislation that would require USDA
DDG requires further review and that it “will be publishing a proposed to use its funding to avoid meat inspector furloughs. According to
rule, with extension of comment period.” Not much is known about the Lean Trimmings, the newsletter of the North American Meat Associa-
production and disposition of DDG. We estimate DDG availability tion, the proposal would reallocate $55 million and defines as essen-
based on ethanol production without knowing exactly what the DDG tial employees as those “ . . . That perform work involving the safety of
yield is per gallon of ethanol or bushel of corn. It is theoretically 17 human life or the protection of property as determined by the head of
pounds/bushel but anecdotal evidence suggests that operational the agency.”
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