Small meatpackers
scramble to meet booming demand
Politico Morning
Agriculture Newsletter
Monday, 6/15/20
Small meatpackers
scramble to meet booming demand
By RYAN MCCRIMMON
With help from Ximena
Bustillo, Liz Crampton and Doug Palmer
06/15/2020 10:00 AM EDT
Quick Fix
— The pandemic has
fueled concerns about consolidation in the meat sector but small meatpackers
may not be able to fill the gaps without financial and regulatory aid to help
them handle the added volume.
— The super PAC
supporting House Agriculture Chairman Collin Peterson thinks he’s in a good
position to win his reelection. The group, backed by members of the sugar beet
industry, has told donors that the race has shifted in recent weeks to his
benefit.
— Oil refiners are
aiming to escape biofuel blending rules by winding back the clock, asking the
EPA for economic hardship status dating back to 2013 that would free them from
their obligations under the Renewable Fuel Standard.
HAPPY MONDAY, JUNE 15!
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Driving the Day
SMALL MEATPACKERS
SCRAMBLE TO MEET DEMAND BOOM: Driven by a cultural shift toward buying local
and the closure of large meatpacking plants due to coronavirus outbreaks, small
processors have seen an influx of business amid the pandemic. But the rising
demand could do more harm than good if Congress and the Agriculture Department
don’t throw small meatpackers a regulatory lifeline, POLITICO's Ximena Bustillo
writes.
Most small plants can
only kill 10 to 20 animals per day, and they can’t easily increase their speed
or volume, says Rebecca Thistlethwaite, director of the Niche Meat Processor
Assistance Network. Meanwhile, the large facilities that employ thousands of workers
can slaughter up to 20,000 per day, she said.
As livestock producers
with fewer options to sell their animals increasingly turned to smaller
packers, those plants scrambled to invest in bigger coolers, freezers, holding
bins and other operating needs just to keep up with the amount of product
coming in. Many have backlogs stretching longer than a year.
To ease the demand,
small processors, ranchers and other advocates are calling for financial
support from Congress and regulatory changes like waiving overtime fees, on top
of broader antitrust enforcement in the heavily concentrated industry.
How we got here:
ProPublica has a deep-dive on the breakdown between large meatpackers and state
health officials that allowed coronavirus outbreaks to worsen in
slaughterhouses across the country. Read the story.
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land use, inequality and the future of work. Subscribe today for a nuanced look
at these issues and potential solutions.
PETERSON’S STATE OF THE
RACE: The sugar beet-backed super PAC investing solely in Peterson’s reelection
this cycle, Committee for Stronger Rural Communities, believes that “certain
elements of the race are firming up and moving in the right direction” for the
Minnesota Democrat, per a state of the race memo circulated among donors
obtained by MA. According to the memo, Peterson has been boosted by active
campaigning, such as holding fundraisers on Zoom, favorable internal polls,
strong PAC fundraising, and what they say is a weak Republican challenger.
Bipartisanship: It
highlights Peterson’s recent work with Republicans during the pandemic, noting
that he appeared alongside GOP Rep. Jim Hagedorn at an appearance at a
meatpacking plant in Worthington, Minn., to plan for how to deal with a backlog
of hogs due to plant closures. Earlier in the day, he also spoke with
Agriculture Secretary Sonny Perdue “to flesh out the message and plan.”
“National stories like
this show Peterson’s value to the 7th CD, and his genuine bipartisan streak.
When things need to get done, people turn to Collin to take the ‘bull by the
horns,’” the memo states.
It also attacks
Peterson’s top GOP challenger, Michelle Fischbach, former state senate
president. She lacks strong local support and knowledge about policy issues
like agriculture, an important industry to the district, the memo argues. “She
stumbled in a media interview when she had to admit she had no idea of the
current soybean price. In a district where farming is the linchpin of the local
economy, this is a high-scale gaffe that has taken hold in the ag community and
will not go away.” Read the rest of the memo here.
REFINERS TRY END-AROUND
IN ETHANOL FIGHT: In the latest round of tug-of-war between oil and
agriculture, small refineries made an unprecedented request that would free
them from their annual RFS requirements, despite a recent court order that
threatened to wipe out most of the annual blending waivers handed out by the
Trump administration.
ICYMI: Earlier this
year, a federal court ruled that the agency could only extend the waivers for
small refiners who had been continuously exempt from annual blending
requirements since the start of the program in 2013. As Pro Energy’s Eric Wolff
explains, oil refiners are now petitioning the EPA for economic hardship status
dating back to then, allowing them to meet the court’s standard going forward.
Between the lines: The
move comes at an awkward time for President Donald Trump, whose political
standing in the Midwest has weakened in recent weeks. The oil and agriculture
industries are key pieces of Trump’s political base, and he’s long been caught
in the middle of their fight over federal biofuel policy — especially the use
of blending waivers, which ethanol producers claim are crushing their business.
Now the stakes are even
higher since the drop in travel sent gasoline consumption plummeting, slamming
both oil companies and ethanol producers whose biofuels are blended into the
gasoline pool.
— With half of all U.S.
biofuel production on pause, Washington has been under heavy pressure to throw
the industry a lifeline. House Democrats included direct aid for biofuel
production in their latest stimulus package, but the bill hasn’t gained any
traction in the Senate.
“Politically, they have
to do something,” an oil industry member told Eric, referring to the Trump
administration. “They’d love to be able to lay low until November, if that
doesn’t disrupt Iowa. But there’s a lot of bad options on the table.”
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Trade Corner
U.S., U.K. WANT A TRADE
DEAL BY NOVEMBER: Washington and London will launch their second round of
formal trade talks today, aiming to sign a deal before the U.S. elections this
fall. That’s an ambitious timeline that would likely require negotiations to
wrap up by early August, our Pro Trade friends tell MA.
Of course, agriculture
remains a major sticking point. The Trump administration wants the U.K. to ease
restrictions on chemically rinsed poultry, genetically modified crops and
hormone-treated beef, but British farmers fear being undercut by less costly
American products that aren’t held to the same production standards.
HAPPENING TODAY at 12
p.m. EDT/9 a.m. PDT: A VIRTUAL INTERVIEW WITH LOS ANGELES MAYOR ERIC GARCETTI:
Los Angeles is grappling with a rising number of Covid-19 cases and a wave of
protests for racial justice after the killing of George Floyd. California
Playbook authors Carla Marinucci and Jeremy White will find out how Los Angeles
Mayor Eric Garcetti is dealing with these twin crises during a virtual
interview TODAY. REGISTER HERE.
Row Crops
— Some grocery stores
are struggling to make a profit from food delivery services that have seen a
jump in sales. Retailers have hired thousands more workers to meet the demand
and dedicated entire stores to online orders only, but the higher costs are
eating into their margins. The Wall Street Journal has the story.
— The pandemic is
fueling interest in organizing in sectors that traditionally lack labor unions.
Grocery, restaurant, warehouse and other workers have been pushing for safer
workplaces and higher wages, including hazard pay, per POLITICO’s Shia Kapos.
— Perdue on Friday
issued a memorandum directing the Forest Service to expedite environmental
reviews and potentially allow for more logging and development on public lands.
More from The Hill.
— Julie Callahan was
named assistant U.S. Trade Representative for agricultural affairs and
commodity policy, after filling the position on an acting basis since April, the
agency announced. Callahan previously worked at the FDA and USDA’s Foreign
Agricultural Service.
— FCC Chairman Ajit Pai
will testify Tuesday at a Senate Appropriations hearing on the agency’s
proposed auction of 5G-friendly airwaves on the C-band, Pro Tech’s John Hendel
reports.
THAT’S ALL FOR MA! Drop
us a line: rmccrimmon@politico.com;
hbottemiller@politico.com; lcrampton@politico.com; jyearwood@politico.com and pjoshi@politico.com.
About The Author : Ryan
McCrimmon
Ryan McCrimmon is an agriculture
reporter for POLITICO Pro, where he covers the farm economy, agricultural
trade, federal spending on food and farm programs and other ag issues. He also
writes the daily Morning Agriculture newsletter.
Before joining POLITICO,
Ryan was a budget and tax reporter for CQ/Roll Call and covered Texas state
politics for the Texas Tribune in Austin. Ryan graduated from Northwestern
University, where he studied journalism, Middle Eastern politics and Arabic. He
also covered Big Ten sports for the Northwestern News Network and Big Ten
Digital Network
Ryan was born and raised
in Charlottesville, Va. He lives in Washington, D.C., with his dog Bailey and
loves playing basketball, making music and traveling to national parks
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