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Agriculture Today

Ag sequester cuts may chop slaughter plant shifts

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Wilson County News
February 27, 2013 | 4,515 views | Post a comment

Earlier this year, a North Texas plant announced its closure, due to the lack of cattle to supply the plant. As the country watches if a second “fiscal cliff” will be averted, more plants might be in jeopardy, if sequestration takes effect March 1. See related article above and on 1A, for more about sequestration.

Comments made by U.S. Agriculture Secretary Tom Vilsack during a Feb. 2 National Ethanol Conference fueled a Texas-sized barbecue that has the meat industry sizzling all the way to Washington, D.C. The debate was not about the use of corn for the production of ethanol, but the topic of sequestration, and the impact it could have on slaughter plants.

“It is likely if sequester is triggered that in our food safety area we will have to furlough workers for a period of a couple of weeks,” Vilsack said. This could result in plants shutting down, a decline in meat products, and an increase in food prices.

In a U.S. Department of Agriculture (USDA) Feb. 12 letter to Patrick Boyle, president and CEO of the American Meat Institute, Vilsack responded to Boyle about concerns of “furloughing” Food Safety and Inspection Service employees, including plant inspectors.

“Unless Congress acts to prevent sequestration, FSIS [the Food Safety and Inspection Service] will have no choice but to furlough its employees in order to stay within the budget Congress has given it,” Vilsack wrote. “... Unlike other budget scenarios, such as a short-term government shutdown, the exemption provisions of the sequestration statutes do not include exceptions that would be applicable to FSIS inspection activities.”

National Cattlemen’s Beef Association President Scott George responded to the news Feb. 13: “Secretary Vilsack is using America’s cattlemen and women as pawns in the agency’s political wrangling with Congress. While we are certain the USDA contains other ‘non-essential’ employees, the Secretary has chosen to announce the consequences of sequestration in terms of a furlough of FSIS inspectors, essentially threatening to close down all production, processing, and interstate distribution of meat. This action has already cost cattle producers significant amounts of money with the downward slide in the futures markets caused by rampant speculation, with untold effect on producers through further regulatory uncertainty.”

Without these inspectors -- also responsible for poultry products and eggs -- the cattlemen’s association estimated the furlough would:

•Impact approximately 6,290 establishments nationwide.

•Cost more than $10 billion in production losses.

•Compromise food safety.

In addition:

•Industry workers would experience more than $400 million in lost wages.

•Consumers will face potentially higher meat, poultry, and egg prices.

The cattlemen’s beef association, along with 37 other groups, voiced its concerns to Vilsack Feb. 11.

“... furloughing inspectors would have devastating trickle-down effects: Farmers raising livestock and poultry would have nowhere to send their animals and would have to shoulder substantial losses. ... The robust U.S. export trade in meat, poultry, and egg products would all but dry up, and imports would be halted at the border.”

The groups reminded Vilsack that in April 2011, the federal government was shut down due to lack of appropriations. At that time, the Food Safety and Inspection Service’s inspectors were declared “necessary to protect Life and Health” and “essential to the Nation’s food safety operations.”

Among the signers were the Poultry Federation, the U.S. Meat Export Federation, the National Grocers Association, and the National Pork Producers Association.

Members of the U.S. Cattlemen’s Association addressed this topic during the Feb. 19 Horn Wrap conference call.

“The ag sequester is bad all around -- FSIS on down the line,” said U.S. Cattlemen’s Association Executive Vice President Jess Peterson after the call. “Cattle producers need to call on Senate and House leadership -- Dems and Republicans alike, along with President Obama -- to get in the same room and work a deal out ... and stop holding working Americans hostage.

“Both sides are failing miserably here,” Peterson said.

The agriculture industry -- especially in Texas -- has faced major droughts and has seen the closure of a Texas packing plant. Will this action lead to more closures across the nation?

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