U.S. GOVERNMENT PUBLISHING OFFICE

35–735 WASHINGTON : 2019

THE SMALL BUSINESS TRADE SNAPSHOT: 

AGRICULTURE AND WORKERS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON RURAL DEVELOPMENT, AGRICULTURE, TRADE, AND 

ENTREPRENEURSHIP 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED SIXTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

APRIL 2, 2019 

Small Business Committee Document Number 116–014 

Available via the GPO Website: www.govinfo.gov 

SBR002 with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA VELA ́ ZQUEZ, New York, Chairwoman 

ABBY FINKENAUER, Iowa 

JARED GOLDEN, Maine 

ANDY KIM, New Jersey 

JASON CROW, Colorado 

SHARICE DAVIDS, Kansas 

JUDY CHU, California 

MARC VEASEY, Texas 

DWIGHT EVANS, Pennsylvania 

BRAD SCHNEIDER, Illinois 

ADRIANO ESPAILLAT, New York 

ANTONIO DELGADO, New York 

CHRISSY HOULAHAN, Pennsylvania 

ANGIE CRAIG, Minnesota 

STEVE CHABOT, Ohio, Ranking Member 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member 

TRENT KELLY, Mississippi 

TROY BALDERSON, Ohio 

KEVIN HERN, Oklahoma 

JIM HAGEDORN, Minnesota 

PETE STAUBER, Minnesota 

TIM BURCHETT, Tennessee 

ROSS SPANO, Florida 

JOHN JOYCE, Pennsylvania 

ADAM MINEHARDT, Majority Staff Director 

MELISSA JUNG, Majority Deputy Staff Director and Chief Counsel 

KEVIN FITZPATRICK, Staff Director 

SBR002 with DISTILLER

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Abby Finkenauer ............................................................................................ 1 

Hon. John Joyce ....................................................................................................... 3 

WITNESSES 

Mr. Mark Meirick, Board Member, Iowa Pork Producers Association, Protivin, 

IA, testifying on behalf of the National Pork Producers Council ..................... 6 

Ms. Rebecca Dostal, Producer, Iowa Farm Bureau Federation, Traer, IA, 

testifying on behalf of the Iowa Farm Bureau Federation ............................... 7 

Mr. Josh Nassar, Legislative Director, International Union, United Automobile, Aerospace, and Agriculture Implement Workers of America, Washington, DC ............................................................................................................. 9 

Mr. Glenn Stoltzfus, Co-owner, Pennwood Farms, District 11 State Board 

Director and Dairy Committee Chairman, Pennsylvania Farm Bureau, Berlin, PA ................................................................................................................... 11 

APPENDIX 

Prepared Statements: 

Mr. Mark Meirick, Board Member, Iowa Pork Producers Association, 

Protivin, IA, testifying on behalf of the National Pork Producers Council .................................................................................................................... 28 

Ms. Rebecca Dostal, Producer, Iowa Farm Bureau Federation, Traer, 

IA, testifying on behalf of the Iowa Farm Bureau Federation .................. 35 

Mr. Josh Nassar, Legislative Director, International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America, 

Washington, DC ............................................................................................ 37 

Mr. Glenn Stoltzfus, Co-owner, Pennwood Farms, District 11 State Board 

Director and Dairy Committee Chairman, Pennsylvania Farm Bureau, 

Berlin, PA ...................................................................................................... 48 

Question and Answer for the Record: 

Question from Hon. Ross Spano to Ms. Rebecca Dostal and Answer from 

Ms. Rebecca Dostal ....................................................................................... 53 

Additional Material for the Record: 

None. 

SBR002 with DISTILLER

SBR002 with DISTILLER

(1) 

THE SMALL BUSINESS TRADE SNAPSHOT: 

AGRICULTURE AND WORKERS 

TUESDAY, APRIL 2, 2019 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, SUBCOMMITTEE ON RURAL DEVELOPMENT, AGRICULTURE, TRADE AND ENTREPRENEURSHIP, Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2360, Rayburn House Office Building, Hon. Abby Finkenauer 

[chairwoman of the Subcommittee] presiding. 

Present: Representatives Finkenauer, Golden, Radewagen, 

Hagedorn, and Joyce. 

Chairwoman FINKENAUER. Good morning. The Subcommittee 

will come to order. 

I want to thank everyone for joining us here this morning, and 

I want to especially thank our witnesses for being here today and 

coming in from all the way from Pennsylvania and Iowa. I also appreciate our friend from the UAW being here, as well. I am very 

grateful you all made the time. 

I grew up in a union family, and I also have a sister and brotherin-law who are corn and soybean farmers. I have watched firsthand 

the last few years as retaliation from the current trade wars has 

caused unease, uncertainty, and economic losses across the heartland. 

Now trade issues are coming to the forefront of national conversations with implications for nearly every sector of our economy, 

and we see a number of escalating impacts from current trade negotiations with our major trading partners. 

Small businesses—which I like to remind folks are also our farmers—make up 97 percent of U.S. exporters. I look forward today to 

hearing about what you all think of the state of trade for our farmers, and also working families, who are critical to small and large 

businesses in numerous trade-impacted industries. 

We also want to understand what you want to see out of future 

trade agreements as Congress learns more about the President’s 

renegotiation of the North American Free Trade Agreement, 

NAFTA, or USMCA, as it is now called, and our trade negotiations 

as they are ongoing with China, Japan, and the European Union. 

It is no secret that farmers and working families are the backbone of our agriculture economy. In Iowa, agriculture and manufacturing go hand in hand. If our farmers are doing well, so are our 

working families—and large and small manufacturers—like our 

UAW workers who work on farm equipment at John Deere—and 

SBR002 with DISTILLER

2 

vice versa. Their sustained success is critical for communities in 

Iowa and the rest of the country. 

To promote success in rural America we must ensure we have 

trade policy that helps us export goods, but also protects our workers, communities, and production. 

Trade issues are obviously very important to me and I know they 

are to all of you here today as well. That is why our first hearing 

in this Subcommittee on Rural Development, Agriculture, Trade, 

and Entrepreneurship was also on trade and the State Trade and 

Export Promotion Program and now our second hearing is also on 

trade. 

Whether it is purchasing the latest iPhone, selling pork or soybeans abroad, or buying a car, every American is impacted by trade 

policies. Our farmers and workers make the Hawkeye State the 

country’s second-largest agriculture-exporting State, shipping $10.9 

billion in agriculture exports abroad in 2016. 

In my district alone, nearly 14,000 people make their livelihoods 

in agriculture, including some of my own family. We also have 

union members in my family, and it is not uncommon in Iowa to 

have both. 

Oftentimes in small family farm operations, under 500 acres, you 

will also have UAW and IBEW members who work hard every day 

with pride on that family farm and also in their union job that provides great healthcare and great retirement. 

Our farmers and workers know some challenges can come with 

trade. We need to understand how sectors of the economy are often 

interlinked—agriculture and workers in manufacturing and transportation, for example—so when we are renegotiating trade deals 

we do so in a way that lifts up all Americans. 

We should stand up to countries that are not playing by the rules 

and lean on our allies for strength. We also must take advantage 

of every opportunity we have to ensure that American workers’ jobs 

and their livelihoods are being considered. 

Ill-conceived trade policy can produce trade wars that create instability. In the simplest terms, trade wars can easily become a tax 

paid by every American, decreasing exports and slowing economic 

growth. Bad trade deals or lack of accountability can hurt communities and American workers. 

It is vital we retain access to new and expanding markets, but 

also use our economic power to ensure that the American worker 

and our farms and businesses are competing on a level playing 

field. 

In our global economy, 95 percent of the world’s consumers live 

outside of the U.S., and for our rural entrepreneurs and farmers, 

the ability to do business overseas is key. 

We know more work needs to be done, however, when only one 

percent of our nation’s 30 million small businesses are able to access foreign markets. More needs to be done when other nations 

undercut American workers and hurt our domestic business. 

In Congress, we need to think about trade as making it easier 

for farmers and small employers to succeed in the international 

marketplace while also protecting our workers. It is my hope we 

can do both, and, quite frankly, we must, and we need a thoughtful 

approach. 

SBR002 with DISTILLER

3 

The farmers and small businesses in my district simply want a 

level playing field on which to compete, and they want to be heard. 

We need to start by doing more listening in Congress on trade. 

We want to hear more from the administration on trade, as well. 

Congress is supposed to have a role in trade agreements, it is important that this Subcommittee raises trade issues when we can to 

get this dialogue going, uplift what is happening with trade and 

tariffs, and highlight the real, on-the-ground impact that our communities across our country are facing. 

The USMCA agreement has not yet been delivered to Congress, 

which is why this hearing is so important. In much of the country 

there are agriculture interests and hardworking Americans whose 

economic interests are linked. If our farmers are not doing well, 

again, they are less likely to buy a new tractor, which, again, are 

made in the heartland by our union members. Iowa State University estimated that the trade wars will cost Iowa alone $1 to $2 billion in losses. 

Trade deals impact all of our congressional districts, and that is 

why we are here today. I want to do some listening and fact-finding 

on the state of trade right now and where our witnesses think Congress and the President should be going to have their back. 

I hope we all take today’s testimony to heart and prioritize your 

concerns through our actions here in Congress, and I hope we all 

take our fellow Committee members’ comments to heart, as well, 

even if we may disagree with different positions. 

With that, I want to thank, again, each of the witnesses for joining us here today and coming all this way, and I look forward to 

your testimony. 

I now would like to yield to our Ranking Member, Dr. Joyce, for 

his opening statement. 

Mr. JOYCE. First of all, thank you, Madam Chairwoman 

Finkenauer. This hearing is incredibly important. 

And a special thanks to Mr. Glenn Stoltzfus from Pennsylvania 

13 in Somerset County for joining us here this morning. 

American farmers simply nourish our families, both here and 

across the world. On average, 20 percent of total agricultural production value is sold on international markets. Some commodities, 

such as cotton, are almost entirely dependent on overseas customers. 

The benefits of agricultural trade expand well beyond the cotton 

industry. In 2017, $138 billion in agricultural exports generated an 

additional $179 billion in economic activity—I will repeat that— 

generated $179 billion additional in economic activity. This resulted in the total economic output of over $300 billion. 

The industry supported 1.1 million full-time civilian jobs, which 

included almost 800,000 jobs off of the farm. 

Farms and businesses along the export chain have evolved to 

meet global demand. They must weather fluctuations in commodity 

prices, the global economy, and also trade dynamics. 

In 2018 the industry was hit with retaliatory tariffs on nearly 

1,000 food and agricultural products with an estimated impact of 

$11 billion. To mitigate damage suffered by U.S. producers, USDA 

Secretary Sonny Perdue initiated a $12 billion assistance package 

that is being delivered through three temporary programs. 

SBR002 with DISTILLER

4 

Today we are here to examine how trade disruptions impact agriculture and resonate impacts on the rural and the national economy. 

I thank each of our distinguished witnesses from Iowa and Pennsylvania, and I yield back. 

Chairwoman FINKENAUER. Thank you, Dr. Joyce. The gentleman yields back. 

And if Committee members have an opening statement, we 

would ask they be submitted for the record. 

I would now just like to take a few minutes to explain the timing 

rules. Each witness gets 5 minutes to testify and members get 5 

minutes for questioning, although we may have a second round of 

questions, as well, since we are so grateful you are here and we 

want to make sure we use our time wisely. 

There is a lighting system in front of you to assist you. The green 

light comes on when you begin, and the yellow light means there 

is 1 minute remaining. The red light comes on when you are out 

of time. And we ask that you stay within that 5-minute timeframe 

to the best of your ability. 

And now I would like to introduce our witnesses. I am so excited 

again to have two folks from my district here today along with an 

expert actually on trade from the UAW or the United Auto Workers Union. We also have a good amount of dairy in northeast Iowa, 

so I look forward to hearing from Mr. Stoltzfus as well. 

Our first witness I am going to be introducing is Mr. Mark 

Meirick. Mr. Meirick is a pork producer from Protivin, Iowa, and 

is currently serving as the District 3 director for the Iowa Pork 

Producers Association. 

Mr. Meirick and his brothers, Joel and Dennis, own and manage 

Farmers Mill, Inc., a grain, feed, and seed and fertilizer center 

serving northeast Iowa. His father started the business as a small 

feed bagging facility in 1964, and the business has grown to a large 

commercial grain elevator serving three counties. 

Mark is active in the Iowa Pork Producers Board, among other 

organizations in Howard County, which is one of our most northern 

counties in Iowa One. Mr. Meirick is married to Wendy, and they 

have three sons, one of which is involved in the business. 

I also have to say I found out yesterday that Mr. Meirick is also 

the nephew of one of my late grandmother’s dear friends, who used 

to bring her communion when she was sick. So Iowa is, yes, definitely like a small town no matter where you are at. 

So thank you again, Mr. Meirick, for being here. 

And then our second witness is Rebecca Dostal. Ms. Dostal is a 

farmer in Tama County, Iowa. Her operation is around 700 acres 

just outside Traer, Iowa. She raises corn, soybeans, Berkshire hogs, 

and cattle. 

Ms. Dostal is an active member and former president of the 

Tama County Farm Bureau, a 4-H leader—which my brother and 

sister were able to participate in, but I, unfortunately, got sucked 

into softball and T-ball, I guess, I don’t know, which I wasn’t good 

at either—and is actively involved in an ag women’s group called 

Women, Land and Legacy. 

In addition to farming, Ms. Dostal is also a substitute teacher for 

both the South Tama and North Tama School Districts. She has an 

SBR002 with DISTILLER

5 

education degree from Iowa State University. And she and her husband also raise three boys on their Tama County farm. 

Welcome, Ms. Dostal. 

Our third witness is Mr. Josh Nassar. Mr. Nassar has served as 

the legislative director for the UAW since December 2011. The Legislative Department is responsible for implementing the union’s 

policy agenda and designing the legislative strategy on labor, trade, 

budget, healthcare, defense, immigration, tax policy, and other 

issues. 

I don’t know if there is anything you don’t do, Mr. Nassar. 

He works closely with members of Congress, the executive 

branch, and stakeholders. Mr. Nassar and his wife Amy live in the 

District of Columbia with their daughters Naomi, Justice, and Janice. 

Welcome, Mr. Nassar. 

I would now like to yield to our Ranking Member, Dr. Joyce, to 

introduce our final witness. 

Mr. JOYCE. Thank you, Madam Chairwoman. 

I am proud to introduce one of my constituents, one of the hardworking dairy farmers from Pennsylvania 13, Mr. Glenn Stoltzfus. 

Glenn and his three brothers, Donald, Dwight, and Dwayne, operate a 700-cow dairy in Berlin, Pennsylvania, which is in Somerset County. The family also farms approximately 1,700 acres, 

growing corn, soybeans, alfalfa, and grass hay, in addition to growing all their forages in high moisture corn. 

Glenn serves on the Executive Committee of the Pennsylvania 

Farm Bureau’s Board of Directors. He also chairs Pennsylvania 

Farm Bureau’s Dairy Committee and serves on the U.S. House and 

Senate legislative committees. 

Now, this is a gentleman who gets up most mornings at 1 or 2 

or 3 a.m. as confirmed by his wife who is present here today. But 

don’t ask him to do anything this coming Saturday because he is 

going to be driving his daughter’s championship basketball team in 

the Maple Fest parade in Meyersdale. 

The Maple Festival Parade is an annual tradition, and his 

daughter Rayne was one of the participants in the Lady Mountaineers. And I have to make special note, when a small town team 

wins a state championship it is a big deal in our world. 

Again, congratulations to the parents, and especially to Rayne. 

Thank you for being here. Thank you for imparting what you do 

in the dairy industry to this Committee. And I yield back to the 

Chairwoman. 

Chairwoman FINKENAUER. Thank you very much. 

Mr. Meirick you are recognized for 5 minutes. 

SBR002 with DISTILLER

6 

STATEMENTS OF MR. MARK MEIRICK, BOARD MEMBER, IOWA 

PORK PRODUCERS ASSOCIATION, PROTIVIN, IA, TESTIFYING 

ON BEHALF OF THE NATIONAL PORK PRODUCERS COUNCIL; 

MS. REBECCA DOSTAL, PRODUCER, IOWA FARM BUREAU 

FEDERATION, TRAER, IA, TESTIFYING ON BEHALF OF THE 

IOWA FARM BUREAU FEDERATION; MR. JOSH NASSAR, LEGISLATIVE DIRECTOR, INTERNATIONAL UNION, UNITED 

AUTOMOBILE, AEROSPACE, AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, WASHINGTON, DC; AND MR. 

GLENN STOLTZFUS, CO-OWNER, PENNWOOD FARMS, DISTRICT 11 STATE BOARD DIRECTOR AND DAIRY COMMITTEE 

CHAIRMAN, PENNSYLVANIA FARM BUREAU, BERLIN, PA 

STATEMENT OF MARK MEIRICK 

Mr. MEIRICK. Good morning, Chairwoman Finkenauer and distinguished members of the Committee. Thank you for the invitation to testify on behalf of more than 60,000 U.S. pork producers. 

My name is Mark Meirick, and I am a farmer from Protivin, 

Iowa. My wife and I raise pigs and grow crops, including corn and 

soybeans. I am a member of the Howard County Pork Producers, 

the Iowa Corn Growers, the Iowa Soybean and Ag Business of 

Iowa. 

U.S. pork is a major contributor to the agricultural and overall 

U.S. economy. Today, U.S. pork producers provide 26 billion 

pounds of safe, wholesome, and nutritious meat protein to consumers worldwide. Exports of pork add to the bottom line of each 

pork producer and support approximately 110,000 jobs in the U.S. 

pork and allied industries. 

In 2018, U.S. pork exports were valued at nearly $6.3 billion and 

represented over 25 percent of the U.S. production. The biggest 

driver of increased exports over the past three decades has been 

free trade agreements, which eliminate or reduce tariff and nontariff barriers to U.S. exports. In fact, we export more pork to the 

20 nations with which the United States has FTAs than to the rest 

of the world combined. 

The U.S. pork industry has the dubious distinction of being on 

three retaliation lists, two with China and one with Mexico. China 

and Mexico are very important export markets for U.S. pork. 

In China we already had a 12 percent tariff on pork imports. We 

now face a combined duty of 62 percent in response to the United 

States imposing tariffs on imports of steel and aluminum and China’s theft of U.S. intellectual property and its forced technology 

transfers. 

On June 5, 2018, Mexico, where U.S. pork previously shipped 

product at a zero tariff rate under NAFTA, imposed a 10 percent 

duty on pork tariffs in response to the U.S. steel and aluminum import tariff. That retaliatory tariff increased to 20 percent 1 month 

later. 

According to Iowa State economist Dermot Hayes, the pork industry stands to lose the entire Mexican market if we continue to 

face the 20 percent punitive tariffs. Retaliatory tariffs have cost 

U.S. pork producers $12 per animal, translating into industrywide 

losses of $1.5 billion annually. 

SBR002 with DISTILLER

7 

As the world’s most competitive producer of pork, the United 

States was anticipating increases in access to Japan and Vietnam 

under the Trans-Pacific Partnership. These export prospects are 

also what prompted construction of five new pork packing plants 

across rural America. Unfortunately, restricted market access from 

ongoing trade disputes is making it increasingly difficult for U.S. 

pork producers to respond to uncertain export conditions. 

Producers are eager to see ratification of the U.S.-Mexico-Canada 

trade agreement. We are very pleased that the USMCA preserves 

zero tariff rate for pork in North America. Under the terms of our 

previous agreement with North American trading partners Mexico 

and Canada became our number one and number four volume export markets, respectively. In fact, those two countries account for 

40 percent of all U.S. pork exports. 

The U.S. metal tariffs have opened the door for some of our largest competitors in Mexico to enjoy duty free access. Professor Hayes 

of Iowa State looked at the possibility of U.S. pork finding alternative markets and concluded that without the Mexican market it 

would be left with a net loss of about 600,000 tons of pork, or 5 

percent of the total U.S. production. A loss in exports to Mexico of 

that magnitude would be catastrophic for the U.S. pork industry 

and for all American agriculture. 

Keep in mind that Canadian retaliation against U.S. pork remains a possibility as long as it faces the U.S. metal tariffs. 

In addition to calling for a swift resolution of the current trade 

dispute with Mexico and Canada, pork producers have been urging 

the Trump administration to begin negotiating new free trade 

agreements, particularly with Japan. For now, Japan is the number one export market based on value for U.S. pork. Last year, it 

concluded two trade agreements that have begun to erode U.S. 

market share in Japan. 

A U.S. free trade agreement in Japan would restore U.S. pork’s 

competitive position in a critical market, and this can’t happen fast 

enough. 

Trade is vital to the success of U.S. pork producers, but tariffs 

on U.S. pork exports to two of our top three markets, no clear 

timeline for new trade agreement negotiations with Japan and 

other key markets, uncertainty surrounding the ratification of the 

USMCA, and growing competition from other pork producing nations have U.S. pig farmers like me more than a little worried. 

The bottom line is that U.S. pork is shouldering a disproportionate share of trade retaliation against the United States. My fellow producers and I need relief. 

Thank you. 

Chairwoman FINKENAUER. Thank you, Mr. Meirick. 

And we now recognize Ms. Dostal for 5 minutes. 

STATEMENT OF REBECCA DOSTAL 

Ms. DOSTAL. Ms. Chairwoman, Ranking Member Joyce, and 

members of the Subcommittee, thank you for the opportunity to address you today. 

My name is Rebecca Dostal. I am a farmer from Tama County, 

Iowa. Our operation is around 700 acres just outside of Traer, 

Iowa, where we raise three boys, corn, soybeans, Berkshire hogs, 

SBR002 with DISTILLER

8 

and cattle. I am honored to have the opportunity to submit comments regarding trade and how it impacts agriculture in rural 

America. 

Rural America and the rural way of life is something I am deeply 

passionate about. I am active in our community as a member and 

former president of the Tama County Farm Bureau, a 4-H leader, 

and I am actively involved in an ag women’s group called Women, 

Land and Legacy. In addition to farming, I am also a substitute 

teacher for both South Tama and North Tama School Districts. 

Agriculture and rural communities provide a lifestyle and value 

system that is very important to me and my family, and I believe 

that without international trade that lifestyle is not sustainable. 

Our way of life deeply depends on foreign consumers and international markets. In order for us to operate in Tama County, Iowa, 

we must be able to feed those living in Hong Kong, Mexico, Mexico 

City, and Cairo, or our farm will not survive. 

As I am sure you are all aware, agriculture is tremendously important to Iowa. We rank first in the Nation in corn and hog production and second in soybean production. In our State, agriculture 

directly employs 330,000 jobs. Last year, Iowa produced over 2.5 

billion bushels of corn and 698 million bushels of soybeans. That 

is a lot of grain. 

Ultimately we need to find somewhere for that grain to go. On 

average, the U.S. has exported 42 percent of our soybeans and 14 

percent of our corn. Our top export countries have been Mexico, 

Japan, and South Korea for corn, and China, Mexico, and the 

Netherlands for our beans. 

Historically, we have relied on foreign markets to export our 

grain, and those foreign consumers have allowed agriculture, including farms like mine, to grow. 

However, this year that dynamic has not been as reliable. Since 

the retaliatory tariffs have hit we have seen the price of beans drop 

below the price of production, hog exports have slowed, and any 

hopes of expanding our operation have evaporated. 

The tariffs have hit us back home in the heartland in a very real 

way that has a ripple effect throughout our community. Every year 

farmers go to their bankers to set up a projected cash flow plan for 

the upcoming crop year. A typical farmer will use an operating note 

to borrow cash to pay for that year’s expenses. With seed, fertilizer, 

and equipment purchases often all coming at the same time, cash 

flow on a farm is difficult without these operating loans. 

When we sat down with our banker and did our budget in January of 2018 we used the projected pricing models that everyone 

uses to determine what level of financing we needed. We are always cautious to make sure that we do not overborrow and only 

borrow what we need. The problem is no level of caution and no 

pricing models could predict a trade war. 

When the tariffs hit, the price of beans crashed almost $2 a 

bushel and the price of corn dropped almost a dollar. An average 

acre in Iowa produces around 200 bushels of corn and 57 bushels 

of soybeans. So on an average acre the farmer lost almost $200 an 

acre on corn and $114 an acre on soybeans. 

SBR002 with DISTILLER

9 

That deep of a drop often causes a farmer from having a profit 

to losing money. Today the price of soybeans is below the cost of 

production, and the price of corn is hovering around an even cost. 

Because of the loss of revenue at the end of the 2018 crop year 

we did not have enough money to pay back our operating loan. Ultimately we had to refinance our operating loan using other equipment and possessions as collateral. 

Luckily, we are diversified, so we can make up our crop losses 

in other areas like cattle and hogs, but when it is that dramatic 

it makes things difficult. It will stop us from purchasing equipment 

upgrades, expanding our herds, or acquiring more land. 

The trade aid payments that were made from the USDA helped 

cover some of our losses but not nearly all of it. Without the trade 

aid we would not have been able to come close to covering operating costs. While we appreciate the assistance, we would much 

rather be paid a fair price by the market, rather than be paid restitution by the government for the trade war. 

Going forward with inputs staying high, prices staying low, and 

no end to the trade war with China in sight, things do not look 

great on my farm. This year I am subbing more than ever to make 

up for losses on the farm, but substitute teaching doesn’t supplement my life ultimately. We are small farmers, and that is what 

our livelihood depends on. 

My ultimate worry is how this impacts Iowa, Tama County, and 

our community of Traer. I see how it impacts our rural schools and 

our rural community. We are losing rural population, our towns are 

shrinking, and our community is slowly dying. If you are a small 

farmer like me and you can’t make a living in agriculture, you have 

no option but to leave. I strongly believe in the rural way of life, 

and with today’s economics, sadly, it may not exist for much longer. 

We need trade to sustain our farmers, our towns, and our communities. 

There is an easy solution to our trade woes. Trade deals like 

TPP, the USMCA, a trade agreement with the EU that includes agriculture, and a trade deal with China that is fair and predictable 

would expand our markets, help American farmers, and sustain 

our rural communities. Protectionist trade policies do not help 

Americans, it only hurts us in the heartland. 

With that, I thank you for allowing me to speak today, and I will 

happily take any questions that you have. 

Chairwoman FINKENAUER. Thank you, Ms. Dostal. 

And now I would like to recognize Mr. Nassar for 5 minutes. 

STATEMENT OF JOSH NASSAR 

Mr. NASSAR. Thank you for having me, Madam Chairwoman 

and Ranking Member Joyce and members of the Committee. I want 

to thank you on behalf of our one million members and our president, Gary Jones, for this opportunity and for being able to participate in this important conversation. 

I think, first of all, when looking at trade I want to talk about 

what we are trying to achieve. For United Auto Workers it is pretty clear. We are trying to provide, make sure there are opportunities for more good-paying jobs in the United States. That is the botSBR002 with DISTILLER

10 

tom line when we look at trade agreements and every other policy 

area. 

And in order to achieve that, to really strengthen the middle 

class and make manufacturing jobs the jobs they used to be, we 

think it is important to look at all policy issues. You have to look 

at labor enforcement, you have to look at tax policy, investments 

in workforce and in many other things. We think that a holistic 

view is needed, but trade is an important part. 

Now, for auto workers, we are proud of the fact that we help 

make—our members help make auto jobs middle class jobs, a 

bridge to the middle class. But that is less and less the case today 

as wages in manufacturing has dropped, and dropped significantly 

in manufacturing in general, but in auto it has been actually 29 

percent drop in 15 years in real dollars. So that is pretty significant. 

And one of the reasons why NAFTA has been such a problem is 

because there has been a lot of manufacturing work, and the ag 

sector is not immune from this, there has been more ag production 

equipment in Mexico, as well. A lot of work has actually gone from 

the U.S. to Mexico and then selling the exact same cars and other 

products back in the United States. That is one big reason. 

But another thing is that NAFTA has been used as leverage to 

undermine union contracts and organizing campaigns with a constant threat of: If you push too hard, we are going Mexico. 

And why is that such a problem? Well, in Mexico there are very 

few independent unions and the labor rights are really atrocious. 

Most of the unions there are company unions where the workers 

have no say in the contract, the terms of the contract are often 

signed to the contract without even voting on it or seeing it. And 

wages there for auto workers and manufacturing workers in general are often $2 to $3 an hour, and they are totally insufficient 

to be able to buy the products that they make. 

So looking forward, when it comes to USMCA or NAFTA 2.0 we 

think that there has been some progress, but work remains, especially in regards to labor rights, because we are concerned about 

while the labor chapter has some improvements from where we 

stand today, where there is no enforceable labor chapter, the enforcement mechanisms are not strong and they rely on this dispute 

resolution mechanism, which has been completely ineffective for 

protecting workers’ rights. So it really hasn’t created a level playing field. 

So there needs to be strengthening of the enforcement of the 

USMCA, and we encourage the administration to get back to the 

negotiating table and to make it a stronger deal than it is right 

now. 

As far as some other things to touch upon on trade, I am going 

to have a minority opinion here on a trade deal with Japan, because, while we certainly want the agricultural industry to prosper, 

we have, as you said, many members who work in building ag 

equipment and also suppliers for those main companies. 

We don’t think auto should be part of a trade deal with Japan, 

because Japan has the most closed auto market in the developed 

world, and we already have about a 100-to-1 ratio of imports to exSBR002 with DISTILLER

11 

ports. In other words, 100 Japanese cars are imported here for 

every 1 car we sell there. 

They have the most closed market in the developed world. It is 

not just U.S. companies, all companies have not penetrated Japan’s 

market, and they do it without tariffs. We are worried that on the 

auto side we could actually make 100-to-1 could be worse if we 

don’t do this trade deal right with Japan. So we would encourage 

cutting the auto sector out. 

We also think that as far as the TPP is concerned the labor chapter there is very weak, and that agreement, if it goes forward as 

it is now, would be bad for workers and for our economy as a 

whole. 

So to summarize, there doesn’t have to be this idea where ag industry and manufacturing industry are seen as opponents in trade 

deals. The truth is that we want the ag sector to do well because 

it is important for our economy and country, but it is also important for the jobs and manufacturing that are important in Iowa, Illinois, and throughout the country. 

Thank you for the opportunity. I look forward to answering your 

questions. 

Chairwoman FINKENAUER. Thank you, Mr. Nassar. 

And now I recognize Mr. Stoltzfus for 5 minutes. 

Thank you. 

STATEMENT OF GLENN STOLTZFUS 

Mr. STOLTZFUS. Thank you, Chairwoman Finkenauer, Ranking 

Member Joyce, and members of the Subcommittee. Thank you for 

inviting me to speak today on the state of the dairy industry and 

the benefits of trade agreements such as the United States-MexicoCanada Agreement. 

My name is Glenn Stoltzfus, and I operate a 700-cow dairy in 

partnership with my three brothers in Berlin, Pennsylvania, Somerset County. My brothers and I also farm approximately 1,700 

acres, growing corn, soybeans, alfalfa, and grass hay. We grow all 

of our forages and high-moisture corn and often sell excess corn 

and hay. 

In addition to helping operate and manage our farm operation, 

I currently serve on the Pennsylvania Farm Bureau’s Board of Directors, along with chairing the Farm Bureau’s State Dairy Committee. I offer testimony today on behalf of the Pennsylvania Farm 

Bureau, an organization representing more than 62,000 farm and 

rural family members throughout Pennsylvania. 

Dairy farmers are the largest segment of producers within the 

Pennsylvania Farm Bureau, and dairy is Pennsylvania’s largest agricultural sector. In other words, it is the largest component of one 

of the State’s largest industries. 

However, across Pennsylvania and the Nation the dairy industry 

is in dire straits. Just last month, USDA reported approximately 

2,700 dairy farms, a nearly 7 percent drop, ceased operation nationwide in 2018. Nationally, Pennsylvania suffered the second 

most closures, with 370 dairy farms lost, a drop just under 6 percent. 

One of my neighbors was one of those farms, and I fear the 

downtrend will only continue. And unlike traditional businesses, 

SBR002 with DISTILLER

12 

the prior business can’t simply be replaced with a new sign or fresh 

paint. Instead, many of these farms will permanently be lost, and 

with it a way of life. 

Delving further into the issue, a perfect storm of decreased consumer milk consumption, increased milk production nationwide, 

and a reversal of longstanding policies by governments to allow 

more domestic milk production have caused global oversupply of 

milk for a sustained period. 

As to consumption, in 2016 USDA projected the per capital consumption of beverage milk at an all-time low of 154 pounds per 

person, with per capita consumption of milk products falling by 25 

percent over the last 20 years. 

In practical terms, all these factors have meant that the price 

American dairy farmers receive for milk has been lousy for a long 

time. And while input costs have remained level or even increased 

in some cases, in my case my price per hundred weight of milk 

peaked at $26.80 in 2014 and went as low as $13.90 last year. The 

price has since improved to $17.30, but the future is uncertain and 

subject to numerous factors, including trade barriers. 

Compounding the problems, net farm income, a broad measure 

of farm profitability, is down over 50 percent since 2013 and presently at one of the lowest points in the last two decades. Thus, 

even diversified dairy operations such as mine have not been able 

to fully rely on other commodities to dampen the dairy despairs. 

Further, unresolved aluminum and steel trade tariffs threaten the 

health of the national farm economy. 

Nevertheless, despite all these problems, one material way that 

can help dairy farmers is to increase export market access. Given 

its quality and efficiency and decades of cultivating trade partners, 

the U.S. agriculture industry has been incredibly successful in utilizing trade to benefit farmers and our Nation as a whole, resulting 

in over 25 percent of all agricultural products being exported. 

Approximately 16 percent of all U.S. milk production was exported last year. In fact, agriculture is one of the few industries 

that exports more product than it imports, accounting for a $21 billion trade surplus. 

Much of the Nation’s agriculture trade success has arisen from 

relations with Mexico and Canada, where it has represented the 

top two agriculture trade partners for nearly every State in the Nation, including Pennsylvania. 

Dairy is no different. Since 2015, Mexico and Canada have 

ranked first and third, respectively, in export markets for U.S. 

dairy products. As a result, trade agreements involving Mexico and 

Canada are critical to our Nation’s agricultural industry, and the 

USMCA represents a chance to bring vital benefits to the industry, 

particularly dairy farmers. 

While not a cure-all for the industry woes, if approved, USMCA 

will provide meaningful benefits for American dairy farmers. The 

agreement will increase dairy market access to Canada by 3.6 percent, a level even better than under the Trans-Pacific Partnership. 

Some specific examples include an export increase of 50,000 metric tons of fluid milk by year 6 of the agreement, along with 12,500 

metric tons of cheese, and 10,500 metric tons of cream over the 

same time period. In total, the agreement is expected to increase 

SBR002 with DISTILLER

13 

dairy exports by 100,000 metric tons annually once fully implemented. 

Additionally, within 6 months of the USMCA’s implementation 

Canada has agreed to end its protectionist Class 7 pricing scheme 

that flooded the global market with subsidized skim milk and milk 

powder and lowered Canadian demand for U.S. ultra-filtered milk 

for cheese production. 

In turn, many American dairy farmers will benefit from the pricing scheme elimination by being able to compete globally on equal 

terms. 

USMCA also provides benefits beyond the dairy industry. Canada has agreed to treat wheat imports in the same manner as domestic wheat for grading and pricing purposes. Poultry exports will 

increase by 10,000 metric tons over a 6-year period. Turkey exports 

can potentially increase by a thousand metric tons each year for 10 

years. Eggs and egg-equivalent product exports will increase by approximately 16 percent over a 6-year period. 

Finally, the USMCA includes provisions that enhance sciencebased trading standards as the foundation for sanitary and 

photosanitary measures for agricultural products. The agreement is 

also the first of its kind to include provisions that address corporation information sharing and other trade rules related to biotechnology and gene editing. 

As the administration was negotiating USMCA, many farm 

groups issued a simple message of do no harm. Since its passage, 

NAFTA has worked incredibly well and brought benefits to agriculture, increasing U.S. agriculture exports to Canada and Mexico 

by approximately $30 billion. In our view, the administration has 

succeeded in doing no harm and done one better. Nearly all agricultural exports remain subject to zero tariffs, significant and historical strides for the dairy industry have been made with Canada, 

and other commodities, such as poultry and eggs, have gained increased Canadian market access. 

Given these advancements, we urge Congress to finalize 

USMCA’s passage. Beyond USMCA, the agreement provides a positive paradigm for future trade agreements, including potential 

noteworthy deals with Japan and the European Union, particularly 

given its emphasis on science-based sanitary standards and inclusion of biotechnology and gene editing. 

On the other hand, if the USMCA’s passage is substantially 

stalled or falls short the administration is unlikely to negotiate 

similar gains in future trade deals. 

As mentioned, trade agreements in and of themselves are not a 

magic potion to fix all difficulties in the farm economy, but when 

meaningful long-term improvements are negotiated, such agreements can provide significant benefits to a farmer’s livelihood and 

help keep farm operations afloat during downturns. 

We believe USMCA is such an agreement. We believe USMCA 

will help American farmers, particularly dairy farmers. And we respectfully request Congress move forward on its passage. 

Thank you again for allowing me the opportunity to share my 

story on behalf of Pennsylvania farmers. 

SBR002 with DISTILLER

14 

Chairwoman FINKENAUER. Thank you, Mr. Stoltzfus. And we 

will begin with questioning, and I will begin by recognizing myself 

for 5 minutes. 

I just again want to say thank you to every single person who 

came here today to testify. This is, quite frankly, heartbreaking 

right now with what is happening in the State of Iowa and also 

across the country after the last few years. And your testimony 

today is candid and brave, and I just truly thank you for all of your 

honesty and for being here today with us. So thank you, thank you. 

Now, one of the questions I want to ask first is to Ms. Dostal, 

and it has to do with the fact, I know you have discussed a bit 

about financing, and I know this is something that a lot of our 

farmers, particularly in Iowa one are dealing with, whether, you 

know, it was last season and they are going in wanting to update 

equipment before a harvest season and finding issues with banks, 

and I know, you know, obviously that then has an impact on John 

Deere as well and our workers. 

So one thing I wanted to kind of chat about is, you know, kind 

of highlighting some of these barriers you have been talking about 

in regards to financing, but is there anything that you think the 

USDA should be doing more of or that the Small Business Administration could be doing to supplement the USDA efforts to help 

ease the situation when it comes to financing and loans. 

Ms. DOSTAL. So I think the biggest problems with like bankers 

or your private bankers is their hands are kind of tied as far as 

how much they can give out based on how much debt you already 

have. Going by what we had done, you know, we did everything 

that we had done in the past 10 years, and you just couldn’t foresee 

that we were going to have prices drop that fast. 

So, you know, I was allowed to refinance my note using things 

that I already own, which obviously means, yeah, you are not going 

to be able to go and upgrade equipment or change things that you 

maybe would have done. I am trying to increase my cattle heard, 

and, you know, you are kind of maxed out on the limit that you 

can get. 

I don’t know that the USDA probably can help, you know, as far 

as because you are already in that debt, so what they did with, you 

know, when they went ahead the USDA did give us, you know, a 

stipend for the soybeans that we were to help kind of get by, but, 

you know, you are still in the same boat this year. You know, we 

have got prices so low right now there is so many people now that 

are going to be planting corn just because bean prices are solo for 

futures. 

So I don’t know, you know, unless this trade war can end so that 

we can have the free trade and be able to be at an even playing 

field with Brazil and other countries that can sell that product to 

them, I don’t know that it is going to make a difference by—you 

know, we don’t want a handout. That is not what we are here for. 

We would just like the opportunity to have that free trade. 

Chairwoman FINKENAUER. Yes. And Mr. Meirick, I know or 

Meirick we chatted a little bit about this yesterday, as well. Do you 

have any thoughts on the financing portion or anything that you 

would like to see in regards to some of the loans? 

SBR002 with DISTILLER

15 

Mr. MEIRICK. Well, we are in a grain elevator business with my 

brothers, and we run into it daily. A couple years ago when prices 

are above breakevens everything goes pretty smooth, guys prepay 

their expenses, and at the end if there is an operating note they 

pay it off. 

And the last 2 years especially since the tariff on soybeans has 

been devastating, but we have been below breakeven on almost all 

commodities, milk, corn, beans, hogs. So the bankers are nervous, 

and I am not sure if the USDA or Small Business Administration 

would have some type of a guaranteed loan program so that when 

the bankers are loaning money they would have a back stop so that 

just in case things don’t improve for unforeseen circumstances 

maybe there would be a back stop through either small business 

or USDA. 

So we have had guaranteed loans in the past, and I don’t know 

the statistics, but maybe 98 percent get repaid, I am not sure, but 

a small portion maybe don’t go the right way, but at least it would 

have a back stop for the local banks, yes. 

Chairwoman FINKENAUER. Thank you. 

And, Mr. Nassar, thank you so much again for being here today 

and bringing your very, very important perspective here that impacts my district, as well, in a very large way. 

So one of the things I am kind of curious, about a couple things, 

but do you guys actually have numbers on how many of your farmers are—so how many of your union members are also farmers? 

And then, also, I am wondering if you can talk a little bit about 

about what you would like to see to make sure that American 

workers actually have a more prominent voice in the trade process 

and what changes you would like to see in regards to trade authority. 

Mr. NASSAR. Sure. Thank you for the question. I don’t have any 

stats as far as how many of our members also work as farmers. I 

know plenty of our members who do work as farmers, as well, and 

come from agricultural communities, so I know that, you know, it 

is very much part of their lives. Our union wants a prosperous agricultural sector. 

As far as, what kind of policies are needed to strengthen middle 

class, I mean, there is a lot. We think one thing that has been a 

problem for us has been outsourcing has been companies going 

overseas and plants closing, and we think more policies could be 

done to stop that, such as claw backs could be done for corporations 

that, you know, take subsidies and then don’t fulfill their promise, 

move overseas. 

We think there are provisions in the tax law which don’t make 

sense, which actually make it so it is easier to—you pay lower U.S. 

taxes on your profits overseas than you do domestically, and there 

are labor laws that are very weak as far as being able to enforce. 

They are largely toothless. 

There is a lot that needs to be done. First of all when it comes 

to USMCA we have got to have a new labor chapters because what 

we have seen in manufacturing is wages have dropped not just for 

U.S. auto workers but for auto workers in all three countries since 

then. So that part really needs some work. 

SBR002 with DISTILLER

16 

Chairwoman FINKENAUER. Thank you so much, and, unfortunately, I am out of time, but, again, we will do a second round of 

questioning here. And with that I will yield to Ranking Member, 

Dr. Joyce. 

Mr. JOYCE. Thank you, Madam Chairwoman. My first question 

is for Mr. Stoltzfus. You had mentioned in your testimony some of 

the issues that plague the dairy farm and many other dairy farmers whom I have been in contact with throughout Somerset and actually through the entirety of Pennsylvania 13 have talked to me 

how the dairy industry has been affected by the decreased use of 

dairy products. 

So some of the initiatives that I have been involved in is first of 

all to make recommendations that whole milk is returned to public 

schools. My concern, and what I hear from the dairy farmers is 

that we have lost a generation of milk drinkers by allowing skim 

milk to be substituted. 

As a physician, as a parent I understand that the nutritional values of milk can be carried in the small amount of fat that is in milk 

that the vitamins A, D, E, and K are in that very small amount 

of fat that is in whole milk. That is needed for brain development, 

it is needed for muscle development. It is needed in the children 

in the public schools. 

Can you address how initiatives like returning whole milk into 

our public school can potentially increase dairy use and actually 

dairy prices? 

Mr. STOLTZFUS. Thank you. Yes, I have often said that I think 

we have—as you stated we have lost a generation of people who 

used to drink milk, whole milk. Fluid milk is the Class 1 milk that 

we receive the highest premium for and in the northeast part of 

this country we tend to sell a lot of our milk in that Class 1 that 

goes for fluid milk, and as that consumption drops we continue to 

lose that premium that is there for that Class 1 milk. 

It is unfortunate what has happened in the schools and in cafeterias where we have tried to push this skim and 1 percent milk, 

and to be honest with you, it is not good, it doesn’t taste good, and 

when you take away that flavor folks don’t—you know, you create 

habits when you are very young and, as you age you tend not to 

change those habits, so in that way, yes, we have lost a generation 

of folks that used to drink fluid milk. 

I think it is nature’s most perfect beverage. Actually, I definitely 

agree with you, adding it—getting whole milk back into schools 

would be a tremendous advantage to us as dairy farmers. 

Mr. JOYCE. I am going to follow up on that, Mr. Stoltzfus, with 

an additional question. The dairy industry has been hard hit with 

imitators in the dairy counter. So recently with a Member I crossed 

the aisle and we wrote a letter to Gottlieb, the FDA Secretary, addressing that in the dairy case that dairy products should be 

present, that imitators of dairy products that are sold under the 

label of being milk or dairy shouldn’t be allowed. Do you think this 

has had impact on your industry, as well? 

Mr. STOLTZFUS. Absolutely. Years ago you used to go to the 

beverage case in supermarkets, and a very large percentage of it 

was milk or milk products. Now we are in competition with all 

kinds of juices and other things, including the nut juice or whatSBR002 with DISTILLER

17 

ever you want to call it that is being called milk that does not come 

from a lactating animal. 

I believe that there is actually a law or a rule that in order to 

be labeled as ‘‘milk’’ it has to come from a lactating animal, and 

it just is one that has not been enforced, and we certainly would 

appreciate that being enforced, and I think it would make a—it 

would distinguish a difference between milk which comes from a 

lactating animal and those products or those drinks that do not. 

Mr. JOYCE. Thank you for that clarification and thank you for 

reminding us what we were all taught in sixth grade science class, 

I appreciate that. 

This question is for Ms. Dostal. Thank you for your input. Thank 

you for telling us how difficult it is on your farm. Do you feel that 

the Iowa Farm Bureau, which you mentioned, participates or encourages you to participate in promotion programs that would 

allow you to export your product, is that part of your background 

in agriculture? 

Ms. DOSTAL. Yes, I have been on a market study tour where I 

went to Brazil through Iowa Farm Bureau. I am very big in beef 

industry, so it was very eye opening to see how Brazil raises their 

cattle down there, and we actually got to go to a packing plant and 

see everything, and they are a major competition in our exports. So 

the reason the farm bureau does the market State tours is to educate us as producers so that we know what we are up against in 

the export market. 

So I think they really, you know, a lot of different times they go 

on trips throughout the year trying to educate consumers and producers on what is happening in other parts of the world, so that 

we know what we are up against when we are trying to produce 

our products and get them exported to those countries. 

Mr. JOYCE. Thank you, and thank you for your hard work. 

Madam Chairwoman, I yield. 

Chairwoman FINKENAUER. Thank you very much. 

And now I would like to recognize Congressman Jared Golden for 

5 minutes. 

Mr. GOLDEN. Thank you, Madam Chair. 

Mr. Stoltzfus. 

Mr. STOLTZFUS. Yes. 

Mr. GOLDEN. All right thank you. Sorry, I want to make sure 

I got that right. 

So I grew up in a town in Maine, Leeds, Maine where we had 

a lot of small dairy farming families, and there are still a few remaining, but a lot of them have moved on, sold their cows and kind 

of a process of consolidation of sorts going on up there, particularly 

starting in the nineties. And, you know, a lot of smaller operations 

in Maine. There is not a whole lot of surplus in the region, so we 

have, you know, essentially a situation where dairy is sent to Massachusetts for processing and returns to Maine for retail sale, and 

they do some value added stuff like yogurt and artisanal cheeses 

and other things mostly sold in the State or in the New England 

region. 

Most of the farms are organic and a lot of them don’t use bovine 

growth hormone, and I am just curious from your perspective it 

seems like under NAFTA we saw a more, you know, an increase 

SBR002 with DISTILLER

18 

in export, but in some ways smaller family farms in places like 

Maine are struggling to survive and compete, and do you think, 

you know, there is a connection there or does that have more to 

do with things going on domestically. 

And is NAFTA, the renegotiated NAFTA, USMCA going to help 

this scenario that I was just describing, and if not, what kinds of 

domestic policies might help reverse the fortunes of smaller dairy 

farmers in places like Maine? 

Mr. STOLTZFUS. I am not sure that there is a relation like between NAFTA and the loss of small dairy farms. Pennsylvania has 

also seen that. It is unfortunate, I think, when you start to lose 

those small dairies in communities, you start to lose your infrastructure, you start to lose the equipment dealers and that sort of 

thing. Unfortunately, there is the economics of scale. I think there 

is a place for small farms and a lot of times it is like you said it 

is that niche market where whether it is organic or local grown or 

whatever it is. 

In Pennsylvania we are seeing kind of a resurgence of those 

niche markets, not necessarily just dairy, but other produce stands 

and the resurgence of farm markets. You know, the farming industry is changing, and I don’t know that that is a whole—a lot of that 

can be related to NAFTA or the USMCA deal that has been proposed. 

Mr. GOLDEN. Thank you. I had a conversation last October, I 

think it was with a dairy farmer in Maine thinking that he would 

be pleased with the new trade deal, but in his case he didn’t think 

that it would make much of a difference in the local market anyway, although it may be good for others around the country, but, 

you know, had he a deep skepticism. 

I do want to agree with the Ranking Member Dr. Joyce talking 

about consumption and some of these things that we can do that 

might help out. I was talking to one of these former dairy farmers 

back home in Maine just this morning and you know what he said 

was there is some overproduction problems and not enough consumption, and what we need is more consumption. And they used 

to refer to skim milk when I was young as white water, but, you 

know, he essentially was saying that he educates his boys to put 

three liquids into their bodies, water, milk, and when they are of 

an appropriate age beer. 

But part of the problem is, of course, that we are not consuming 

enough here locally, but a bit of a deep skepticism in Maine that 

opening up Canada to, you know their market may not be big 

enough in terms of their demand to really fix the problem for us, 

but I do appreciate your testimony today and your feedback. 

You know, we were talking a little bit earlier about cotton actually, and my community Lewiston, Maine used to have textile 

mills, most of which are gone, in fact, almost all of them have left 

and, you know, so it is not a surprise to hear that cotton producers 

farmers are relying upon export and trade at this point because 

most of the processing in the United States, particularly in places 

up in New England seems to have left the country. 

And I was just curious, you know, Mr. Nassar, it seems like that 

is a common problem and something that your organization talks 

a lot about in regards to trade where what we see is perhaps an 

SBR002 with DISTILLER

19 

increase in exports, but the fleeing of the manufacturing and processing side of things, whether we be talking about textiles, about 

food or, you know, things like auto. I am just curious is there anything about the USMCA that you think is going to stop the loss of 

those jobs leaving the U.S. because I think we all agree that we 

would like to see, you know, U.S. products being processed in 

America and sold to, you know, American consumers. Keep the jobs 

here essentially. 

Mr. NASSAR. Thank you for the question. You know, it is really 

difficult to project what would come from it because we haven’t 

really seen any economic analysis, but I think what as far as, retaining jobs, relying just on trade alone in a deal just in USMCA 

is probably is insufficient. You also need to have surrounding policies, you need to have good tax policies, et cetera. 

I think one thing though to point out is that when you lose a 

manufacturing plant it devastates a whole community, and it is not 

just the plant, it is all the suppliers. For example, in a car about 

75 percent of a car is made in the parts sector. Also in the ag Imp 

sector there are a lot of parts. Plant closures really has a devastating impact, but I would just say we need more analysis we 

need more information to be able to make an educated prediction, 

but it is really going to be hard to happen without a stronger labor 

chapter. 

Mr. GOLDEN. Thank you. 

Chairwoman FINKENAUER. Thank you, Mr. Golden, and I will 

now represent—I will now recognize Representative—you are not 

too far away, just a little bit, a little bit north of Iowa there. I will 

recognize Representative Jim Hagedorn for 5 minutes. 

Mr. HAGEDORN. Madam Chair, thank you. I appreciate the 

time. Ranking Member, it is good to be here. Thanks for the testimony, the witnesses’ time. 

I am sorry to be late, I was over in an agriculture subcommittee 

meeting talking with the Undersecretary of Agriculture about 

trade, so kind of along the lines of what we are getting at here. 

You know, southern Minnesota, a lot of farmers, a lot of agra 

business and highly dependent on making sure that they have 

markets around the world for the products, and I tell people that 

there are kind of three aspects of what we want to do for our farmers. One is to knock down those barriers and another is to make 

sure we sustain farmers when times are tough like with the farm 

bill things like that, and then we also have to make sure we have 

good government. 

You know, when I grew up on a grain and livestock farm near 

Truman, Minnesota, I used to go out and walk the beans. They 

don’t really do that much anymore, but we would pull the weeds 

to make sure that the bean plant could get the proper nutrients, 

sunlight, and water so it could thrive we get the best yield possible. 

And we kind of have to do that here in Washington because there 

is a lost bad government. We need to pull the weeds of government, 

and I agree with what you said. Tax policy is important, regulatory 

policy, ObamaCare, which has been very tough on farmers, and energy policy, make sure we have downward pressure on that. 

SBR002 with DISTILLER

20 

But a big part of what we are talking about here is making sure 

we knock down the barriers, we expand our trade so we have the 

markets, and so I would ask Mr. Stoltzfus? I am sorry. 

Mr. STOLTZFUS. Close enough. 

Mr. HAGEDORN. I apologize for butchering that. The USMCA, 

I support that. I hope the Speaker will bring that up at the proper 

time. You do see that as a positive development, right, especially 

in the areas of agriculture? 

Mr. STOLTZFUS. Absolutely. I think it is stated in testimony, 

that you know, that most farm organizations when they went into 

the negotiations we said do no harm. In other words NAFTA was 

very good to agriculture, but I think they have done one better. I 

think if this gets ratified I think it will open up markets, particularly in the dairy industry where Canada has been extremely protective of their dairy industry up there. 

When you go to Canada or you talk to a dairy producer and you 

start talking about dairy trade, the conversation ends right there. 

And if we can make any kind of stride there I think it will be a 

plus for dairy farmers. 

Mr. HAGEDORN. Good deal. Mr. Meirick, I grew up on a hog 

farm, as well, and as a matter of fact Martin County right next to 

where I live they call it the bacon capital U.S.A., so a lot of pork 

production, I think second largest pork producing district in the 

whole country. And parts of, you know, what we need to do as a 

government our role of the Federal Government is to protect agriculture from imports that could disrupt our markets. 

One of the things that is happening in China right now it is pretty devastating is this African swine flu, the virus, and we want to 

make sure we protect our farmers here by not allowing that in the 

country as best we can. What about the concept of a vaccine bank, 

do you think that should be fully funded? Do you think that would 

have a positive effect in the future should we have a problem? 

Mr. MEIRICK. Well, sure. African swine fever is a huge issue. 

There is no vaccine, and there won’t be any vaccine for at least 10 

years, so we are a long ways out on that. There was some legislation on vaccine bank in this farm bill, and it will relate to foreign 

animal diseases, but not specifically to African swine fever, that is 

a long ways out. 

But we will still need help from the government to protect the 

borders to keep stuff from coming in, and you have the African 

swine fever, and they do that at airports. They have the beagle patrols. There is various ways that they are going to help to try and 

keep that out because the only way we can avoid African swine 

fever is to keep it out of our country. Once it is here it is too late 

because, again, there is no vaccine for it. 

And it is going to take years, there is plenty of people working 

on vaccines, and they might need some government help for helping to fund some of that research, but it will be a ways down the 

road, but if it does happen here our exports stop immediately. So 

if we export 25 percent of our hogs, which we do, the day we have 

African swine fever come here, our exports are shot. So that would 

be huge. It would devastate the hog industry in the United States. 

So we have to—number one, we have to keep it out from coming 

across our borders. 

SBR002 with DISTILLER

21 

Mr. HAGEDORN. I agree with that. And some people don’t kind 

of follow that if our hog production goes down our exports then also 

the corn and other things that, you know, feed the hogs, that is 

going to take a hit too, and our commodity prices along the way— 

farmers are going to have a lot of bad repercussions. 

Mr. MEIRICK. Absolutely. Just a string of dominos. Exactly 

right. Yes. 

Mr. HAGEDORN. A few years back we had something a little 

similar in the pork industry, the hog community and they thought 

that maybe a vaccine or something was far off, but it is remarkable 

how when people put their mind to it and we get the best scientists 

and others in the biotech communities working that they can find 

something, so hopefully there will be a breakthrough soon, but—— 

Mr. MEIRICK. I agree. They are putting a lot of resources into 

it. This is a really tricky virus. They haven’t worked on anything 

quite like this. So some of the viruses in the past they have fairly 

short-term gotten a solution, but this one is a really tricky one, 

and—but you are right, they are putting their smartest people at 

it, so we are hoping for the best. 

Mr. HAGEDORN. I appreciate that. I yield back. Thank you. 

Chairwoman FINKENAUER. Thank you. 

And now I am going to recognize members who would like to ask 

a second question for 5 minutes, as well, and I will start by recognizing myself. 

Again, what you all are bringing up here today is so powerful 

and important that is heard in Washington. One of the things that 

keeps me up at night, and I am sure many of you as well, are the 

long-term effects of what has now become a very long drawn out 

trade war process. I still will never forget actually where I was 

when I saw President Trump’s tweet about the steel and aluminum 

tariffs 5 days before a special election in Pennsylvania, Mr. Conor 

Lamb’s, and then about a month and a half after that was when 

we all of a sudden saw the retaliatory tariffs come from China that 

directly hit my State and our agriculture industry in a very big 

way. 

After that obviously then the discussions about the renegotiation 

of NAFTA. You have had again because of then the steel tariffs 

going on Canada, as well and in Mexico you then have the 20 percent tariff that Mexico throws on our pork industry, and here we 

are about a year and a half later and I am very concerned about 

the long-term impacts about what this has cost us and wanting to 

make sure that the deals we are getting are truly going to be worth 

everything that our State has gone through. 

And I am concerned about that. I don’t know if we are going to 

reach that, but I want to make sure again that we are doing everything to address these long-term effects that have been happening 

over the last again year and a half. 

One of the things I want to touch on here is the impact of, you 

know, our next generation of farmers who have been watching this 

occur. Our workers who have been watching this occur, and what 

especially when you are looking at again, you know, the tariffs, the 

soybean tariffs from China, I mean, you have got China and Brazil 

creating new contracts, Brazil is deforesting as fast as they can to 

plant more soybeans, and that is just not going to go away. 

SBR002 with DISTILLER

22 

So these are the things I am concerned about and also wondering 

if you guys could each speak a little bit, I know we are a little limited on time here, but about a minute each of what you are seeing 

as what will be the long-term effects here or things we might not 

even know until, you know, 5, 10 years down the road here. 

Mr. Meirick, if you would like to start. 

Mr. MEIRICK. Well, as farmers and producers we are used to 

risk. I mean, every day there is plenty of risk. What we don’t need 

is extra unknown risk, unknown barriers that the tariffs presented 

like Rebecca said when you go to your banker, you make a plan, 

and all the sudden out of the blue here drops a tariff on top of your 

head. 

So there is the known unknowns and then the unknown unknowns, so when something falls out of the sky like a tariff we 

have a hard time being able to process that. So what will happen 

is the smaller farmers, which we talked about before, the back 

bones of the community, they will just give up. They will get a job 

in town, they won’t be able to get any more funding, and they will 

dry up and they will just be two farmers farm the whole county. 

Maybe in 100 years it is going to be that way anyway, I am not 

sure. 

But in the short term for our communities we like to keep it a 

little closer to the way it is now. Does that make sense? 

Chairwoman FINKENAUER. Absolutely. Thank you Mr. Meirick. 

Ms. Dostal? 

Ms. DOSTAL. Yes, I would like to agree with Mr. Meirick. As a 

mother of three boys, I would not encourage my sons to come back 

to the farm, and that is sad because that is our rural communities. 

So I have a 16-year old boy that I said if you want to stay in agriculture go into drones, you know, into the agronomy side of it so 

that you can sell to the bigger producers because he is right, probably in, you know, the next 20 years you are going to have the two 

biggest producers farming in the whole county. And we are already 

seeing that because we just can’t compete with the rent prices and 

the things that are going on with the prices the way they are. 

So our biggest benefit is that we are diversified, and that is what 

I was always told, you know, don’t always keep all the same eggs 

in one basket, so we can try to make up for it in other things. Right 

now cattle prices are good, but, you know, with Brazil producing 

more cattle, too, like you said, it is going to start hurting somewhere else. 

So probably as far as a future of, you know, our farming community I think I was talking earlier, you know, our high school graduate 35 kids. That is a small school, and we have a lot of them in 

Iowa, but you see the urban sprawl, you see the bigger towns just 

getting bigger, and that is because people aren’t farming, they are 

finding jobs in town. So I think this is really hurting them. 

Chairwoman FINKENAUER. Thank you, Ms. Dostal. Mr. 

Nassar. 

Mr. NASSAR. Yes, thanks for the question. I do want to say that 

I think there is a role for enforcement, and that at times, enforcement policies are needed when there is flooding of markets and 

such. I would say for that to be effective it has to be with many 

SBR002 with DISTILLER

23 

other countries and that has been something that is missing from 

the current policies. 

It is a little different for manufacturing, but we have seen a real 

loss in confidence in manufacturing, and it continues to this day. 

For example, you know, in spite of everything that is being done, 

General Motors announced that it is planning on closing four factories despite record profits. And we are seeing kind of a lack of 

confidence in manufacturing. 

So that is partly related to the trade policies, and it is something 

that really has to get turned around quickly. 

Chairwoman FINKENAUER. Thank you. 

And Mr. Stoltzfus. 

Mr. STOLTZFUS. Thank you for the question. I kind of think 

that, you know, for years we have complained in the ag industry 

that we haven’t been able to play on a level playing field, and the 

policies of past administrations, I am going back 20, 30 years, really haven’t been a whole lot different from one to the other when 

it comes to ag trade. This administration is trying something different, and yes, it hurts, and we have yet to see whether or not it 

is actually beneficial or not. 

If in the end it comes out we can play on a more level playing 

field with the rest of the world we will be far ahead. I think here 

in America we have the ability to out produce anybody because of 

the innovation, the technology we have, and I tend to think right 

now although the prices are bad in just about every commodity, the 

future of ag is tremendous. The technology that is there and the 

things that kids can get involved in, people coming out of school 

that—it is different. It is not going to be the same way. It is changing, and we can’t stop change. So we need to adapt to it. 

I think the future of ag is bright, and I think it will continue to 

be that way. 

Chairwoman FINKENAUER. Thank you, Mr. Stoltzfus. 

And I now would like to—we just have Mr. Golden now, recognize Mr. Golden for 5 minutes. 

Mr. GOLDEN. Thank you. I like this discussion that we are having about labeling and, you know, what we call our products, and 

I agree again with the Ranking Member when it came to the issue 

of, you know, what we call milk. I actually signed on that that letter as well. You know almond milk, not milk, but that is just my 

opinion, but anyway. 

You know, Mr. Meirick I wanted to ask you a little bit about this 

new NAFTA deal, and, you know, some of the concerns that I have. 

I wasn’t sure if you might agree, and, you know, if you were in 

charge for a day if you might have pushed for some additional 

changes that could be good for you, but back home where I come 

from people take a lot of pride in Maine made, American made, you 

know, products. They like to know what they are purchasing. 

And given a choice between buying something from away or 

something that is here from the U.S. they will often side with the 

U.S. even if prices are a little bit higher and within reason of 

course, but I was surprised that the negotiators for this deal didn’t 

try to restore the country of origin labeling. 

And I know that is something that Canada and Mexico complained about to the World Trade Organization, but, you know, I 

SBR002 with DISTILLER

24 

was hoping that this would be an opportunity to try in this new 

negotiation put on to the table and try to get them to drop their 

complaints. Would it be a benefit to the pork industry to be able 

to label your products as made in the U.S.A.? 

Mr. MEIRICK. Well, just speaking for myself here I don’t know 

the official position of NPPC. I don’t represent them directly but, 

no, I would say I would say no. In our industry wherever it comes 

from it is all Federally inspected. It has gone through inspection 

process, so really where it comes from as long as it passes our inspection for the most part is good. 

In the packing plants, and as a producer, if I was getting feeder 

pigs from Canada, which happens frequently, it creates a bottleneck then of is that an American hog. It was born in Canada, but 

it comes here at 20 days old, and I have them for the next 100 

days, so is that a product of Canada or a product of the U.S.? So 

right away there is trouble. 

You get to the packing plants where they are trying to be the 

most efficient. One load comes from Canada, one load comes from 

the U.S., one load is mixed. How do they handle that? Because they 

have to separate that. And every time you have to separate, that 

costs money. And then what the consumers want they wanted it all 

labeled but they didn’t want to pay any extra. 

Well, somebody has got to pay for that, so you know who pays 

for that? The producer. We get less money for our product because 

the plant has to go through the process of splitting up these loads 

and then get them in the right chutes and get the right label on 

it. That costs money. And the consumer is not going to pay, so I 

pay. 

So in my position I don’t like that idea at all. Does it make 

sense? 

Mr. GOLDEN. It is thoughtful, and I appreciate your feedback. 

Mr. MEIRICK. Thank you. 

Mr. GOLDEN. You know, I think it is a difficulty for a smaller 

operations in places like Maine. I think about the lobster community, you know, where I talk to lobster men and women one of the 

top things they regret is that they don’t have control over processing locally, you know, they hate to see it go to Canada, and at 

the end of the day they want, for instance, Maine lobster be labeled 

as such. They hate to see it go to Canada and then come back with 

that labeling that shows that it is a U.S. Maine lobster and not a 

Canadian one. 

Mr. MEIRICK. Well, anyone, any packing plant can put whatever label they want. They could put if they want only U.S., they 

can put U.S. on there, but I don’t think there should be a regulation. If you think that is an advantage, put it on there, and if you 

don’t think it is an advantage don’t put it on there. Just like organic or any other niche. 

So that is the way I would like to put it. 

Mr. GOLDEN. I appreciate the feedback, and, you know, I do 

want to look further into some of the things around import and export inspections in this trade deal and whether or not it is, in fact, 

going to make sure that we have got a safe product coming in. We 

talked about the bird flu aspect and how it could really, you know, 

damage your industry significantly. 

SBR002 with DISTILLER

25 

And the last piece is just a buy American preferences continue 

to be waived under this new deal, which, you know, as subcommittee Chair on contracting and infrastructure for this Committee I think is regrettable. I would always prefer to see an American business get the American Government contract first. 

Unfortunately, I think under this deal we were unable to get 

that in, and so, unfortunately, I think we will continue to see competition for buy American preferences and U.S. Government taxpayer, you know, American taxpayer you know contracts purchasing Mexican and Canadian goods for—from the American Government or selling it to the American Government, which is unfortunate. I wish we could have done something about that, and I am 

interested if you would benefit from such a policy. 

Mr. MEIRICK. Well, it comes back to cost. At what—where do 

you draw the line? I mean, if I can buy something from Japan at 

$10 would I pay $20 for its American? Normally most of the—our 

county when they are buying a truck for the county they buy it the 

cheapest they can because that makes our county more—it is more 

feasible, and it lowers the cost to the county if they buy the cheapest one. 

Now, that is talking about county. When you are talking about 

the globe there is chances of buying stuff from wherever. So I don’t 

know the answer to it, and I would like to buy American too, and 

if I have a chance I would too, but at what cost? That is the question. 

Mr. GOLDEN. I am out of time. I see that Mr. Nassar would like 

an opportunity. I leave it up to the Chairwoman. 

I mean, I understand what you are saying, sir. My concern, of 

course, is at what cost is at the end of the day if we lose the jobs 

here in the United States then we don’t have people with good 

work, but. 

Mr. MEIRICK. But as a taxpayer in your county you want to 

keep the costs as low as they can. And in some cases you might 

be willing to pay a little bit more, but where do you draw the line? 

That is just the question. 

Mr. GOLDEN. Right. Delicate balance. 

Mr. Nassar. 

Mr. NASSAR. Yes, thank you for the opportunity. I just want to 

say where we believe that U.S. workers are most productive and 

actually shows that it is, but we don’t want to compete on an 

unlevel playing field, and what we are seeing it is not good when 

the price is a lot lower because workers are exploited, and that is 

what we see in Mexico, for example. 

I just want to emphasize that workers there who want to join a 

union often face violence. This is not hyperbole, it is fact. In fact, 

the State Department just said as much in their report which is 

in my testimony. So, yes, level playing field, but at what point do 

we say that the price is more important than everything else? 

So I think there is a balance to be had, and exploiting workers 

shouldn’t be a competitive advantage. 

Chairwoman FINKENAUER. Thank you, Mr. Golden. 

And I also again want to take an opportunity to thank our witnesses here today, and I am very grateful for the discussion we 

were able to have. And, again, although we all, you know, come 

SBR002 with DISTILLER

26 

from different backgrounds or different view points the fact that it 

was a thoughtful, respectful discussion is something that, you know 

I actually think happens more in D.C. than we think, but it is nice 

to actually showcase this, as well, that these are the types of discussions that should be even had even though they are tough ones, 

but that makes them all the more important. So thank you, thank 

you, thank you. 

And I also have to say, you know, I am heartbroken hearing 

some of the testimony today. Ms. Dostal, I will never be able to forget you sitting here and having to tell me that you were, you know, 

encouraging your sons not to go into the, you know, to the farm, 

and that is tough to hear as I am, you know, I have got a nephew 

who is about to—he is the one—he is the son of my sister and the 

brother-in-law who are corn and soybean farmers, they have got 

about 500 acres. And I often times think about him, as well, and 

what does his future look like and what will they be telling him? 

So it hit very close to home. 

And I know, you know, Mr. Stoltzfus, I know you mentioned 

economies of scale and how it is changing, but the reality is, I 

mean, our small family farms, they are the backbone of our not just 

our economy in Iowa but also our culture. It is our values. It is who 

we are. And I am committed to fighting like hell to make sure I 

am doing everything I can to preserve that way of life, as well as 

the way of life for our working families across the district, as well. 

Mr. Nassar, speaking of our UAW workers and other folks in 

manufacturing, you know, wages are—have basically been stagnant 

in the State of Iowa for the last 10 years. It is tough, and it is 

tougher every day for working families to make it. And I truly believe for America to succeed, for Iowa to succeed, this is why it is 

so important to come together on these issues because we both do 

better when, you know, the other one is doing better. And so, 

again, grateful to start these real conversations that are tough. 

And in regards to small businesses we know, you know, when we 

are creating new markets and new producers we create new jobs, 

and we also bolster our economy, which obviously, is just incredibly 

important across the board here in congressional districts all across 

our country, but if we are not taking the trade negotiations 

thoughtfully and carefully and with a plan that also can have negative impacts. 

And so, again, I am just grateful we are having these discussions 

and starting them before we even get the USMCA delivered to Congress, which, you know, we should be expecting I am assuming 

some time, and it is important we continue to have these discussions, as I have said. 

And so one of the things is while I just wanted to touch on that 

you guys all did for me quite well was again these long-term impacts. I am worried after just, you know, a week ago I had a young 

guy, he was 16, sort of in the same boat I am sure as your son who 

told me that he is not sure if he will be going into the family farm. 

He is one of four. He is the youngest. And he is going to school for 

engineering, which is also important, but he was really worried. He 

looked at me and he talked about his community, his—you know, 

the businesses in the rural area where he grew up, you know, 

SBR002 with DISTILLER

27 

again, rural communities changing all across America after the last 

few years and worried about what that future looks like. 

So just thank you for your perspective on all of this, and I also 

want to make sure that we are uplifting these stories to the administration and making sure that they are hearing what has been 

going on on the ground and making sure that what they are doing 

ends up worth it in the end, and I hope to God it is. 

We have to take—we have to take this opportunity with pending 

deals to make it worthwhile and make improvements where they 

are needed. We need a strategy for trade that is fair to our workers 

and our domestic industries, ensures labor protections, and opens 

new markets for our farmers while leaning on our close allies for 

strength in the global marketplace. 

I know this hearing helped inform many of my thoughts, as well 

as the folks that were in and out here today as well, and I am sure, 

you know, again, folks watching this and hopefully our fellow colleagues we can have conversations with regarding this testimony 

today will benefit. 

I now again would just like to say thank you for the final time. 

Grateful for all of you. Please have all safe journeys back to Pennsylvania and Iowa, and I remain hopeful for the future, but we 

sure have a lot of work to do, and I am excited to have the opportunity to do it with all of you. Thank you. 

And with that, I would ask unanimous consent that members 

have 5 legislative days to submit statements and supporting materials for the record. 

Without objection, so ordered. 

And if there is no further business to come before this Committee, we are adjourned. 

Thank you again to our wonderful witnesses for taking time to 

be here. 

[Whereupon, at 11:45 a.m., the Subcommittee was adjourned.] 

SBR002 with DISTILLER

28 

A P P E N D I X 

SBR002 with DISTILLER


Insert offset folio 28 here 35735.001

NATIONAL 

PRODUCERS 

COUNCIL 

Written Testimony Of 

National Pork Producers Council 

On 

The Small Business Trade Snapshot: 

Agriculture and Labor 

United States House of Representatives 

Committee on Small Business 

Subcommittee on Rural Development, Agriculture, 

Trade, and Entrepreneurship 

April 2, 2019 
29 

SBR002 with DISTILLER


Insert offset folio 29 here 35735.002

Introduction 

The National Pork Producers Council (NPPC) is a national association representing a 

federation of 42 state producer organizations. It represents the federal and global interests 

of 60,000 U.S. pork operations. The U.S. pork industry is a major value-added 

component of the agricultural economy, and a significant contributor to the overall U.S. 

economy. In 2018, pork producers marketed about 124 million hogs, and those animals 

provided total cash receipts of more than $20 billion. Overall, an estimated $23 billion of 

personal income and $39 billion of gross national product are supported by U.S. pork. 

Iowa State University economists Daniel Otto, Lee Schulz and Mark !merman estimate 

that the U.S. pork industry is directly responsible for the creation of more than 37,000 

full-time equivalent pork producing jobs and generates about 128,000 jobs in the rest of 

agriculture. lt is responsible for approximately 1 02,000 jobs in the manufacturing sector, 

mostly in the packing industry, and 65,000 jobs in professional services such as 

veterinarians. real estate agents and bankers. All told, the U.S. pork industry supports 

more than half a million American jobs, in mostly rural parts of our country. 

Today, U.S. pork producers provide 26 billion pounds of safe, wholesome and nutritious 

meat protein to consumers worldwide. Exports are vital to the livelihoods of America's 

pork producers. New technologies have been adopted and productivity has been increased 

to maintain the U.S. pork industry's international competitiveness. 

Exports of pork add significantly to the bottom line of each pork producer and support 

approximately 110,000 jobs in the U.S. pork and allied industries. In 2018, U.S. pork 

exports totaled 5.3 billion pounds valued at nearly $6.4 billion. That represented over 

25 percent of U.S. production, and those exports added more than $51 to the value of 

each hog marketed with the average price received for a market hog in 2018 being $141. 
30 

SBR002 with DISTILLER


Insert offset folio 30 here 35735.003

The biggest driver of increased exports over the past three decades has been free trade 

agreements, which importantly eliminate or significantly reduce tariff and non-tariff 

barriers to U.S. exports. 

U.S. pork exports have risen over 1,500 percent in value and over 1,400 percent in 

volume since 1989- the year the United States began using bilateral and regional trade 

agreements to open foreign markets. 

Indeed, the importance offree trade agreements (FTAs) to the U.S. pork industry is 

underscored by the fact that it exports more pork to the 20 nations with which the United 

States has FTAs than to the rest of the world combined. 

Effects of Tariffs on U.S. Pork Producers 

Mostly because of tree trade agreements, the United States is the leading global exporter 

of pork. As a result, U.S. pork is an attractive candidate for trade retaliation. America's 

pork producers- and many other farmers- are experiencing such reprisal now. 

The U.S. pork industry has the dubious distinction of being on three retaliation lists: 

China and Mexico related to U.S. actions under Section 232 of the Trade Expansion Act 

of 1962 and China in response to U.S. tariffs imposed under Section 30 I of the Trade Act 

of 1974. 

China and Mexico arc very important export markets for U.S. pork. China was the No.3 

volume market at more than 350,000 metric tons and a value market of over $851 million 

in 2018. Mexico is U.S. pork's largest volume market and the No.2 value market, taking 

almost 777,000 metric tons of pork worth more than $1.3 billion last year. 

China, which already had a 12 percent tariff on pork imports, one year ago today put an 

additional 25 percent duty on a host of American products, including pork, in response to 

the United States imposing taritTs on imports of steel and aluminum. Then a few weeks 
31 

SBR002 with DISTILLER


Insert offset folio 31 here 35735.004

later it levied another 25 percent tariff- bringing the total duty to 62 percent- in 

retaliation for U.S. tariffs on $34 billion of Chinese goods because of its theft of U.S. 

intellectual property and for its forced technology transfers. 

On June 5, 2018, Mexico, where the U.S. pork previously shipped product at a zero-tariff 

rate under the North American Free Trade Agreement (NAFTA), imposed a I 0 percent 

duty on pork imports in response to the U.S. steel and aluminum import tariff. That 

retaliatory tariff increased to 20 percent one month later. According to Iowa State 

Economist, Dermot Hayes, the pork industry stands to lose the entire Mexican market if 

we continue to face the 20 percent punitive tariffs. According to Professor Hayes, 

Mexico's retaliatory tariffs have cost U.S. pork producers $12 per animal, translating into 

industrywide losses of$1.5 billion annually. 

There never is a good time to have an export disruption, but the timing now is 

particularly bad. U.S. pork has been in expansion mode predicated on past profitability 

and because it expected exports to continue growing, with production projected to grow 

by over 4 percent in 2019. That expectation was well-founded. 

As the world's most competitive producer of pork, the United States was anticipating 

increases in access to Japan and Vietnam under the Trans-Pacific Partnership (TPP) and, 

under existing U.S. free trade agreements, was counting on shipping more pork to 

Australia, Canada, Central America, Colombia, Mexico, Peru and South Korea. 

Those export prospects also are what prompted construction of five new pork packing 

plants across rural America .. In fact, U.S. pork producers marketed nearly 124 million 

hogs in 2018 up from 120.5 million in 2017. Unfortunately, restricted market access from 

ongoing trade disputes is making it increasingly difficult for U.S. pork producers to 

respond to uncertain export conditions. Investment decisions arc made years in advance. 

We are playing defense when we have enormous opportunity to go on offense with one 

of America's most competitive export products. Rather than undermining existing trade 
32 

SBR002 with DISTILLER


Insert offset folio 32 here 35735.005

agreements that are working so well for U.S. agriculture, we should be working to 

expand exports by opening new markets and improving access where it already exists. 

For U.S. pork, export growth potential is enormous, particularly as people in developing 

nations add meat to their diet. This includes China. 

U.S. pork alone can put a huge dent in the U.S. trade imbalance with China if it were to 

terminate its punitive tariffs on pork and numerous other barriers which restrict U.S. 

access. 

Opening Markets to U.S. Trade 

Pork producers are eager to see ratification of the US-Mexico-Canada (USMCA) trade 

agreement. We are very pleased that the USMCA preserves zero-tariff rate for pork in 

North America. Under the terms of our previous agreement with our North American 

trading partners, Mexico and Canada became our No. I and No. 4 export markets 

respectively. In fact, those two countries account for 40 percent of all U.S. pork exports. 

The benefits of the USMCA are being diluted by U.S. metal tariffs, resulting in Mexico's 

retaliation against U.S. pork. These tariffs have opened the door to some of our largest 

competitors in Mexico, including pork from the European Union and Canada, which 

enjoy duty-free access. Professor Hayes of Iowa State looked at the possibility of U.S. 

pork finding alternative markets and concluded that, without the Mexican market, it 

would be left with a net loss of about 600,000 tons of pork, or five percent of total U.S. 

production. A loss in exports to Mexico of that magnitude would be cataclysmic for the 

U.S. pork industry and for all American agriculture. Please keep in mind that Canadian 

retaliation against U.S. pork remains a possibility as long as it faces the U.S. metal tariffs. 
33 

SBR002 with DISTILLER


Insert offset folio 33 here 35735.006

In addition to calling for a swift resolution of current trade dispute with Mexico and 

Canada, pork producers have been urging the Trump administration, since its inception, 

to begin negotiating new free trade agreements, particularly with countries in Asia, 

starting with Japan. 

Japan is the No. 1 export market based on value for U.S. pork- for now. Last year it 

concluded a trade agreement with the European Union and is also part of the 

Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or TPP-11. 

Both trade deals have begun to erode U.S. market share in Japan, as pork from EU 

nations and other TPP countries enter at (eventually) much lower tariffs than U.S. pork. 

A U.S. free trade agreement with Japan would restore U.S. pork's competitive position in 

a critical market, and this can't happen fast enough. 

I do want to recognize positive development facilitated by the Trump administration. 

New markets for U.S. pork- Argentina and Paraguay- were opened last year and the 

administration continues to work with the pork industry to open other markets, such as 

Brazil, India and Thailand. 

We have also urged the administration to include agriculture in future negotiations with 

the European Union. We are encouraged that the administration and the Congress have 

made it clear that agriculture needs to be included in the negotiations. 

Trade is vital to the success of U.S. pork producers. But tariffs on U.S. pork exports to 

two of our top three markets, no clear timeline for new trade agreement negotiations with 

Japan and other key markets, uncertainly surrounding the ratification of USMCA and 

growing competition from other pork-producing nations have U.S. pig farmers like me 

more than a little worried. 

The bottom line is that U.S. pork is shouldering a disproportionate share of trade 

retaliation against the United States, and producers need reliet: 
34 

SBR002 with DISTILLER


Insert offset folio 34 here 35735.007

BRIEF SUMMARY 

Mark Meirick 

Protivin, IA 

Mark Meirick is a pork producer from Protivin, Iowa and is currently serving as the 

District 3 Director for the Iowa Pork Producers Association. 

Mark and his brothers, Joel and Dennis, own and manage Farmers Mill, Inc., a grain, 

feed, seed and fertilizer center serving Northeast Iowa. Mark's father started the business 

as a small feed bagging facility in 1964 and the business has grown to a large commercial 

grain elevator serving three counties. 

Mark has served on the Iowa Pork Producers board for seven years and is involved in the 

finance and public policy committees. Mark is also active in his community by serving 

on the Howard County Economic Development Fund and the Howard County 

Community Foundation committees. He is a member of the Holy Trinity Parish and 

active in the Turkey Valley Community School. 

Mark is married to Wendy and they have three sons, one of which is involved in the 

business. 
35 

SBR002 with DISTILLER


Insert offset folio 35 here 35735.008

Testimony of Rebecca Dostal 

before the House Small Business Committee's Subcommittee on Rural Development, 

Agriculture, Trade, and Entrepreneurship 

Hearing: The Small Business Trade Snapshot: Agriculture and Workers 

April 2nd 2019 

Ms. Chairwoman, Ranking Member Joyce, and Members of the Subcommittee, thank you for the 

opportunity to address you today. My name is Rebecca Dostal, I am a farmer from Tam a County, 

Iowa. Our operation is around 700 acres just outside of Traer, Iowa where we raise three boys, 

corn, soybeans, Berkshire hogs, and cattle. 

I am honored to have the opportunity to submit comments regarding trade and how it impacts 

agriculture, and rural America. Rural America and the rural way of life is something lam deeply 

passionate about. I am active in our community as a member and former President of the Tama 

County Farm Bureau, a 4H Leader, and I am actively involved in an ag women's group called 

Women, Land and Legacy. In addition to farming, I am also a substitute teacher for both the 

South Tama and North Tama School districts. 

Agriculture and rural communities provide a lifestyle and value system that is very important to 

me and my family, and I believe that without international trade, that lifestyle is not sustainable. 

Our way oflife deeply depends on foreign consumers and international markets. In order for us 

to operate in Tama County Iowa, we must be able to feed those living in Hong Kong, Mexico 

City, and Cairo, or our farm will not survive. 

As I am sure you are all aware, agriculture is tremendously important to Iowa. We rank 1" in the 

nation in corn and hog production, and 2nd in soybean production. In our state, agriculture 

directly employs 330 thousand jobs, and in the last census of agriculture, total production 

agriculture and ag-related industries accounted for $1 1 billion in output, or more than 33 percent 

oflowa's total output. 

Last year Iowa produced over 2.5 billion bushels of corn, and 698 million bushels of soybeans. 

That's a lot of grain. Ultimately, we need to find somewhere for that grain to go. On average, 

the US has exported 42% of our soybeans and 14% of our corn. Our top export countries have 

been Mexico, Japan, and South Korea for corn, and China, Mexico, and the Netherlands for our 

beans. Historically, we have relied on foreign markets to export our grain, and those foreign 

consumers have allowed agriculture, including farms like mine to grow. When 95% of the 

world's consumers are outside of our boarders, you have to find ways to sell to them. 

However, this year, that dynamic has not been as reliable. Since the retaliatory tariffs have hit, 

we have seen the price of beans drop below the price of production, hog exports have slowed, 

and any hopes of expanding our operation have evaporated. The tariffs have hit us back home in 

the heartland in a very real way that has had a ripple effect throughout our community. 

Every year fanners go and meet with their bankers to set up a projected cash tlow plan for the 

upcoming crop year. A typical farmer will use an operating note to borrow cash to pay for that 
36 

SBR002 with DISTILLER


Insert offset folio 36 here 35735.009

year's expenses. With seed, fertilizer, and equipment purchases often all coming at the same 

time, cash flow on the farm is difficult without these operating loans. 

When we sat down with our banker and did our budget in January of2018 we used the projected 

pricing models that everyone uses to determine what level of financing we needed. We are 

always cautious to make sure that we do not over borrow, and only borrow what we need. The 

problem is, no level of caution, and no pricing models, could predict a trade war. 

When the tariffs hit, the price of beans crashed almost two dollars a bushel, and the price of corn 

dropped almost a dollar. An average acre in Iowa produces around 200 bushels of corn and 57 

bushels of soybeans. So, on an average acre, the farmer lost almost $200 an acre on corn, and 

$114 an acre on soybeans. That deep of a drop often causes a farmer from having a profit, to 

losing money. Today, the price of soybeans is below the cost of production, and the price of 

corn is hovering around even cost. 

Because the loss of revenue, at the end of the 20 !8 crop year we did not have enough money to 

pay back our operating loan. Ultimately, we had to refinance our operating loan using other 

equipment and possessions as collateral. Luckily, we are diversified, so we can make up our 

crop losses in other areas like cattle and hogs, but when it is that dramatic, it makes things 

difficult. It will stop us from purchasing equipment upgrades, expanding our herds, or acquiring 

more land. 

Luckily, the trade aid payments that were made from USDA helped cover some of our losses, but 

not nearly all of it. Without the trade aid, we would not have been able to come close to 

covering operating costs. While we appreciate the assistance, we would much rather be paid a 

fair price by the market, rather than be paid restitution by the government for the trade war. 

Going forward, with inputs staying high, prices staying low, and no end to the trade war with 

China in sight, things do not look great on my farm. This year I am subbing more than ever, to 

make up for our losses on the farm, hut substitute teaching doesn't supplement my life, 

ultimately, we are small farmers, and that is what our livelihood depends on. 

My ultimate worry is how this impacts Iowa, Tama County, and our Community of Traer. I see 

how it impacts our rural schools and our rural community. We arc losing rural population; our 

towns are shrinking, and our community is slowly dying. If you are a small farmer like me, and 

you can't make a living in agriculture, you have no option but to leave. I strongly believe in the 

rural way of life, and with todays economics, sadly, it may not exist for much longer. We need 

trade to sustain our fanners, our towns, and our communities. 

Luckily, there is an easy solution to our trade woes. Trade deals like TPP, USMCA, a trade 

agreement with the EU that includes agriculture, and a trade deal with China that is fair and 

predictable, would expand our markets, help American farmers, and sustain our rural 

communities. Protectionist trade policies do not help Americans, it only hurts us in the 

heartland. 

With that I thank you for allowing me to speak today, I will happily take any questions you have. 

2 
37 

SBR002 with DISTILLER


Insert offset folio 37 here 35735.010

. '/ni:Mrn/y . 7Yfr'I'I'.J~ 8000 E:AST JCf"FERSON AVE. 

DETROIT. M!CHJGAN 48214 

PHONE 13131 926·5000 

NTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA- UAW 

GARY R JONES PRESIDENT RAY CURRY SECRETARY- TREASURER 

V1CE-PRES!DENTS TERRY OlTTES • CINDY ESTRADA • RORY l GAMBLE 

April 2, 2019 

The Small Business Trade Snapshot: Agriculture and Workers 

Committee on Small Business Subcommittee on Rural Development, Agriculture, 

Trade, and Entrepreneurship 

Submitted by Josh Nassar 

UAW Legislative Director 

1757 N Street NW, Washington, D.C. 20036 

Madam Chair Finkenauer, Ranking Member Joyce, and members of the Small 

Business, Rural Development, Agriculture, Trade and Entrepreneurship subcommittee, 

thank you for the opportunity to share our views on trade policy and its impact on the 

economy and working people. 

It is my honor to testify on behalf of the International Union, United Automobile, 

Aerospace, and Agricultural Implement Workers of America (UAW), President Gary 

Jones and our one million active and retired members. As researchers, engineers, and 

skilled trades and production workers in the automotive, aerospace, and agricultural and 

construction equipment industries, we welcome this hearing. 

The importance of manufacturing in our agricultural sector is often overlooked. 

Agricultural equipment sales are directly linked to the health of the agriculture sector. 

When the agriculture market is down, it is also down for agriculture equipment We 

have close 18,000 members in the Agriculture implement sector with a heavy 

concentration in Illinois and Iowa (Region 4). Our members manufacture combines, 

tractors, and products needed by our emerging biofuel industry. We represent over 

7,000 members at Caterpillar and approximately 9,500 at John Deere. These jobs help 

build a stronger local economy and create a strong middle class. Furthermore, many 

small businesses work as suppliers for larger companies. 

The UAW footprint in agriculture equipment is prominent in rural communities and small 

towns across the United States. 

Below is a brief snapshot of UAW in the agriculture equipment sector: 
38 

SBR002 with DISTILLER


Insert offset folio 38 here 35735.011

• Energy has been in business for 75 years in Monticello, lA which has a 

population 3,871 At Energy, UAW local 1613 workers build cylinders for 

John Deere, Case, Bobcat. 70 workers are employed at the company. 

• UAW Local120 represents over 250 members work at Donaldson 

Company in Cresco, lA. Cresco has less than 4000 residents. They 

manufacture filters which are used to protect a customer's farm tractor 

engine and make products to solve customers' filtration challenges. 

These jobs enable workers to provide for their families and contribute to a healthy, local 

economy. In developing trade policies, we should not put high-skilled and specialized 

agricultural manufacturing jobs at risk. If these jobs are lost workers may be forced to 

retire or relocate to try to find new jobs, many of which pay lower wages. Trade policies 

have a profound impact on workers, manufacturing, and the agriculture sector. 

The UAW supports industrial policies that strengthen the middle class, create good 

paying jobs providing benefits and retirement security in the United States and reduce 

income inequality both here and abroad. When it comes to trade policy, our 

overarching goals is to create good paying U.S. jobs now and in the future. 

Comprehensive Industrial Policy 

Any effort to reset America's trade policy must also be accompanied by a strong 

industrial policy focused on education, workforce training, research and development, 

support for advanced manufacturing and technologies, building a 21st century 

infrastructure, balancing environmental and energy policy, and creating penalties for 

companies that turn their back on American workers. A properly crafted industrial policy 

will create new industries, as well as re-shore old ones. 

We need Congress to advance equitable tax policies that uplift working families and not 

reward billionaire CEO's with massive tax breaks while incentivizing businesses to 

outsource jobs overseas. A comprehensive approach will improve living standards, 

reduce poverty, help our environmental impact, and vastly improve American's quality of 

life. It has been demonstrated time and time again that a vibrant middle class is needed 

in order to have a strong economy and democracy. 

The fact is, extensive damage has already been done and workers are paying the price 

for policy failures and neglect by our elected leaders. What can be done to build an 

economy that works for all? 

Major players in the Agriculture Implement industry have expanded operations in 

Mexico while reducing employment in the United States in recent decades. Since 2000, 

the U.S. has lost over 3 million manufacturing production jobs- with trade playing a 

significant role. 

2 
39 

SBR002 with DISTILLER


Insert offset folio 39 here 35735.012

The average factory worker makes less than the median wage for all occupations. Real 

wages in manufacturing fell between 2003 and 2013 at a faster rate for workers overall 1. 

One fourth of manufacturing jobs make less than $13.07 per hour2• 

Trade 

Corporate driven trade agreements that pit workers against one another have played a 

big role in eroding the middle class. The North American Free Trade Agreement 

(NAFTA) or USMCA is a significant culprit. Since its passage 25 years ago, U.S. trade 

deficits with Mexico has cost hundreds of thousands of manufacturing jobs. We 

appreciate that international trade is an important aspect of global supply chains in the 

automotive and other manufacturing sectors and that not all imports directly result in the 

loss of U.S. jobs. 

Still, trade deficits of the magnitude we have today led to the displacement of U.S. 

production and corresponding jobs losses. Under NAFTA, there is no place that 

outsourcing is a bigger problem than in the auto industry. The U.S. automotive and 

auto parts trade deficit with Mexico has surpassed $45 billion annually. 

While overall trade volume and corporate profits are up, wages in all three countries 

have remained relatively stagnant3. Workers are all too often not compensated fairly for 

their work4 . The fundamental right to collectively bargain is under constant attack, 

resulting in union density falling across North America while economic inequality has 

grown5. 

NAFTA renegotiations will only be successful if they lead to higher wages in all three 

countries, reverse our crippling trade deficit with Mexico, and create new manufacturing 

jobs in the United States. 

NAFTA's Impact on Auto Industry 

The impact of NAFTA on the entire supply chain must be looked at. It is a mistake to 

look solely at final assembly. More assembly plants mean more first-tier parts, then 

more second-tier parts, and on and on. It is a vicious cycle for UAW members whose 

jobs have moved to Mexico. 

Over the first eleven years of NAFTA (1994-2005), there were new production facilities 

in both the U.S. and Mexico. This was primarily due to foreign-based auto 

manufacturers adding production capacity in the region. However, in the subsequent 

eleven years (2005-2016), a different trend emerged. Production capacity was 

1 https:llwww.nelp.orglwp-contentluploadsi20151031Manufacturing-Low-Pay-Declining-Wages-Jobs-BuiltMiddle-Ciass.pdf 

2 https:llwww.bls.govliagltgsliagauto.htm 

3 See, e.g., Robert E. Scott, Jeff Faux and Carlos Salas, "Revisiting NAFTA: Still Not Working For North 

America's Workers," Economic Policy Institute, 2007. 

4 ld. 

5 Heather Long, "U.S. Inequality Keeps Getting Uglier," CNN Money, Dec. 22, 2016. Available at: 

http :lim oney. cnn. com/20 16112122/newsleconomy/us-inequality-worselindex. html. 

3 
40 

SBR002 with DISTILLER


Insert offset folio 40 here 35735.013

eliminated in the U.S. and Canada and added in Mexico. In many cases work was 

moved from the U.S. to Mexico. Between 1993 and 2014, Mexico's share of NAFTA 

production increased from 8% to 19%s. 

Light Vehicle Final Assembly Plants in NAFTA 1994-2016 

1994 2005 2016 Change 

1994-

2016 

Canada 14 13 10 -4 

Mexico 9 11 17 +8 

United 59 62 49 -10 

States 

NAFTA 82 86 76 -6 

Source: Ward's Automotive 

Share of NAFT A Production 

Countrv 1993 2016 

Canada 15% 13% 

Mexico 8% 19% 

u.s. 77% 67% 

Auto companies are making new major investments in Mexico. The facts are: 

• Every major OEM and supplier have operations in Mexico. 

• Mexico produced 4 million vehicles in 2018 and bought just 1.4 million. 

The remaining exported, mostly to the U.S. 

• There are 800,000 autoworkers in Mexico, over 90% of them are in 

parts. 

In 1993, the U.S. had a very small auto parts (NAICS 3363/HS 8708) trade deficit with 

Mexico of $1 billion. By 2016, it was 20 times larger at $23.8 billion. As the trade deficit 

increased, wages declined. Adjusted for inflation, auto parts production workers' average 

hourly wages declined by 23 percent in the past decade. Between 2000 and 2014 alone, 

employment in U.S. parts suppliers declined 36 percenf While many factors, including 

changes in technology and attacks on workers' rights to collectively bargain, have also 

contributed to the decline, NAFTA played a big role in creating the enormous trade 

deficits we face in this sector today. 

In 2016, the U.S.' automotive (NAICS 33611/HS 8702) trade deficits within NAFTA 

were: 

6 Ward's Automotive. 

7 William A. Galston, "How the vise on U.S. wages tightened," The Wall Street Journal, March 31 2015. 

4 
41 

SBR002 with DISTILLER


Insert offset folio 41 here 35735.014

2016 Change 1993-

Country Automotive 2016 

(NAICS 3361) 

Trade Deficit 

Canada $20.6 billion +11.4% 

Mexico $45.1 billion +1288% 

Source: The North American Free Trade Agreement, 

CRS, May 24, 2017 

The U.S. has an auto parts (NAICS 3363) surplus with Canada but a large deficit with 

Mexico 

2016 Auto Change 2006-

Country Part 2016 

(NAICS 

3363) 

Trade 

Deficit 

Canada -$12.4 billion 57% 

(surplus) (Larger surplus) 

Mexico $23.8 billion 23700% 

Source: The North American Free Trade Agreement, 

CRS, May 24, 2017 

Another disturbing trend is the change in the mix of parts the U.S. is importing. The U.S. 

has growing deficits in high value auto parts like engines, transmissions, seating, 

steering, and suspensions. These components employ tens of thousands of American 

workers at high pay. 

NAFT A, like other flawed trade deals, has had a lasting impact. Poor labor standards in 

Mexico have a real economic impact on the U.S. as companies relocate to take 

advantage of workers who lack basic rights and are underpaid. Workers in Mexico are 

often put in harm's way for exercising their most basic rights. Auto workers in Mexico 

often make less than $3 dollars an hour despite booming profits and record growth for 

the industry. Mexico needs to fix its labor laws, so workers can bargain for a better 

standard of living. 

5 
42 

SBR002 with DISTILLER


Insert offset folio 42 here 35735.015

Mexico has made false promises in the past, it is important that they make and 

implement real changes so workers can join real unions. Repressive policies and 

"protection" unions -the Mexican equivalent of a company union - keep workers from 

organizing in a meaningful way, maintaining wages and working conditions at their 

lowest levels. When workers try to form their own independent unions, they are met with 

repression and even violence. Recently, PKC interfered with Mexican workers' right to 

freedom of association at a wire harness production plant in Ciudad Acuna, Mexico 

Mexican workers. Workers have been attempting to form a union for more than decade, 

but their attempts have been met with employer interference including worker 

intimidation and firings. 

NAFTA hurts manufacturing workers directly and indirectly. Workers often face both 

direct and implied threats if they attempt to form a union. In many cases, employers will 

openly threaten to close their plant and move to Mexico when workers fight for job 

security, better wages, health and safety improvements and retirement security. Veiled 

threats force workers to accept lower wages for fear that the company will ship their 

jobs abroad. If the revised NAFT A is to truly curtail outsourcing, Mexico's labor laws and 

practices will need to be fundamentally changed for the long haul. 

The U.S. State Department's Mexico 2018 Human Rights Report concludes that the 

government did not consistently protect workers' rights in practice. Its general failure to 

enforce labor and other laws left workers without much recourse regarding violations of 

freedom of association, working conditions, or other problems8 Despite this realization, 

NAFT A does not provide any adequate way to address these abuses. Mexico has been 

undertaking labor reforms and it is too early to tell if they will have a real impact in 

improving workers lives. Labor reforms that looked promising in the past failed to deliver 

the changes workers need. We hope history will not repeat itself but would be naive to 

assume they will succeed in making real changes. Meaningful standards with strong 

enforcement mechanisms must be put in place. 

Labor standards are important not just from a human rights perspective but also from an 

economic one. Poor labor standards in Mexico has only heightened the offshoring of 

U.S. manufacturing jobs. Poor labor standards in Mexico have a real economic impact 

on the United States as companies relocate to take advantage of workers who lack basic 

rights and are underpaid. 

Trade rules are only as good as their enforcement. Enforcement tools must be expanded 

and used promptly. 

To comply with the ILO Declaration on Fundamental Principles and Rights at Work and 

ILO Convention 182, Mexico, at a minimum must: 

• Require independent, democratic unions 

• Require workers to vote on all contracts and union leadership 

8 U.S. State Department. Bureau of Human Rights and Democracy. Country Reports on Human Rights 

Practices for 2018. 

6 
43 

SBR002 with DISTILLER


Insert offset folio 43 here 35735.016

• Require unions to provide copies of contracts to workers 

• Require that unions have a duty to represent their members 

Beyond allowing labor violations to be settled using the same dispute settlement system, 

considering the decades long suppression of labor rights in Mexico, labor violations 

should be subject to special punitive duties. Additionally, labor unions in all three 

countries should have standing authority to bring charges of labor abuses -regardless 

of whether the union represents the workers. 

In conclusion, we must create a new trade model that puts workers in the driver's seat, 

not corporations seeking to outsource to maximize profits. We need to get back to the 

negotiating table. 

Auto Trade with China 

China tilts the playing field by propping up domestic companies and state-owned 

enterprises through direct subsidies, and suppressing workers' rights, it uses unfair 

market access processes and policies to force technology transfers from foreign firms. 

Together these actions have caused a dramatic loss of U.S. manufacturing jobs, 

suppressed American wages, and potentially stifled innovation. For American workers, 

this trend is untenable. 

Since 2002, the U.S.'s trade imbalance with China has increased $316 billion, or 307%. 

Between 2001 and 2015, it is estimated 3.4 million American workers lost their jobs to 

unfair trade with China. While the U.S. has an automotive trade surplus with China, an 

auto parts trade deficit has exploded. In 2002, the U.S.'s auto parts trade deficit with 

China was $972 million, since then it has grown nearly thirteenfold to $12.4 billion. 

Automakers from here and abroad have placed big bets on China by making enormous 

investments. We are concerned that an increasing share of vehicles and technologies of 

the future will be made in China instead of the United States. 

Auto Trade with Japan 

Decades of well-intentioned efforts by US trade negotiators from Republican and 

Democratic administrations to open the Japanese auto market to foreign competition 

have been an unambiguous failure. While Japan is the third largest auto market in the 

world, it only imported 351,000 vehicles in 2017, or 6.7% of its 5.2 million sales. In 

contrast, the US imported 8.6 million vehicles in 2017, accounting for 49.2% of sales. 

In 2017, the US had a $68.9 billion trade deficit with Japan, with nearly 75% of that 

deficit coming from motor vehicles and parts. Last year, Japan had a $39.8 billion trade 

surplus in motor vehicles, and $11.5 billion surplus in auto parts. Over the past fifteen 

years, Japan's motor vehicle and parts trade imbalance has only worsened, with the 

motor vehicle imbalance growing $4.8 billion (14%) since 2002, and the auto parts 

imbalance growing $2.2 billion (24%). It has been estimated that the US-Japan trade 

imbalance has eliminated nearly 900,000 US jobs. 

7 
44 

SBR002 with DISTILLER


Insert offset folio 44 here 35735.017

What makes the prospect of a more balanced playing field so unlikely, is that Japan's 

automotive tariff is already zero percent. To insulate its domestic automotive 

manufacturers, Japan instead uses non-tariff barriers (NTBs). These barriers include: 

currency manipulation; a discriminatory system of taxes; onerous and costly vehicle 

certification procedures for imported automobiles; a complex and changing set of safety, 

noise, and pollution standards, many which do not conform to international standards 

and add significant development and production costs; an unwillingness by Japanese 

dealerships to carry foreign automobiles; and government incentives to purchase 

Japanese-made kei cars. NTBs to foreign autos in the Japanese market have been 

inherently structural, ever-changing, and impervious to American negotiating efforts. 

These barriers have created an uneven playing field, so much so that for every car the 

US exported to Japan in 2017, Japan sent 100 back. 

Negotiations between the United States and Japan on a bi-lateral trade agreement is 

alarming given Japan maintains the most closed auto market in the developed world. We 

urge the Administration to proceed with caution. We are deeply concerned that a trade 

deal with Japan could ultimately further widen our enormous auto trade deficit and hurt 

our domestic auto industry. Regarding Japan, it is critical to guard against non-tariff 

barriers, like currency manipulation, that has cost millions of U.S. jobs. Modern 

agreements must take this pervasive non-tariff barrier on directly. 

Auto 232 

The U.S. is in a race with other advanced countries to develop the automobiles and 

technologies of the future. We recognize that trade enforcement actions alone will not 

get the job done. While Germany and other industrial countries have developed policies 

that are investing in its citizenry and infrastructure, the U.S. has instead taken a lowroad approach. American companies may develop new products, but they have 

increasingly outsourced manufacturing to low-cost countries. As noted above, with job 

losses and decreases in wages, this has hollowed out much of middle America. 

Maintaining the status quo is not an option. 

Special attention must be paid to key components that are important for the U.S. to 

remain relevant in vehicle parts manufacturing. We urge the Trump Administration to be 

ambitious and creative in using the many tools at its disposal to ensure more auto parts 

and vehicles are built in the United States. 

Safeguards should be put in place to ensure domestic production of specific strategic 

parts. Technologies that have been developed primarily thanks to American R&D (for 

example, autonomous vehicles) and regulatory requirements (emissions and fuel 

efficiency standards) should be manufactured in the U.S. Protecting strategic parts will 

help ensure U.S. manufacturers will remain industry leaders, and that all American 

workers will share in that prosperity. 

Tariffs can be an effective when appropriately targeted to specific trade practices and 

are a part of a comprehensive strategic plan to address unfair trade actions. However, 

tariffs alone are insufficient to boost U.S. jobs and strengthen our industrial base. The 

8 
45 

SBR002 with DISTILLER


Insert offset folio 45 here 35735.018

UAW believes that tariffs are a tool, not a comprehensive plan for ensuring industries of 

the future are created and built in the U.S. 

It would be shortsighted to categorically rule out using tariff and other enforcement 

mechanisms to level the playing field. We shouldn't compete with one arm tied behind 

our back. For this very reason, we believe the Administration should not abandon their 

auto 232 investigation. We hope the Administration will ultimately take a measured and 

targeted approach to bolster domestic manufacturing. 

Tax Policies Encourage Offshoring 

Signed into law in December 2017, the Tax Cuts and Jobs Act (TCJA) encourages the 

outsourcing of U.S. manufacturing jobs. Because of this law, multinational corporations 

pay at most only half that rate on their offshore profits as they do on their earnings here 

at home, creating an incentive to ship jobs overseas. 

For example, a company with $100 million worth of tangible offshore assets pays no 

U.S. taxes on the first $10 million of foreign profits they report. Many companies end up 

paying no U.S. taxes on foreign earned profits. The tax law created a new, unique 

incentive for U.S. corporations to move real investments offshore, along with the 

manufacturing jobs that go with them. These incentives will become greater over time if 

they remain in place. 

We urge Congress to act quickly to end the perverse incentives by passing The No Tax 

Breaks for Outsourcing Act of 2019 (H.R. 1711) sponsored by Rep. Doggett. This 

legislation would help stem the tide of offshoring jobs by setting a minimum tax on the 

foreign profits of multinationals equal to the statutory corporate tax rate on domestic 

profits and apply that rate to a similar base. H.R. 1711 eliminates incentives passed by 

the Tax Cuts and Jobs Act (TCJA) which encourage companies to outsource U.S. 

manufacturing jobs. 

The more investments offshored, the less in taxes they pay. In 2018, corporate tax 

receipts fell by over 30% in 2018. Big companies by and large pocketed tax breaks and 

many broke promises to give workers raises. Instead, companies are often taking 

billions in windfall and putting it toward dividends or buying back their own stocks, which 

greatly benefits CEO's and wealthiest shareholders. According to Americans for Tax 

Fairness, corporations are spending 130 times as much on stock buybacks as they are 

spending on workers' bonuses and wages. Authorizations for stock buybacks, which 

overwhelmingly benefit the wealthy, have increased by $923 billion since the tax law 

was passed, while workers are getting $7.1 billion in one-time bonuses and wage 

increases. 9 

TCJA is adding to our national deficit. The Congressional Budget Office estimated that 

the law would increase the federal debt by $1.889 trillion from 2018-2027, about $433 

billion more than the Joint Committee on Taxation projected last December. Predictably, 

9 https:l/americansfor1axfairness.orglkey-facts-american-corporations-really-trump-tax-cuts/ 

9 
46 

SBR002 with DISTILLER


Insert offset folio 46 here 35735.019

many elected leaders have called for cutting hundreds of billion in Medicare and other 

essential programs in the name of deficit reduction. Working people could be forced to 

pay for TCJA in numerous ways. 

Incentives to offshore and ballooning deficits are far from the only problem created by 

the current law. GM is a recent example of how the tax law is failing to live up to its 

promise. In November 2018, GM announced it would close four U.S. auto 

manufacturing plants. GM justified the cuts by citing long term savings, the cuts would 

free up $6 billion in cash for a nets savings of $4.5 billion in cash by 2020. Meanwhile, 

they made a net profit of $10 billion in 2018 alone and have returned $25 billion to their 

shareholders through dividends and repurchases in recent years10. 

Congress must hold corporations responsible. Assuming they will keep their promises 

to invest in the United States is foolhardy at best. We urge this Committee to look at 

claw back provisions and other mechanisms to curb the pervasive practice of pocketing 

tax breaks and turning their back on U.S. workers. 

Weak U.S. Labor Law 

As discussed earlier, real wages have stagnated for auto workers in recent decades. 

This is happening for a number of reasons. 

Employers routinely hire union busting consultants and hold captive audience meetings 

to intimidate workers. Employers face little consequence for refusing to negotiate 

contracts or delay union elections. U.S. workers continue to face barriers when trying to 

form a union. 

The increased use of temporary employees is an important factor. The number of 

workers in temporary or contract positions are on the rise in various industries including 

automotive. Perma-temps, the use of temps for extended periods of time with no path to 

full-time employment is becoming all too common in the auto industry- contract work is 

shifting from administrative jobs to blue collar occupations. Jobs in transportation and 

material moving and production now account for 42 percent of the temp industry. 

Furthermore, perma-temps earn 22 percent less than private sector workers and work 

with little to no benefitsH The median worker in the staffing industry earns $12.40 an 

hour, compared to an hourly wage of $15.84 by all private sector workers, regardless of 

industry12. The growing use of temp work drives down wages, benefits and job security 

in the auto industry and undermines good, middle class jobs. Congress must stop 

ignoring the loss of good full-time jobs. 

10 Barra, Mary. Deutsche Bank Global Auto Industry Conference. January 16, 2018. 

https:llinvestor.gm.comlstatic-files/d5c42255-3f96-4121-ad78-7 476ae9db9d6 11 Smith, Rebecca and McKenna, Claire. "Temped Out How Domestic Outsourcing of Blue Collar Jobs 

Harms America's Workers," National Employment Law Project, September 2, 2014. 12 U.S. State Department. Bureau of Human Rights and Democracy. Country Reports on Human Rights 

Practices for 2018. 

10 
47 

SBR002 with DISTILLER


Insert offset folio 47 here 35735.020

The right to collectively bargain strengthens the economic security of workers. On 

average, a worker covered by a union contract earns 13.2 percent more in wages than 

a peer with similar education, occupation, and experience in a nonunionized workplace 

in the same sector1a Unionized workers are more likely to have health care benefits, 

access to paid leave, employer provided pension plans and safer working conditions 

compared to their non-union counterparts. Strengthening our labor laws and increasing 

penalties against employers who do not recognize workers' legal right to have a voice 

on the job will strengthen the middle class and reduce income inequality. Congress and 

the Administration need to fight for workers by strengthening our labor laws. 

Supporting Domestic Production of Future Vehicles 

Most of the production footprint of tomorrow's advance automotive technology is 

overseas. Today, the U.S. only produces 13 percent of the world's semiconductors. By 

2021, the U.S. will produce only 14 percent of the world's lithium-ion batteries unless 

significant steps are taken. Lithium-ion batteries are the most valuable component in 

electric vehicles (EVs). With the growth of demand from EVs, global lithium-ion battery 

production capacity is expected to grow by 73 percent between 2017 and 2021xv and 

lithium-ion batteries could become a $40 billion market by 2025. This has sparked a race 

to develop the production capacity to meet growing battery demand and it is this race 

that will determine the geography of much of the EV value chain. 

Conclusion 

We cannot repeat the mistakes of the past. NAFT A and broken trade deals have had 

long lasting and deep impacts for workers, communities, small businesses, and our 

trade partners. We need a new trade model that is worker centric and values people 

over investor profits and discourages companies from outsourcing good paying jobs 

abroad. 

We. as a country, need to take a more holistic approach to trade and labor policy. It is a 

mistake to look at trade in isolation. We need to make a strong commitment to a 

comprehensive, sustainable strategy to create and maintain good manufacturing jobs in 

the United States. 

Thank you for the opportunity to share our views. I look forward to answering your 

questions. 

JN/ns 

opeiu494/aflcio 

13 https:llwww.epi.org/pressltodays-labor-unions-give-workers-the-power-to-improve-their-jobs-and-unrigthe-economyl 

11 
48 

SBR002 with DISTILLER


Insert offset folio 48 here 35735.021

Pennsylvania •.• " 

Farm Bureau 

Growing Communities 

Many Voices 

United Vision 

Statement of the Pennsylvania Farm Bureau 

TO THE 

HOUSE COMMITTEE ON SMALL BUSINESS 

SUBCOMMITTEE ON RURAL DEVELOPMENT, AGRICULTURE, 

TRADE, AND ENTREPRENEURSHIP 

REGARDING: SMALL BUSINESS TRADE SNAPSHOT: AGRICULTURE 

AND THE DAIRY INDUSTRY 

April2, 2019 

Presented by Glenn Stoltzfus 

Board Director, Pennsylvania Farm Bureau 
49 

SBR002 with DISTILLER


Insert offset folio 49 here 35735.022

Chairwoman Finkenauer, Ranking Member Joyce, and Members of the Subcommittee: 

Thank you for inviting me to speak today on the state of the dairy industry and the 

benefits of trade agreements such as the United States Mexico Canada Agreement (USMCA). 

My name is Glenn Stoltzfus, and I operate a 700-cow dairy in partnership with my three 

brothers, in Berlin, Pennsylvania, Somerset County. My brothers and I also farm approximately 

1,700 acres, growing corn, soybeans, alfalfa and grass hay. We grow all our forages and highmoisture corn, and often sell our excess corn and hay. 

In addition to helping operate and manage my farm operation, I currently serve on 

Pennsylvania Farm Bureau's Board of Directors, along with chairing Farm Bureau's State Dairy 

Committee. 

I offer today's testimony on behalf of Pennsylvania Farm Bureau, an organization 

representing more than 62,000 farm and rural family members throughout Pennsylvania. Dairy 

farmers are the largest segment of producers within Pennsylvania Farm Bureau, and dairy is 

Pennsylvania's largest agricultural sector; in other words, it's the largest component of one of 

the state's largest industries. However, across Pennsylvania and the nation, the dairy industry is 

in dire straits. 

Just last month, USDA reported approximately 2,700 dairy farms, a nearly 7 percent 

drop, ceased operations nationwide in 2018. Nationally, Pennsylvania suffered the second most 

closures with 370 dairy farms lost, a drop of just under 6 percent. One of my neighbors was one 

of those farms, and I fear the do"-'11ward trend will only continue. And unlike traditional 

business closures, the prior business can't simply be replaced with a new sign and fresh paint. 

Instead, many of these farms will be permanently lost, and with it, a way oflife. 

Delving further into the issue, a perfect storm of decreasing consumer milk 

consumption, increased milk production worldwide, and a reversal of longstanding policies by 

Page 1 of 4 
50 

SBR002 with DISTILLER


Insert offset folio 50 here 35735.023

governments to allow more domestic milk production have caused a global oversupply of milk 

for a sustained period. As to consumption, in 2016, USDA projected the per capita consumption 

of beverage milk at an all-time low of 154 pounds per person, with per capita consumption of 

milk products falling by 25 percent over the last twenty years. In practical terms, all these 

factors have meant the price American dairy farmers receive for milk has been lousy for a long 

time-all while input costs have remained level or even increased in some cases. In my case, my 

price per hundredweight of milk peaked at $26.80 in 2014 and went to as low as $13.90 just last 

year. The price has since improved to $17.30, but the future is uncertain and subject to 

numerous factors including trade barriers. 

Compounding the problem, net farm income, a broad measure of farm profitability, is 

down over 50 percent since 2013, and presently at one of the lowest points in the past two 

decades. Thus, even diversified dairy operations such as mine have not been able to fully rely on 

other commodities to dampen the dairy despairs. Further, unresolved aluminum and steel 

tariffs threaten the health of the national farm economy. Nonetheless, despite all these 

problems, one material way that can help dairy farmers is to increase export market access. 

Given its quality, efficiency, and decades of cultivating trade partners, the U.S. 

agriculture industry has been incredibly successful in utilizing trade to benefit farmers and our 

nation as a whole, resulting in over 25 percent of all agricultural products being exported; 

approximately 16 percent of all U.S. milk production was exported last year. In fact, agriculture 

is one of the few industries that exports more products than it imports, accounting for a $21 

billion trade surplus. 

Much of the nation's agricultural trade success has arisen from relationships with Mexico 

and Canada, which represent the top two agricultural trading partners for nearly every state in 

the nation, including Pennsylvania. Dairy is no different. Since 2015, Mexico and Canada have 

ranked first and third, respectively, in export markets for U.S. dairy products. As a result, any 

Page 2 of 4 
51 

SBR002 with DISTILLER


Insert offset folio 51 here 35735.024

trade agreements involving Mexico and Canada are critical to our nation's agricultural industry, 

and the USMCA represents a chance to bring vital benefits to the industry, particularly for dairy 

farmers. 

While not a cure-all for the industry's woes, if approved, USMCA '"'ill provide meaningful 

benefits for American dairy farmers. The agreement will increase dairy market access to Canada 

by 3.6 percent-a level even better than under the Trans-Pacific Partnership. Some specific 

examples include an export increase of 50,000 metric tons of fluid milk by year six of the 

agreement, along with 12,500 metric tons of cheese and 10,500 metric tons of cream over the 

same time frame. In total, the agreement is expected to increase dairy exports by 100,000 

metric tons annually once fully implemented. 

Additionally, within six months of USMCA's implementation, Canada has agreed to end 

its protectionist Class 7 pricing scheme that flooded the global market with subsidized skim milk 

powder and lowered Canadian demand of U.S. ultra-filtered milk for cheese production. In turn, 

many American dairy farmers will benefit from the pricing scheme elimination by being able to 

compete globally on equal terms. 

USMCA '"'ill also provide benefits beyond the dairy sector. Canada has agreed to treat 

wheat imports in the same manner as domestic wheat for grading and pricing purposes. Poultry 

exports will increase by 10,ooo metric tons over a six-year period, turkey exports can potentially 

increase by 1,000 metric tons each year for 10 years, and eggs and egg-equivalent product 

exports will increase by approximately 16 percent over a six-year period. 

Finally, the USMCA includes provisions that enhance science-based trading standards as 

the foundation for sanitary and phytosanitary measures for agricultural products. The 

agreement is also the first of its kind to include provisions that address cooperation, information 

sharing, and other trade rules related to biotechnology and gene editing. 

Page 3 of4 
52 

SBR002 with DISTILLER


Insert offset folio 52 here 35735.025

As the Administration was negotiating USMCA, many farm groups issued a simple 

message of "do no harm." Since its passage, NAFI'A had worked remarkably well and brought 

significant benefits to agriculture, increasing U.S. agricultural exports to Canada and Mexico by 

approximately $30 billion. In our view, the Administration has succeeded in "doing no harm," 

and done one better. ~early all agricultural exports remain subject to zero tariffs, significant and 

historical strides for the dairy industry have been made with Canada, and many other 

commodities such as poultry and eggs have gained increased Canadian market access. Given 

these advancements, we urge Congress to finalize USMCA's passage. 

Beyond USMCA, the agreement provides a positive paradigm for future trade 

agreements, including potential noteworthy deals with Japan and the European Union, 

particularly given its emphasis on science-based sanitary standards and inclusion of 

biotechnology and gene editing. On the other hand, if USMCA's passage is substantially stalled 

or falls short, the Administration is unlikely to negotiate similar gains in future trade deals. 

As mentioned, trade agreements in and of themselves are not a magic potion to fix all the 

difficulties with the farm economy. But when meaningful, long-term improvements are 

negotiated, such agreements can provide significant benefits to a farmer's livelihood and help 

keep farm operations afloat during cyclical downturns. We believe the USMCA is such an 

agreement. We believe the USMCA will help American farmers, particularly dairy farmers, and 

we respectfully request Congress move forward with its passage. Thank you again for allowing 

me the opportunity to share my story on behalf of Pennsylvania farmers. 

Page 4 of 4 
53 

Æ 

SBR002 with DISTILLER


Insert offset folio 53 here 35735.026