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HEARING TO REVIEW THE STATE OF THE 

PORK INDUSTRY

HEARING

BEFORE THE

SUBCOMMITTEE ON 

LIVESTOCK, DAIRY, AND POULTRY

OF THE

COMMITTEE ON AGRICULTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

MAY 4, 2011

Serial No. 112–14

(

Printed for the use of the Committee on Agriculture 

agriculture.house.gov 

COMMITTEE ON AGRICULTURE 

FRANK D. LUCAS, Oklahoma, Chairman 

BOB GOODLATTE, Virginia, 

Vice Chairman 

TIMOTHY V. JOHNSON, Illinois 

STEVE KING, Iowa 

RANDY NEUGEBAUER, Texas 

K. MICHAEL CONAWAY, Texas 

JEFF FORTENBERRY, Nebraska 

JEAN SCHMIDT, Ohio 

GLENN THOMPSON, Pennsylvania 

THOMAS J. ROONEY, Florida 

MARLIN A. STUTZMAN, Indiana 

BOB GIBBS, Ohio 

AUSTIN SCOTT, Georgia 

STEPHEN LEE FINCHER, Tennessee 

SCOTT R. TIPTON, Colorado 

STEVE SOUTHERLAND II, Florida 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

MARTHA ROBY, Alabama 

TIM HUELSKAMP, Kansas 

SCOTT DESJARLAIS, Tennessee 

RENEE L. ELLMERS, North Carolina 

CHRISTOPHER P. GIBSON, New York 

RANDY HULTGREN, Illinois 

VICKY HARTZLER, Missouri 

ROBERT T. SCHILLING, Illinois 

REID J. RIBBLE, Wisconsin 

COLLIN C. PETERSON, Minnesota, Ranking 

Minority Member 

TIM HOLDEN, Pennsylvania 

MIKE MCINTYRE, North Carolina 

LEONARD L. BOSWELL, Iowa 

JOE BACA, California 

DENNIS A. CARDOZA, California 

DAVID SCOTT, Georgia 

HENRY CUELLAR, Texas 

JIM COSTA, California 

TIMOTHY J. WALZ, Minnesota 

KURT SCHRADER, Oregon 

LARRY KISSELL, North Carolina 

WILLIAM L. OWENS, New York 

CHELLIE PINGREE, Maine 

JOE COURTNEY, Connecticut 

PETER WELCH, Vermont 

MARCIA L. FUDGE, Ohio 

GREGORIO KILILI CAMACHO SABLAN, 

Northern Mariana Islands 

TERRI A. SEWELL, Alabama 

JAMES P. MCGOVERN, Massachusetts 

PROFESSIONAL STAFF

NICOLE SCOTT, Staff Director 

KEVIN J. KRAMP, Chief Counsel 

TAMARA HINTON, Communications Director 

ROBERT L. LAREW, Minority Staff Director 

SUBCOMMITTEE ON LIVESTOCK, DAIRY, AND POULTRY

THOMAS J. ROONEY, Florida, Chairman 

BOB GOODLATTE, Virginia 

STEVE KING, Iowa 

RANDY NEUGEBAUER, Texas 

K. MICHAEL CONAWAY, Texas 

STEPHEN LEE FINCHER, Tennessee 

TIM HUELSKAMP, Kansas 

SCOTT DESJARLAIS, Tennessee 

CHRISTOPHER P. GIBSON, New York 

REID J. RIBBLE, Wisconsin 

DENNIS A. CARDOZA, California, Ranking 

Minority Member 

DAVID SCOTT, Georgia 

JOE COURTNEY, Connecticut 

TIM HOLDEN, Pennsylvania 

LEONARD L. BOSWELL, Iowa 

JOE BACA, California 

KURT SCHRADER, Oregon 

WILLIAM L. OWENS, New York 

MICHELLE WEBER, Subcommittee Staff Director 

(II) 

(III)

C O N T E N T S 

Page 

Cardoza, Hon. Dennis A., a Representative in Congress from California, opening statement ........................................................................................................ 2

Rooney, Hon. Thomas J., a Representative in Congress from Florida, opening 

statement .............................................................................................................. 1

Prepared statement .......................................................................................... 2

WITNESSES

Wolf, Doug, Owner, Wolf L&G Farms, LLC; President, National Pork Producers Council, Lancaster, WI ............................................................................ 3

Prepared statement .......................................................................................... 5

Maschhoff, Julie, Vice President, The Maschhoffs, Inc., Carlyle, IL ................... 11

Prepared statement .......................................................................................... 13

Brenneman, Rod K., President and Chief Executive Officer, Seaboard Foods 

LLC, Shawnee Mission, KS ................................................................................. 21

Prepared statement .......................................................................................... 22

(1)

HEARING TO REVIEW THE STATE OF THE 

PORK INDUSTRY 

WEDNESDAY, MAY 4, 2011

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON LIVESTOCK, DAIRY, AND POULTRY, 

COMMITTEE ON AGRICULTURE, 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 2:05 p.m., in Room 

1300, Longworth House Office Building, Hon. Thomas J. Rooney 

[Chairman of the Subcommittee] presiding. 

Members present: Representatives Rooney, Goodlatte, 

DesJarlais, Ribble, Cardoza, Scott, and Schrader. 

Staff present: Patricia Barr, John Goldberg, Tamara Hinton, 

John Konya, Debbie Smith, Pete Thompson, Michelle Weber, Nathaniel B. Fretz, Mary Knigge, and Jamie Mitchell. 

OPENING STATEMENT OF HON. THOMAS J. ROONEY, A 

REPRESENTATIVE IN CONGRESS FROM FLORIDA 

The CHAIRMAN. This hearing of the Subcommittee on Livestock, 

Dairy, and Poultry to review the state of the pork industry will 

come to order. 

Good afternoon and welcome to today’s hearing to review the current state of the pork industry. I would like to begin by thanking 

Ranking Member Cardoza for his help in preparing for today’s 

hearing. I would also like to welcome our witnesses and extend our 

gratitude to them for being here today to share their time and expertise with our Subcommittee. 

This hearing is the third in a series to review the current state 

of the various sectors of the livestock, dairy, and poultry communities. In today’s hearing we will be focusing on the modern pork 

production sector. 

Our witnesses today represent a small farrow-to-finish producer, 

one of the largest family-owned pork farming networks in the 

United States, and a packing company. 

Pork is the most consumed meat in the world, and U.S. pork producers are doing a tremendous job in meeting the growing demand 

for this high-quality, safe, and nutritious source of protein. 

The trust that global consumers have in U.S. pork is based upon 

the commitment that our producers have made to responsible animal care, environmental stewardship, and advancements in food 

safety. I look forward to hearing more about the work each of our 

witnesses are doing to enhance the quality of pork production in 

our nation. 

2

Our witnesses have been asked to describe the pork production 

system from their perspective, discuss current economic conditions, 

and highlight some of their public policy challenges. In this hearing, as with the other initial hearings we have had, we hope to 

gain some perspective about the issues we should be focusing on 

in greater detail later in this Congress. 

I appreciate my colleagues’ attendance and interest in these initial hearings. I continue to welcome and encourage everyone to 

offer suggestions as we move forward with our Subcommittee’s 

agenda. 

[The prepared statement of Mr. Rooney follows:]

PREPARED STATEMENT OF HON. THOMAS J. ROONEY, A REPRESENTATIVE IN

CONGRESS FROM FLORIDA

Good afternoon and welcome to today’s hearing to review the current state of the 

pork industry. I would like to begin by thanking Ranking Member Cardoza for his 

help in preparing for today’s hearing. I would also like to welcome our witnesses 

and extend our gratitude to them for being here today to share their time and expertise with our Subcommittee. 

This hearing is the third in a series to review the current state of the various 

sectors of the livestock, dairy, and poultry communities. In today’s hearing, we will 

be focusing on the modern pork production sector. Our witnesses today represent 

a small farrow-to-finish producer, one of the largest family-owned pork farming networks in the United States, and a packing company. 

Pork is the most consumed meat in the world, and U.S. pork producers are doing 

a tremendous job in meeting the growing demand for this high-quality, safe, and 

nutritious source of protein. The trust that global consumers have in U.S. pork is 

based upon the commitment that our producers have made to responsible animal 

care, environmental stewardship, and advancements in food safety. I look forward 

to hearing more about the work each of our witnesses is doing to enhance the quality of pork production in our nation. 

Our witnesses have been asked to describe the pork production system from their 

perspective, discuss current economic conditions, and highlight some of their public 

policy challenges. In this hearing, as with the other initial hearings we’ve had, we 

hope to gain some perspective about the issues we should focus on in greater detail 

later in this Congress. 

I appreciate my colleagues’ attendance and interest in these initial hearings. I 

continue to welcome and encourage everyone to offer suggestions as we move forward with our Subcommittee’s agenda.

The CHAIRMAN. I would now like to recognize Ranking Member 

Cardoza for his opening statement. 

OPENING STATEMENT OF HON. DENNIS A. CARDOZA, A 

REPRESENTATIVE IN CONGRESS FROM CALIFORNIA 

Mr. CARDOZA. Thank you, Mr. Chairman. It is a pleasure to be 

here with you again. Thank you to our witnesses for attending 

today and sharing with us your experience and expertise on the 

current state of the pork industry. 

The industry is vital to the health of our country, and it is vital 

that we make sure that we keep you strong and healthy and continuing to provide our country with a plentiful supply of your product. Pork production provides nearly 35,000 direct full-time equivalent jobs which helps generate an additional 515,000 indirect jobs. 

USDA projects that commercial pork production will be at 22.6 billion pounds in 2011, an increase of about half a percent from last 

year, but this depends largely on the policies developed by this 

Committee and implemented by USDA. 

3

That is why I am very happy to be working with the Chairman 

to have this hearing today to discuss pork production and the 

trends in the industry and the problems this Committee should 

focus on as we move forward. Our witnesses today will present 

positive and negative trends faced by producers and packers. These 

include feed price escalation, animal disease, antibiotic questions, 

air quality and environmental issues, as well as general Federal 

over-regulation. As a Committee we will work to help promote policies that will help the pork industry grow and thrive. 

A strong pork industry provides affordable, healthy food for our 

nation and supplies, as I said before, thousands of jobs for our 

country. 

As we continue to listen to agricultural producers, we need to 

pay special attention to their feedback on which Federal programs 

are most effective and economically efficient with the industry, and 

which ones are not working. We are going to have to make some 

really tough choices as we move forward toward the next farm bill. 

This Committee must make sure that our resources are focused on 

initiatives that best help our producers and processors as a whole. 

I look forward to your testimony, and I yield back my time. 

The CHAIRMAN. I would like to thank the Ranking Member. The 

chair would also request that other Members submit their opening 

statements for the record so the witnesses may begin their testimony and to ensure there is ample time for questions. 

I would like to now welcome our panel of witnesses to the table: 

Mr. Doug Wolf, Owner of Wolf L&G Farms, from Lancaster, Wisconsin; Ms. Julie Maschhoff, Vice President, The Maschhoffs, Incorporated, Carlyle, Illinois; and Mr. Rob Brenneman, President and 

CEO of Seaboard Foods, Shawnee Mission, Kansas. 

Mr. Wolf, please begin when you are ready. 

STATEMENT OF DOUG WOLF, OWNER, WOLF L&G FARMS, LLC; 

PRESIDENT, NATIONAL PORK PRODUCERS COUNCIL,

LANCASTER, WI 

Mr. WOLF. Good afternoon, Chairman Rooney, Ranking Member 

Cardoza, and Members of the Subcommittee. I am Doug Wolf, a 

pork producer from Lancaster, Wisconsin, and President of the National Pork Producers Council. I appreciate the opportunity to appear before you today to testify on behalf of NPPC. 

The U.S. pork industry represents a significant value-added activity in the U.S. economy. America’s 67,000 pork producers generate nearly $35 billion of gross national product and help support 

more than 550,000 mostly rural jobs. The U.S. pork industry can 

continue to be a leader in food production and meet domestic and 

world demand for pork as long as exports continue to grow, feed 

grains are available, and producers are allowed to operate without 

undue legislative or regulatory burden. I will address each of these 

factors. 

There is no dispute that free trade agreements have been a 

major reason for the rapid growth of U.S. pork exports over the last 

2 decades. The United States is now the lowest-cost pork producer 

in the world and the U.S. pork industry is the number one global 

exporter of pork. But the industry will not stay in that position if 

4

competitor countries cut trade deals in key markets and the United 

States does not. 

U.S. pork producers urge Congress to approve free trade agreements with Colombia, Panama, and South Korea. When fully implemented, those FTAs will generate more than $770 million in additional pork exports, increase hog prices by more than $11 per 

head, and create more than 10,000 U.S. pork industry jobs. 

While exports have been, and with new FTAs will continue to be, 

a boon for the U.S. pork industry, they will do little good if domestic policies hamper producers’ ability to operate. Hog prices are 

high now because production is lower relative to just 3 years ago, 

the results of producers’ response to sharply higher cost of production which now averages about $170 per market hog. That is 20 

percent higher than last year and 60 percent higher than the average from 1999 through 2006. 

These costs are now being passed along to consumers in the form 

of higher retail pork prices. The USDA estimates those prices will 

rise between six and seven percent in 2011. 

Certainly other factors are pushing up meat prices, but 65 to 75 

percent of pork production costs are for feed, including grain. Those 

prices also have been rising rapidly because of global shortages and 

increased demand, particularly from ethanol production. Additionally, feed grain supplies have been getting higher. While producers 

can deal with higher prices we are concerned about ability of feed 

for our animals. Despite the third highest corn harvest on record 

last fall, USDA estimates only about 2 weeks of corn carryover 

stocks. 

Soybean stocks are low. If we have a weather event in the Corn 

Belt, or if China, for example, makes a major corn purchase, we 

could see spot feed shortages across the U.S. While DDGs can provide some relief, they have limited use in hog diets and they are 

not an equal replacement for the corn and soybeans we use. We 

asked USDA to address these potential feed grain crises, but so far 

it has taken no action. 

Finally, pork producers have real concerns about looming Federal 

regulations, including ones from EPA, FDA, and USDA that seem 

to be promulgated without regard to the realities of today’s modern 

food animal production systems. Chief among them is a proposed 

USDA regulation on buying and selling of livestock and poultry, 

the GIPSA rule. 

As you know, Congress in the 2008 Farm Bill, asked USDA to 

address five specific issues related to livestock and poultry contracts. Unfortunately, the agency’s proposed GIPSA rule goes well 

beyond those issues. According to a study by Informa Economics, 

the rule would cost the pork industry alone nearly $400 million annually. It would create legal uncertainty, raise production cost, lead 

to more vertical integration in the U.S. pork industry, and could 

force producers like me out of business. 

NPPC wants USDA to write a regulation that sticks to five topics 

that Congress asked it to address and to do thorough cost-benefit 

analysis that is available for public comment before it issues an interim or final rule. Not doing so would be reckless and lead to serious questions about the openness and transparency of the rulemaking. 

5

Thank you again for inviting me to testify. I would be happy to 

answer any questions. 

[The prepared statement of Mr. Wolf follows:]

PREPARED STATEMENT OF DOUG WOLF, OWNER, WOLF L&G FARMS, LLC; PRESIDENT, NATIONAL PORK PRODUCERS COUNCIL, LANCASTER, WI 

Introduction 

The National Pork Producers Council (NPPC) is an association of 43 state pork 

producer organizations and serves as the voice in Washington for the nation’s pork 

producers. The U.S. pork industry represents a significant value-added activity in 

the agriculture economy and the overall U.S. economy. Nationwide, more than 

67,000 pork producers marketed more than 110 million hogs in 2010, and those animals provided total gross receipts of $15 billion. Overall, an estimated $21 billion 

of personal income and $34.5 billion of gross national product are supported by the 

U.S. hog industry. Economists Dan Otto and John Lawrence at Iowa State University estimate that the U.S. pork industry is directly responsible for the creation of 

34,720 full-time equivalent pork producing jobs and generates 127,492 jobs in the 

rest of agriculture. It is responsible for 110,665 jobs in the manufacturing sector, 

mostly in the packing industry, and 65,224 jobs in professional services such as veterinarians, real estate agents and bankers. All told, the U.S. pork industry is responsible for more than 550,000 mostly rural jobs in the U.S. 

Exports of pork continue to grow. New technologies have been adopted and productivity has been increased to maintain the U.S. pork industry’s international competitiveness. As a result, pork exports have hit new records for 17 of the past 19 

years. In 2010, the U.S. exported more than $4.8 billion of pork, which added $56 

to the price that producers received for each hog marketed. Net exports last year 

represented about 20 percent of pork production. The U.S. pork industry today provides 21 billion pounds of safe, wholesome and nutritious meat protein to consumers 

worldwide. 

Profile of Today’s Pork Industry 

Pork production has changed dramatically in this country since the early 1980s. 

Technology advances and new business models changed operation sizes, production 

systems, geographic distribution and marketing practices. 

U.S. pork farms have changed from single-site, farrow-to-finish (i.e,. birth-to-market) production systems that were generally family-owned and small by today’s 

standards to multi-site, specialized farms many of which are still family-owned. The 

changes were driven by the biology of the pig, the business challenges of the modern 

marketplace and the regulatory environment. Separate sites helped in controlling 

troublesome and costly diseases and enhanced the effect of specialization. Larger operations can spread overhead costs (such as environmental protection investments 

and expertise) over more farms and buy in large lots to garner lower input costs. 

The change in sizes has been the natural result of economies of scale, plain and simple. 

Marketing methods have changed as well. As recently as the early 1980s, a significant number of hogs were traded through terminal auction markets. Many producers, though, began to bypass terminal markets and even country buying stations 

to deliver hogs directly to packing plants to minimize transportation and other 

transaction costs. Today, hardly any hogs are sold through terminal markets and 

auctions, and the vast majority of hogs are delivered directly to plants. 

Pricing systems have changed dramatically, too, from live-weight auction prices 

to today’s carcass-weight, negotiated or contracted prices, with lean premiums and 

discounts paid according to the predicted value of individual carcasses. The shift to 

lean premiums and discounts was largely responsible for the dramatic increase in 

leanness in pork seen in the 1990s. 

Today, the prices of about five percent of all hogs purchased are negotiated on 

the day of the agreement. All of the other hogs are sold/priced through marketing 

contracts or packer produced in which prices were not negotiated one lot or load at 

a time but determined by the price of other hogs sold on a given day, the price of 

feed ingredients that week or the price of lean hog futures on the Chicago Mercantile Exchange. These newer risk-management mechanisms are entered into freely and often aggressively by producers and packers alike to ensure a market for and 

a supply of hogs, respectively, and to reduce the risks faced by one or both parties. 

Robust pork demand in both the domestic and export markets likely will make 

2011 a successful year for U.S. hog producers. Pork cutout values and farm-level hog 

prices are near record highs, and prices of lean hog futures contracts for summer 

6

months exceeded $100 per hundred pounds carcass-weight until recently. The recovering U.S. economy, the weak U.S. dollar, successful marketing efforts by producer 

groups, packers and processors and an expanded opportunity for pork sales to South 

Korea have all contributed to these strong prices. 

U.S. Pork Industry Concerns 

The demand for meat protein is on the rise in much of the world. Global competitiveness is a function of production economics, regulations, labor costs and productivity. The U.S. pork industry can continue to be a leader in food production and 

meet the needs of increased consumer demands as long as exports continue to grow, 

feed grains are available and producers are allowed to operate without undue legislative and regulatory burdens. 

Trade 

There is considerable global demand for pork and pork products. Pork represents 

44 percent of global meat protein intake, far more than beef and poultry. And there 

is no disputing that free trade agreements have been a major factor in the rapid 

growth in U.S. pork exports over the last 2 decades. Since the year before the North 

American Free Trade Agreement was implemented in 1994, for example, U.S. pork 

exports to Mexico have increased 780 percent to $986 million last year; since the 

year before the Australia FTA was implemented, U.S. pork exports to that country 

have grown by 1,300 percent to $148 million; since the year before the Central 

America FTA was implemented, U.S. pork exports to the CAFTA countries have increased by 313 percent to $119 million; and in the 2 years since the Peru FTA took 

effect, U.S. pork exports to that South American country have almost doubled to 

$1.2 million. The Center for Agriculture and Rural Development at Iowa State University estimates that U.S. pork prices were $56 per hog higher in 2010 than they 

would have been in the absence of exports. The U.S. pork industry last year exported more than 1.9 million metric tons of pork valued at $4.8 billion. 

The United States is now the lowest-cost pork producer in the world, and the U.S. 

pork industry has established itself as the No. 1 global exporter. But the industry 

will not stay in that position, even as the lowest-cost producer, if competitor countries cut trade deals in key markets and the United States does not. 

U.S. pork producers have been and continue to be strong supporters of trade 

agreements, including the deals with Colombia, Panama and South Korea, which 

are pending Congressional approval. Iowa State University economist Dermot Hayes 

estimates that, when fully implemented, those FTAs will generate more than $770 

million in additional pork exports, causing live hog prices to increase by $11.35 per 

head and creating more than 10,200 direct pork industry jobs. 

The downside of growing exports, of course, is a larger economic impact should 

there be any disruption in trade. Pork producers understand this dynamic and recognize that it would be devastating for U.S. pork producers and the entire pork industry. 

NPPC supports development of risk-management programs that would support 

producers and packers should U.S. export markets ever be interrupted by a serious 

animal disease outbreak. This is something NPPC will be working to address in the 

next farm bill. 

As it demands of other countries, the United States must live up to its trade obligations. Bilateral and multilateral trade agreements lay out specific commitments 

for the signatories, and failure to abide by them can—and often does—lead to disputes that hurt one or more countries. 

Such was the case with the trucking provision of the North American Free Trade 

Agreement among the United States, Canada and Mexico. The United States refused to allow Mexican trucks to haul goods into the country. Mexico took its case 

to a NAFTA dispute-settlement panel, which ruled that it could retaliate against the 

United States. In March 2009, the Mexican Government placed tariffs of up to 20 

percent on 89 U.S. products worth $2.4 billion; in August 2010—after no U.S. action 

to resolve the dispute—it added more products, including pork, to its retaliation list. 

The duties made U.S. goods going to Mexico less competitive with products from 

other countries and placed more than 26,000 U.S. jobs in jeopardy. 

NPPC is pleased that the U.S. and Mexican Governments finally have resolved 

the trucking dispute, that the United States will live up to its NAFTA obligation 

and that Mexico has agreed to suspend the tariffs on U.S. goods. Congress must 

allow a U.S. pilot program that lets Mexican trucks haul products into the United 

States to go forward. If it does not, Mexico undoubtedly will reinstate, and possibly 

raise, the tariffs on pork and other U.S. goods. 

7

Feed Availability 

A major reason for higher hog prices is lower production relative to just 3 years 

ago, the result of producers’ responses to sharply higher costs of production. Costs 

for typical farrow-to-finish producers will average about $85 per hundred pounds 

carcass-weight this year based on corn and soybean meal futures on April 1. That 

figure is 20 percent higher than last year and 60 percent higher than the average 

for 1999–2006, before the advent of Federal biofuels policies. These costs are now 

being passed along to consumers in the form of higher retail pork prices, which set 

six record monthly highs during 2010 and are almost certain to set new highs this 

year. Indeed, the U.S. Department of Agriculture in its April 25 food inflation forecast projected that retail meat prices will rise six to seven percent this year, the 

largest jump since 2004. 

Certainly, other factors are pushing up meat prices, including increased global demand and higher transportation costs—the result of rising fuel prices. But 65 to 75 

percent of pork production costs are for feed, including grains, the prices of which 

also have been rising rapidly. (Each market pig consumes approximately 10.5 bushels of corn and 4 bushels of soybeans in the form of meal.) Additionally, feed grain 

supplies, particular corn, have been getting tighter. 

Even with the third largest corn crop on record, the projected 2010–2011 yearend stocks-to-use ratios for both corn and soybeans are the lowest ever. USDA recently estimated 2010–2011 crop year corn ending stocks of just 14 days, a historic 

low. Total corn usage, driven by nearly 5 billion bushels of corn going to ethanol 

production, is now routinely more than 13 billion bushels per year and still growing 

because of constantly rising renewable fuels mandates and, at least at present, soaring oil and gasoline prices, which make ethanol production more profitable. The ethanol industry will use more than 1⁄3 of this year’s corn crop. (As an aside, USDA 

has overestimated the amount of dried distillers grains with solubles—DDGS, a byproduct of ethanol production—that are returned to livestock producers as feed.) 

U.S. pork producers are concerned about the impact on the industry of the increased use of corn for ethanol production. The U.S. pork industry strongly believes 

the country needs a strong renewable energy sector. However, it cannot come at the 

expense of the U.S. livestock industry. Reducing the use of imported oil—becoming 

energy independent—and focusing on renewable fuels are laudable, but markets 

must be neither distorted by subsidies and taxes nor constrained—or compelled—

by mandates to the point where they cannot send effective price signals. 

Where mandates and subsidies are allowed to exist and distort the market, it is 

unconscionable that long-established laws would be ignored to drive greater ethanol 

production. But this is the path the Administration has taken in response to demands to allow an increase to 15 percent (E15) from the current ten percent in the 

amount of ethanol that can be blended into gasoline. Despite the clear language in 

the Clean Air Act that fuel additives be safe in—not harm—all vehicles, the U.S. 

Environmental Protection Agency approved E15 for 2001 and newer model year vehicles. NPPC and other stakeholders filed suit against EPA over its decision. Pork 

producers obey the rule of law, and they expect the U.S. Government to do the 

same. The United States must invest in research and development for other energy alternatives, such as using animal manure and fat and biomass, including switchgrass 

and corn stover. 

The U.S. pork industry wants to emphasize that the right balance is needed to 

meet the needs of fuel and feed security. 

The increasing demand for corn has resulted in cash corn prices of more than $6.50 per bushel and corn futures prices around $7.50 per bushel. For the most part 

producers will adjust to higher feed grain prices, but there’s not much they can do 

about a lack of available supplies. 

Currently, only about nine percent of corn has been planted this year compared 

with 46 percent at the same time last year. While NPPC has faith in the American 

farmers’ ability to produce feed grains sufficient to meet demand, it is concerned 

about factors beyond their control, particularly the weather. 

The last real drought in the major corn-growing states happened in 1988, 23 years 

ago. Of course, too much rain also could cause problems. (Last week, Reuters reported that Texas is experiencing its worst drought in 40 years and that there are 

widespread crop failures in the state because of it.) Should the Corn Belt suffer a 

drought or other weather event that reduces the harvest, there will be regional 

shortages of feed. 

Any difficulties with this year’s or next year’s U.S. corn and soybean crops could 

be disastrous for U.S. pork producers. Ethical care of animals requires producers 

to feed them even when feed prices are high. But if there are feed shortages, livestock producers cannot simply turn a light switch to stop production and cannot 

8

stop feeding their animals. Taking animals to market before they reach market 

weight really isn’t an option. Such an action likely would severely depress livestock 

prices, hurting producers’ bottom line. Producers will do all in their power to secure 

feed to care for their animals, but Congress and the Obama Administration also 

should be contemplating how to address physical feed shortages to avoid any potential welfare issues if such a situation does occur. 

Another factor that could affect U.S. feed grain supplies is a major corn purchase 

by another country. According to the U.S. Grains Council, China’s corn reserves are 

10 million to 12 million metric tons lower than previously estimated, and it is expected to import an additional 2 million to 3 million metric tons before the end of 

the current crop year. Such a major purchase would make tight U.S. supplies even 

tighter. 

NPPC has asked USDA to address potential feed-grain shortages, requesting that 

non-environmentally sensitive farm acres enrolled in the Conservation Reserve Program (CRP) be released early and without penalty so that they may be planted to 

crops. It also has asked that a contingency plan be developed should corn demand 

exceed supply. Unfortunately, USDA has declined to consider either option. 

Legislation and Regulation 

Federal legislation and regulations must not impose unnecessary costs on the U.S. 

pork industry or restrict it from meeting consumer demands in an economical manner; government intervention must not stand in the way of market-based solutions. 

The structure of the production and packing sectors should be allowed to change 

with the demands of the growing global marketplace. This includes allowing producers and packers to change to adopt new technologies and pricing and marketing 

mechanisms that enable producers to reduce their risks in the current highly volatile markets and allow packers to capture economies of scale. The U.S. pork-packing 

sector is the envy of the world in terms of efficiency and food safety, and legislation 

and regulations should not take away or hamper that source of international advantage. Allowing producers and packers the freedom to develop new ways of doing 

business will only enhance the value of U.S. pork products, at home and abroad, 

and reduce costs and risks. 

Unfortunately, there are several pending Federal regulations that will have the 

opposite effects. 

Chief among them is the proposed USDA regulation on the buying and selling of 

livestock and poultry—the GIPSA rule. Congress in the 2008 Farm Bill asked USDA 

to address five specific issues related to production contracts:

• Criteria for determining whether an undue or unreasonable preference or advantage has been given to any producer.

• Whether a poultry dealer or swine contractor has provided sufficient time for 

a grower to remedy a breach of contract that could result in contract termination.

• Whether a poultry dealer has given reasonable notice of any suspension of delivery of birds to a grower under a contract.

• When a requirement of additional capital investment during the life of a contract constitutes a violation of the Packers and Stockyards Act as an unfair 

practice.

• The factors that comprise a fair usage of arbitration, including notification and 

the option for producers to opt out of automatic arbitration to resolve disputes.

The U.S. pork industry was stunned in June 2010 when USDA proposed a rule 

that not only went well beyond the five issues Congress asked it to address but included provisions considered and clearly rejected by Congress. If implemented as 

currently drafted, the GIPSA rule would have a devastating impact on livestock producers. According to an analysis of the rule conducted by Informa Economics, it 

would cost the U.S. pork industry nearly $400 million annually. Industry analysis 

of the regulation concluded that it likely will have a chilling effect on innovation 

and flexibility, leading to a race toward mediocrity. It will create legal uncertainty 

that will drive costs higher and cause an increase in vertical integration in the livestock sector, driving producers out of the business and possibly affecting meat supplies. All of those effects will harm the U.S. pork industry’s international competitiveness, costing U.S. on-farm and pork processing jobs as well as negatively affecting the U.S. balance of trade. 

NPPC continues to urge USDA to scrap the current GIPSA rule and to write a 

regulation that sticks to the five mandates it was given by Congress in the 2008 

Farm Bill. It also requests Congress to conduct oversight hearings on the origins 

9

of the rule, the legal and economic analyses used to develop it and the rule’s impact 

on small businesses. 

Today, the U.S. pork industry has developed a wide variety of marketing and pricing methods, including contracts, to meet the changing needs of a diverse marketplace. U.S. pork producers will not be well served by having certain types of contracting mechanisms eliminated, actions that only would force livestock markets to 

revert to an inefficient system used more than half a century ago in which animals 

were traded in small lots and at prices determined in an open-market bid system. 

This system was inefficient and makes no economic sense in today’s economy. 

The U.S. pork industry opposes any legislation or regulations that restrict marketing opportunities or interventions into hog markets unless such actions address 

a clear, unequivocal instance of market failure or abuse of market power. To date, 

USDA has not presented any evidence that either is taking place. 

Another challenge faced by the U.S. pork industry is the attempt by various activist groups to use the regulatory process to advance their agendas. Currently, for example, Farm Sanctuary, an anti-livestock group, is requesting USDA’s Food Safety 

Inspection Service (FSIS) to amend its ante mortem inspection regulations to prohibit the slaughter of all non-ambulatory livestock, including swine. 

Such a ban not only would eliminate approximately 66 million pounds of safe and 

wholesome pork from the food chain—causing meat supply and carcass disposal 

problems—but would be contrary to the available scientific evidence on non-ambulatory hogs and provide no added benefit to public health, food safety or animal wellbeing. 

Most hogs that become non-ambulatory are fatigued and will recover with adequate rest, and all animals destined for slaughter must be presented for ante 

mortem inspection to FSIS inspectors as directed under the Federal Meat Inspection 

Act as well as an FSIS directive. Additionally, euthanizing non-ambulatory hogs 

would weaken the ability to detect animal diseases and eliminate a method of comprehensive disease surveillance. 

A second issue involves packing plant disruptions that have taken place over alleged animal welfare problems. Many of these incidents involved FSIS animal welfare inspectors who were newly hired and had minimal training in swine behavior 

and handling. The disruptions—plant shutdowns—have created the potential for 

very serious animal welfare issues. 

An FSIS directive requires plants to remain closed until a violation is resolved 

to prevent further inhumane acts. Consequently, shutdowns may result in trucks 

waiting to offload animals, indirectly causing further inhumane handling issues, including dangerous temperatures for the animals, especially during the summer 

months. 

NPPC wants to ensure that the use of regulatory control actions, including plant 

shutdowns, for minor, non-egregious handling violations do not lead to secondary 

animal welfare issues when trucks are not diverted to other plants. It also would 

like FSIS animal welfare inspectors to be better trained—FSIS has new training 

materials on animal handling—and, when egregious violations do occur, for inspectors to divert trucks to other plants. 

Pork producers also have concerns about a proposed guidance issued in June 2010 

by the U.S. Food and Drug Administration. Draft Guidance #209 (The Judicious Use 

of Medically Important Antimicrobial Drugs in Food-Producing Animals) recommends that livestock producers eliminate from food-animal production antibiotics 

used to promote feed efficiency. 

But the majority of the FDA-approved antibiotics that are labeled only as growth 

promotants actually prevent disease or illness. So eliminating them undoubtedly 

will lead to an increase in illness and disease in pigs and a corresponding increase 

in the amount of antibiotics needed to treat illness and disease. Banning antibiotics 

that are known to prevent illness in livestock has serious animal well-being implications. 

While the draft guidance would allow such antibiotics to be used after they are 

submitted to FDA for re-review and the agency determines they prevent disease or 

illness, that process is prohibitively expensive and time consuming, typically costing 

millions of dollars and taking 7 to 10 years to complete. 

Although the guidance does not have the force of law, producers are concerned 

that it may be treated as such by FDA, which is being pressured by opponents of 

modern animal agriculture and several public health groups to address an increase 

in antibiotic-resistant illnesses in humans, which they blame on the use of antibiotics in livestock and poultry production. (There is no scientific evidence linking 

antibiotic use in livestock with antibiotic resistance in people.) 

10

It must be noted that FDA’s animal drug approval process requires that products 

not only be efficacious and safe for animals but also that they do no harm to human 

health and the environment. 

The pork industry’s Take Care: Use Antibiotics Responsibly program educates 

producers on proper uses of animal health products, which are employed as part of 

an overall herd health plan developed in consultation with veterinarians. Prohibiting the use of any of these important tools will jeopardize animal health, increase 

production costs and, potentially, lead to higher retail meat prices. 

Pork producers take a broad view of what it means to be environmentally responsible farmers and business people and have fully embraced the fact that their operations must protect and conserve the environment and the resources they use and 

effect. Producers take this responsibility with the utmost seriousness and commitment, and it was in that spirit that they have made major commitments to environmental conservation. 

Today, the pork industry is meeting EPA’s stringent zero-discharge standards for 

livestock operations under the Clean Water Act (CWA). Yet, despite that success, 

EPA continues to pressure the industry. 

As an example, in its 2008 CAFO Rule—which includes the zero-discharge standard—EPA, at the urging of environmentalists, ignored the 2005 decision of the U.S. 

Court of Appeals for the 2nd Circuit in Waterkeeper that there was no duty for a 

producer who was not discharging to apply for a CWA permit. It illegally expanded 

its jurisdiction to include not just a requirement that operations that are discharging obtain a permit but also that operations that might have discharges in the 

future obtain them. To make matters worse, EPA also reversed the burden of legal 

proof and the long-standing due process notion of innocence until proved guilty by 

demanding that producers prove to the agency that, even though they don’t discharge today, they won’t discharge 20 years from now. 

NPPC led the charge on behalf of all livestock producers against this, and in 

March the Court of Appeals for the 5th Circuit ruled in National Pork Producers 

Council v. EPA that EPA could only require permits from livestock farms that are 

actively discharging and that it was unlawful for the agency to speculate about future conditions. 

While the National Pork Producers Council decision is a major victory over EPA, 

it has not ended the pressure that producers feel from the agency. Last May, as part 

of the litigation, EPA entered into a sweetheart settlement agreement with several 

environmental groups. That settlement resulted in a guidance document being released 2 days later—with no industry input—that stated in clear terms that EPA 

had decided to regulate dust that has blown out of hog barns through ventilation 

fans, lands on the ground and mixes with rainwater as a regulated discharge of a 

pollutant under the Clean Water Act. Furthermore, the deal required EPA to propose by May 25, 2011, that all large livestock operations, with or without a history 

of actually discharging and without evidence that discharging is occurring, to submit detailed information to EPA about their operations. EPA agreed to post the information in a national database available online and accessible to the general public, including environmental activists. Producers would have to submit nearly all the 

business data and manure management records that would be required under a 

CWA permit, including their nutrient management plans. 

On the air emission side of the equation, NPPC is proud of its leadership in helping to organize and negotiate the groundbreaking Livestock Air Consent Agreements and the National Air Emissions Monitoring Study (NAEMS). The NAEMS 

was a multi-year study, funded by livestock producers and carried out by university 

scientists under protocols and controls developed and overseen by EPA. The purpose 

of NAEMS was to develop a better scientific understanding of the emissions associated with livestock production, and it included monitoring of a number of species 

around the country. The data from that study was transmitted to EPA last summer, 

and the agency is currently in the process of reviewing it and developing speciesspecific air emissions factors. 

After spending a number of years developing and implementing the data collection efforts, and at a cost of millions of producer-contributed dollars, NPPC is deeply 

concerned that EPA will not commit the resources and expertise needed to develop 

top quality and sound emissions factors from this data. NPPC is urging EPA to take 

the time it needs to bring the right personnel to bear on the task of fully understanding the data that was collected and to make use of scientific expertise at 

USDA as part of that effort. Unfortunately, this has not yet taken place. 

Conclusion 

The U.S. pork industry is the lowest-cost producer and No. 1 exporter of pork in 

the world, and U.S. pork producers continue to produce the most abundant, safest, 

11

most nutritious pork in the world. They have proved very resilient, most recently 

weathering financial crises in 1998–1999 and 2008–2009 as well as the vagaries of 

a free market economy, all while investing in and adopting new technologies that 

have promoted animal health, protected the environment and added thousands of 

jobs and billions in national income to the American economy. 

To continue as leaders in the global and domestic economies, the U.S. pork industry requests that Federal policies and regulations support the American farmer and 

not hinder—as the proposed GIPSA rule would—his or her ability to feed the world.

The CHAIRMAN. Thank you Mr. Wolf. 

Ms. Maschhoff. 

STATEMENT OF JULIE MASCHHOFF, VICE PRESIDENT, THE 

MASCHHOFFS, INC., CARLYLE, IL 

Ms. MASCHHOFF. Thank you for the opportunity. Good afternoon. 

Ladies and gentlemen of the Subcommittee, my name is Julie 

Maschhoff, and I along with my husband Ken Maschhoff, my brother-in-law and sister-in-law Dave and Karen Maschhoff operate The 

Maschhoffs. 

And today I would like to tell you a little bit about our family 

operation and how it has evolved in the pork industry and our history with this industry. Ken’s parents were pioneers in the industry in many ways. 

On your first page of my handout you will see a picture of Ken’s 

father, Wayne, and his grandfather, Ben. And behind them you will 

see one of the very first consignment buildings that were put up 

in the State of Illinois. They have consistently challenged, with 

each generation, how to bring new technology into this farming operation; and today, five generations later, our family continues that 

value in bringing forth new technology, and as a result we have become the largest family-owned pork production network in North 

America. 

Our focus has not changed through the years. Our focus is still 

to raise pork in an efficient, humane, and environmentally responsible manner. But with each generation the definition of those 

terms change. Grandpa Ben’s definition of environmental responsibility was to allow the pigs to run through the cornfield and salvage corn every fall. Today we have a team of 30 people in our environmental department to make sure that we have the correct nutrient management plans in place, and that manure is always used 

as a valuable fertilizer, that it needs to be used and recycled into 

our cropping operations. 

Our commitment to humane production is shown by the animal 

welfare standards that have been developed by our animal care 

team and that, subsequently, every person in our operation is 

trained on. And we believe that our farms are still the perfect example of large-scale, sustainable agriculture. 

Today we operate in nine different states, primarily in Illinois, 

Iowa, Missouri and Nebraska, but also with sow farms that are the 

reproduction centers located in Oklahoma, Indiana, Georgia, Alabama, and South Dakota. Along with 320 other family farmers that 

we call our production partners, and with the help of 950 employees, we now produce four million pigs a year, which is enough pork 

to feed ten million consumers here in the U.S. and around the 

world. 

12

Our business philosophy was handed down through the generations. We still believe it is people that make things work, so we invest heavily in human resources. We have maintained the strong 

work ethic and the pride in ownership that has been passed down 

from generation to generation. But today we make decisions based 

on science and information. We embrace and develop new technology, often testing all of our production methods in our own research farm, named after the great State of Georgia—just an 

aside—and utilizing our farms, before we ever ask our production 

partners to adopt a new technology. 

And finally, we emphasize communication. We know we have to 

communicate clearly what we are doing among our employees and 

our production partners, but we also have to clearly communicate 

to our allied industry partners and to the consuming public. 

But what really makes The Maschhoffs unique is our pig. We are 

pig geeks—we will admit it—and we think the Maschhoff pig is a 

very unique animal. We have worked for over 10 years to come up 

with our own genetically enhanced pig, for lack of a better term, 

but we have evaluated genetic lines from throughout the world. We 

have been to Denmark, we have been to Norway, we have looked 

at England, we have looked at China, and we have tried to take 

the best of the best to make sure that we have a unique animal 

that is something that our customers, our friends in the packing 

industry, will want to use as they satisfy their end-customers. 

And, of course, all of our improvements are based on scientific 

techniques and carried out in cutting-edge facilities under modern 

animal husbandry practices. 

Our pigs’ health is another unique aspect of our operation. We 

locate our breeding herds in very isolated rural areas as much as 

possible, because that helps us prevent exposure to different diseases in the swine industry. Any use of vaccinations and medications is limited to strict adherence to both FDA guidelines as well 

as our customer guidelines, and all caregivers are trained to focus 

on individual pig treatments. 

Our pigs’ living environment is very different from Grandpa 

Ben’s day. Today, pigs are raised in barns that are designed to provide an optimum climate for pig comfort, so no longer will pigs get 

sunburned as they did with Grandpa Ben. They will not have to 

rely on a pond to keep cool, since they cannot sweat. Instead, they 

are in climate-controlled buildings. And, of course, thanks to our 

cold winters that we have in Illinois, they are protected during 

those winter months. Automated feed and watering systems are 

there to prevent any hunger or thirst issues. 

Again, all of our housing practices are designed on science-based 

standards to ensure that we are doing what is best for the animal’s 

welfare, and we are routinely auditing these environments to ensure we are always in compliance. 

Our future challenges are the very things that Mr. Wolf mentioned. Will we be allowed to continue to use the tools in our toolbox with antibiotics; will we be able to—allowed to conduct business, or will GIPSA interfere with our business models and our 

ability to negotiate and enter into contracts; and how will EPA continue to regulate our business, or will we be free to compete on the 

world market? 

13

In closing, I would like to thank you for your time and your attention, the opportunity to share with you today, and I will be 

happy to answer any questions. 

[The prepared statement of Ms. Maschhoff follows:]

PREPARED STATEMENT OF JULIE MASCHHOFF, VICE PRESIDENT, THE MASCHHOFFS, 

INC., CARLYLE, IL 

Our History and Mission 

Our ancestors arrived in the Carlyle, Illinois area and began farming over 150 

years ago. Five generations later, The Maschhoffs is one of the largest family-owned 

pork production networks in North America. Our Mission Statement is: ‘‘Our focus 

every day is to raise pork in an efficient, humane and environmentally responsible 

manner.’’ We strive to instill this mission into every one of our employees and production partners on a daily basis. 

The Maschhoffs are industry leaders in adopting the latest production technologies, building modern animal facilities, and carrying out research in a speciallydesigned research facility. Our family is committed to providing for the welfare of 

our employees and animals, and we believe that pork production today exemplifies 

sustainable agriculture on a large scale. We employ management strategies and 

make significant capital investments to reduce odor, protect water resources, and recycle manure to enrich the land and supply needed soil nutrients for crop production. 

Since 1979, when Dave and Ken Maschhoff entered into a pork production partnership, the Maschhoffs have continuously adopted new production technologies, expanded the company’s reach by building feed mills and adopting contract production, and grown the business from its base in southern Illinois to operations in nine 

states. Today, The Maschhoffs family business manages 192,000 sows, producing approximately four million market hogs annually. We have more than 950 employees 

and have created a production network with 320 Production Partners, family farmers who have built modern production facilities and manage the wean-to-finish 

phase of the pig production cycle. 

Our business philosophy centers around: investing in human resources; maintaining a strong work ethic and pride in ownership; making information-based decisions; 

embracing and developing new technology; and emphasizing communication among 

employees/partners, suppliers and customers, and the pork-consuming public. 

Our Business Model 

The Maschhoffs, like many other pork producers in the U.S., is a model of a partially-integrated company. We own reproduction facilities (sow farms) and the sows 

in the production system, and we utilize both company-owned and Production Partner-owned (contract) facilities for the wean-to-finish stage of production. Baby pigs 

around 21 days of age are weaned and then placed in the wean-to-finish barn to 

be raised up to market weights of around 280 pounds. The Maschhoffs do not own 

pork processing facilities, so we contract with several major pork packing plants to 

supply market hogs. We also utilize the spot hog market to sell a portion of our pigs. 

Production Partners are family farmers who have entered into production contracts with The Maschhoffs to build wean-to-finish barns, manage those facilities 

and care for the pigs during that phase of production. The Maschhoffs maintain 

ownership of the pigs throughout the life cycle, and also supply the feed and veterinary care for the pigs, thereby removing the two main sources of market/price risk 

(hog market and feed) for the farmers. We typically enter into 10–12 year negotiated 

contracts with our Production Partners, a period of time long enough for the farm 

family to get the production facility paid for. The Production Partner is responsible 

for day-to-day care of the pigs, maintenance of the buildings, utilities and insurance, 

and management of the valuable manure resource. Typically, the manure is used 

on the Production Partner’s land as a source of soil nutrients for corn production. 

This model has worked extremely well in the Upper Midwest for hog production 

and is greatly supported by the financing community. It is very common for a family’s son or daughter who wants to return to the family farm to participate in contract pork production as a way to get started in a career in agriculture. Given today’s high land prices and start-up capital costs, being a Production Partner with 

The Maschhoffs has been a highly viable way for beginning/young farmers to get 

started and to build equity. In fact, demand for production contracts today far exceeds supply in the Midwest. 

14

Feed Production and Environmental Stewardship 

Feed for pigs consists mainly of corn (the energy source) and soybean meal (the 

protein source), along with vitamins and minerals. In recent years with the rapid 

growth of the ethanol industry and the resulting competition for corn, we have also 

adapted the ethanol byproduct distillers grains into pig diets. As such, The 

Maschhoffs is a major buyer of corn, soybean meal and other feedstuffs in the areas 

where we operate. Over the years we have constructed two large feed mills and have 

entered into numerous feed toll milling arrangements with local elevators and cooperatives. It takes about 650 lbs. of feed to grow a weaned pig from 15 lbs. to a 

market hog weighing 280 lbs. Of that feed, at least 60 percent is corn with the balance being a combination of soybean meal and distillers grains. This year we are 

going to need 35 million bushels of corn, 165 thousand of tons of soybean meal, and 

293 thousand tons of distillers grains to produce enough feed for our production system. 

Distillers grains from the ethanol industry represents both a challenge and an opportunity for us in the way we feed pigs. With corn becoming increasingly expensive, we are constantly searching for ways to re-formulate our least-cost feed rations 

using any and all feedstuffs available. We do utilize a wide array of food industry 

byproducts as a substitute for corn when the pricing makes sense. And, we feed distillers grains as an energy and protein source, substituting partially for both corn 

and soybean meal, again when the pricing makes sense. Currently we utilize distillers at an inclusion rate of up to 30 percent in wean-to-finish diets, a rate that 

changes with different feed rations. The biggest constraints to utilizing distillers 

grains are: (1) the variability in quality from plant-to-plant and even within a plant 

from hour-to-hour; and (2) pigs being monogastric (one-stomach) animals, they deposit fat in a such a way that the fatty acids included in distillers grains are directly 

deposited in the pig; when too much distillers are fed, the pork belly becomes soft 

due to the type of fat laid down, and the carcass risks rejection from pork processors 

and their customers. Contrary to what many in the ethanol industry claim, distillers 

grains is far from an ideal feed for the pork industry—we feed what we can when 

it makes sense, but there are definite limitations to its use. 

Producing feed and raising pigs is one of the oldest, most successful and sustainable ways to add value to the corn and soybean commodities produced in the Midwest. In addition, the manure produced in pork production is entirely recycled into 

the soil to increase its fertility and to provide much-needed nutrients (nitrogen, 

phosphorous, potassium and micro-nutrients) for crop production. At The 

Maschhoffs, we have invested significant resources in personnel, machinery, training and technology to manage the manure resource. In fact, we have more than 30 

full-time equivalent employees dedicated to environmental management throughout 

our production system. 

To reduce nutrient excretion by the pig, thereby reducing emissions and odor, we 

tailor the pig’s diet to its nutritional needs at a particular stage of growth, a process 

called phase feeding. We also use feed additives such as the enzyme phytase to increase the absorption of feed phosphorous by the pig, reducing the amount of phosphorous excreted in the manure by 20 to 30 percent. 

Food Safety 

Food safety is always at the forefront of our thinking at The Maschhoffs. We work 

closely with our pork processing customers to ensure that food safety at the consumer level is maintained. Food safety at The Maschhoffs begins at the farm level 

by focusing on maintaining pig health and welfare. Our entire production system 

is actively involved in the National Pork Board’s ‘‘Pork Quality Assurance’’ (PQAPlus) program, and we work with our trucking partners via the ‘‘Transport Quality 

Assurance’’ (TQA) program to ensure pigs are handled safely and humanely. We 

strive to protect consumers by following the strictest feed and medicine traceability 

protocols to ensure that the pork they eat is safe and nutritious. 

Community Outreach 

Through our Community Partnership Program, The Maschhoffs makes matching 

contributions to qualified charities and events in which our employees and Production Partners are involved. Local 4–H clubs, FFA clubs, rural fire departments, 

churches and schools are just some of the beneficiaries of The Maschhoffs’ support. 

Government Regulation and Our Business 

As a substantial family business involved in agricultural production, The 

Maschhoffs face a large number of regulations at the local, state and Federal Government levels. I will comment on just a few of the more significant issues here. 

Let me start on the positive with several highly-beneficial government activities 

15

that directly impact our pork production business. I mentioned how important food 

safety is for us at The Maschhoffs—we have great confidence in the USDA’s meat 

inspection system under the Food Safety Inspection Service (FSIS). In fact, FSIS 

has been highly successful in driving down cases of meat-borne pathogens, as reported by the Centers for Disease Control (CDC). We supported the passage last 

year of the FDA Food Safety Modernization Act (FSMA), as amended, because we 

feel the FDA needs more tools to help the agency maintain consumer confidence in 

the nation’s food supply. Anything that jeopardizes consumer confidence in food is 

very bad for our business. We are hopeful that the many rules under development 

now by the FDA under the FSMA will truly help it maintain food safety and not 

lead to increased bureaucratic interference in our feed and pork production systems. 

Finally, we at The Maschhoffs have long supported mandatory price reporting for 

pork, including wholesale cuts. The regulations under development at USDA’s Agricultural Marketing Service will hopefully bring even more transparency into the 

pork meat price discovery system and benefit producers such as ourselves who rely 

on many USDA price reports to make day-to-day decisions in marketing our animals. 

As you are aware, the U.S. pork industry has been wildly successful over the past 

15 years in increasing pork exports—we are now the leading pork exporting country 

in the world, and year in and year out export around 20 percent of the pork we 

produce. I would urge you to ratify as soon as possible the three pending free trade 

agreements (South Korea, Colombia, and Panama) which would be highly beneficial 

to all of us in the pork industry. 

On the other side of the ledger, I need to mention several sets of regulations in 

place or under development that are of great concern to us. Let me start with the 

GIPSA rule currently under review at USDA. As presented for comment, the proposed rule would be a great threat to our pork production business model in two 

main areas: (1) we feel the proposed rule would force us to do away with our system 

of contracting with production partners, thereby taking away an important economic 

tool for hundreds of family farm pork producers in the Midwest; and (2) we would 

be hamstrung in our supply contract negotiations with our pork processor partners. 

In general terms, the GIPSA rule would, as a colleague recently put it, ‘‘put us in 

a race to mediocrity in pork production’’. We hope the USDA will keep in mind that 

our production contracts and supply contracts are negotiated, business transactions 

that contain proprietary business information. We have no problem with the several 

livestock contracting provisions that the Congress called for in the 2008 Farm Bill, 

but the proposed GIPSA rule goes far beyond Congressional intent and would do 

great damage to the livestock industry in the U.S. 

The EPA, as some on the Agriculture Committee have previously noted, seems to 

be an agency with a whole lot of solutions to problems that just don’t exist in agriculture. We are most concerned about CAFO regulations, the December 2010 ‘‘Clean 

Water Protection Guidance’’ that would greatly expand the set of waters subject to 

jurisdiction under the Clean Water Act, EPA’s misguided attempts to regulate dust 

in agriculture, and repeated attempts to regulate air emissions from livestock facilities. It is disheartening to those of us who have committed to producing livestock 

in a sustainable fashion for 150 years to hear government officials talk about manure (or milk) as toxic waste. Perhaps it is our own fault for not educating those 

same officials as to how we operate, for example, that we store manure below 

ground in steel-reinforced concrete tanks that do not discharge; that we know the 

nutrient value and field placement of every single gallon of the millions of gallons 

of nutrients that we field-apply each year; or that manure is so valuable to corn producers that it is bought and sold as a commodity and that demand far outstrips supply in the areas where we operate. 

A rule under development at USDA/FSIS that deals with non-ambulatory animals 

at processing facilities gives us great concern. As a result of a petitioned rulemaking 

process, two anti-livestock interest groups, the HSUS and Farm Sanctuary, are asking FSIS to condemn all non-ambulatory animals, including pigs that are temporarily unable to walk due to stress and/or heat exhaustion. Such a rule could cause 

the pork processing industry to condemn over 60 million pounds of perfectly good 

meat in a year. We have addressed this issue many times in the past in the Congress, and to date our ‘‘downer pig’’ champion Congressman Boswell has always had 

the good sense to explain to his colleagues the difference in physiology between pigs 

and cattle, and that given a little time to rest, almost all non-ambulatory pigs will 

get up and walk and be perfectly fine for the food supply. 

I mentioned earlier in my remarks regarding food safety that we supported the 

FDA Food Safety Modernization Act. In general, we feel the FDA does a fair job 

in another of its duties, the review and approval of animal drugs. In fact, FDA’s 

animal drug approval process requires that the product not only be efficacious and 

16

safe for animals, but also that they do not harm human health or the environment. 

The FDA’s June 2010 draft guidance #209 (The Judicious Use of Medically Important Antimicrobial Drugs in Food-Producing Animals), however, concerns us greatly. 

The draft guidance, by doing away with the use of animal health protection products 

for animal health maintenance or production, would take away an important tool 

pork producers have in using FDA-approved products to keep pigs healthy. We fear 

a situation such as what has occurred in Danish pork production where similar restrictions resulted in more sick pigs and ultimately an increase in the amount of 

antibiotics needed to treat those pigs. In addition, keeping pigs healthy results in 

better feed efficiency of the pigs (less feed needed to produce more pork) which is 

especially important during this time of high corn prices. 

Finally, let me comment the impact of ethanol policy on our pork production business. I already pointed out the challenges pork producers face with using distillers 

grains in pig feed. As significant users of energy and petroleum products, we pork 

producers are as interested as anyone in finding new, renewable sources of energy 

to reduce our imports of oil from unstable parts of the world. However, some 

thought needs to be given to the unintended consequences of the development of 

those alternatives. In our specific case, an analysis is called for of the impacts that 

the triple threat of ethanol support in the U.S. (consumption mandates, ethanol import tariffs, and price subsidies) has had on corn prices and in turn costs for livestock producers. We know that there are many world-wide demand and supply factors that have influenced corn prices over the past 5 years—what we need is a recognition that ethanol has played a part in the contraction of the country’s livestock 

industry, that there are and will continue to be implications for meat consumers in 

the form of higher prices, and ultimately, we need an honest discussion about what 

our country’s strategy is for getting beyond corn-based ethanol. 

Our Future 

Pork production is a major source of job creation in this country. Iowa State University has estimated that a 100 million gallon ethanol plant in Iowa uses 37 million bushels of corn per year and directly employs 80 people. The same 37 million 

bushels of corn made into feed and fed to pigs in a farrow-to-finish operation directly employs 800 people! Add to that the hundreds of additional jobs created in 

the meat packing, processing, food wholesale and retail sectors, and exports, and 

one realizes the importance of livestock production in producing economic value and 

creating good jobs in this country. 

At The Maschhoffs, we are planning for the sixth generation of family members 

to carry on the tradition of pork production in the Midwest to support (and grow) 

the thousands of jobs dependent on livestock and meat production in Illinois and 

beyond. We are concerned with the many regulations at all levels of government 

that continue to pose threats to our business. Those include business, income and 

estate taxes; environmental permitting; legal and regulatory intrusions into business contracting; food safety regulations; compliance with nine state sets of workers’ 

compensation laws; and in some locations, a failing transportation infrastructure. 

There are other issues as well that we have to deal with on a daily basis: access 

to affordable capital to finance our business; threats from anti-livestock and strident 

animal welfare groups; restrictions to free trade; the costs of energy and health care; 

not to mention the availability and cost of our main input, corn. I joke with my four 

children that in order to keep this business going, we are going to need them to 

study law, medicine, business and psychiatry! In spite of the numerous threats to 

our business, we remain optimistic because we are engaged in agriculture in a part 

of the country that is best suited to a combination of crops and livestock production. 

We benefit from a rare combination of soils and climate that are the envy of farmers 

around the world and that have given us a tremendous comparative advantage in 

animal agriculture. 

We love what we do and we are proud to be involved, along with hundreds of Midwestern farm families, in the noble endeavor of feeding people throughout the 

United States and around the world. We ask that the Congress and the Administration work to maintain a business climate and regulatory environment that allows 

us to focus on what we do best—producing pork.

17

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The CHAIRMAN. Thank you very much. 

Mr. Brenneman. 

STATEMENT OF ROD K. BRENNEMAN, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, SEABOARD FOODS LLC, SHAWNEE 

MISSION, KS 

Mr. BRENNEMAN. Mr. Chairman, Ranking Member, and Members 

of the Subcommittee, thank you for the opportunity to appear before you today. My name is Rod Brenneman, and I am the President and CEO of Seaboard Foods. 

I have provided the Subcommittee with a more detailed testimony for the record. Seaboard Foods is a vertically integrated pork 

producer and processor, currently ranking as one of the top five 

pork processors and producers in the United States. 

Mr. Chairman, Seaboard Foods has experienced both the up-anddown cycles and the corresponding challenging economic conditions 

facing the pork sector firsthand at every level: hog production; 

processing; marketing; and international trade. Many issues 

threaten the economic viability of the pork sector, among them escalating input cost for feed, artificial and unwarranted barriers 

that hinder international trade, and increased regulation such as 

the rule proposed by the Grain Inspection, Packers and Stockyards 

Administration. 

In mid-2008, corn prices were nearly 150 percent above 2007 

prices. Some said that 2008 was an anomaly. Unfortunately, today 

the U.S. pork industry again faces rising input costs, most notably 

historically high corn prices that are double April 2010 levels and 

surpassing even 2008 levels. Corn prices have been above $7 all of 

April, with no signs of relief. Although there are several reasons for 

the increase in feed prices, paramount among them is the determined government policies to promote the use of corn for ethanol. 

These policies need to be reevaluated and, in my opinion, completely changed. When roughly 40 percent of the corn crop is used 

to produce fuel instead of animal feed or food production, it is difficult for anyone to argue that the policies have had no impact on 

food prices, and there are many studies that support this view. 

The United States is the world’s largest pork exporter and the 

third largest pork producer, trailing China and the European 

Union. As one of the most efficient in the world, the U.S. pork industry can be competitive in world markets, but our producers and 

processors can only do so with a level playing field and the elimination of unjustified barriers to trade. We must resist protectionist 

sentiment in managing our own trade issues and encourage our 

trading partners to act in kind. 

We do best when markets are allowed to function without market-distorting subsidies, high tariffs and quotas, and non-scientific 

barriers that inhibit the free flow of products. 

In addition to addressing trade barriers, we must take advantage 

of all prospective trade opportunities. The three pending free trade 

agreements with Korea, Colombia, and Panama represent significant long-term growth markets for the U.S. meat industry. 

Finally I would like to discuss the GIPSA proposed rule, which 

is the most troubling and problematic government action I have 

witnessed during my career in the pork industry. Simply put, the 

22

rule, if implemented as proposed, would unravel the substantial 

progress and innovation achieved by hog producers and the processing industry during the last several decades. In my opinion, this 

proposed rule goes well beyond the scope of the mandate in the 

farm bill that was passed by Congress. Much of the proposed 

progress in the pork sector during this time has come about because of close working relationships that have evolved between hog 

producers and processors. 

At Seaboard, although we are largely vertically integrated, we 

still have close relationships with producers. Those relationships 

are the force that drives the innovation that enables the industry 

to deliver to consumers the products they demand. 

It is both ironic and disconcerting that GIPSA would propose a 

rule that threatens the use of marketing agreements, tools that 

RTI International, in a study commissioned by GIPSA and completed in 2007, identified as providing substantial benefits for producers, packers, and consumers. The GIPSA rule, however, threatens the use of those agreements because of the legal liability it 

could impose not only on processors, but also swine contractors who 

use such agreements. 

In conclusion, I have three recommendations for the Subcommittee to consider: 

First, encourage the Secretary of Agriculture to provide an opportunity for review and comment on the economic impact analysis 

currently being done by the Chief Economist regarding the GIPSA 

rule. 

Second, encourage and work with the U.S. Trade Representative 

to finalize and pass the three pending free trade agreements with 

Korea, Colombia, and Panama, and work to open export markets 

to U.S. pork, particularly China, which continues to impose nonscience-based restrictions on U.S. pork. 

And finally, look critically at eliminating the current Federal 

support for corn ethanol to ensure the pork industry and consumers are not negatively affected to the benefit of the mature corn 

ethanol industry. 

Thank you for the opportunity to appear before the Subcommittee, and I am happy to answer any questions that you 

might have. 

[The prepared statement of Mr. Brenneman follows:]

PREPARED STATEMENT OF ROD K. BRENNEMAN, PRESIDENT AND CHIEF EXECUTIVE

OFFICER, SEABOARD FOODS LLC, SHAWNEE MISSION, KS 

Mr. Chairman, Ranking Member, and Members of the Subcommittee, thank you 

for the opportunity to appear before you today. My name is Rod Brenneman and 

I am the President and CEO of Seaboard Foods. Seaboard Foods would like to express our appreciation to the Subcommittee for holding this hearing on the state of 

the U.S. pork industry. 

Seaboard Foods is a vertically integrated pork producer and processor, producing 

and selling fresh, frozen and processed pork products to further processors, food 

service operators, grocery stores, retail outlets and other distributors in the United 

States. Internationally, Seaboard sells to those same types of customers in Japan, 

China, Mexico, Russia, Korea and many other foreign markets. In 2010, the U.S. 

pork industry exported over 20 percent of the total pork produced and Seaboard’s 

amounts were in excess of this overall average at approximately 27 percent. 

The pork processing business is highly competitive and capital intensive. In 1995 

Seaboard Foods invested over $150 million to open a state-of-the-art packing and 

23

processing facility in Guymon, OK. To operate that plant at full capacity requires 

approximately $75 million in working capital. 

Our processing facility in Oklahoma employs approximately 2,300 people, and we 

also market all of the product for a similar sized facility that is located in Missouri. 

These two facilities have a combined processing capacity of over 10 million head per 

year—representing about nine percent of the U.S. slaughter volume. 

Seaboard Foods’ live production facilities are located in Oklahoma, Kansas, Texas 

and Colorado, and are supported by our six centrally located feed mills. These facilities consist of genetic and commercial breeding, farrowing, nursery and finishing 

buildings. Seaboard Foods raises approximately four million hogs each year, making 

Seaboard the second largest hog producer in the United States. Our facilities consume more than 40 million bushels of corn and milo and over 350,000 tons of soybean meal per year. 

Mr. Chairman, Seaboard Foods has experienced both the up and down cycles and 

the corresponding challenging economic conditions facing the pork sector first-hand 

at every level—hog production, processing, marketing, and international trade. 

Many issues threaten the economic viability of the pork sector, among them escalating input costs for feed and energy, artificial and unwarranted barriers that 

hinder international trade, and a rule proposed by the Grain Inspection, Packers 

and Stockyards Administration that would reverse more than 30 years of progress 

and innovation driven by consumer demand. 

Input Costs 

The U.S. hog and pork production industry in 2011 is faced with rising input 

costs, with corn prices at levels that are more than double the price that they were 

in April 2010, and higher fuel expenses at the pump as you are fully aware. 

Corn is estimated to account for upwards of 70 percent of feed grains in pork production and soybean meal accounts for another 20 percent of the feed. In mid-2008, 

corn prices were nearly 150 percent above 2007 prices. In addition, soybean meal 

prices reached record levels during that same time period. Some said 2008 was an 

anomaly. Unfortunately, we find ourselves once again dealing with historic corn 

prices that have already surpassed 2008 levels. Corn prices remained above $7.00 

for the entire month of April and there are no signs of relief. We estimate our corn 

feed costs this year will be at least $85 million dollars above what we paid for corn 

in 2010. 

Last year’s corn crop was considered within the top five most productive years, 

however our supplies are at the lowest levels in 15 years and as I mentioned before 

corn prices are once again at historical high levels. Although there are several reasons for the increase in feed prices, paramount among them is the determined government policies to promote the use of corn for ethanol. This same phenomena is 

taking place around the world and is causing concerns to governments in both the 

developed and developing world and also the World Bank. This effort, while seeking 

a desirable goal which is to lower the U.S. reliance on fossil fuels, has had an unfortunate unintended consequence to the U.S. meat industry and ultimately to consumers. In fact, there are many people around the world that are being put in a 

position of not being able to afford to feed themselves and their families as a result 

of these high prices. These policies need to be reevaluated and in my opinion, completely changed. When roughly 40 percent of the corn crop is used to produce fuel 

(ethanol) instead of animal feed or food production, it is difficult for anyone to argue 

that the policies have had no impact on food prices, and there are many studies that 

support this view. 

Trade Overview 

The United States is the world’s largest pork exporter, and the third largest pork 

producer, trailing China and the European Union. Export markets have become increasingly important to the viability and economic health of U.S. pork industry as 

per capita U.S. red meat consumption has declined in recent years. Foreign demand 

for U.S. pork is growing because economic growth and rising middle class disposable 

incomes, especially in north Asian markets, are expanding at the same time the 

U.S. market faces rising food prices amid the recent recession. In this difficult economic environment, U.S. pork exports are increasingly important to maintaining the 

economic viability of our industry. 

In 2010, U.S. pork exports exceeded 1.92 million metric tons, worth $4.78 billion, 

only two percent below the 2008 record of 2.05 million metric tons and more than 

$4.88 billion. Last year, the U.S. set new export records to Mexico, Australia, Central America, the Philippines, Taiwan, Dominican Republic and New Zealand. 

The positive trend for U.S. pork exports continued in February 2011, with an increasingly large portion of total U.S. production going to international customers 

24

while returning more revenue to America’s red meat industry. For the month of 

February, 27 percent of U.S. pork production was sold outside of the United States 

with the incremental value of exports reaching $51.48 per head versus 25.2 percent 

and $43.81 last year. Total pork exports jumped 15 percent in value and eight percent in volume versus February 2010 totals. Mexico, Japan, the Hong Kong/China 

region, South Korea and Canada remain the top five export markets. 

The growth leader for U.S. pork exports in February was South Korea, which purchased a record 19,532 metric tons valued at $49.2 million as that nation continues 

to deal with product shortages driven by a major outbreak of foot and mouth disease 

(FMD). 

Trade Barriers 

The U.S. pork industry can be competitive in world markets but our producers 

and processors can only do so with a level playing field and the elimination of unjustified barriers to trade. We must resist protectionist sentiment in managing our 

own trade rules and encourage our trading partners to act in kind. We do best when 

markets are allowed to function without market distorting subsidies, high tariffs 

and quotas, and non-scientific barriers that inhibit the free flow of products. 

Despite the rebound in U.S. pork exports in 2010 which helped the U.S. meat industry weather the economic downturn at home, significant tariff and non-tariff barriers exist to expansion of U.S. pork exports in key foreign growth markets. For example, some major trading partners threaten to reject USDA export certificates, and 

demand certification of prescriptive and unscientific standards such as zero tolerance on the FDA approved antibiotic tetracycline. Additionally, these countries often 

delist U.S. meat plants because of minor clerical errors in export documentation or 

for alleged residue violations. U.S. pork sales to Russia have plummeted from 

203,000 MT in 2008 to 83,000 MT in 2010, largely due to Russia’s unfair sanitary 

and phytosanitary restrictions. 

Many promising long-term markets, such as mainland China, Taiwan and the European Union continue to restrict U.S. pork shipments based on unjustified, nonscientific import regulations which ban pork meat containing residues of 

Ractopamine hydrochloride (a safe feed additive to increase efficiency of pork production approved for use in the United States and 26 other countries) and zero tolerance for pathogens common on raw products. As of June 1, 2011, China will implement a new restrictive labeling law which will significantly increase production 

costs and in some cases prevent some producers from supplying this growing market. USDA is actively negotiating with Chinese officials to guarantee product 

traceability and minimize the additional labeling requirements. 

There are numerous smaller markets which continue to maintain bans on U.S. 

pork from several U.S. states because of the A/H1N1 virus despite the clear scientific evidence to indicate that the virus cannot be conveyed to humans through 

the consumption of U.S. pork. Many other markets require procedures and testing 

to minimize risks associated with trichinae. In the United States there is a negligible risk of trichinae as a result of high biosecurity protocols and modern production practices. 

In addition to addressing trade barriers, we must take advantage of all prospective trade opportunities. The three pending free trade agreements (FTAs) with 

Korea, Colombia and Panama represent significant, long term growth markets for 

the U.S. meat industry. Passage and implementation of the three FTAs would represent an additional $2.3 billion in meat and poultry exports and the potential creation of 29,524 new jobs, according to a white paper prepared by the American Meat 

Institute (AMI). To benefit from this potential, the Administration and the Congress 

must act now to pass and implement these agreements. Our competitors are actively 

working in these markets—if we don’t act fast to set the stage for long term export 

growth and job creation, other countries will. 

GIPSA Proposed Rule 

The GIPSA proposed rule is the most troubling and problematic government action I have witnessed during my career in the pork industry. Simply put, the rule, 

if implemented as proposed, would unravel the substantial progress and innovation 

achieved by hog producers and the packing industry during the last several decades. 

Much of the progress in the pork sector during this time has come about because 

of close working relationships that have evolved between hog producers and the 

packers. At Seaboard, although we are largely vertically integrated, we still have 

close relationships with producers. Those relationships, partnerships really, are the 

force that drives the innovation that enables the industry to deliver to consumers 

the products they demand. It is both ironic and disconcerting that GIPSA would propose a rule that threatens the use of marketing agreements, tools that RTI InterVerDate 0ct 09 2002 11:46 Jun 16, 2011 Jkt 041481 PO 00000 Frm 00028 Fmt 6633 Sfmt 6621 I:\DOCS\112-14\66439.TXT BRIAN
25

national in a study done for GIPSA and completed in 2007 identified as providing 

substantial benefits for producers, packers and consumers. The GIPSA rule, however, threatens the use of those agreements because of the legal liability it could 

impose not only on packers but also swine contractors who use such agreements. 

The GIPSA rule is also troubling for another, more basic reason. I’m not a lawyer. 

I’m a businessman who runs a pork company. But I am a citizen and basic civics 

teaches us that there are three branches of government for a reason. I think it is 

troubling when the Executive Branch blatantly ignores the Judiciary, the branch of 

government that interprets the laws. And, it is also troubling when the Executive 

Branch ignores the intent of Congress, indeed, this Committee—when it enacts 

laws. Simply put, the disdain found in the GIPSA rule for the courts and the Congress is just not good government. 

Conclusion 

Many factors influence the pork sector and I am confident that we can address 

these problems and make the industry stronger than ever. If I may, I have three 

recommendations for the Subcommittee:

• First, encourage the Secretary of Agriculture to provide an opportunity for review and comment on the economic impact analysis currently being done by the 

Chief Economist regarding the GIPSA rule;

• Second, encourage and work with the U.S. Trade Representative to finalize and 

pass the three pending free trade agreements with Korea, Colombia and Panama and work to open export markets to U.S. pork, particularly China, which 

continue to impose non-science-based restrictions on U.S. pork; and

• Finally, look critically at eliminating the current Federal support for corn ethanol to ensure the pork industry and consumers are not negatively affected to 

the benefit of a mature corn ethanol industry.

Thank you for the opportunity to appear before the Subcommittee. I am happy 

to answer any questions you may have.

The CHAIRMAN. Thank you, Mr. Brenneman. 

We will now move into questions. The chair would like to remind 

Members that they will be recognized for questions in order of seniority for Members who were here at the start of the hearing. 

After that, Members will be recognized in order of arrival. I appreciate the Members’ understanding of this. I would like to ask the 

first question, and then we will move on to the Ranking Member 

and on down the line. 

I will direct my question to Mr. Wolf, but if the other two witnesses would like to answer as well, after Mr. Wolf, feel free to 

chime in. 

Mr. Wolf, if we were to reach a critical situation prior to the next 

harvest where some hog producers could not have enough access to 

corn to feed their animals, what options would producers have and 

what kind of chaos would physical feed shortages create? 

Mr. WOLF. Thank you, Mr. Chairman, for that question. It is a 

concern that the industry has been looking at for quite some time, 

and we feel it is a valid concern. A scenario that has been put to 

us, or an analogy, is that it is like the bottom of a lake, it isn’t 

smooth and we are going to have pockets. Parts will probably run 

out of physical availability of feed, not the whole industry. 

If we don’t know that this is coming, it could be a catastrophe. 

We could always look at other commodity feeds that we can try to 

blend in, maybe some wheats or some other products. But the problem is this year we have the perfect storm where we are short on 

all commodities. So what we are trying to do is ask the Congress 

and USDA to look ahead as far as they can and anticipate to what 

degree they can, with the help of the pork industry, to make sure 

that we don’t end up there; because the only availability that we 

26

would have to us if we run out of feed is to go ahead and harvest 

early at a lighter weight, just to make sure that the animal welfare 

is good. 

The CHAIRMAN. Anybody else? 

Mr. BRENNEMAN. I would just comment from a processing standpoint, if pigs were required to come in early, there is a limitation 

to how small they can be processed. The plants are capable of accommodating some variation in size, but they can’t accommodate 

complete variation in size. So there would also be some limits on 

the processing side. 

The CHAIRMAN. As a follow-up, if you have to harvest early, what 

does that do to, like, the normal annual cycle of production and 

then, I guess, the cost or the price? 

Mr. BRENNEMAN. Well, I will talk about it from a product standpoint. And if they come in at a much lower weight than what is 

traditional or expected, it causes a number of concerns. One would 

be from the consumer standpoint and our customer standpoint. 

Their expectations are for certain size of products in the marketplace. If the pigs come in early, they are obviously not as heavy 

and the product sizing would change, so that could have some impact. But, you know, overall, it will have a significant cost impact 

as well, because when you look at the capital investment required 

in a processing and a production industry, quite frankly, when you 

shrink the amount of pounds that go through facilities that were 

designed for much more poundage, the net cost, the fixed-cost component of that is quite significant. 

The CHAIRMAN. Anybody else? 

Ms. MASCHHOFF. I was just going to comment on the throughput 

factor which Mr. Brenneman just stated. When you have a system 

of our size, and any size it is designed to run, it normally takes 

51⁄2 months to bring that pig to the correct market weight. Under 

a supply contract agreement, which we have, we promise to deliver 

a certain number of animals at certain weights. We have maybe a 

10 pound window. We strive very hard to make sure that we meet 

that targeted weight for our customers. And all of a sudden, everything gets thrown out of whack and the entire system has to—the 

ripple effect goes on for a long time. 

The CHAIRMAN. Thank you. Mr. Cardoza.

Mr. CARDOZA. Thank you, Mr. Chairman. 

I just want to state for the record that I support your views on 

the GIPSA rule. I think it is of grave concern to the industry, and 

we are working on it. 

With regard to antibiotics, in the last session of Congress I was 

on the Rules Committee, and the Rules Committee, in my opinion, 

conducted a hearing outside of its jurisdiction on the question of 

animal antibiotics. I was opposed to it then, and I remain opposed 

to it. 

I think we came to—or the Committee erred in its judgment in 

moving in that direction. But I would like to here, in the appropriate committee, explore your views on the dissemination of antibiotics and your views how it affects your product and consumers, 

and let you all have an opportunity to make a comment on that 

question. And, as well, you might want to comment on how you feel 

27

it impacts your competitiveness with regard to other countries that 

have banned antibiotics. So whoever would like to start. Mr. Wolf. 

Mr. WOLF. Thank you. I appreciate that question, too. It is another issue that seems very timely today. We have had a lot of discussion looking at it. Antibiotics provide a special place in our toolbox for animal production, livestock production. They are a necessary product to have available from an animal welfare standpoint 

to assure that these animals are cared for to their maximum potential. We need to have them available, because it also provides a 

means of increasing efficiency to the animals to protect them so 

that they don’t get unhealthy or get sick, and that will help out as 

far as our carbon footprint or our cost production, whatever; it is 

just going to be a good issue there. 

So it is important that we have these available, understanding 

that today the producers are certified through our PQA program 

that assures that proper use of the antibiotics are done, they are 

used very judiciously and through a veterinary directive. 

So I will stop with that and allow Julie to go from there. Thank 

you. 

Mr. CARDOZA. Are you aware of any knowledge that the antibiotic use in animals is contributing to human resistance to the antibiotic production? 

Mr. WOLF. At this time I haven’t seen, or our industry hasn’t 

found, any study that can actually attribute that to that—to an 

animal. 

Mr. CARDOZA. Thank you. 

Ms. MASCHHOFF. I guess I would agree with Mr. Wolf’s comments. Antibiotics are so critical for us. But remember, they are always used under a veterinarian’s care. We employ two full-time 

vets and work with an additional dozen vets in different states, in 

different areas, to make sure that we are always using antibiotics 

as a tool to its best advantage and to our animals’ advantage. 

We participate in a program called Safe Feed/Safe Food, and the 

bottom line and the whole goal of this program is that the healthier 

the animal is when it comes to market, the healthier food product 

is going to be going to our consumers. And ultimately that is our 

goal. We want to make sure that everything we do produces a safe 

product in a humane manner for today’s consumers, and antibiotics 

are critical to allow us to do that. 

Mr. BRENNEMAN. I would just echo what they have said, but all 

of our antibiotics are administered under the direction of licensed 

veterinarians. I am not aware of any studies that connect, as Mr. 

Wolf said, that connect the use of that with immunity or whatever 

from humans. 

But the other thing, it is a very delicate issue because you get 

into definitions of therapeutic versus subtherapeutic versus antibiotics used for growth hormones. 

And, the other issue that Mr. Wolf mentioned is the animal welfare issue. We want to make sure we have the tools available to 

us to be the very best that we can from an animal welfare standpoint, too. I think we need to be careful about drawing too many 

lines in the sand with tools that are available to us to treat the 

animals the very best that we can. 

28

Mr. CARDOZA. Thank you. Very briefly, are there alternative 

feeds that you can employ? In my area, when I was growing up, 

for our hogs we fed them sweet potatoes, because that is what we 

had. My grandparents were sweet potato growers. Are there alternatives that you can use in light of this corn shortage as a temporary stop-gap? 

Ms. MASCHHOFF. Well, there is a reason you don’t see grass-fed 

pork on anyone’s menu. So there are only certain things, because 

a pig has a single stomach and is a monogastric animal. So there 

are certain limitations to what we can do with ethanol byproducts. 

They can only be used to substitute to a very small degree what 

corn would normally provide. But we are limited. And we don’t 

mind that, because through our extensive research with nutrition, 

we have found that the carcass requirements do change as you 

change the feed. And obviously if we want to continue to supply 

what consumers are looking for, we have to be very cognizant that 

there are certain feed stuffs that we must continue to use in the 

pork industry, and corn still remains the feed of choice. 

Mr. CARDOZA. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you Mr. Cardoza. We will now move to 

Mr. DesJarlais. 

Mr. DESJARLAIS. Thank you, Mr. Chairman, and thank you to all 

of our witnesses today for your testimony. 

Mr. Wolf, we all hear frequently from our constituents about the 

burdensome environmental regulations created by local, state and 

Federal authorities. Could you take a moment and expand on your 

testimony about how your particular sector is affected? 

Mr. WOLF. Thank you. I appreciate that; the question, too. The 

regulations that are being forwarded out by EPA are getting 

stronger all the time, the Clean Water Act and the Clean Air Act 

that are now coming forward. There are certain limitations to agriculture that just can’t be taken care of, and a good example would 

be the dust rule, the proposed dust rule. Anybody who has been in 

rural country this time of year, during planting, realizes that you 

just have no control; that is just part of the factors that are going 

on. So we feel that there is getting to be some over-burdensome 

regulation being proposed by EPA, and we are working with the 

EPA to prevent that from affecting the industry today. 

Mr. DESJARLAIS. Would anyone else like to add anything to that? 

Mr. BRENNEMAN. No. I guess, just generally speaking, we would 

be—we want to make sure that any new regulations, of course they 

all add costs, are based on sound science and not emotional issues 

or other issues that might be out there. 

Ms. MASCHHOFF. I would go so far as to say that regulation 

should be based on sound science and the courts, because we know 

that the recent Fifth Circuit Court has ruled that we do not need 

permits as confined animal feeding operations that do not intend 

to discharge. And yet in Illinois, we are fighting a battle to not 

have to pay for very, very expensive permits which the courts have 

ruled we do not need. And Region 5 seems to feel that they have 

the right to mandate permits, and we are under a court system 

that says we do not need the permits. 

So as producers we see this type of tug of war going on, and it 

leaves us with a lot of uncertainty and a lot of frustration in what 

29

EPA is trying to accomplish and what good they are trying to do 

for American farmers. 

Mr. DESJARLAIS. Okay. Thank you. Ms. Maschhoff, you mentioned the Maschhoff super-pig, basically. I will direct this question 

to you. 

Ms. MASCHHOFF. I like that term. I will have to write that down. 

Mr. DESJARLAIS. Some groups are advocating a legislative ban on 

the use of antimicrobials for growth promotion and feed efficiency. 

What impact would this legislative ban have on development of 

antimicrobial resistance and what impact would this legislative ban 

have on animal health? 

Ms. MASCHHOFF. Well, let me give you the blond version, because 

when we talk about antimicrobial resistance, what we are doing 

when we feed antimicrobials, we are really just trying to regulate 

the floor in the pig’s gut. There is a very nice way to put it, but 

that is what it does. And what we are doing is, we are allowing 

that animal to take up feed more efficiently. It is allowing that pig 

to take all that energy and put it right towards growing. It means 

they don’t have to use it to fight off different diseases, it doesn’t 

sidetrack what that animal is doing as it grows every day. So those 

antimicrobials are very important in making sure our animals are 

eating and growing efficiently. 

What that means is they need less corn. We have a corn shortage. It reduces our carbon footprint. It just seems to be a win-win 

situation all around, because there is no negative effect when that 

animal is harvested. 

Mr. DESJARLAIS. Mr. Wolf, you made the statement that the rising costs are due to the competition for grain in the production. 

The availability and price of feed obviously has a huge impact on 

the business plan. Do you have a plan to address what many are 

expecting to be very short supplies on feed later this year? 

Mr. WOLF. Thank you. Personally, in my personal situation, we 

are diversified, so we grow our own grain; so we are fortunate from 

there. But from an industry standpoint, let me tell you, most of our 

industry has tried to forward price product, which it works out 

pretty good until actual physical availability becomes limited. So 

our concern is today that, although our producers have contracted 

and protected againist a price rise, whether or not the companies 

can fulfill on the physical delivery of these grains. So there is a 

real concern there. 

And what can you do? There isn’t a lot that the industry can do. 

I mean, if you can’t take physical delivery, which most of the industries can’t take that kind of quantity, it is just going to be difficult. 

Mr. DESJARLAIS. Thank you. Thank you, Mr. Chairman. 

The CHAIRMAN. Mr. Scott. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Last Congress, when I had the privilege of being the Chairman 

of this Subcommittee, there were three issues that seemed to dominate the debate. One, of course, was the dairy economy. And I 

won’t get into that today, though, because the last time we did 

that, we had a bunch of protesters dressed in cow uniforms running through the halls of Congress. 

30

But the other two issues on which we spend a majority of our 

time have great relevance today. One is the issue of antibiotics and 

the use of antibiotics; and the other, of course, is the GIPSA rule. 

I will begin with the antibiotics issue with you, Mr. Wolf, if you 

could please explain to the Committee in what ways you use antibiotics in your operation. 

Mr. WOLF. Thank you, Mr. Scott. We talked a little bit earlier 

about the antibiotics being in our toolbox as a tool to use. And the 

tools that are available, with the whole idea behind our toolbox, is 

to provide the safe, nutritious product that the pork producers do, 

so the consumer can be assured that when they buy a pork product, that it is the best in the world. And so the antibiotics that we 

use in my particular operation are to assure the safety. 

Now, whether that is to use it on a preventative basis or to use 

it to medicate animals that are actually sick, but it is very judicious. The thing to remember is that these antibiotics are expensive. 

Mr. SCOTT. Let me ask you, in your estimation, would it cost 

more to treat an animal after it becomes ill than it would to engage 

in preventive care? 

Mr. WOLF. Yes, sir; yes, sir. An animal, once it becomes sick, not 

only does it take more antibiotics to bring it around and make it 

more healthy, but that animal will never recover 100 percent and 

become as efficient as an animal that never has been sick before. 

So there is more cost. 

Mr. SCOTT. I went over to Europe and looked at the Danish system over there. What effects would you anticipate, either positive 

or negative, from a move to a system like the Danish implemented 

several years ago? 

Mr. WOLF. Well, the Danish program points out exactly what we 

have been talking about, the entire group here today, is that they 

have implemented the non-antibiotics except for under a treatment 

situation. And what we have seen is that they have actually increased their use of antibiotics. It has taken more antibiotics to 

treat these animals than if they use them on a proper preventative 

basis. And from what our studies have shown, too, is they haven’t 

seen any human change after the antibiotics as far as bacterial resistance, so we see that it hasn’t done anything. 

Mr. SCOTT. So just to make sure we are clear, would you say the 

Danish system is more positive or more negative? 

Mr. WOLF. Negative, sir. 

Mr. SCOTT. All right. Very good. 

Ms. Maschhoff, I would like to ask you a few questions about 

GIPSA. I have been rather outspoken on that, and I certainly feel 

very concerned about that. I stated many times last year, in my 

opinion it far exceeds the scope of what we mandated in the last 

farm bill. And we were clear in the House and we were—so, but 

anyway, I spoke very strongly on that. 

It is my understanding that your business model requires you to 

rely heavily upon contractors; is that correct. 

Ms. MASCHHOFF. That is correct, sir. 

Mr. SCOTT. And that the rules proposed by GIPSA would have 

a negative effect on your business; is that correct? 

Ms. MASCHHOFF. We believe they would be. 

31

Mr. SCOTT. Can you explain to the Committee how and why that 

is the case? 

Ms. MASCHHOFF. Certainly. Thank you for that opportunity. 

Under the Maschhoff system, we have worked out a business model 

where a contract on a production side is entered into, negotiated, 

and agreed to between another independent family farmer and ourselves. That family farmer constructs a building to our specifications and then raises the animals under our protocols until it is 

ready for market weight. They have a guaranteed return every 

month because of their production contract with The Maschhoffs. 

Because of the strength of that contract, they are allowed to go to 

their banker, receive the funding necessary to put up a barn, which 

could cost anywhere from $800,000 to $1 million based on the 

strength of that contract. So that becomes a very important part 

of their balance sheet and their negotiations with the bank. 

In turn, now that we have those animals on feed, so to speak, 

we have to ensure that we have a home for that Maschhoff superpig. So we turn around and negotiate with our end-customers in 

the packing industry. And depending on what each packer needs 

for their particular customers, our pig is worth a different amount 

to them, and we enter into a supply contract to ensure that we 

have a home for that pig. That contract is what allows us to receive 

financing from the banking community. 

If the GIPSA proposed rule goes into effect, all of a sudden the 

mere fact that you have a contract raises suspicion and you have 

to defend that contract. And, oh, I don’t know, but I bet there is 

a lawyer out there just somewhere, waiting to create a lawsuit to 

see if they are really fair or not. 

But remember, every contract is negotiated on the strength of 

what each party brings to the table. We have spent 10 years and 

over $10 million to create the genetic material that makes up the 

Maschhoff pig today. We have invested millions more in making 

sure that we have barns that allow for the best, most efficient 

growth environment for those animals. How do we capture that 

type of investment if we can’t negotiate a contract that lets our pig 

stand alone and become worth perhaps just a bit more to someone 

in the supply chain? 

Mr. SCOTT. Thank you very much. That was a very good answer 

and very important to get those points out relative to the GIPSA 

rule and the impact it has in our business. And I concur with you 

100 percent. 

Mr. Chairman, if I may, I know my time is over, but I just have 

one more point. And especially I want to ask this point, since Ms. 

Maschhoff’s operations are in my State of Georgia. And I would 

like to ask you about the corn and the cost of feed, particularly in 

Georgia, where we don’t happen to grow much corn. Can you explain to the Committee the price pressures that you are feeling at 

present and where you expect that to go in the future? 

Ms. MASCHHOFF. Well, as you probably know, Georgia only produces about 35 million bushels of corn, 1⁄2 of 1 percent of the entire 

U.S. corn crop. Because of the competing interest of ethanol in the 

poultry industry, it is very difficult to find corn; and as a result, 

we typically have to bring it in from other corn states, because 

Georgia is basically corn-deficit. As the price continues to raise, it 

32

does force us to balance that ration and change it as best we can, 

while still providing for maximum nutrition and animal welfare. 

But it is continually a concern, and it does keep us awake at night, 

as to where the actual commodity will be coming from in the future. 

Mr. SCOTT. Thank you. And, Mr. Chairman, thank you for your 

kindness in giving me that extra time. 

The CHAIRMAN. My pleasure, Mr. Scott. We will now move to Mr. 

Ribble. 

Mr. RIBBLE. Thank you, Mr. Chairman. Thank you to the panel. 

As a former business owner myself, it is always good to talk to 

some other business owners. So thanks for being here, thanks for 

taking time away from your companies to come and talk to us 

today. It is really important that you are here, and I wanted you 

to know how much I appreciate it. 

Mr. Wolf, since you are from the grand State of Wisconsin, as I 

am, I would just like to address my first question to you. Hog production in Wisconsin has dropped by over 1 million head. Can you 

talk to us a little bit about what has caused that drop-off and what 

the economic impact has been? 

Mr. WOLF. Well, thank you, Mr. Ribble. I appreciate you being 

here from Wisconsin, too, and taking time away from your business 

to run and represent us here. It is a great honor. In Wisconsin, 

there was a time when I started 35 years ago, that we were a large 

pork production state. A number of things have happened over the 

years. Number one, of course, we lost our packing industry. It has 

become more efficient, and of course we understand that. 

But the second part of it is the competitive disadvantage that 

regulation has put Wisconsin in as far as pork producers, coming 

down from the EPA and DNR as far as costs that other states 

around us don’t have to compete with; and therefore, it has just 

been unfavorable for producers to locate in Wisconsin. 

Mr. RIBBLE. Okay. When you talk about the EPA, can you maybe 

cite some specific examples? 

Mr. WOLF. Well, the only couple that come right to the top of my 

head is that as far as our nutrient content is established at a little 

different rate than other ones are. As far as determining CAFO 

numbers, they count them at a different rate. So there are a number of issues like that that just makes it—on a competitive nature, 

if you had your choice and you are going to run a business, which 

you have, you are going to go to the one place that has less regulation. 

Mr. RIBBLE. Very good. Thank you. 

Ms. Maschhoff, six generations, that is impressive. Not a lot of 

family businesses stay around for that long, so congratulations to 

your family. 

You mentioned in your testimony that there have been—one of 

the threats to your business have come from anti-livestock and strident animal rights groups. Can you talk to us a little bit about—

you mentioned it briefly in your testimony, but I would like you to 

go a little bit further—on the difference today on how you are 

treating animals than maybe three generations ago, and what the 

improvements have been in the quality and safety of your pigs? 

33

Ms. MASCHHOFF. Well, every aspect of animal care has changed. 

This is not your grandpa’s farm anymore. Just like every other industry in this country, we have moved forward, thanks to technology and science-based decision-making. So our housing has 

changed based on science, our nutrition requirements have 

changed. 

One example, which I think is very unique, is as we study how 

the genetic lines that we use grow, we actually ultrasound that animal every week of its life. So we actually have a model of how it 

grows every single week; how much weight it gains; where the back 

fat is deposited; how much muscle is being maintained, et cetera. Based on that type of technology, we create 27 different rations to 

feed that animal over the course of the 51⁄2 months that it is growing. And one ration may last 3 days, one ration may last 2 weeks, 

depending on what that animal needs at every stage of its growth 

curve. 

That is the way science has guided and changed the way we 

raise animals in this day and age. And that is one of the things 

that we think makes The Maschhoff system unique, the fact that 

we are not afraid to invest in technology, because we believe those 

changes will allow us to be more competitive in the marketplace. 

Mr. RIBBLE. Well, why do you suppose the animal welfare groups 

are so concerned, then? Is there a communication problem, is there 

a lack of understanding? 

Ms. MASCHHOFF. There is a lack of people eating meat, from 

their perspective probably. But in terms of a—there probably is a 

communication issue. We need to continue to have opportunities to 

explain that everything we do is guided by science. Sometimes 

those technical answers aren’t the most entertaining and so they 

get lost in the shuffle of everyday news. But we obviously do need 

to do a better job communicating. But there are a great many people who try to use the banner of animal welfare when, really, they 

are just actually people who believe in animal rights and believe 

in taking away the consumer’s choice to have meat in their diet. 

Mr. RIBBLE. Okay. Thank you very much. 

Mr. Brenneman, thanks for being here. In your testimony you 

said, ‘‘I am not a lawyer, I am a businessman. But I am a citizen, 

and basic civics teaches us that there are three branches of government for a reason. I think it is troubling when the Executive 

Branch blatantly ignores the Judiciary, the branch of government 

that interprets the laws. And it is also troubling when the Executive Branch ignores the intent of Congress, indeed this Committee, 

when it enacts laws. Simply put, the disdain found in the GIPSA 

rule for the courts and the Congress is not good government.’’ Congratulations for writing that paragraph. I wish I had said it so accurately and so correctly. Welcome to my world. 

My question, though, really relates—I just wanted to congratulate you on that statement. My question relates to trade. What is 

the cost of waiting? What is the big deal if some of these agreements take a little bit longer so that their—as the Administration 

would tell us, more thoroughly conceived? 

Mr. BRENNEMAN. Well, it is hard to put a number on the cost, 

and I apologize that I can’t do that. Each one of them would be 

looked at slightly different. But the export markets are increasVerDate 0ct 09 2002 11:46 Jun 16, 2011 Jkt 041481 PO 00000 Frm 00037 Fmt 6633 Sfmt 6601 I:\DOCS\112-14\66439.TXT BRIAN
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ingly important to the pork business today, more so than any other 

time. We rely on the export markets. When we see one or more export markets close, such as we did back in 2009 when H1N1 hit, 

it had a significant impact on the U.S. pork industry. So while I 

can’t give you an exact number I know there are a lot of statistics 

out there, and each one of the agreements would be different. It 

is—there is no doubt it is extremely significant to our industry. 

Mr. RIBBLE. Well, thank you very much for your testimony. And, 

Mr. Chairman, I apologize for going over a little bit. 

The CHAIRMAN. That is okay. Mr. Schrader. 

Mr. SCHRADER. Thank you, Mr. Chairman. A pleasure to be at 

the hearing. 

As a veterinarian, it is nice to hear the livestock industry is alive 

and doing fairly well, albeit with some challenges. And I associate 

myself with the remarks of most of the Members of the Committee 

on many of the issues you face, whether it is trade or GIPSA rule 

and antibiotic issues. I guess as a veterinarian, just a quick line 

of questioning. And maybe, Ms. Maschhoff, you could respond if 

that is all right. You already talked about the life cycle of the pig 

from birth to the packer is what? 

Ms. MASCHHOFF. I am sorry, what is the question? 

Mr. SCHRADER. The life cycle of your pig is? 

Ms. MASCHHOFF. Five and a half months to 6 months. 

Mr. SCHRADER. And you also testified that that animal is in pretty good shape. You even get that ration fine-tuned to maximize 

that individual’s well-being, I assume. 

Ms. MASCHHOFF. They definitely get more vitamins than I do, 

probably. 

Mr. SCHRADER. I suspect they eat better than I do. 

Ms. MASCHHOFF. They probably do, unless you have a personal 

chef like our pigs have. 

Mr. SCHRADER. Exactly. I think that is a very good point. If we 

ate as well as our animal friends, we all would be less obese and 

in better shape, quite frankly, at the end of the day. 

The antibiotics are misconstrued, oftentimes, by people as they 

talk about it as a growth promoter, and people immediately jump 

to steroids, people immediately anthropomorphize about what you 

are doing. I think you testified pretty well, but the antibiotics are 

to decrease the stress and improve the life quality of that animal 

while it is here on this planet; isn’t that correct? 

Ms. MASCHHOFF. That is absolutely correct. 

Mr. SCHRADER. An animal that is stressed and upset, do they 

gain weight, do they feel good? 

Ms. MASCHHOFF. No. They basically go off feed and water. And 

by walking those pens every day, you can immediately tell which 

animals need attention. 

Mr. SCHRADER. And so your goal in your operation is to minimize 

that stress, not just from a financial standpoint, but for the wellbeing of that animal, I assume? 

Ms. MASCHHOFF. Yes. 

Mr. SCHRADER. What antibiotics do you use on your farm, what 

type of range in the course of your operation, if I may ask? 

Ms. MASCHHOFF. It is a very broad spectrum, and I rely on our 

veterinarians to prescribe everything for the herd health. 

35

Mr. SCHRADER. What is the withdrawal—is there withdrawal 

times in your industry? 

Ms. MASCHHOFF. Yes. Virtually every substance that is prescribed by a veterinarian would have a withdrawal period which 

we adhere to. 

Mr. SCHRADER. And what is the range in that withdrawal time? 

Ms. MASCHHOFF. It could be anywhere from 10 days to 21 to 28 

days. It varies, depending on the pharmaceutical we are using. 

Mr. SCHRADER. So that seems like a pretty reasonable amount of 

time. I think the public needs to understand that the reason we 

have those withdrawal times is to ensure the safety of that product 

when it hits their dinner table. The idea that we are going to induce antibiotic resistance borders on the absurd when we look at 

the facts and how these antibiotics are actually fairly judiciously 

used. 

In your own herd or your operation, I know there is a huge turnover given the life cycle we are talking about here. What sort of 

antibiotic resistance have you seen, if you will? You are using a 

line of antibiotics. Are you having problems in that regard? 

Ms. MASCHHOFF. We are not having a problem with antibiotics. 

Mr. SCHRADER. So the fact that we are not having any problems 

in the immediate population with antibiotic resistance would tell 

this country boy that maybe if you are not having it with the immediate population, it is kind of unlikely we are going to have it 

in the human population. The consumer is not even exposed to the 

actual antibiotic which is broken down and withdrawn from the 

animal system or from the operation long before it hits that person’s dinner table? 

Ms. MASCHHOFF. That would be logical. 

Mr. SCHRADER. Shifting real quick to the farm bill—I mean, it 

is coming up—we do have some issues and we are in a tough budget environment. I think the Ranking Member and the Chairman of 

our full Committee are committed to trying to have agriculture do 

its part. I am sure the direct payments will come under siege 

again, and that is a topic for another discussion, I guess. But what 

areas is the pork industry most concerned about that we need to 

be making sure stay in the farm bill to help this industry grow and 

thrive? Anybody. 

Mr. WOLF. Thank you. And I appreciate that question because I 

am Chairman of our Farm Bill Task Force for the National Pork 

Producer Council, and we are looking forward to that one. Probably 

the issues that come up with the pork producers are going to be 

the ones we discussed today; is the fairness and equal regulation 

so that we don’t get over-regulated. That, if anything, we go back 

to 2008 and get the five things that were requested out of GIPSA 

and get those done right; and let’s move on, and enough is enough 

on that. 

But from a forward standpoint as something that we may be 

looking at in the future is feed availability to assure that the livestock has feed availability, physical availability. And that is something that the grain industry has done a fantastic job of creating 

demand. I envy them. They have done a great job. But they have 

done a job beyond the support of supplies that we can do. 

36

We have limited, limited land and areas that we can produce 

these grains, but we just over-created demand for grain. So now we 

are going to ask the government to help and assure that we don’t 

have the welfare concerns of the livestock industry. 

Mr. SCHRADER. Good. Thank you. I yield back. 

The CHAIRMAN. I now recognize the former Chairman of the 

Committee on Agriculture, Mr. Goodlatte. 

Mr. GOODLATTE. Thank you, Mr. Chairman. I appreciate your 

holding this hearing. 

Ms. Maschhoff, your written testimony mentions regulatory efforts to impose requirements for the treatment of non-ambulatory 

livestock at processing facilities. Can you take a few moments and 

expand on that subject and describe how the pork sector would be 

affected? 

Ms. MASCHHOFF. Yes, thank you. In the pork industry when a 

pig moves off of a truck, if it gets winded, if it gets tired, it needs 

to lay down and rest. It doesn’t have any—there really is no correlation between that animal resting and that animal’s health; it 

just gets tired. And studies have shown over and over and over 

that when that animal is allowed to rest that 30 minutes, or whatever the case may be, it is fine. 

The current regulation that Representative Goodlatte is referring 

to would mandate that if that animal lays down to rest, it is nonambulatory permanently and therefore should be removed from the 

food supply. This would erase 6 million pounds of pork out of the 

food supply, just like that, with no compensation to the farmers. 

That is not exactly based on sound science. So that is a proposed 

area that has us greatly concerned. 

Mr. GOODLATTE. And no risk whatsoever to consumers because 

the meat is in no way tainted or affected by any kind of illness. 

So you would advocate, as would I, that there would have to be 

some kind of diagnosis of an illness before the animal would be——

Ms. MASCHHOFF. That is correct. If there was presence of a fever, 

an elevated temperature, for example, that shows that that animal—a physical symptom that a veterinarian can say, yes, this animal is sick. But simply resting is not an indication of being sick. 

Mr. GOODLATTE. Do you utilize any government programs to help 

you manage the environmental challenges that you face? As we 

reprioritize our budget allocations, can you tell us more about those 

programs, including the application process and the usefulness or 

value of the programs? 

Ms. MASCHHOFF. Currently we do not use any government programs. However about 12 years ago when the EQIP, Environmental Quality Incentive Program, was allowed, we did participate 

in that program. That was a cost-share program that allowed us 

to install various equipment and improve our processes for handling the environmental aspects of our operation. 

Today our production partners have become more reliant on that 

program as our operations are fully in place now. So it has become 

more important to our production partners than to our immediate 

concerns at The Maschhoff headquarters. 

Mr. GOODLATTE. I understand that some groups—this is directed 

at Mr. Brenneman—I understand that some groups that may be 

perceived as anti-agriculture have requested the Food Safety InVerDate 0ct 09 2002 11:46 Jun 16, 2011 Jkt 041481 PO 00000 Frm 00040 Fmt 6633 Sfmt 6601 I:\DOCS\112-14\66439.TXT BRIAN
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spection Service to amend its regulations to prohibit the slaughter 

of all non-ambulatory swine, especially pigs that aren’t walking, no 

matter the reason, no matter how briefly. 

So I wonder if you could expand on what Ms. Maschhoff has said 

and explain what the practical and economic consequences to such 

a rule would be from your standpoint. 

Mr. BRENNEMAN. Certainly. As Mrs. Maschhoff said, it is many 

times just an animal that needs a rest. These are not sick animals 

and, quite frankly, they don’t threaten the safety of the food. And 

that is the one piece that I would add on to everything that she 

said before; that this is not really—we need to be careful not to 

confuse this with food safety issues and create a food safety issue 

out of this, because it has no impact on the safety of the food unless there is clearly an illness or something there. 

From a cost standpoint, it would be a significant cost to producers and, quite frankly, to processors to have to deal with that 

as well, because you have animals that come in that need the rest. 

You potentially then have an open shackle that goes—because you 

don’t—you wouldn’t be planning for those animals to go down. 

Mr. GOODLATTE. Mr. Wolf, another issue that concerns—I don’t 

have a lot of pork production in my district, very little if any, but 

I have a lot of poultry and beef cattle and dairy. And I hear a lot 

from those producers concerned about the impact that governmentsubsidized ethanol programs have on them. And one of the byproducts, as you probably know, of ethanol is dry distillers grains, 

which those promoting ethanol promote as a byproduct that helps 

to offset the loss of some of the corn from the market that my constituents argue drives up the price of animal feed. 

How do you respond to those who assert that DDGs are a viable 

feed source in place of corn? Does it work in your business? Does 

it work with pork in general, with hogs in general? 

Mr. WOLF. Thank you. It brings up an important factor that, yes, 

we have been able to bring the DDGs back to the swine market, 

although it is a limited basis on where, how much you can use it. 

It affects carcass quality, which, here again, our whole thing is on 

food safety and food nutrition integrity, so we want to be careful 

that we don’t do that. Some livestock species can incorporate it better. Beef can incorporate it better. 

The thing to remember is that out of that 56 pound bushel of 

corn, we are going to get back 17 pounds of DDGs. So the difference in numbers there is just gone. And today, even with modern ethanol production, they are telling me that they are even able 

to get more of it than that, so we are down under 17 pounds of return. So even though that part of it can be utilized, and it does 

work out okay to a limited source, it is not going to replace what 

is being used. 

Mr. GOODLATTE. Mr. Chairman, thank you very much. 

The CHAIRMAN. Thank you. And Mr. Schrader do you have any 

other questions? 

Mr. SCHRADER. I am good. Thank you, sir. 

The CHAIRMAN. I would like to thank the witnesses for their participation in this process today and for coming out and helping us 

understand the pork industry a little bit better. I hope all of you 

will consider coming back as we delve more into some of the speVerDate 0ct 09 2002 11:46 Jun 16, 2011 Jkt 041481 PO 00000 Frm 00041 Fmt 6633 Sfmt 6601 I:\DOCS\112-14\66439.TXT BRIAN
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cific issues that we touched on today. And again, on behalf of the 

Committee, I appreciate your testimony and your answering of our 

questions. 

Under the rules of the Committee, the record of today’s hearing 

will remain open for 10 calendar days to receive additional material and supplementary written responses from the witnesses to 

any question posed by a Member. 

This hearing of the Subcommittee on Livestock, Dairy, and Poultry is adjourned. 

[Whereupon, at 3:10 p.m., the Subcommittee was adjourned.]

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