In my last column, I discussed several packing plants under construction, remodeling or in planning. Since then, the economic principle that always rules over the beef chain—supply and demand—made a major change. Fed cattle supplies are tight, boxed beef prices have dropped significantly, fed cattle prices are up and packers are losing money for the first time in years.
There is all that new capacity in the works, and right now, the existing capacity is fighting over the available cattle supply. That is great for cattlemen for now, and it will last for days or weeks, depending on a lot of variables. But many people have pondered about new capacity coming on in a year or two when cattle numbers are sure to be lower. Continued drought could make the supplies lower yet.
But we have one thing going for us. The industry is making these decisions; private industry is deciding to add capacity, not the government. I note that because you and I as taxpayers are going to be on the hook for the hundreds of millions of dollars Congress pledged this year in the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 to help companies build more chip fabrication plants. The economy and chip demand surged after the pandemic; there weren’t enough chips to build cars and electronics, and panic set in.
But wait. As usual, when the government goes where it doesn’t belong, it messes up. Now, the economy has slowed down, a recession is either here or coming soon and chip makers are slowing production lines and moaning about too many chips and too much capacity. We suspect some of them will ponder canceling new plants and losing government money or going ahead to get government money and adding to the industry’s overcapacity for a number of years.
Speaking of that repulsive mix of congressional ineptitude and crafty politicians, the government is scheduled to run out of budget just about now. Just as the Inflation Reduction Act included things few people knew about, like a major attack on private-sector health insurance alongside Medicare, Congress is again contemplating a monster omnibus spending bill that will have nasty surprises in it. Congress is supposed to approve 12 different spending bills out of committee during the year after hearings and debate. Like irresponsible college students, they end up cramming everything into one monstrosity—thousands of pages—at the last minute. But politicians hide all kinds of nasty things in the monster bills, and, as famously explained by House Speaker Nancy Pelosi, they have to pass the bill to find out what’s in it.
This year, with little time left on the congressional calendar and the Democrats about to lose their House majority, rather than pass another short-term continuing resolution to deal with the Dec. 16 deadline, the Democrats want to extend the current bloated spending levels through the end of the fiscal year, Sept. 30, 2023. In addition, the parties have been fighting over irrelevant measures to attach or not attach to the defense appropriations bill.
There is another issue the Democrats would like to push through before their majority disappears. Agriculture has been pleading with the government for years to help them get farmworkers and eliminate government obstacles. Agriculture knows well the fallacy of the saying “There is no work Americans won’t do.”
Farmworker visas are a complex issue. Democrats want to give amnesty to an estimated 1 million farmworkers here illegally. Republicans want farmworkers with skills and work ethic, but they want the opportunity for citizenship to be earned over time, not just handed to illegals.
However, Republicans don’t want any immigration legislation until the Democrats stem the tide of invading illegals. The Democrats also want provisions for migrant workers to more easily sue their employers.
To complicate matters further, even Republicans who oppose granting amnesty lean toward allowing a farmworker exemption.
The current law has no seasonal farmworker H-2A cap, but they can only be in the U.S. for 10 months, a problem for employers needing year-round help. The 2021 bill the House passed would create 20,000 three-year slots for year-round farmworkers.
That bill has a complicated system that illegal farmworkers could work through to attain citizenship. One route could allow illegals to work on a “certified agricultural worker” visa for five and a half years, with the possibility of indefinite renewals. Through another route, after working 14 years, they could apply for a green card.
Time may run out in this Congress.
Also, a California court has extended the enforcement delay of the state’s Proposition 12 pork production law. — Steve Dittmer, WLJ columnist
(Steve Dittmer is the author of the Agribusiness Freedom Foundation newsletter. Views in the column do not necessarily represent the views or opinions of WLJ or its editorial staff.)
