Agriculture, Forestry & Economic Development-Senate and House

Just an FYI that you're not on you thank you are. Okay I was looking to see were. Thank your cursor in go just go to the bottom of the screen within a little box is going to pop up against the mental thank you. If you're like me instant guitar one say so. What. I could. We. I don't know what that was but John John to okay. Members of maybe we'll come to order of the joint house and Senate agriculture forestry and economic development committee gonna start out senator Cooper you got any comments tonight nothing side okay thank you all for braving the cove aired we have some business we have to take care of and going to get some updates on how this code where the epidemic is a factor not agriculture in the state of Arkansas on other issues so we're going to start out to we need to approve the minutes of the December fifth meeting. We have a motion to approve the minute second all all in favor signify by saying aye. All opposed nay motion carries. All right next on the agenda of we have some rules that we need to approve the ag department came to this these rules on produce safety problem that or prompted by the federal government might need take care of those okay. They can't hear me on the. Guide. Again it. All right. Can you all hear out there. Maybe maybe not. Hold on just a second we'll get this. Very. Hi. This kind. by hold on. In the here and do that. No. Okay the money. Okay. The problem is that this Speaker is too close to this microphone. Well done a turn this off. Right to. Yes We love technology. Or I mean putting them in wearing a hat the. Right to. Your own. Let's. They're going to be speaking to them. When we turn this one off and. Yes. Yeah member well. With the with. We yeah we by the member. Jack members were gone rate sales for about ten minutes here I'm sorry trying to get these technical difficulties worked out. Recess. Six the word whatever. This. Hello. One through thirty. Testing one two three. Ask if somebody else has. In here. I I. No less than men in in here right now in regular computer laptop or phone on on zone for this. We need to by the. Bail out. Yeah. On. Yes. Still test testing one two one three three. That's right of the. Yes there. Not to not say the one on one on there. Yeah yeah. Not yet that's right. Testing one two three. Hi. Absent OR. Can we live with that everybody. Okay. Are you all happy with that down there. Okay we ready to go now. Alright members will start this buying back up. And try this again I apologize for the technical difficulties but we all know how that goes in today's day and age our first of all to review these rules of white hall gin Marc Staal do you all want to come up in the present the proposed rules here that we need to be considered. Please enter does yourself who you're with and total. Review these rules. I'm weight hajj counsel for the agriculture department I do have mark still with me who is or Section manager over regulatory services if I get stuck with anything he'll be here to help me out John this is that we bring in your produce safety rule I'm happy to be here talking to you something about other than that camera so this this is a a a rule that the federal government has put in place and course the federal government has primary authority over this but it's one of the situations where the federal government will say to the state's stage you can administer this if you want to but you have to administer the federal rules and we felt like we would be in a better position to understand Arkansas farms in Arkansas farmers than federal government would so we chose to administer their rules so all we've done in this rule is just saying we're adopting the federal rule because that's what we have to do. We actually have two different rules in front of you the one that you are required by statute to review is our penalty matrix the enforcement response portion but since the two are tied together we do have both of them in front of you be happy to answer any questions. Okay good good you just break where Explain the real for some people that might not have it in front of them and that this that or someone in their place yes this this is a rule that the FDA enacted percent to the federal food safety modernization act which brings into like minimum standards for the safe growing harvesting packing and holding of fruits and vegetables that are grown for human consumption historically the department's efforts have been focused on produce quality as opposed to actual safety in the growing and handling of that the federal rules will put into place minimum standards for. Cleanliness making sure that nothing is contaminated in the packing growing harvesting process and of course we have a grant from the federal government to enforce this and a significant portion of the amount of that grant is actually a sub grant to the university of Arkansas cooperative extension service for them to do education outreach and training for the producers that are covered by this rule so they'll they'll be a a very good deal of informative efforts to make sure that the farmers and producers covered by the us understand the federal rules. Okay members are there any questions out here senator Cooper. Senate grant sufficient to cover what they need to do. We believe it is and I haven't spoke to the university of Arkansas about that but the the sub grant is in excess of three hundred thousand dollars and so we think that that would be sufficient that's I certainly a lot more that is put into education and outreach than most rules that most state agencies promulgated so we we think it is a specially considering this rule only covers farms that produce produce more than what with a value of more than twenty five thousand dollars per year so we only have fifty something farms fifty something produce producers that are actually going to be covered by this rule so that money should be sufficient thank you. I thank senator MALOCH you have a question. Thank you Mr chairman of. On page three under legal authority this is on a. Exhibit the two. Says Arkansas plant acted in the subsection be to be named at a later date. March marked exhibit due to this is the of I mean the department agriculture produce safety enforcement response rules. Under legal authority. All that and that should not be in there we can we construct that out okay. So do you under your implementing basically the federal rule I'm right here yes other government yes and then so. As far as hearings on any violations or whatever it to. Talk about a food safety committee of the board it is that in existence now or will that be named later now we do have a probably safety okay does it as a part of the of the plantar wart if the department plant board okay so the plant board division will be responsible for the inspections or the yes limitation and monitoring of this law yes okay alright thank you right. All right senator. Bill one may get you on here. Thirty you know of thank your own. We on the okay. Not man go back to page two on the same page Bruce was on. Near the base civil penalty it says here first level enforcement is one hundred to five hundred dollars. The base bill two years three hundred. Two or three are the lowest you're going to go no matter what if not why as the base not a hundred. We do that to give staff the plant board has given staff the ability to settle for a mid range if it does go toward before the board and the board. Can assess penalty of anywhere from a hundred to five hundred dollars but that mid ranges is where the staff has the authority to settle a case staff doesn't have the authority to settle a case four hundred dollars. So the board can assess a penalty from one to five hundred dollars okay for that but if if the producer. Doesn't want to go to a hearing and would like to settle it staff can only settle it for that mid range level that's the that's the only authority the plant board has given staff to settle a case for okay that's just if I want to get it over with and move on absolutely thank you. All right Representative makes you're recognized thank you Mr I have two questions if that's okay with me Sir of the the first question I have just make sure I understand fully what we're doing worse actually taking the rules that exist now on the federal level shifting them down to the state level so as far as producers concern they're not gonna see any new rules or regulations coming their way just who is going to be enforcing those rules and regulations that a correct characterization was going on that is correct okay and so that leads me to the my to my second question is there some point where the federal government is going to monitor your efforts and if and when would there be a case where the federal government would come in and say take a case from you or want to pull that authority back from you you go to that little bit form as as part of the grant federal government will be doing some monitoring they do this in other programs that we have not camped for example and if they come and review our case files once a year as they do in other sections they find that we have a complaint that we they feel like that we should have gone forward with him we didn't then they can say okay we're going to start investigating these types of situations with none of our other programs we've we've never had that situation occur all right thank you things from our. Senator Wallace you're recognized for a question charm to your left you mentioned that camera so I will just talk a bit about and I'm from Mississippi county I should have kept my mouth. It with all the rain we've had this year is are any look at moving those cut off dates back. at this point it would take an emergency rule to do so I have heard no talk of that in a course and ensure where under the administrative procedure ACT to adopt an emergency rule you have to find that there is imminent peril to the public health safety and welfare and so it would take an emergency rule to do that I have not heard any talk of of that occurring thank you Sir if possible afterwards I'd like to talk we just briefly certainly thank you. Okay we are who's in state seventy three who else is go question don't have. Wardlaw. Represent Wardlaw you're recognized thank you Mr. My net must see was label to upon be on your screen. when you look at these rules and you look at the last page where you got the severity and the levels in the initial inspection. I'm a little bit familiar with this go through a couple food safety audits every year what. What's going to happen if the farmer goes through a US the A audit which is done through the plant board with your people. Hi I thought what me throughout complaint would get filed and how that would work if they've had an audit and in what me through it if they haven't had an audit because what this looks like when I leave read these levels. Is that why you're in your audit you now can find instead of an a corrective action in my reading this wrong or. I'm gonna let mark Stoll who's our section manager answer that question for okay. Mark please enter does yourself for the record mark stars on part of our culture. No Sir the get give audit or a separate program from produce safety even with the federal government the get give FOR voluntary where the produce safety rule is mandatory so any time our inspectors on on on it they're not looking for anything produce safety related with that program we can't keep them separated they do not tie and like if they see a violation or something of that right you up for on the audit they do not carry that over and appropriate safety those inspections are separate okay but Mister chairman I guess some lead way that so. You're supposed to get a gap audit today if you pass the thing is ten thousand dollars of sales per year and I can have that number wrong is ten or twenty are I don't know exactly you know the number I will exceed that so we get an audit promised and USDA every year. But the way you read these inspections who who's going to turn our how are you going to know if these violations or are there is it just going to come from the public that walks up to the farm are no will have inspectors it'll get in contact with the producers and they'll set up inspections so so what you're telling me is that we're going to go through three inspections now or for five or six instead of the two that cost us thousands of dollars today they're not sure that we're doing things food safe and corrected we're washing to produce and we're making surveys of the gloves on and we're clean and are not set for cutting the produce or. We're gonna spend more money yet the produce safety under this is my act is more in depth and focuses on food borne illnesses in that worker hygiene biological so amendments agricultural water things of that nature no it is a free program the producer does not pay for the inspection. And the universe of Arkansas extension service will meet with the grower and perform a on four brightness review to provide an educational step and get the grower ready and then we'll follow that up and in fact this past year we had initial inspections which is a nother level that FDA put in for more education so far large growers we had initial inspections this year where we went just kinda went over the farm with them to see if there's any violations or anything that they could correct. So we're trying to educate before regulate educate while we regulate. To make sure that there's no outbreaks in Arkansas. Okay ms chairman I reserve for council. Not. Any other questions by the committee. Saying none We have to review this the the we have a motion we have a motion second. Motion second review all in favor signify by saying aye. Bose night. Motion the rule is review thank you all. All right next we have a discussion of the impact of the cold but not saying with the. On agriculture in the state of Arkansas it's been a very trying time. We've all sane intimate shelves different to issues in the grocery stores and what you have the university of Arkansas extension service here to On the zone to help us out with this and we'll go ahead and get started with that presentation mark talking can you hear me. Join today by doctor John I understand services are in. The department of agriculture. You also hold on your certain more general here in. I say. Having a little technical difficulty and mark board okay words. This. A truck driver signs on the PMR okay I I'm service the. Agriculture university of Arkansas system okay hold on just sign. When is it yeah can you all hear out there. Perhaps a little agricultural engineering here all right on or microphone a system but but we'll get there if we get some duct type person by one Mar will get this line is. Okay try once again. I mark copper and on the up vice president of agriculture for the university of Arkansas system go higher today I'm joined by doctor John Anderson services are head of the department of agricultural economics and act right business and here's impediment. Who is the director of the national act lawsuit we want to talk to you a little bit about the impacts that the Colbert nineteen sat on Arkansas agriculture all all start off and just to remind you of the importance of agriculture to the state of Arkansas. You look at the the annual contribution not counting the retail food of fiber or wood products retail sector it tends to a county about twenty one to twenty two billion dollars if you add in those retail markets another four billion dollars Arkansas agriculture is really quite diverse or when we talk about the impact of this pandemic we've got to remember all the different components of Arkansas agriculture. If you look at the farm level receipts the biggest sector that we have this poultry which is dominated by broilers but we also have backed the egg layer and Turkey components as well Ben within our row crops up soy beans rice cotton and corn or principal will grow crops cattle very important often times a lot of our poultry growers will also have cattle birds off a bit and then not to forget our trees on the timber and wood products industry very important all. If you look at the broad impacts of cold but on Arkansas agriculture we have really three different types of impact to your one is been the destruction of our supply chains. Yes we both started to will work at home and we shut down certain industries. Let's remember that the slight majority of the dollar has been traditionally spent on food to just get prepared outside the whole so when we shut down our restaurants we have separate supply chains to go into the food service industry as opposed to go to the grocery store and so that's been a major shops and people not eating in our restaurants and having to get the groceries and. They're all larger portion of their meals at home the second is beyond the worker safety the labor availability this is impact and it's part of the reason we have or restaurants or food service in our schools are closed stop that if you look at our our processing plants there's issues and servicing on that but it also gets the transportation sector and yes also because of disruptions in in our state particularly some of our specialty crops that jobs have already started to get the market. The third impact that we have you as well to hold all of this rest of the call but impacts is caused a decline in our economy. Probably heard the term supply chain management at the shape recovery at U. shaped recovery W. shake recovery board did you ever have the rest of your life is in the probably the last few weeks here but as we go into the job downturn here impacts our incomes and the income drops will influence the product mix it'll be purchased on. I do want to emphasize that there is no evidence to suggest that virus is transmitted by the food supply chain it's respiratory in the food of supply is yes this state as we go through the process. That's your asking academic to talk you're going to have to suffer through a little bit of a lecture so I'm going to give you so economics one all wanted in Sherman Douglas I assume you read this way but just in case this great pressure here what are consumers make purchasing decisions price obviously it's very important and what they choose to do incomes are very important and then you have your taste preferences that a big change in a little bit through time here quality is important convenience is important the the life experiences associated with eating yes important method of production is important and even the origin of where the up the farm is located of influence some decisions the other stat yes expectations and what we've seen in some of our markets in some cases we have panic buying to people are afraid that there's not going to be a lot of product on the shelves and so they're buying and the reporting there should the filling up their their freezers and Pat with product aw that's impacted or commodities differently across off of it and then the perception of food safety if they think that the food is not safe for their experiences not state that may alter their their experiences. When we get back to the supply chain disruptions off of it yeah he gets product flow and it goes in both directions so it will be influence what's available on our groceries shows yeah and Dan you mentioned while some of the be counter septic you're not toilet paper on the shelves or or not really the selection that you have or when it appears it goes quickly all of those yes. You also have an opportunity for some price divergence between the retail prices to consumers or pain and the price of the farmers are paid and then we've seen some of the eight the the destruction centers alternate boot way square were have been of some of our vegetable crops and fruit crops filed under bill be for on the ground up some cases of the population. When we. About our supply chain. Remember. There is. Set of supply and demand each stage of the production. We have a promotion mark. I'm sorry we need to anybody out there it's not speaking you need to mute your. Your phone Sir. On on this site are. Okay. Okay go ahead mark. H. stage in the supply chain we have different supply and demand conditions so if we have a disruption particularly in our processing plants there may be a shortage on an increase in retail price yes there's limited quantity that gets into the retail markets when you move down particularly into the product it's that goes into those plants there may be there if they can't process all the animals the birds of other product then there's less demand for and that's one of the things that can contribute to this difference in the price we see at the retail level versus what we see is that the the the farm level. The the and that's a concern that we have. Obviously Arkansas in the nation and the world needs to have functional food supply chains and this is really important but we also need to think about this production capacity that as soon as we get through the cold that it would start to return to normal we want to be able to wrap up our production as quickly as possible and try to maintain that production we have and we don't want to lose any of our business does our farms or any that capacity that we have up and down the supply chain as we go through if we have ships from the food service back to the grocery stores that's a question is how much permanent investment that would go in the delivery more product into the grocery change rather than the food service how long is that going to last so it's it's complicated I want to turn it over to John Anderson and let him go through different commodity groups and give a little more detail and then I'll ask your as that meant to quickly go over some of the legal issues that are on the horizon so the job I thank start Cochran I will see if I can share my screen here and a lot of you probably aren't sitting where you can the. Look at the screen but if you are you've got that I'm happy to share these with the committee later after the fact that I will build a little bit on some of the things I could conquer was talking about that to some specific commodity groups so that I want to start with one point though you know doctor conger talk about several sources of impact that were C. and I just want to point out quickly that the for the most part I think we focused on short run it backs of of call would nineteen the loss of food service the slowdown in the economy that plant disruptions we've seen so far but a lot of these impacts acts they're gonna play out over a long time we've seen consumers lose a lot of income we sink savings plated we're saying that mark was talking about the the taste of preferences aspect of the manual part of that is how we the rich get that we've seen a heightened perception of risk develop among consumers these kind of things acts are going to play out over a long period of time so just keep in mind as I talk about this you know there are losses that we know that we can identify that we have that we have seen and and came qualify right now but losses are actually going to crew over for a long time and a lot of these sectors because these long run impacts in some cases may end up being more significant than some of the media the backs which saying. This act so far on the protein sector before compulsory and the one of the primary effects that we've seen a covered nineteen it's been really a radic price behavior and that are Cochran kind of gave an overview of where that comes from but we went from panic buying was kind of give us a surgeon demands to loss of the food service trade that that they're really reduced demand for certain products like states for instance that you know be free of cats. Now we've got a process that model acts which is give us a whole other set of issues in price behavior at the wholesale level so a lot of kind of crazy up and down I in those markets depending on which particular factors work at any particular time right now the big issue is capacity constraints the closed due to cover nineteen the inability to get workers in the plants the need to socially distance with the implants and the reduction in line speeds associated with that all those things really boiled down to a capacity constraints and that's reduced our ability to process livestock and poultry in a timely manner has been particularly true for beef pork as Australians just a second and the the you know start Cochran say that's doing this this group in a pretty large weights between are priced at wholesale prices downstream product is strange but upstream we've we've got a lot of livestock and poultry that we can't do anything with a longer term something we haven't talked a lot about but I think we need to keep an eye on production down the road is going to be affected by breeding stock decisions really all three of the sectors that are being made right now so you know what's called three we've got lots of impacts for breeding decisions with the work we've got years of just sit out of a fax from these breeding decisions that are being made Allen this tough market environment couple quick pictures that I think are useful we've got some good date on advance retail sales is some preliminary data on retail sales on a monthly basis on food service and great places. Better than twenty five percent drop in spending on food service and dining in March twenty twenty that's the most recent month April will be considerably lower than that so just to give you some idea of the scale of destruction there's really no precedent for this kind of she have this over night shift in demand that we sang associated with with called nineteen After all button there at in terms of slaughtered this is weekly beef pork and candle holder Grover slaughter as a percent of twenty nineteen average slaughter it's a pretty good benchmark to look at we actually needed to be processing a little higher rates of twenty nineteen because our production we're expected. All three of those species house large dropped a lot because the the disruptions we just talked about technically for beef and pork I mean we right now run and almost thirty percent below last year's weekly average in terms of cattle and hog slaughter brothers back to recover quite a bit that industry is I'm I'm amazed at how well they're managing the disruptions are dealing with but for. catalogs we talk about the whole sale our little price affects this is really what's behind and just the mass of property and in the process three but. Look at a at a low point this out about brewery industry in terms a longer term just rest disruptions this is broader check placements I don't think in my career I've ever seen is dramatic drop in check placements particularly at this time of year when you typically looking at a fairly steady increase in check placements. What about ten to fifteen percent in terms of birds being placed with the with growers for girl out that compared to where we were in January and February and so this is again affect the that's going to play out over a longer period of time the same thing really is going on with the accents of which suggests affects and roller industry it really will be felt for the rest of the year and maybe into next year. In a major role crop sector the experiences kind of been mixed based on the major end user markets corn and cotton prices a bit sharply lower most of the year with that downturn really accelerating in the middle of February when I would nineteen effects really kicked the end a lot of students you market linkages got at all warning you got the synthetic fiber market the competes with cotton and the lower energy prices and. Created demand hit on both of those commodities sort based kind of fall quarter lower for the most part a lot think there also some fairly significant global trade concerns of behind to clients in that market as well as some concerns about what the livestock industry slow down is going to mean for a protein feeds. All right so we it's really been a volatile market a lot of up and down generally cannot get certainties contributed to that to trade disruptions been part of that I think particularly in the rice market consumer stockpiling created a surging demand that really has this has now passed pretty much for rice we lost three service business continues to affect those markets so not is as big a negative price thanks for rice and wheat because those are very grains and and we did have this surgeon start calling it panic buying but long term the weaker economic environment is to is going to be a challenge for those industries to all these major row crops that right now we got the we got planning season going obviously busy times have an all hands on deck season and bill keeping worker safety and maintaining social distancing. During that time has been a real challenge for our growers. But one certainly that they've taken very seriously just tell you what picture here that's kinda emblematic of what's going on and crop markets courts futures prices you see a fairly sharp downturn starting early in the year really accelerated kind as we got here in this mid February time hearing it but really not much live yet in the in this market and I think it's indicative of the the level of. demand destruction that we expect in this in this market. First firstly crops again a lot of a lot of uh nine different different effects depending on where one is position in the market that we did see a surge in demand for panic buying but also obviously for levels very negative effects loss the service one thing is firstly crop industry that state's unique and worth paying attention to the loss of institutional business has been a major blow to a lot of our specially crop operations in a lot of especially crop farms per set up for pharmacy school they were set up just to sail into local food service outlets that was set up to to to move product the farmers markets you know all of those outlets have been disrupted in a huge way by code nineteen a particular school systems obviously with a complete shut down on all schools that really reduced that farmers school trade and so a lot of our farms that do we really encouraged over the years to to tap into those outlets and develop those those local supply chains that have really suffered in in this code nineteen episodes we have also seen major concerns over labor labor availability and worker health and safety those will continue to be concerns that as we as we re open and get people back to work this the potential for outbreaks in effect that those outbreaks and apple production is going to stay with us for awhile. Finally for street what products that again major supply chain disruptions from widespread shut downs you know a lot of paper products just like food products are used in workplaces and restaurants and and all kinds of places that were closed as a result over nineteen we also saw some cases temporary loss of capacity similar what was stated big processing although not as dramatic I don't think but those shutdowns locally can have a very big effect and in some cases you know A bill shutting down that in the in the in the. Late spring really kind of come pales or or stands the seasonal effects of whether that the that have come or timber producers out of production and solving cases and so those temporary shutdowns I at least locally and had made her facts I think for this sector the real issues are gonna be a longer term issues that come up from the general economic downturn this sector ridiculous susceptible to to take off cycles and the downturn in the economic cycle is something that can really affect this industry in a big way obviously this sectors tied the housing and related sectors very closely and Alex fairly negative movement forward on slick and hopefully we will have a quick recovery but the pace and the the shape of that recovery is really going to have a big impact on our timber sector I want to show you one graph here that they grammatically makes a point here. This is a chart some something that just came out actually from the census bureau on monthly retail sales on furniture and home furnishing stores and obviously you know furniture Baltimore the just temper but that that that type of product is is really indicative of where a lot of our wood products you always think of cabinetry and flooring and things like that that would track pretty closely with with the sales. you know better than twenty five percent drop in March in those products April would probably look even worse in and yet that figure so the shutdowns have a big impact on on the the markets for products that are closely connected to our chamber sector housing starts nationally were down pretty pretty strongly as well I think globally they look pretty good but a nationally about a fifteen percent drop I remember those numbers right so the long term issues and temper sector one that we would really be paying close attention to the media effects maybe not look all that the I don't look all that dramatic to this sector but long term there's vulnerability here to to pay attention to the. With that I'll stop and the doctor Cochran on pass it back to you for further than you want to talk about legal issues. Health and safety finally an issue and I suspect many of you have from constituents on this so it's been an issue in Arkansas key stakeholders in agriculture in Arkansas but also around the country and that is the issue state being inspection. that one has a. Taken on a life of its own there's a bit of a prairie fire across the country thank you Carole producers saying are Re ignited if you are for lack of a better term in their interest in expanding their market and have diversification and they're it from I have many of them from their viewpoint deferred diversification in terms of how you can take the cattle get it to market. A cleaning without going through the traditional supply chain with Packard this is an issue that we've worked with people in other states in this state. Rate groups Senate staffers house staffers this is just something this product menace amount of interest you know mainly because you have states that have different approaches and different nuances to how they approach the inspection but also there's to federal proposals right now that are one of which are one of the other likely to find their way into the next round of the stimulus legislation and depending on what Congress does there that will have an impact back into the states then I should have mentioned in the beginning to other folks on the call in our senior staff attorneys at the ankle center rusty wrongly lessons from one and this is an area to that they spent several amount of time on west you days. All calls there. That's a whirlwind and we covered a lot of ground here but we were really happy to try to address any questions here or any future I would do I refer people to our our website you eight E. X. dot EDU where we have not only are impact analysis a lot of the other information to help Arkansas agriculture at a whole host of things for small businesses are four H. programs and how you keep kids entertained while they're at home and personal finance almost of of resources there still be glad to to answer any questions that you might have. All right thank you mark and and Harrison and everybody there very good presentation we have a question here from Representative Bentley. You are recognized thank you chairman us for doctor Cochran can hear me. In your hair mark. No I cannot okay you could repeat the question I'll do that thanks chairman can you hear me OK you bet all right to questions I have for doctor carcasses okay I've had calls and constituents really concerned about chick placement so can he verify why we have a session that the use of their three weeks between getting their checks and now they're five weeks to see have any explosions act while those guys are dealing this at this point here in Arkansas okay mark the question was wired check placements down at this time some the producers are concerned. Or so I have a payment center or scheduled with expectations of a certain number of logs per year and with the the placements bring down that out time is longer and therefore they won't have as many flaws and will be unable make their payments why is the check placement down at this time. Well fortunately we've not had any plant closures in Arkansas on the boulder process sign up you yes yes yes there's there's two impacts that code is having on our arms meat protein industry one of it is the the redirection of product that had gone into the food service industry protect we seen is demand has dropped for of consumption at restaurants that yet nursing homes schools like accept our offer that the industry is adjusted to that all gets yet to be determined with the the new worker safety protocols that are being put in place at the up processing plants what will happen on the throughput there but it's a combination of the two and I don't know if we have good evidence is to just sign up proportions but this is a big concern for us because obviously tree is a huge part of Arkansas agriculture where working regionally in the south with the poultry industry that a doctor and it's just part of a team that's trying to do some damage assessments were having discussions with the poultry industry about what are some of the policy options to be able to provide some relief for our poultry growers two they have those that had guaranteed loans through SPH have qualified and we have some growers center getting some relief on their their debt payments for the vestments in their houses those that had loans through other blending components have to say or private or not currently eligible so that's something certainly that's that's needs to be addressed and then going through or there are some things that we could do was in direct payments that are being made available to some of the other commodity groups through the care is really program that's a dentist. Certified USDA that in the first round did not include poultry with but this is a big concern because the cash flow for a poultry farm is very very sensitive to the number of birds and the number of blocks that they have in a year so even losing the equivalent of a houseful flock or for us the a relatively small percentage of ten to fifteen percent of the birds could really make a difference as to whether or not that that farms profitable entity can survive that's part of my comments on why it's so important for us to come up with ways to protect and maintain that production capacity so when we get back to normal we can get those those parts of those Burch movement forward. Okay thank you for that next month motion mark represent bill what you had to the second question yes Sir thank you chairman my next question is I've noticed in some other state specifically Kansas we're trying to help farmers that set up some Facebook sites for farmers to be able to conduct contact consumers directly so they're setting up the farmer chip person on Facebook so their farms and say I've got this ready and and consumers can go straight to that farmer do we have any restrictions here in Arkansas that would make that prohibitive here performs to go directly to consumers saying a Facebook site to get some sales for those farmers for. Person this probably down your alley but anybody chime in their the the question is a in other states their band of efforts by individual farmers to utilize social media to market some of their products directly to the consumers are are there any restrictions in the state of Arkansas here this time or any prohibitions on direct. Producer two. consumer marketing. That sum it up represent yes Jackie Chan. Ross is that something you guys want to touch on with respect in the state meet expectations. Commerce. Hi I'm happy to address that in terms of direct sales of animals to consumers the issue is going to be the method in which they're slaughtered so there's no prohibition if you as a producer where to sell the animal while it is still alive. If you do that but it can be processed in a custom harvest processing facility and the consumer can use it for their own purpose for teachers for their families for their unpaid guest seeds but they're not allowed to sell it they're not allowed to Give it away so that that would fit under the custom exempt slaughtered exception. If you're talking about selling it after the animal is already been slaughtered and processed however it would have to have been slaughtered and processed in a FSIS inspected disability because Arkansas does not have a state inspection program but as long as it was slaughtered and processed in this FSIS inspected facility then there's no problems selling it after it is already been slaughtered and processed the only issue right into their is Health department regulations as to. How the need has to be capped and what the requirements are for retail store. And on the specialty crops side I mean there's really no restrictions on fruit vegetables being sold. Right now the only restrictions are all wrong made products there they'd have to sell a lot of animal and once it um that transfer takes place it would be up to the end consumer to get a process stand handle it better correct. At except okay thank you. Right Representative bear you had a. Question thank you Mr chair my question is relates to a conversation I had with the. Carol producer. yesterday at he brought to my attention that quality has Somewhat circumvented the system in a is allowing some of their farmers producers I guess kind of producers to sell meet directly process and so made directly with that USDA inspections. Of that so I don't have a real date on that but I was wondering if it maybe some of the legal staff at you they might might have something on that what what the new legislation that while me has prop for. We've actually got yeah I I heard you're right okay. We've we've actually seen that as well what they are doing their so you still have to sell the live animal on the other but what they're trying to do in Wyoming is redefined owner is so I currently in Arkansas you could sells I say steer you could sell it by the quarter to four different people and that's perfectly fine what they're trying to do and Wyoming it is to go beyond that. And you could have a customer on the front and that's willing to buy ten rabbis and thirty five pounds of hamburger meat the issue is you have to build a cell all of that and we're not really sure whether or not at best I S. is going to agree with this new definition of the word owner and we talked to some FSIS personnel not high up or the local inspectors and they didn't seem to think it was permissible but they weren't completely sure. Our. Sure so cell is then my understanding that the whatever along the is proposing at this point is sort of on hold now until they get to the approval. I don't know I don't know if they're on hold or not the thing that's going to be still a limitation is. You still have to sell all that meet all the animals alive so that's that's the trick with that is you basically have to have that entire steer sold or your reserve the rights whatever's left over to the current owner say stairs still think and there's going to be some problems in implementing this because it just gets more complicated no seven quarter now you're talking about selling the individual cuts of meat before the animals actually slaughtered. And the difference that it would make practically speaking is that would allow by redefining owner it would allow more meat to be slaughtered under custom slaughter exemptions that doesn't need to be inspected doesn't need to go through a facility that has a continuous inspection requirements. Thank you. Our. Maybe it any other questions. Okay if not hi mark it in your team there we appreciate everybody there comments and up button up with our technical issues here and is always you always do a great job in a very informative presentation thank you all and state side. Thank you. The. Number by by. Alright members. Next we have an in person presentation we have the Arkansas cattlemen's association here to talk to us about it's very fortuitous I think one thing that code is going to speak on is state inspection which we just heard some of their some comments to and also there have been probably come on up here. And set down get ready to. Give your special there but there's been some talk also about country of origin light going on may we had some members of might some comments or questions on that at a time when producers are or having the in some cases euthanized called so we're still importing hogs and port And there were restrictions on that the past a golden reduce yourself so you're with and then the first if you would talk to us a little bit about the country of origin labeling issue and whites dated at this time and thank you on the state made specs and any other comments you have told you that thank you chairman my name is Cody Burkle men I served as executive vice president of the Arkansas cattlemen's association. Appreciate the opportunity that the chair both chairman Douglas and term Cooper give me this morning to to answer your question Percent Douglas trim Douglas there is mandatory country boards and labeling started. And that's essentially two thousand eight it was part of the two thousand eight farm bill under I believe it was senator Tom Harkin from Iowa. Was his brain child now country of origin labeling Has the roots a lot further back then then just two thousand eight it actually has some roots back and some of our earlier trade bills back in the nineteen forties but under those trade obligations meets and and different agriculture products I'm going to all of them but some meets notes and things like that were not covered under contribution labeling seven two thousand eight senator Harkin decided it was it was time for mandatory country of origin labeling in cool is this what the industry knows it is now. that process was taken by USDA and they implemented a rule. A few years later course you know we all know that USDA takes little time and most government agencies take a little time to implement implement the rules. And That came about and and I believe it was Two thousand eight and December two thousand eight two thousand nine Canada and Mexico are two main trading partners on the north American continent. said they didn't like in cool that it was it that it was detrimental to their products coming into the to the United States now to before I jump ahead to follow our our main import from Mexico for cattle is live cattle so we're talking feeder cattle that coming to Texas Senator usually fade out and our and our takes a speed lights and in the process they're faded in Texas and then usually processed in Texas as well then our main import from Canada is actual of beef cuts so there's there's some difference is there between will get from Mexico what we get from Canada but anyway Mexico and Canada said they that they felt that this was detrimental to and and illegal under our trade obligations and they took it before the World Trade Organization the WTO and the the WTO agreed with them said that this was indeed mandatory cool was indeed a roadblock to fair trade amongst Mexico Canada and United States of the WTO said that we had to adjust our mandatory of country boards and labeling requirements. USDA went back reworked those requirements to where the product pretty much had to say where was born raised and harvested Daisy work it around Mexico Canada once again said that we don't like that in fact you made it worse than what the original with original law was so. You know leave it to to some of our bureaucracies to make something worse often originally was but that's what the that's what was claimed once again the WTO side with Mexico and Canada said this will not work used a went back a third time worked around again. Once again just kind of cutting out some dates and stuff here chairman but once again WTO ruled in favor makes come Canada at the third time they said now that you've you've done all you can do pretty much work this round to be favorable or not favorable to be fair to next can can and trade. They said you don't get another shot now we're gonna allow Mexico and Canada to retaliate against your products if they so if they so desire and Mexico and Canada that was around two thousand fifteen Mexico and Canada made it known that they would retaliate up to about two billion dollars to American American products American beef products. Now I think it's you know I'm not an economist unfortunately doctor John Anderson is already left arson meeting but we talk about two billion dollars for the products retaliation and and our two biggest trade partners that made the do not states Congress sparing nervous and so they did repeal all mandatory of controllers in labeling on beef now I'd like to make sure that it's still still point out that there is still mentor country of origin labeling on poultry and some different I products but on on beef and pork that is no longer. required. During this code outbreak we have seen. Some some produce organizations that believe that country board level labeling was responsible for higher cattle prices. Now I'm not an economist and so I won't speak to that but there is there's certainly studies that have been done that show that that not be the case the studies her are out there and available to the to the public and they were conducted by land grant universities and the professors and doctors that that to know their business. So there there has been a resurgence in people calling prince producers especially calling for in for mandatory country boards and labeling again. Just Cody conjectured opinion and totally aside from Arkansas cattlemen's association opinion and is that I feel in cool is is certainly going to be a a difficult subject to broach because now the WTO the way they've the way they've ruled if we were to bring back mandatory country boards and labeling Canada Mexico do not have to wait they do not to go back to WTO to retaliate against our products there had to go ahead all we have to do is is reinstate mentor country boards and labeling and they can refer therefore retaliate against our products so while they're well they're certainly some discussion and stuff in Washington and and your guess is will is as good as mine is what will happen in in our nation's capital I could see this the mentor controllers labeling being a very difficult issue going forward. Does that answer your essential somewhat chairman. I find that does go to yeah and there's some other issues in there that that we talked about for example we import a lot of made cuts there a trimmings for example that the going to hamburger and different things there and the the process or would have to label all their hamburger then is is it you know that that the the bill would Justin's I've taken up with this and and everything white one stuff would be almost astronomical and this would be a federal issue and nothing the state could do on on country of origin labeling correct that that's correct chairman yes Sir the the intricacies of mandatory controlled in labeling even whenever it was was mandatory when it was all is we're very very high I mean it was it was a very intricate system and the way that the processors and even imports a cattle and and when I say imports cattle I'm not speaking about large of multinational conglomeration time talking about the guys down in South Texas that we're buying Mexican cattle or maybe some of the guys up and and Montana and places like that they were bringing in Canadian cattle so the the tracking requirements in the way that they were having to two separate all that out. Was very onerous on reserve for our industry. Sep but yes this is this is a federal issue chairman now there have been in all honesty in all fairness there have been some states that have tried to to push legislation to move legislation Ford for mandatory country border labeling Montana being the first one that comes to mind they have not been successful in that effort. By senator MALOCH Jo thank you had a question on this for clothing. Thank you Mr chairman. Cody I will do whatever is best for the American beef producer and I've got friends in the industry they're certainly supportive of country of origin labeling but I've also seen from some social media opposed in other news articles from some producers who think we might be better off just to. From a marketing standpoint I mean if we if we market very boldly American raised American process or whatever from a marketing standpoint not from a country of origin labeling part of. A prospect that they think that might be better is is the industry divided on this issue or or is it is there a fairly consistent position I would say the industry is is quite divided on this issue senator you know it you bring up a very good point I can still walking into I'll spouse I'll go ahead and call the. An Arkansas chain I don't notice appropriate but I can walk into hearts grocery store right now and they still have product that is labeled born racing harvested in the United States. There is still an opportunity for voluntary country boards labeling and just like that you mention Senator under under mandatory country boards label if you looked on a label and it said product of the US it was very small you had to find it. Most people if they see it most companies people whatever if they're labeling their product and they see that there's value in that product US Hey they're going to put a big American flag on it they're going to make it big in noticeable so the consumer can see it and the and they see definitely some some value in that but yes Sir it is a very divisive issue in our industry. Any other questions on a tool with FOR code. Great if not I've talked to this a little bit about the Resurgence in interest in state inspection of made made products yes Sir you know I had the I had to some testimony written up here but I believe I'll just I'll just set that aside and we'll just we'll just eyeball and talk talk with you. If one thing has pointed out if if code has pointed out any one thing to the Arkansas cattle producer it is that we are dependent upon our supply chain and and our hands are essentially tied with the current system that we have you know I for many of you know Arkansas's is a calque have state meaning that the many mayor Arkansas Rangers they breeder cal nine months later you do you have a cath and they keep that cast until it weighs about five hundred fifty pounds and they they take it to the local law stock market it is sold it goes to a back grounding facility whether that be in Kansas Oklahoma Texas Nebraska somewhere like that to raise to to a to a pound of about eight hundred what about a hundred pounds or so and it is input into a feedlot whether that be in Texas Oklahoma Kansas for Nebraska I will some places like that. It is in fate two of what we call a finish late night finished what it's going to be somewhere between twelve thirteen fourteen hundred pounds. The Ford is harvested in moved into our to our resale retail facilities now what we sing with cove it is as was pointed out in the the you of a presentation is that with the our our our packing workers getting sick and they are in close proximity there in these packing plants they're very efficient very effective but there are some pretty taught working conditions of when we see these plants slow down we see a backlog and in our supply chain so as of the last I heard there around six hundred thousand head of cattle that were still that had already. Needed to be moved through the processing facilities the packing facilities six thousand had were still sitting on the feed lots now these are cattle that are getting bigger and the and and Walt Walt carcass weights over them in American beef industry have gone up significantly over lesser years. Speaker gives us better beef but it doesn't always mean that bigger is more profitable so when these when these cattle get to a certain size you're just feeding on just to be fading with that point they're they're not bring you anymore economic income. So of we have seen us of very large resurgence as tears and mentioned in his last presentation of producers here in Arkansas all asking for a public are a state inspected program for our beef. Now according to my research and and the good or the good people's research the that the act at the egg national like law center she's me we have laws on the books right now that will allow Arkansas to move for with the state inspection they're still on our books we allow for state inspection but in in nineteen eighty or eighty one it was pretty much handed over to the federal government FSIS and the department of health actually does the inspection on some of these facilities. Currently we only have three facilities in Arkansas that allow for the public to bring in at the foot poll worker lamb or something like that bring in livestock and had a process where they can resale to the to the general public so only three many times these these packing facilities are are booked out months and when I say months I'm I'm talking seven eight nine ten months even years in advance so if you're small producer trying to sell your B. R. your product to the local the local market it's really hard logistics wise to figure out okay if I have a camp today. When when exactly will be he he be ready and even and even then whenever you know he's ready to go to harvesting other rate to be process can you get in. So what we've what. Just like I said what producers of ask for is a state inspected program now we know that state inspection means that they're going to have to meet the same federal guidelines as it what they call at least equal to federal guidelines for state inspection but we feel that a state inspection would allow. Local producers to meet local beef demand and in times like this whether it be now or in the future that that could that could definitely be you know something that they can producers could help with. Every state surrounding Arkansas has a state inspection. Program except for Tennessee there's only there there are only neighbor the does not have some kind of state inspection program. I did want to mention under of a meat poultry inspection program the state inspection that's that would be cooperate between Arkansas on if this I. S. three different types of plants can exist you have a state plant a custom plant and then at Talmadge eight can plant so just real quick a state plant would be light like we mentioned would be a program through maybe the Arkansas department of ag right now it's another Arkansas department of health worked around get it on the dock so department a bag it would be inspected by state employees it would be a state inspection system but once again it would have to meet the at least equal to of processes through two food service inspections Under at USDA that would be a state plan now custom plants or facilities that Saddam process products for private individuals only they're not inspected in almost all products must return to the original owner cannot be sold so we know those there's there's number those in Arkansas many of them process beef and hogs but a large a majority of them depend upon the deer harvest every fall to make sure that they have their money for the year. The Talmud J. complain is is kind of a it's kind of a mixture between a state inspected plants and a used inspected plant but pretty much what it is is the inspectors grade they inspect to USDA's inspectors but they're state employees so since they work for USDA but there are paid for by the state but the thing about them the Talmud J. can or T. a plant is when that meat is inspected it can then enter into of interstate trade or even even the export trade so you have a little higher degree of of inspection under a TA plant. Operating calls I know that says I know we're you know I I haven't stuck my hand the saying and I've heard. What the governor said about our better hole in our budget for that for the state nav A what's to do good work over the fiscal session. operating costs for a program like this is going to for smaller states ranges from about two million dollars to ten million dollars for a larger state so there is certainly a cost with it I will say that FSIS does offer about they they will split the cost about fifty percent with the state of if if they choose to have a state inspection. So I'm I've jumped around a lot there and and but I just wanted to give a general idea of the Arkansas cana producers you know I. That they they've been hurting you know in a in early March we sell five hundred fifty what steers let me pull up my I don't I don't want to tell you the wrong thing here. In early March we saw five hundred fifty what steers drop about eighty eight dollars and fifty cents ahead whenever whenever they were sold local market. And you know in an industry. Where profit and loss and break evens can be depended on a couple cents a pound eighty eight dollars and fifty cents can put somebody could put somebody in a deep hole really really quick. A state inspection program would not be a silver bullet I I wanna go and make that clear it would not be a silver bullet. it would take time to get up and running established all the rules regulations figured out and you know you know maybe something that that could be considered instead of just jumping full intersection program to some kind of pilot program where we have three or four inspectors that are able to to inspect you know we still got to visit with our custom processors and see what is what is keeping them from actually going ahead get USDA certified where they can they could inspect like that. So there's a number of different things I still have to be worked out that still need to be done before a state inspection to take place but I think. I think I can speak fairly comfortably for the Arkansas catfish you're saying that this is a a a a desire that they have a wish that they have to be able to to. To create for themselves another market and to further Market their product to to local demand. With that I'll I'll be quiet and be glad to be quite entertaining questions I'll possibly. I thought if I go Arkansas bait producers with a lot to be able to market their products to Arkansas our Kansans to be able to consume that good Arkansas based here in the state purchase it locally senator Cooper. Thank you Mr. Of I'm glad you touched on this and and the wrote this to our attention and covered it. A few days ago of seeing several reports on the supply chain breakage and that if you break it anywhere along the chain. Consumers are not going to have anything at the store and then you have. Product backing up on the farms are or where the whatever product it is in the. I saw a pretty interesting report to just a few days ago about holds it we're back in the then and. People who did the interview with those indicating it probably gonna put them out of business. They had thousands of hope that they had no place to go with them I don't think this was Arkansas but to. I presume that Arkansas. It is relative to most of the states in a general sense you have. Yeah processors that the shut down for a while it's going to affect the producer in the and the number of states that that's a big producer if that's a big. Processor and then in connection with that so in other report that there was a big to process through that shut down. In the west thank amid west of forgotten what state it was but it was going to supply a huge percentage of. The product for two three states around and the. So when you have a something like a huge processing plant that shuts down. Part of the pro the part of the problem there may be we needs more diversity in the. In the facilities that the we're not so dependent upon one or two places that. Produce that much of a percentage for this country and when you have some of these huge plant to check the on that conflict. The bill to the grocery store when I was listening to that earlier I was trying to determine how much of that is because of the restaurant shooting down and how much of it was the processors been interrupted for awhile even if they go back on line. Before long the they're still a supply chain disruption there in in you looted to the producers of the whole farmers in the cattle farmers it to have no place to go and they've they've got left letter stuck up there that they still got to feed and they still got no market for. And when they go out of business recovery is a long time after that to. How much of that do you think is restaurant shutting down and how much has to do with the the with the slaughter facilities been disruptive in the supply chain. Senator Cooper I can tell you that right about half of of all product in the beef industry goes to our to to restaurants and so The restaurant shutting down his has created a huge hole for the cattle industry. You know on the on the processing side. You know I I would agree I think we need more diversity and in our in our packing capabilities There's no doubt though that the that the packing industry is an extremely capital intensive industry it is an extremely Labor is is is you know of course a huge part of that that and keeping our our processing capacities up and running. It it's just it's just it you're right I mean everything you said it you if things has rye I would like to point out that Because the cattle industry is different than the hog industry in that we're not vertically integrated. there is a we have I have heard no cases of cattle being euthanized in the in our country and I think that's important to point out we've also seen the hogs and that is happening in this report they were talking about euthanized and thousands of a hoax yes yes Sir I mean absolutely have I have been pretty some conversations where you know we're talking about the to the session of of millions of all this and you know it it all just as a as some other group in livestock production has friends that have hog houses it just absolutely crushes crushes are are sold for for those producers to take your point of people going out of business center the this this this will no doubt have affect on small okay okay of producers and small producers in Arkansas we see once again not economist here but I think doctor Anderson with you they would tell you that that the cattle industry is very cyclical much like a culture all the way around but we see times like this were small producers are suffering a loss they will they will get out of business. and our cattle prices will go up because the her number goes down right so it's just a basic supply and demand you've got more demanding you have supplies so your price goes up well that price goes to taking back up in these guys like to jump back in right when the prices are really high and we we over we over supply or demand in. Prices go down again so there's no doubt that that code nineteen will affect our small producers we hope there's some the cares ACT and senator MALOCH and I were talking for the started As many of you may know under the the cares act guess it was round to whatever around we're on now and in our national economic assistance. There was On my goodness about nine nine point so about nine billion dollars that was given to agriculture FOR the economic assistance. Are you a study by Dr Daryl peel it issue said that the cattle industry alone has suffered about three point one billion dollars of the damages to the purchase and and the cow calve sector of that was was leading the way with about three point five billion in of about four point five billion skews me so. There's gonna be a lot of lot of small producers are harmed even with an economic assistance from the federal government. Thank you I have a. I accept most of what the the the theory is there except the. I'm a little bit skeptical about where the data is wrapped on the Restaurant impact or not because people are going to eat eat somewhere an inmate in the may issue of to go budget grocery store rather than at the restaurant. so I don't know hacker all of that is but one thing we do know if somebody goes out of business they're not coming back. Probably if they're large if they're large facility. so of you know if they're if they're still able to cut her down and the. And and go through that during that downturn but if somebody like the stories that I was here in the. Is true then. Then that's going to be a family for family situation is just gonna be lost forever that's that they were going bankrupt yes so I just wanted to explore those aspects to the in the and even thought about the the inspection program may be something that could help that but I think in the future there's some adjustments to do need to be made to the supply chain thing thank you thank you senator. Represent helmet your next online here. Thank you Mr chairman. Cody I don't know whether you realize this or not but when you get elected to the the legislature in used crosses ladder we're you become an instant expert on everything. And the and I got a call last week from someone that was wanting to find a place to get there get out process to you know steer water was at nine and I told him about the you know we're the deer process in his well I don't know what I want to do that and I said what do you have a front loaded into twenty two rifle. What year shall. And and he's it cannot do that and I said a minute Jim was as far as I know there is no prohibition anywhere for you to go out and but your your own stuff as long as you don't sell it to anybody else I mark shore right on that. Yes Sir my knowledge you're absolutely right now at yeah you get you didn't I hope you wonder about all the hard work that comes after the twenty two and and and string them up. I will experience what happens to. One other quick question is all the basic comes in import in the United States is it inspected by the federal inspectors also. It is it is inspected to a level six equal to USDA standards okay yes ever everyone of them is to yes okay alright thank you. All right to represent makes you are Napster thank you Mr Mike my questions real brief file I don't know I guess it was five years ago during the drought we saw a drastic drop in the number of cattle in Arkansas because of the the problems related to the drought do we potentially find ourselves in a similar situation with this with the backlog going in the processing where we see a drastic drop in the number of cattle in the state which sets us up for a long term recovery with this because. Users you know what I have in order to protect the counselor does not know. Maybe. Yeah I know I'm asking you look into a crystal ball but all we potentially looking at a long term issue with this verses I you know the the processing they open up next week and suddenly everything's you know. Roses and well of the I think that the thing to remember person makes is that uh with six thousand head you know even if if He plans came fully online you're still talking about about seventy eighty thousand head a week and so yeah you can do the do the quick math there that still so over a month of well over a month of backlog cattle but still have to be moved through and then you're not even taking into account the cattle that are steadily coming into the to the supplies so yes it's it's possible that that this could be a long term there Sturch to be long term effects there are associations out there that represent our our feeding industry the feedlot ensure that have come up with the program. Just mention it call the set aside program that I know that they're trying to get some traction on the national level that would allow feed lots to be paid to about two hundred two dollars ninety cents a day per head of these cattle that are ready to be harvested the they would pay for their maintenance feed cost to where you know our our feed lots for not sitting there he emerging but that is that's not really in Arkansas issue as we have no feeding capacity here in Arkansas of but yes there's there's actually some long term ramifications I thank thanks for. Senator MALOCH. Thank you Mr chairman. We visited before the meeting about the process of that I used to use in south Arkansas who also did some processing for resale that simply got out of the business of any processing because of the expense of the USDA inspector these states that surround us or anywhere that has the state inspection system. It is that cheaper that are you you know that does the producer order does the processor still have to pay for that inspector and is it cheaper than a USDA inspector or does the state absorb some of the cost. You know me because these folks could do USDA inspections now they just have to pay for that inspector while he's on site as I understand it so apparently this to the state system must be cheaper but elaborate on that some if you would yes Sir so. My understanding Senator you processing facility does not have to or does not pay the salary of that inspector but calls meat inspection is required by the federal government they absorb the cost of that I think the the as far as the state inspection being cheaper I'm not sure that it's really much cheaper it's more flexible I guess would be the answer to that so just for an example under FSIS if I have a meat packing facility I have people working for me under the regulations I've got to pave my parking lot from police I look I'm all about take your my employees but I'm not sure what paid parking lot has to do with food safety of so under state inspection. You could probably get away you know with the just a very nice gravel parking lot so it's it's simple things as small things like that that the state inspection would be able to have some flexibility even though and still be considered equal to AT the science fiction that would probably save some money would it save a whole lot probably not because you still got to meet the standards of you know you of having non poor services things that are easily clean it you know cleaned and and kit free pathogens and things like that. All right to a Representative eaves. Your maps thank you Mr chairman help me understand the state inspection process to are you saying that if we had the state inspection process that that we would be able to sell that product to individuals and to state parks and Walmart using that process as long as it didn't cross state lines yes Sir in state would that have the possibility of insulating us somewhat down the road if we run into the same kind of situation we're in now. Talking about the supply chain yes Sir I'm I'm gonna say that's it's it's hard to it's hard to say that I think you could help us somewhat but I'm not sure that it would insulate is because you know you're talking one animal at one one beef animals going to provide about four hundred forty pounds of beef and the you know than taking really many people at all to go ahead to consume four hundred forty pounds so it could help but I'm not sure it would insulate completely. I represent bear. Thank you Mr. A. I'm sitting here and I've heard these numbers of thirty two percent reduction and and forty percent reduction you talk about beef and. Four of my questions simple. Where is that. If if we're not feeding the third port water we feed. Is is is a poultry industry doing very well now ours ours is the did you have that information is where that's. Diva I represent back I guess I need some clarification on the question well it seems like the market there's a market out there were feeding were feeding people and there's forty percent less beef out there right now being processed there's are by their thirty percent let's base forty percent less port being process what is said being substituted for those in the in the supply chain. Absent back that's that's. I'm not sure I'll just go and say I don't know I need you know product is still getting to to our retail locations were. I guess we we talk about a reduction we're talking about that product is still getting out is just a lot slower and that's why we're saying Saying you know some of the empty shelves and things like that. But you know I. Chance your question fully I'd I do not know. I know there's there was that there was has been some panic buying spikes through through the code nineteen outbreak and so I know a lot of people have. I saw a lot of people I know there's people out there that have floated away some product and things like that so that that product is still there I think that's that's one thing that is important to mention the product is still there it's just coming in trickles and it's it's a little more difficult to get you might have to settle for a hamburger instead of a rabbi or something like that. I know that's a big I know it's a big settle. Thank you. Senator hill. Callie one thing I'd like first look at it if Texas is doing it and all the other states around us are doing as far as the processing goals for us to sell locally produced beef to the consumer we all know the consumer draft demand in the coming consumers right now are asking for locally raised products anywhere you go. If you look at the research together information together I'll run the bill for you for us to do that. That fair enough yes Sir thank you Sir because the consumer drive it if you don't get the consumers what they want some other product will. Any other questions I've got a question or comment or total Mike here Cody that was whose state nineteen we your another questioner I'll just say this I I and Senator hill off thank you correct they're one of the big big. Benefits of having a state inspection will be for more processors out there for you can individuals could. Sell some Babe and supply local restaurants and I know right now at least up in northwest Arkansas the local grown the local produce or your food is source from that's a big benefit not only to an individual that it's supplying that market but also to the restaurants and sales to. It is a good selling point. Senate Representative Stan berry jump in here. Thank you Mr chairman the. Co correct me if I'm wrong. The United States has only four major beef processing plants and in the United States. Two of those are owned by Large companies the. Very familiar and then to the other two were owned by L. the L. the United States companies and one of those is China. In the four. Producing. Facilities furnish about eighty five percent of our beef and America. In is is that pretty close to. Yes for the record that's my understanding of it and I just bring that point up. We've been hailed somewhat hostage for many years. And and I don't know what the process is no you get into a lot of different things about supply and demand and and whatever but. Would you feel of when you say the that America has been commonly held hostage over a period of time Kind of a. Monopoly situation and I don't mean that in a mean way I mean it's just We have only had so many people the the term and put the market of beef in the. When you when we're getting a dollar plan on for our steers it six hundred pounds and and we go to the grocery store next five or six dollars plan for circa that are even more FOR certain certain cuts of beef. Something's not right there. Yes Sir yes Sir. No I I You know the the cattle industry. I'll first start out much I guess my answer Russian berries is saying. Neither myself or the ACA begrudge a profit to the packing sector of our industry they they have they have to make their profits and we need them to make their profits and so that our industry can remain a strong and and and stable. Do we wish there's more competition. Absolutely yes Sir I believe that being a fair assessment a fair statement to make that The way the way that the cattle business is done when we talk about buying fat rate cattle rate harvest and going to these processing facilities that's another conversation is being held is being held at the national level of I mean we could I could sit here we could hear talk all day about the intricacies of how cattle were bald and how their process and who makes what money and how much is made by everybody. I guess it's important to remember that for for each animal there's only a certain amount of. Prof a profit or a certain amount is going to come out of one animal so when you have an issue like ours that has to be divided for ways it can be it can get very difficult and just to speak pretty bluntly the the cal calf producers always the the the bottom guy he never has the leverage are hardly ever I won't say never he hardly ever has the leverage. It seems like when when cattle go up fifty cents a pound Bob or goes up its forever yes Sir and cattle go down fifty cents a pound Bob or studies to sign. So that's a purpose just to pre to business to be in. A lover thanks to very much. Absolutely I mean that's you know of a. You know I but I firmly believe that the Arkansas on American farmers ranchers is the you know the hardest working most dependable people of this nation has to offer and they they go out they do it every day and they. Yeah they they're there they'll complain about the prices and justifiably so but they're gonna can continue to do it every day. Thank you Mr. Okay thank you for that of Jody thank you appreciated appreciate everybody's been here and stuff I did just want to add a couple comments here I don't know what in my past life. I spent twenty years managing night or processing plant I know a little bit about it I'm one of the problems way here today we hear about why are there is there no made on the shelves when the restaurants are shut down you know there's one thing we have to understand restaurants took a different packaging a different cut and stuff and a lot of these plants are set up to supply our restaurants the equipment set up the packaging the of. You don't have the ability to put to take bone states in the package that that in a plant that is supplying the food service industry the sands up a whole warning you know there's a difference there I a in milk we hear about Mel being dumped. And yet there were some shortages of milk in the store a lot of this mail to indicate the packet Jana and process and was going to school lunch you know the little little half pint cartons that we all drank use kids but I don't have the. Capacity. In lots of cases to repackage listen gallon jugs or half gallons so it's the way our supply and demand has build up our supply chain and now that it's totally disrupted and throwing things out we hear about animals being euthanized. What we have to remember some of these facilities is we had had and cattle because we have them out in large hands and and and out in the open but you talk to check in house that is growing four pound birds for the fast food industry. If a plant shut down for two weeks. That bird goes from four pounds to six pounds your put fifty percent more checking in this house it's gone bust at the signs it's not to mine for the capacity is not there to grow those animals so if applied shut down for two weeks you've got two million chickens to euthanized the same way with hogs all god deal market whites two forty two and fifty pounds. You keep amend there for another two or three wakes because the plants are shut down there's no room to hold them there's no place to go with them you've got to do something with the so I know we all get those calls from our. Constituents what's going on we're doing the best we can these plants are starting to ramp back up if people quit hoarding. You know. I'd. We sure don't want to run out of food and we don't wanna run out of toilet paper either so you know with that being said no more questions will adjourn the meeting thank you all.