With tax revenues plummeting, state governments are addressing the shortfall by taking a closer look at the way employers get work done.  As Ice Miller reported in November 2009, the U.S. Government Accountability Office (GAO) started the ball rolling when it issued a report in 2009 concluding that the federal government was missing out on billions of dollars of tax revenue as a result of rampant worker misclassification.  The GAO also concluded that the Internal Revenue Service (IRS) and the Department of Labor (DOL) were not doing enough to rectify the problem.

Both the IRS and DOL took heed.  Earlier this year, the IRS commenced a three-year tax audit program designed, in part, to determine whether employers have misclassified their workers as independent contractors.  The IRS has pledged to share the information it obtains with state governments, who, of course, are facing significant budgetary woes themselves.  More recently, the DOL instituted a misclassification initiative of its own.  The DOL intends to promulgate new record-keeping rules that it hopes will lead employers to discover misclassification within their ranks and then correctly classify the workers on their own.

Congress is considering new legislation as well.  A bill titled the Employee Misclassification Prevention Act was introduced in April 2010.  The bill seeks to require employers to keep records relating to workers who perform labor or services for them and to notify each worker of his or her status, prohibit retaliation for status-related complaints by workers, and, importantly, impose fines for misclassification.

Courts and government agencies apply multi-factor tests to determine if an individual is an employee or an independent contractor.  In general, an employer/employee relationship exists when the employer possesses the right to control or direct the worker.  In this context, control includes not only the intended result of the individual’s work, but also the details and means by which the work is to be accomplished.  In contrast, to establish an independent contractual relationship, the independent contractor must be able to direct his or her own method for accomplishing the results required by the contract.  The determination is extremely fact-sensitive; therefore, each practice and procedure which the employer has adopted (or adopts in the future) will directly impact upon the analysis.

Classification is an issue with far-reaching consequences.  In addition to withholding income taxes and matching each employee’s contribution to Social Security and Medicare, employers generally contribute to the unemployment compensation fund and pay workers compensation premiums for their employees.  They also often fund a host of benefits for their employees, such health insurance, 401K matching and pension contributions.  Not surprisingly, employers who misclassify could face inquiry from a number of different government agencies, as well as unexpected lawsuits.  Some repercussions are less obvious, however.  For example, reclassification of misclassified workers could push some employers over the 50 full-time employee mark for coverage under the employer penalty provisions of the Patient Protection and Affordable Care Act, which becomes effective in January 2014.

What’s at stake?  The IRS and state revenue agency will likely levy tax penalties on employers for deposit-related and reporting violations and demand payment of back taxes.  In addition, employers’ failure to properly classify and treat workers as either employees or independent contractors may lead to liability for workers compensation, tort litigation, benefits, wrongful termination and various statutory civil rights violations, among others.  As a result, employers may also be on the hook for back wages and other damages.

Businesses concerned with preserving independent contractor relationships with their service providers should regularly review those relationships to ensure that the service providers are actually functioning as independent contractors.  Businesses should also consider entering into written agreements at the outset of the relationship that underscore the parties’ intent that the relationship be that of an independent contractor rather than employer-employee.

If you are concerned that your company may have improperly classified workers, now is the time to address the problem.  Governmental interest in worker misclassification is more likely to intensify than wane in the coming months and years.  A self-audit of how your company deals with and treats non-employee workers can reveal whether your classification of workers as independent contractors will stick.  The lawyers in Ice Miller’s Labor and Employment Group can assist employers with the audit process, revise implicated policies and procedures, and, if necessary, communicate on the company’s behalf with applicable government agencies.  Whether you find you have classified correctly or need to make changes, you will appreciate the peace of mind you gain and should feel prepared for the day the government comes knocking.

Germaine Winnick Willett and Ice Miller’s other labor and employment attorneys assist employers faced with employment discrimination, wage and hour, contract, and other employment-related litigation.

Contact – germaine.willett@icemiller.com

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.

An Interview with the National FFA Officer



Where do you live now?

In Hemet, CA; however, I attend school in Fresno California at Fresno State University.

Where were you born?

I was born in San Pedro, CA.

How old are you?

I am 19 years old.

A little about your family (brothers/sisters, etc)

I have one older sister who is four years older than me (23 yrs old), she works in the Navy as an intelligence specialist and has a son whose name is Antwaun.

A little about your educational goals (college, major, etc)

I’m at California State University Fresno majoring in Agriculture Business but will switch back to Agricultural Education and hopefully a double major in Psychology! I want to own my own youth leadership development company.

What do you drive?

1999 Nissan Altima, 2005 Chevy Malibu, and 2006 F150

What are your hobbies?

Basketball, Soccer, Football, Swimming and Working Out

What’s your favorite movie?

Remember the Titans

What’s the last book you read?

The Last Lecture

What is your favorite song of all time?

“Waiting on the world to change” by John Mayer

What’s your favorite restaurant and why?

Cheescake Factory because I love their Pasta Carbonara.

What quote motivates you most?

“You gotta live and learn, so you can learn to live”

What one thing did you learn from your family that inspires you most?

The importance of perseverance and dedication to one’s family.

What was your motivation for becoming a National FFA officer?

Spending a year traveling the U.S. and getting to see how different state associations were and all the incredible things that our more than 500,000 students do with their involvement, which has continued to allow me to grow.

What are the top two things you’ve learned from being a National Officer?

Time management and how diverse our nation truly is. Being able to travel the entire U.S. and internationally to Japan has taught me to really stay organized and on top of time, but also how to simply see people and places for what they really are.

Fast-forward the clock ten years, where do you see yourself?

With a family, graduated from college, and hopefully running my own leadership conference.

If you could change one thing in the world, what would it be?

That everyone could have the courage it takes to follow through on their goals or anything they commit to.

The Drivers of the Quebec Hog Industry

“A key difference is Quebec is comprised of small and medium-sized producers, compared to the rest of the North American industry where producers often operate on much larger scales,” says Christian Breton, president of Genetiporc, Aliment Breton Foods Genetics Company.

Quebec boasts Canada’s largest sow population – just under 380,000, about 29 percent of the country’s sows. The average Quebec producer has 250 sows. Sow numbers range from 100-to-30,000 per operation. Small producers with fewer than 500 sows account for about 40 percent of Quebec’s production.

This large core of smaller, independent producers offers pork industry suppliers a stable customer base. It also creates a dynamic environment where producers are eager to work collaboratively with players at every level of Quebec’s pork chain to achieve innovations that advance not only their own businesses, but the industry as a whole.

Today, that collaboration is especially important as Quebec’s industry works to find new export markets for the pork it produces. Quebec doesn’t generally export live market hogs, but it exports over half of its pork. According to Statistics Canada, in 2009, Quebec slaughtered 7.8 million hogs and exported more than 465,000 tons of pork internationally, about 43 percent of Canada’s total pork exports.

duBreton, a division of Breton Foods, is one of two Canadian pork processing plants accredited for export to the European Union. The company first began working with some Quebec producers as it developed new markets for producing and processing organic, antibiotic-free and humanely-raised pork, due to growing demand from U.S. customers.

“We’ve developed protocols for raising pigs to ensure the meat is certified for those markets. Producers here in Quebec work side-by-side with us to implement these protocols on their farms,” says Breton.

“We’re in a competitive industry. We must all continue to improve and innovate. Collaborating with local pork producers makes us all more competitive in Quebec and globally.”

While “variety” may be the spice of life, it’s not necessarily the goal of a high-profit farm’s annual live-weight marketing plan.   As we discussed earlier, variation is a natural part of any biological process and it is difficult to reduce below certain threshold levels.  However, experience shows that the amount of variation we induce above the natural level can be both larger than expected and detrimental to farm profitability.

One of the most revealing pictures you can construct is picturing all your pigs sold over a period of time, such as year, a month or even a week, in a table of weight ranges and lean percents.  Figure 1 is just such a picture containing about 65,000 pigs from actual farm data.  I simply divided the table into columns which are ten lbs wide and the rows advance for each change in a single percent lean.  The numbers in the cells are the number of pigs which fall into that combination of weight and lean percent.  You can change the top values to the actual sort loss weight ranges your packer provides, but a simple look at the level of variance which exists in a typical production setting is sometimes stunning.

To give a frame of reference, I have placed a box in the figure above which contains all of the pigs weighing from 243 lbs to 297 lbs with a lean percent between 51 and 58 at marketing.  This box encompasses the individual cells containing the most pigs.  Would you be surprised to find out that this box only contains about 65 percent of the total pigs marketed?  A full 35 percent fell outside this range and if we accounted every pig sold as a cull to a light weight market or resold as unfit, we approach 40 percent outside the box.  Now consider the percent of pigs in the box above not of total marketed, but as a percent of born alive or weaned and the percent in the box starts to look challenged.

Placing a box in the matrix gets at the question, how do you judge what is an acceptable or standard pig?  For many people, a pig which does not receive a discount from the packer is an acceptable or standard pig.  For others, it is any pig which the packer doesn’t reject or resell.  The common thread which connects all of the answers I hear is that none of them are strictly based on the profitability of the pigs sold.

The weight and lean percent ranges which determine which pigs receive a premium (or no discount) can be very wide and while correlated with profit are by themselves, poor targets for a couple of very important reasons.  First, in a typical packer matrix in the US, this range of premiums (or no discounts) can encompass 35-50 lbs in the live weight and five to eight percentage points of lean.  The profitability difference between pigs that receive some premium or that make it into this producer’s target box can differ by $15 or more per head on each end of the box.  Second, even if a pig receives a discount it may still earn a profit.   In fact, at the borders of a box containing the “undiscounted” or premium priced pigs are many such “cross-over” pigs, pigs earning more profit per head outside the box than some that make it inside.

The most common mistake producers make when setting targets for standard or acceptable pigs marketed is the over-reliance on sort loss as the key measure of success.  The problem with this measure is that it is imprecise.  The mistake is made:  If we consider a single load of pigs sold on a particular day, the less sort loss the better (the more profits).  However, if we compare selling it today versus waiting a week, we may incur more sort loss/cwt by waiting, but still increase total profitability for the load.  This is where many producers get confused comparing sort loss and profitability on a given day versus sort loss and profits at two different points in time.

Another way to think is if I sell my pigs at an average weight of 275lbs, I want all the pigs to be tightly grouped around the average.  This reduces sort loss and increases profitability.  However, if I compare selling at 275 vs. 280, I may have higher average sort loss at 280 but have higher total profit per pig when market prices and feed costs are favorable.  The industry needs a way to clarify these confusing concepts, especially over the next several months when profitability is likely to be high.  No one wants to miss an opportunity by applying a conventional wisdom that may be limiting profits.

The National Pork Producers Council’s World Pork Expo, June 9, 10 and 11 at the Iowa State Fairgrounds in Des Moines, Iowa, is a much-anticipated annual event that brings together pork producers, allied industry, international visitors, industry leaders and the media.

As the largest pork-specific trade show, World Pork Expo is considered the prime spot for introducing new products, entertaining producer customers and learning about what the trends in the industry. Some 19,000 pork producers attend along with thousands of exhibitor staff, event workers and industry influencers.

Over the years, World Pork Expo has evolved from the early days in the 1980s when it was an industry event that showcased pork products to a huge consumer event that happened to have a pork industry trade show attached through the 1990s, to what it is today, a global, industry-focused trade show that brings together all aspects of the sector.

Today’s World Pork Expo is two and a half days of trade show for producers interested in upgrading their genetics programs, finding out the latest animal health information and learning about technological advances that will allow them to be better stewards of the welfare of their animals, the environment and their businesses. They come to visit with fellow producers and favorite suppliers; to celebrate when prices are up and commiserate when prices are down.

More than meets the eye

As a pork producer strolling the aisles, talking with suppliers, sitting in on educational seminars and enjoying a free lunch at the Big Grill, it might be hard to tell that there are many layers of industry happenings going on during World Pork Expo.

Most importantly, of course, is the interaction between producers and exhibitors. That’s really the whole point behind the event: to provide a forum that highlights best practices and helps producers find the solutions to the ever-changing issues they face.

It also helps that World Pork Expo is a great place to reconnect with colleagues and enjoy the company of some of the great folks who share a common passion for the pork industry.

World Pork Expo is all about producers and exhibitors but, because the U.S. pork industry is recognized as a powerhouse in domestic and global trade, World Pork Expo also draws top level government officials and industry leaders as well as local, national and international media.

NPPC makes wise use of World Pork Expo as a platform to announce its work toward addressing the issues that impact the U.S. pork industry.

On the opening day, the media center – a quiet little building on the west side of the grounds – is buzzing with news conferences beginning at 8 a.m. and continuing throughout the day. Reporters file their stories and broadcasts, conduct interviews in the hallways and use the media center as home base throughout their visit.

World Pork draws reporters from trade media and general news organizations. Just last year, reporters were on hand from as diverse a media pool as Pig Progress from the Netherlands to Bloomberg News to the local affiliate stations for NBC, CBS and ABC.

NPPC’s representatives work to provide story ideas and interviews that fit each reporter’s needs. A national ag industry reporter needs a different story than the local TV news, so interviews are arranged to fit each reporter’s audience.

For the past two years, CNBC’s commodities reporter, Jane Wells, has conducted live broadcasts from World Pork Expo’s hog show arena beginning at 7 a.m. on the second day of the show. The broadcasts include interviews with pork producers and industry influencers recorded the day before and sent via satellite link from the fairgrounds.

Not only is this important for the news of the day, but the CNBC camera crew takes the opportunity to capture background footage of the show that is used throughout the year to illustrate livestock and ag industry reports. Rather than relying on stock footage, CBNC’s producers have great shots of good-looking, best-of-breed hogs being shown by dedicated kids and adults in a clean environment.

In a time when anti-ag activists are adept at supplying footage that shows ag in a negative light, NPPC has realized the importance of showing that pork producers take the welfare of the animals in their care very seriously. World Pork Expo provides that opportunity on a national and international scale.

Where there’s a crowd

Of course, where there’s a crowd, there are politicians and World Pork Expo also draws its share, including senators, ambassadors, cabinet members…even presidents.

Some producers will remember that in 2002 President George W. Bush spoke at World Pork Expo, marking his first post-911 visit to Iowa. What those producers will not have seen was the extensive preparation for the visit, weeks of working with the White House and Secret Service on logistics, security and background checks.

A White House Press Room was set up in the Varied Industries Building where national and international news teams filed their reports. Nearly 200 requests for media credentials had to be vetted and verified.

There was set-up for the pre-speech meeting with NPPC’s producer board of directors and the post-speech picnic where the President rolled up his sleeves and dug into some tasty barbecue provided by the National Pork Board.

Looking back at the photos from the event, it was clear that this visit was taken very seriously by the Bush administration. In the entourage were faces that weren’t so well known then as they are now, including Tom Ridge, Karl Rove and Ari Fleischer.

And yet, even with this intense pressure, pork producer hospitality ruled. As the president’s limousine was rolling out, one SUV lagged behind. Suddenly, a chef rushed up with a Styrofoam to-go box filled with barbecue and handed it to the Secret Service agent at the wheel. “If we forget the pilot’s ribs, Air Force One isn’t going anywhere,” the agent said as he sped after the motorcade.

While it’s fun to reminisce, it’s even more fun to look forward to what the 2010 World Pork Expo holds in store.

It’s no secret that the past few years have left the industry feeling pretty battered. But the extraordinary thing about the pork industry is its optimism in the face of adversity, the ability of producers and suppliers to plan for and ride out the inevitable tough times, coming out stronger and with better solutions on the other side. It will be great to see what the industry has come up with this most challenging round.

Just remember, though, as you’re visiting with your friends at JBS United, there’s a lot going on behind the scenes on behalf of you, your fellow pork producers and the entire industry.

As we all anticipate this year’s World Pork Expo at the Iowa State Fair Grounds in Des Moines, we should take time to appreciate those who focus on preparing this great event. This year’s Expo will be held June 9 to the 11 and will bring together thousands of pork producers and industry leaders from all over the world.

At the World Pork Expo, companies have the opportunity to put their name out in front of the most influential pork producers. As a producer, there are three exciting days of learning, collaborating and training. Those attending should make use of the unlimited knowledge that surrounds you and your peers and take time to learn from each other.

This edition of the paper focuses on the “behind the scenes” of the expo and what it takes to make it a great event, year after year.  Share your thoughts and experiences from World Pork Expo 2010 and join in the online conversation at www.currentinpork.com.

The Future of the Quebéc Hog Industry

Over the past ten years, the Québec hog industry has grown on average four to five percent each year.  In 2009, total hog production was about 7.8 million finished hogs; about half that number would have been produced in larger integrated systems.  At least 400,000 finished hogs were born in other provinces.  This tendency of sourcing weanlings in other provinces goes back to when the Québec government placed a moratorium on new development projects.  This moratorium was lifted, but with significant permitting requirements.

Québec has had it hard over the last few years.  Circovirus struck in late 2004 and early 2005, long before hitting the rest of North America.  Reprieve came in the spring of 2006 with the vaccine.  Since then, producers have been confronted with high feed costs, an appreciating Canadian dollar and low hog prices.

The industry is split in terms of independent versus corporate/contract growers.  There are about five key corporate/contract grower groups in Québec, including Agri-Marché.  However, our business model includes a significant independent producer segment.

In the past, the provincial government has provided a risk share program (ASRA), which helped producers through tough times.  Producers are still responsible for accumulated deficit amounts and must pay a risk premium over $10 per market hog.  Additionally, qualifying restrictions were added in order to constrain hog production. In 2011, the external sourcing of weanlings may change considerably with new provincial government rules, where the risk share program will only cover Québec born pigs.

Over the last 6 months, the Federal Hog Farm Transition Program has contributed to reducing the sow herd size of at least 137,000 sows in Canada.  This will have a ripple effect on the number of hogs going to market in the next six to nine months (allows for staged depopulation scenarios).  The most critical concern will be whether we see abattoir closures.  In Québec, there are about six sizeable abattoirs where the largest has over 50 percent slaughter capacity.

In the future, we could see further industry consolidation and an increased competitive landscape in the animal feed business.  Despite challenges, the Québec industry remains an exciting and competitive environment where opportunities exist for those who innovate and think outside the box.

Contact – pgaudreau@agri-marche.com

Countering the mythology about farm antibiotics

The public gets treated to a constant barrage of oversimplified, sensationalized and just plain incorrect myths about how and why pig farmers use antibiotics. It’s become, according to Liz Wagstrom, DVM, former assistant vice president of science and technology for the National Pork Board, “a kind of urban legend.”

One good example was repeated last summer during Congressional testimony regarding the pending federal legislation to ban most uses of animal antibiotics. In his testimony, biogenetic engineering researcher Lance B. Price, PhD, repeated a myth that’s been popularized by opponents of farm antibiotics, including the bill’s sponsor. “Except in extremely rare situations,” Dr. Price told the House Rules Committee, “we do not try to prevent outbreaks of human diseases using population-scale antibiotic treatment. We would never consider doing away with our hygiene-based interventions and relying solely on antibiotics to maintain human health, so why do we do this with animals?”

CBS anchor Katie Couric echoed that myth during the network’s two-part series on farm antibiotic use in March, when she challenged Dr. Wagstrom: “Some people say giving animals antibiotics to prevent illness or promote growth is like putting antibiotics in a child’s cereal.”

Let’s first de-stuff the obvious straw man raised by Dr. Price’s assertion that farmers “do away with hygiene-based interventions.” Farm record summaries over the years show that for every nickel the average U.S. pig farmer has traditionally spent on feed additives and medicated feed, for instance, he has invested roughly 75 cents in facilities and the electricity and fuel to heat and air condition them, labor to clean and care for animals, and veterinary care to tend them.

Dr. Price’s dismissal of subtherapeutic and group-level use of antibiotics in human medicine is equally disingenuous. Here’s why:

• Benefits to giving human patients a routine course of antibiotics before surgery were reported as far back as the 1960s. Today antibiotics are routinely given alongside anesthesia, as well as to prevent meningitis, periodontal disease and other diseases in intensive care patients. Though Dr. Price is correct in arguing it’s not done to replace hospital hygiene, it is certainly done in response to poor general hospital infection control, in which studies prove personnel fail to simply wash their hands from half to 75 percent of the time, and 2 million patients are infected annually.
• The National Library of Medicine’s database of journal research lists more than 2,300 scientific reviews on the subject of human antibiotic prophylactic prescribing, and more than 11,000 original studies. Although obviously not all encourage the practice, a brief scan of the reviews confirms routine antibiotic prevention is in fact commonly recommended to prevent infection during procedures and conditions ranging from orthodontics to heart surgery to acne.
• So-called “epidemiologic treatment,” or giving every patient a course of antibiotics regardless of whether or not they’ve tested positive for the target disease, has been recommended to prevent venereal disease by the government’s advisory panel for clinical preventive medicine for two decades. It’s precisely the kind of “population-scale antibiotic treatment” Dr. Price deems unacceptable when veterinarians do it.
• Antibiotic risk assessment expert Tony Cox, PhD, calculates that in the United States, fully one third of all human tetracycline—the second most heavily prescribed human antibiotic—goes not to treat or prevent infectious disease, but to help clear up teen acne. It is used in just the type of low-dose, months-long regime criticized when producers do it.
• Two recent studies show such routine preventive antibiotic dosing helps prevent, respectively, MRSA during surgery and post-partum infection in women undergoing Caesarean birth. Both meta-reviews (a recombination and recalculation of data from several studies into one), the first showed injecting antibiotic into the nostrils of patients prior to surgery reduced the rate of MRSA infection after surgery by eradicating bacterial colonization common there, while the second review found pre-Caesarean antibiotics reduced serious infectious complications for the mother by 31 percent.
• According to a review by Scottish infectious disease specialist Ian Gould, MD, the average hospital now uses the equivalent of every patient receiving a full daily dose of antibiotic from their first day of admission until the day they’re sent home. Although Dr. Gould rightly notes that on average, less than half of patients will actually receive antibiotics at any one time, the healthcare system has reached the point of antibiotic “ecological saturation” because those who do get antibiotics are often on double doses or combination doses. “Many guidelines advocate prolonged antibiotic prophylaxis,” he writes, “…and often these uses are justified by a reasonable evidence base. On many other occasions, however, prescribing is definitely inappropriate—‘just in case’ or on the basis of a poor quality severity assessment or misdiagnosis.”

Contrary to what has been reported by the media and in testimony before Congress, routine preventive administration of antibiotics is an important tool doctors use to help prevent disease in susceptible human populations, just as veterinarians and producers do.

Contact – admin@antibiotictruths.com

Discussions from Ralph’s

The warm weather has arrived and the high market hog prices have brightened attitudes.  Warm weather brings its share of storms and tornadoes as well as the rebirth of Mother Nature.  A trucker who stops in regularly says he can best tell the change of seasons by the type of road kill.  According to Darnell, deer and raccoons are multi-season species, but skunks and muskrats are definite signs of warmer weather.

A recent discussion at Ralph’s Tire Repair & Convenience Store has been food labeling. Food labeling is interesting; Ralph’s carries a new drink called “Muscle Milk”, a nutritional shake that clearly states on the label it contains no milk.

Another interesting food label thought: the USDA says that locally grown food is anything produced within 400 miles of where you live.  This means someone living in Indianapolis could buy tomatoes labeled “locally grown” from parts of Ontario, Canada.

Protein producers have come under adversity, but a recent proclamation by the Governor of Michigan, Jennifer Granholm, calls for a “Meatout Day” and shows how little some politicians understand human nutritional needs and the economic impact of protein production.  More unnerving is the fact that agricultural groups such as produce, fruit, dairy and nut folks failed to offer comments.  Despite negative press, pork producers continue to stand behind their product and industry.  One producer made a profound statement, “My granddad and dad just had to work hard and produce a good product, but my generation needs to do the same PLUS tell friends, neighbors and consumers what we do, why we do it, and how we do it.  We need to reassure them that we are part of a socially responsible, safe and sustainable food production chain that protects public health and well-being.”

A woman from Chicago stopped by one day recently to have a tire fixed and realized that many of the patrons were farmers.  She said she has been farming on FarmVille, a popular online game, for the past six months.  She heard producers were having trouble with corn quality and didn’t understand why they wouldn’t plant another crop, wait a few hours, and then harvest the new crop.  Things must be easier in the virtual world as opposed to the real world.

Hope the weather is good in your area!