Cattlemen's Capitol Concerns

March 6, 2008

The Cattlemens Capitol Concerns (CCC) is a weekly report from Washington, D.C., giving an up-to-date summary of top policy initiatives concerning the cattle industry; direct from the National Cattlemens Beef Association (NCBA). Please feel free to reprint in full or in part. If youd like to include NCBAs logo, contact us at 202-347-0228.

USDA Prepares Rule to Increase Access for Beef from Argentina: NCBAs cattle-producer members are worried that USDA will soon release a rule that could expand trade access for Argentina and jeopardize the health of the U.S. cattle herd. Animal diseases, especially Foot-and-Mouth Disease (FMD), continue to be a problem in Argentina and neighboring countries. For this reason, NCBA has opposed USDA releasing the rule before conducting an updated and thorough risk assessment.

In response to the proposed rule formally titled, Change in Disease Status of the Patagonia South Region of Argentina With Regard to Rinderpest and Foot-and-Mouth Disease, NCBA filed comments nearly one year ago on this issue in March 2007.

The risk to U.S. agriculture and to our cattle producers of introducing FMD into our country is too great and the economic and animal health consequences are far too significant to prematurely allow a change in the disease status of Patagonia South as it relates to FMD and rinderpest at this time, NCBAs comments said. USDA should keep in mind that their actions must protect the health of the United States cattle herd as well as protect the economic livelihood of U.S. cattlemen and other affected livestock species as trade is resumed with all international partners.

Of equal concern to cattlemen is why USDA would expand their efforts to increase beef imports from another country when U.S. beef and breeding stock exports to other countries continues to be banned.

Clearly USDA has its priorities mixed up, says NCBAs Vice President of Government Affairs Jay Truitt. It is unconscionable for USDA to work to expand access for any other beef into our country when they have yet to fulfill its responsibilities regarding the reopening of export markets for U.S. beef and breeding stock. Scienceis always the primary concern for making these types of decisions but you just cannot ignore the financial impacts of these types of decisions especially when costs of production are skyrocketing largely based on government policies. We needrelief and we need results that mean beef and cattle sales to previously strong markets.

Texas Closes Border to Canadian Cattle Bound for Mexico: Texas Agriculture Commissioner Todd Staples announced March 4th an order to stop specific Canadian cattle from passing through the states export facilities into Mexico.

Texas cattlemen support the move.In a joint statement issued today by the Texas and Southwestern Cattle Raisers Association, Texas Cattle Feeders Association, and the Texas Farm Bureau, the groups say, It is imperative that Mexico accept all U.S. breeding cattle consistent with OIE standards, including cattle older than 30 months, so that U.S. beef producers continue to have an equal and open market with Mexico. If Mexico can accept breeding cattle from Canada, they should accept them from the United States.

Mexico has denied access to U.S. breeding stock and older cattle since December 23, 2003, when the United States announced its first-ever case of BSE. Currently, Mexico will only allow the importation of U.S. dairy heifers under the age of 24 months, despite in-depth international negotiations to broaden this to include breeding stock.

When the United States implemented the second Minimal Risk Regions Rule on November 19, 2007, it was widely believed that Mexico would lift the restriction on breeding stock, but the situation between the United States and Mexico remains unresolved. Meanwhile, Mexico has agreed to take older cattle and breeding stock from Canada while denying the same arrangement with the United States, a move inconsistent with international standards.

The time for Mexico to allow the importation of U.S. breeding stock consistent with guidelines established by the World Organization for Animal Health is long past due, said NCBA Chief Economist Gregg Doud. What may be at play here is Mexicos concern about its exports to third country markets. If these countries are pressuring Mexico to go against international guidelines, we believe that is outrageous and completely unacceptable behavior.

USDA officials have reportedly expressed disappointment with their counterparts in Canada for yielding on confirmed science to political maneuvering.

"If USDA allows these cattle to cross the Canadian border into the U.S., they will not move through the Texas Department of Agricultures (TDA) export facilities along the Mexican border, Commissioner Staples said. I have instructed TDA employees overseeing the agency's livestock export facilities along the Mexican border to not facilitate the trade of any Canadian cattle that would be inconsistent with the protocol for exporting U.S. cattle to Mexico." Commissioner Staples is asking states that border Mexico to follow Texas lead.

TDA manages five livestock export facilities on the border in Brownsville, Del Rio, Eagle Pass, El Paso and Laredo. Additionally, there are two privately owned livestock export facilities in Texas and three other facilities in New Mexico and Arizona. Traditionally, the United States shipped approximately $125 million annually in live cattle breeding stock to Mexico.

JBS Acquisition Would Make Them Largest Beef Processor: JBS announced this week its intention to purchase National Beef, Smithfield beef assets and Five Rivers Ranch Cattle Feeding, LLC from Conti and Smithfield. The approximate value of the transaction is $1.5 billion, and the purchase would make JBS the largest beef processor and feeding operation in the United States.

Based in Sao Paulo, Brazil, JBS is a relatively new entrant to the U.S. beef industry and has proven its desire to be a major player in the United States through significant investment. NCBA appreciates the investment in the industry, says NCBA Vice President of Government Affairs Jay Truitt. One of our biggest concerns of the past several months has been the gradual closing of a number of processing plants due to economic conditions. This type of investment, at least temporarily, lessens those concerns.

As part of the transaction, JBS will acquire facilities in the following locations: From National Beef - Dodge City, Kan. (beef plant); Liberal, Kan. (beef plant); Brawley, Calif. (beef plant); Kansas City, Kan. (further processing); Hummel's Wharf, Penn. (further processing); and Moultrie, Ga. (further processing). From Smithfield - Souderton, Penn. (beef plant); Plainwell, Mich. (beef plant); Green Bay, Wisc. (beef plant); and Tolleson, Ariz. (beef plant). Also, the purchase will include some rendering assets from Smithfield.

The transaction is now subject to review by the U.S. Department of Justice, which will likely take a period of months. During the review period, all companies will operate independently, and there should be no immediate impact to the industry at large.

As with any transaction of this size and impact on the industry, the appropriate government officials will review this transaction to ensure the situation does not create an anti-competitive environment for U.S. cattlemen, said Truitt. Within this review, NCBA will be asking that buyer-side impacts to agricultural producers and seller-side impacts to consumers be considered. Cattlemen and consumers are welcome to comment on the process as well.

President Bush Urges Congress to Pass Colombia Trade Agreement: In remarks this week at the White House, President Bush signaled that he may be ready to send the U.S.-Colombia Trade Promotion Agreement (TPA) to Congress for consideration. Due to recent geopolitical unrest in northern South America, President Bush said the agreement was necessary at this time to demonstrate solidarity with the Colombian government.

My message to the United States Congress is that this trade agreement is more than a matter of smart economics, it is a matter of national security. If we fail to approve this agreement, we will let down our close ally, we will damage our credibility in the region, and we will embolden the demagogues in our hemisphere, President Bush said. Republicans and Democrats in Congress need to come together and approve this agreement. By acting at this critical moment, we can show the Colombian people and millions across the region that they can count on America to keep its word, and that freedom is the surest path to prosperity and peace.

The White House could submit the U.S.-Colombia TPA to Capitol Hill as early as next week. Under trade promotion authority "fast-track" rules, Congress would then have 90 days to consider the deal, which could mean a vote would take place by the end of July.

NCBA is a staunch supporter of the U.S.-Colombia Trade Promotion Agreement. The U.S.-Colombia TPA will create a two-way street for trade and would result in immediate duty-free access for high quality U.S. beef, and the elimination of tariffs on other products over 15 years, says NCBA Director of Legislative Affairs Stacey Satterlee.The best way for Americas farmers and ranchers to achieve and sustain prosperity is for Congress to support expanding trade within the global marketplace.

ATAC Members Announced: New and returning members of the Agricultural Technical Advisory Committee for Trade in Animals and Animal Products have been announced for the 2008-2012 term.

Of interest to cattlemen, the following have been named as participating members of the 31 person committee:

- Ed Blair, Blair Brothers Angus

- Daniel Dierschke, Dierschke Farms

- Gregg Doud, NCBA

- Dana Hauck, Pike Trail Cattle Company, Inc.

- Thad Lively, U.S. Meat Export Federation

- Terry Stokes, NCBA

Sage Grouse Decision Will Come During Next Administration: A Federal District Court decided on February 29th that the U.S. Fish and Wildlife Service (FWS) will determine, again, whether to list the Sage Grouse under the Endangered Species Act (ESA). As part of the evaluation of the status of the species, the Western Association of Fish and Wildlife Agencies (WAFWA) is completing a new Conservation Assessment that is expected to be completed in November 2008.

The FWS announced January 7, 2005 that the Greater Sage Grouse did not warrant protection under the ESA. A coalition of environmental groups challenged the decision in court, prompting the FWS to re-examine the issue. Under the order, the FWS will complete its determination at the latest by May 2009.

NCBA and the Public Lands Council have historically supported local conservation efforts as a more scientifically viable means for species protection than federal listing. Sage Grouse habitat often exists on Western rangelands where ranchers graze livestock. If the bird is listed as a federal endangered species, ranchers face increased costs, regulatory delays and land use restrictions that could seriously impact their operations.

NCBA Thanks Auction Participants: The 3rd Annual NCBA-PAC/PEF All-Breed Bull and Horse Auction was held Wednesday, February 6th at the 2008 Cattle Industry Convention and Trade Show in Reno. NCBA thanks those members who made it to the auction and especially those who contributed or purchased a lot!

2008 Bull Auction Contributors:

- Dalebanks Angus of Eureka, Kan.

- Marshall Cattle Company of Burlington, Colo.

- Genex Cooperative, Inc. of Shawano, Wisc.

- Yon Family Farms of Ridge Spring, S.C.

- One Penny Ranch of Foley, Minn.

- Gardiner Angus Ranch of Ashland, Kan.

- Wulf Limousin Farms of Morris, Minn.

- Ridgefield Farm, LLC of Dahlonega, Ga.

- Thomas Angus Ranch of Baker City, Ore.

- Bieber Red Angus Ranch of Leola, S.D.

- Leland Red Angus Ranch of Sydney, Mont.

- Seven L Ranch of Devers, Texas

- Steele Land and Livestock of Anita, Iowa

- Fink Beef Genetics of Randolph, Kan.

- TC Ranch of Franklin, Neb.

- Pollard Farms, LLC of Enid, Okla.

- Errer Hill Farms of Friedens, Penn.

- Byrd Cattle Company of Red Bluff, Calif.

2008 Bull Auction Buyers:

- Nock Trading Company of San Luis Obispo, Calif.

- Bill Larson of Fowler, Colo.

- Hilliard Brothers of Florida of Clewiston, Fla.

- Williamson Cattle Company of Okeechobee, Fla.

- Ross Garwood of Amelia, Neb.

- Tom Pyfferson of Pine Island, Minn.

- Mystic Hill Farms of Culpeper, Va.

- Centennial Livestock Paso Robles, Calif.

- Likely Land and Livestock of Likely, Calif.

- Tyndall Farms of Pink Hill, N.C.

- Bagley Cattle Company of Milville, Calif.

- Dallas Schott of McGiaughlin, S.D.

- Dahl Land and Cattle Company of Gackle, N.D.

- McCarty Cattle Company of Fruita, Colo.

- David Faber of Sioux Center, Iowa

- Joplin Regional Stockyards of Mt. Vernon, Mo.

- Wulf Limousin of Morris, Minn.

- Craig Uden of Cozad, Neb.

- Brain Debrie of Scottsbluff, Neb.

Don't Miss NCBAs Award-Winning Cattlemen to Cattlemen: On this weeks episode, airing March 4-9, Cattlemen to Cattlemen takes a look at the serious drought conditions affecting the southeast section of the country. Plus, we get the spring forecast from Dr. Art Douglas, and well visit a cattle producer in central Kentucky and learn more about premises registration. And just in time for Saint Patricks Day, our culinary expert will share great corned beef recipe!

On next weeks episode airing March 11-16, well discuss the proposed purchase of Smithfield Beef and National Beef by JBS, and Chad Spearman of Cattle-Fax offers insights on the grain markets. Plus, we take a look at the proposed Beef Checkoff enhancement. Well hear from two cattle industry experts about the cost of running a cow in 2008 as well as their tips on how to manage those higher expenses. And we pay tribute to cattle industry leader Paul Hitch.

Media Contact: Karen Batra at kbatra@beef.org or call 202-347-0228.

This publication is funded by cattle producers and other industry supporters through their voluntary membership contributions to NCBA. To join the tens of thousands of cattle producers from across the U.S. in working to preserve our legacy, contact NCBA Member Services at 1-866-BEEF-USA or Membership@beef.org.