Cattlemen's Capitol Concerns: February 12, 2004

Cattlemen's Capitol Concerns

February 12, 2004

The 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 National Cattlemen’s Beef Association (NCBA).

Animal ID: This week, NCBA Director of Legislative Affairs Bryan Dierlam briefed U.S. Congressional staffers on both the House and Senate sides on the Animal ID issue and gave an update on the U.S. Animal Identification Plan (USAIP). NCBA is part of the USAIP team, that along with other industry groups, government officials and members of the academic community, have been working on a plan for over two years. We are confident the USAIP will accomplish the goals of enhancing cattle health monitoring in the event of an animal health incident.

While legislation is being introduced in Congress, the USDA has significant authority to proceed with implementation of an animal ID system without additional authority from Congress required.  Nonetheless, NCBA continues to monitor all legislation introduced and any developments relative to USDA existing authority.

Animal ID Bills:  Senator Chuck Hagel (R-NE) introduced legislation today which will implement a national animal identification plan. The bill, S. 2070, the ‘‘United States Animal Identification Plan Implementation Act’’ calls for amending the Animal Health Protection Act to direct the USDA Secretary to implement the USAIP. Already this session, there are at least seven new bills calling for an animal ID system. The Hagel bill draws on the expertise of the USAIP team, calls for confidentiality of producer information, and allows for participation by states and third party vendors.  Also this week, Rep. Collin Peterson (D-MN) introduced an animal identification bill that authorizes the Secretary to create a national electronic ID system for livestock.  The Peterson bill also contains language to protect producers from disclosure under FOIA.  

Australia FTA: This past weekend, U.S. and Australian negotiators concluded negotiations of a free trade agreement (FTA) between the two nations. The agreement is not final until approved by Congress, sometime this year or next. While NCBA has consistently had strong concerns throughout the final negotiations of this agreement, we have continued to be involved in the process, staying engaged in order to push for a realistic agreement that would minimize economic impacts on U.S. cattle producers. Our long-standing policy has been to negotiate further trade liberalization via the multi-lateral (WTO) process and urge that any bilateral agreement which increases access to the U.S. market be conducted parallel with the multilateral process. We are extremely disappointed that the U.S.- Australia FTA negotiations did not proceed in this way. We also do not believe any one particular commodity or agricultural product should be simply carved out of trade agreements, as it sets a bad precedent for future trade negotiations.

NCBA encourages the Bush Administration to put every means at its disposal into completing a multilateral (WTO) agreement that will provide significant new access for U.S. beef exports. Also, we urge the Administration to focus resources on re-opening export markets lost after the Dec. 23rd identification of a single cow with bovine spongiform encephalopathy (BSE).

What Will this FTA Mean for Cattle Producers? The agreement is not final until approved by Congress, and specifics are not yet available. In addition, it is important to keep in mind that Australia has only filled their tariff rate quota of 378,214 metric tons once in the past 10 years, in 2001. Here are the basics for beef: (1) Initial increased imports from Australia under the Tariff Rate Quota (TRQ) will amount to about 0.17 percent of U.S. beef production, and 1.6 percent of U.S. beef imports. (2) The quota increases will take effect when U.S. beef exports return to 2003 (pre-BSE) levels, or three years after the effective date of the agreement, whichever comes first. (3) After the transition period, a price-based safeguard will be available, designed to be sensitive to market disruptions for high-quality beef. (4) U.S. above-quota duties will be phased out over an 18-year period. (5) The U.S. and Australia will cooperate in international organizations on BSE standards. A summation of the overall agreement can be found at www.ustr.gov.

BSE Update:  USDA hosted a technical briefing Monday on the BSE investigation, and announced that the investigation is essentially complete.  NCBA applauds USDA, and especially the staff at USDA’s Animal and Plant Health Inspection Service (APHIS), for conducting the BSE investigation in a very thorough, open and transparent manner. More than 75,000 animals and 189 premises were investigated by USDA in their search. As expected, all 255 "animals of interest" found have tested negative for BSE. This includes 14 of the 25 ‘birth cohort’ – the animals born either one year before or one year after the index cow – deemed by international standards to be animals we should target. Though 11 of the 25 animals were not found, they represent a very low risk for BSE according to the USDA and the International Review Team. With the investigation complete, we want to move forward, and we are confident we can resume trade with our international partners consistent with guidelines established by the Office of International Epizootics.

Japan Trade Negotiations:  While NCBA continues to be involved in trade negotiations and work towards the reopening of our export markets, U.S. Trade Representative Robert B. Zoellick was in Japan this week meeting with top Japanese trade officials.  The main purpose of the visit was to re-engage in a strategic dialogue on the Doha Round in the WTO. Next, the Ambassador will meet with trade officials in China, Southeast Asia, South Asia, Africa, Europe, and Costa Rica. NCBA strongly supports moving the Doha agenda forward, working for new additional export opportunities for U.S. cattle producers across the globe. The trade officials also discussed the single case of BSE found in the U.S. We continue to reiterate that our 15 years of preparation, firewalls and safeguards ensure the U.S. beef supply remains the safest in the world. The U.S. shall continue to reiterate the safety of our beef exports. We must fight for fair trade activities based on science.

CME Contract Changes: The CME recently submitted a proposal to the CFTC to double the daily price limit on the live cattle and feeder cattle contracts from the current limit of $1.50 per cwt to $3. At the recent 2004 convention in Phoenix, NCBA members debated this proposal and adopted policy not to support the $3 limit and instead to propose an alternative.  The alternative would expand the limit to $2 on a daily basis, but allow the CME to move the limit to $3 if the market closes at the limit on two consecutive days.  The rule change by the CME was brought about due to the market volatility of the past few months and the inability of the $1.50 limit to accommodate changes in the cash price. 

NCBA is submitting comments to the CFTC which are due tomorrow, Friday, February 13th.  We are urging other cattle producers and interested parties to draft comments of your own and submit them by close of business tomorrow.  It is important that we all comment, and have producers comment, or the CME will likely expand the limit to $3.  To quickly submit comments online, go to http://hill.beef.org/comments1.asp .

Thailand Trade: U.S. Trade Representative Robert Zoellick announced today intentions to negotiate a free trade agreement (FTA) with Thailand. Thailand is already the U.S.’s 18th largest trading partner with $19.7 billion in total trade during 2002, and the 16th largest market for U.S. farm exports. Increased access to Thailand's market would be a logical step toward negotiating agreements with other Asian countries and would create new opportunities for U.S. agricultural producers.

Prairie Dog/Endangered Species Update:  The U.S. Forest Service has decided to change their control policy on Prairie Dogs. This is particularly good news for cattlemen who struggle with the animals and the damage they inflict on grazing lands.  USFS has historically prohibited cattlemen from controlling prairie dog populations.     

USDA Announces Emergency Conservation Program Funding:  USDA Secretary Ann Veneman announced this week almost $2 million in Emergency Conservation Program (ECP) funding for Alabama, Colorado, Idaho, Missouri, Mississippi, Oklahoma, South Dakota, Tennessee and Utah. The funds are aimed at helping farmers and ranchers rehabilitate land damaged by natural disasters across the country, including drought, tornados and flooding.  More information on ECP and other disaster assistance programs is available at local FSA offices and online at: http://disaster.fsa.usda.gov/.

State Meetings: NCBA Chief Economist Gregg Doud is speaking at the High Plains Ag Expo in Goodland, Kansas today.  Doud will brief attendees on the latest export market developments, estimated cost of new BSE regulations, and the status of the U.S. Animal Identification Plan. NCBA Director of Legislative Affairs Bryan Dierlam will be traveling to Georgia for the Georgia Cattlemen’s Association Convention this weekend in Athens, Feb. 13-15.  Dierlam will give an update on what’s happening lately in Washington D.C., legislative initiatives dealing with BSE, animal ID, funding for animal health programs and other policy issues.

Bring Your Voices to the Steps of the U.S. Capitol! It’s that time of year again… plans are already in the works for the 2004 NCBA Spring Conference on the Capitol. Hundreds of cattlemen from across the country will be heading to Washington for this can’t-miss event! Attendees will hear directly from top policymakers, meet face-to-face with key Congressional offices, government agency influencers and have the opportunity to articulate policy priorities for today’s cattle industry. Rumor has it, NCBA has even extended an invitation to Vice President Cheney to speak with our members. In light of the recent discovery of one case of BSE in the U.S., cattle industry issues are especially "hot topics" in Washington D.C. this year.

This Washington D.C. meeting is another chance to congregate forces, review top political priorities for cattle producers, and tell members of Congress and government officials first-hand about what’s needed where you live. For more information, go to http://hill.beef.org/spring or contact our D.C. office at 202-347-0228.

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

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.

For more information, please visit our web site at hill.beef.org.

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