Cattlemen's Capitol Concerns Archive
Cattlemen's Capitol Concerns
February 7, 2008
The Cattlemen’s 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 Cattlemen’s Beef Association (NCBA). Please feel free to reprint in full or in part. If you’d like to include NCBA’s logo, contact us at 202-347-0228.
Cattlemen Gather to Set Policy Priorities: More than 5,000 cattle producers from across the nation are in Reno, Nevada, this week for the 2008 Cattle Industry Annual Convention and Trade Show. The event is hosted by the National Cattlemen’s Beef Association (NCBA), the Cattlemen’s Beef Board, American National CattleWomen, Cattle-Fax, and the National Cattlemen’s Foundation.
Convention activities kicked off on Wednesday, February 6th with Cattlemen’s College, a full day of producer education workshops. Wednesday afternoon also marked the opening of the cattle industry’s largest-ever trade show. The NCBA Trade Show has attracted over 270 exhibitors this year and includes a new demonstration area featuring cattle dog training, chuteside handling techniques, and ranch horsemanship.
Thursday’s program includes the Annual Cattle-Fax Outlook Seminar, which examines underlying trends and issues affecting cattle producers’ profitability in the coming year. Experts from Cattle-Fax presented their analysis on cattle and beef inventories, feedgrain supplies and costs, and global trade opportunities, as well as a long-term national weather outlook (see “Cattle-Fax Outlook Warns of Continued Volatility” below).
Friday’s agenda includes a keynote address by newly confirmed U.S. Agriculture Secretary Edward Schafer (see “Schafer to Address Cattlemen in Reno” below). Also on Friday are the ever-important NCBA committee meetings, where NCBA members will discuss policy that could become NCBA’s roadmap for the future. This policy will be voted on by NCBA members at Saturday’s Board of Directors and annual membership meeting.
Updates on convention news and activities will be posted at www.beefusa.org. A complete convention agenda and schedule of events are available at: http://www.beefusa.org/convscheduleofevents.aspx.
Cattle-Fax Outlook Warns of Continued Volatility: Volatility in the grain markets is sure to squeeze cattle feeders and limit prices for feeder calves in the coming year, according to today’s Cattle-Fax Outlook Seminar at the 2008 Cattle Industry Annual Convention. The livestock industry struggled to adjust to $3 per bushel corn for most of last year, and prices exploded to over $5 per bushel in January with no expectation of dropping.
"Prices for other commodities have risen along with corn, increasing competition for what farmers choose to plant," said Randy Blach, executive vice president of Cattle-Fax.
Unprecedented demand for corn, wheat and soybeans is driving the price surge. Primary causes for this trend are strong export demand and the increased government mandate for ethanol development as directed by the recently passed energy bill.
"Profit opportunities exist, but it will take tough management to find them this year," said Blach. "We always have to re-evaluate our business, and some of the dynamics this year make it imperative that cattlemen position their business to minimize risk as much as possible and take advantage of the profit opportunities that are out there. Volatility will be more extreme than in years past."
Schafer to Address Cattlemen in Reno: A highlight of the 2008 Cattle Industry Annual Convention in Reno will be remarks by U.S. Ag Secretary Ed Schafer on Friday morning. Schafer was appointed by President Bush on October 31st, and unanimously confirmed by the U.S. Senate on January 28th.
“As governor of North Dakota, Secretary Schafer worked actively to expand overseas markets for U.S. products,” said NCBA President John Queen, a cattleman from Waynesville, N.C. “He also took a strong leadership role on many ag issues with the National Governor’s Association. So cattlemen look forward to hearing from him on Friday, and to working with him as the new leader of USDA.”
It is expected that the Secretary will discuss the impact of rising corn prices, the status of the 2007 Farm Bill, and his plans for addressing the continuing beef trade impasse with Korea and Japan. This will be Schafer’s first public address before the cattle industry.
Meanwhile, back in Washington…
President Continues Push on Beef Trade: Although he was officially confirmed as Agriculture Secretary on January 28th, Ed Schafer was sworn in yesterday, February 6, in a ceremony at the Department of Agriculture with many political leaders – including President Bush – in attendance. In his remarks, President Bush stressed the importance of the Administration’s trade agenda and highlighted Schafer’s important role in expanding foreign markets for U.S. agriculture products, especially U.S. beef.
“Ed is going to join with other members of my administration to work to pass free trade agreements with Colombia and Panama and South Korea,” the President said. “We will support a successful conclusion to the Doha round of trade talks. Ed and I are going to work tirelessly to open foreign markets for U.S. beef.”
Senate Names Farm Bill Conferees: The U.S. Senate took one step closer to completing the 2008 Farm Bill this week by naming their representatives to the Farm Bill Conference Committee. The following Senators, all members of the Senate Agriculture Committee, were appointed as conferees:
Majority
- Tom Harkin (D-Iowa), Senate Agriculture Committee Chairman and Chairman of the Conference Committee
- Max Baucus (D-Montana), Senate Finance Committee Chairman
- Kent Conrad (D-North Dakota), Senate Budget Committee Chairman
- Patrick Leahy (D-Vermont), Senate Judiciary Committee Chairman and former Chairman of the Senate Agriculture Committee
- Blanche Lincoln (D-Arkansas)
- Debbie Stabenow (D-Michigan)
Minority
- Saxby Chambliss (R-Georgia), Senate Agriculture Committee Ranking Member and former Chairman of the Senate Agriculture Committee
- Richard Lugar (R-Indiana), Senate Foreign Relations Committee Ranking Member and former Chairman of the Senate Agriculture Committee
- Charles Grassley (R-Iowa), Senate Finance Committee Ranking Member
- Thad Cochran (R-Mississippi), Senate Appropriations Committee Ranking Member and former Chairman of the Senate Agriculture Committee
- Pat Roberts (R-Kansas), former Chairman of the House Agriculture Committee
NCBA is monitoring any action by the House of Representatives to appoint their conferees. Until that takes place, House and Senate Agriculture Committee staff will continue to meet to work on differences between the House and Senate bills.
The House Ag Committee has developed Farm Bill conference side-by-side documents that compare provisions in both bills. These are posted on the House Ag Committee website at:
www.agriculture.house.gov.
Congress Ponders COOL Delay: House Ag Committee Chairman Collin Peterson (D-Minn.) told the Wall Street Journal this week that the law to implement mandatory country-of-origin labeling (COOL) may be postponed due to the delay in finalizing a new Farm Bill.
Language in both the House and Senate versions of the 2007 Farm Bill makes some much-needed adjustments to the mandatory COOL law scheduled to be implemented in September of this year. USDA’s rulemaking process can’t begin until provisions to the COOL law are finalized, and there may not be enough time to go through an appropriate rulemaking and implementation process. Peterson says the continued delays may push back implementation of COOL to January 2009.
Concerns Arise as Senate Reviews New RFS Increase: The Senate Energy and Natural Resources Committee held a hearing today, February 7, to listen to testimony on the energy market effects of the Renewable Fuel Standard (RFS) increase, which was included in the energy bill signed into law on December 19, 2007.
In remarks today, Committee Chairman Jeff Bingaman (D-N.M.) acknowledged potential flaws with the RFS increase. “I am particularly concerned about three aspects of the RFS: first, early year biofuel requirements could be too aggressive; second, mandates for specific technologies and feedstock could prove to be overly prescriptive; finally, the environmental restrictions may be too narrow,” said Bingaman.
NCBA actively opposed increasing the RFS and urged Congress to take a market-based approach to ethanol development. The new law calls for the production of 15 gallons of grain-based ethanol by 2015, up from a total requirement of 7.5 billion gallons under the previous RFS.
“The law favors certain technologies and feedstocks with individual mandates. This kind of micromanagement is likely to make government policy look foolish in the long run,” said Bingaman. “If we cannot produce enough ethanol and biodiesel to meet these aggressive mandates, while maintaining food and fuel prices that consumers can afford, taxpayers will blame Congress, as they should.”
Hearing on National Veterinary Medical Service Act: The House Ag Subcommittee on Livestock, Dairy, and Poultry held a hearing February 7, to review the National Veterinary Medical Services Act (NVMSA). The NVMSA was enacted in 2003 and directs USDA to help pay the educational loans of licensed veterinarians who agree to work in areas of the country that are underserved by veterinarians, in underserved disciplines of veterinary practice or in underserved areas of the federal government.
While the NVMSA has been funded each year, the USDA has yet to initiate a rulemaking process. Objectives of today’s hearing were to determine the cause for delay and get the program back on track toward development and implementation.
NCBA members recognize an urgent need for more large animal veterinarians to help serve the cattle industry, especially in rural areas. NCBA policy encourages the vigorous recruitment, selection and training of students with the aptitude and desire to fill the increasing void of food animal veterinarians.
“I think we are headed for a train wreck if we do not address the lack of veterinarians in rural areas and the lack of ‘heir apparent’ large animal/food animal veterinarians to take the place of soon-retiring veterinarians,” said Rep. Jack Kingston (R-Ga.) who is the Ranking Member on the House Appropriations Subcommittee on Agriculture. “There are about 85,000 veterinarians practicing today, and of that number, 8,550 are food animal veterinarians - that’s only 10 percent of veterinarians working in the food animal field.”
Kingston also pointed out that, included within the Fiscal Year 2008 Omnibus Appropriations Bill, was language directing USDA to come up with a timeline and implementation plan. There is also language in the Senate Farm Bill that asks the same of USDA in addition to requesting an emphasis be placed on food animal veterinarians.
Cattlemen Support Ag Transportation Bill: NCBA sent a letter this week to Rep. Dan Boren (D-Okla.) in support of a bill he introduced that exempts agriculture producers from certain commercial trucking rules.
“Our members are just cattle producers trying to make a living by hauling their own cattle and feed, not commercial truckers who are driving cross-country with loads of goods that don’t belong to them,” wrote Jay Truitt, NCBA’s vice president of government affairs. “As such, we do not believe that individual cattle producers should have to register their vehicles with the Department of Transportation, abide by hours of service rules, maintain driving logs, submit themselves to government drug tests, or maintain any of the other records that were intended only for commercial truckers.”
Boren introduced H.R. 3098 in July 2007, and the bill currently has 20 cosponsors. The bill is awaiting further action in the House Transportation and Infrastructure’s Subcommittee on Railroads, Pipelines, and Hazardous Materials.
Defense, Economy Highlight Budget Priorities: President Bush released his Fiscal Year 2009 budget request on February 4th. The package, aimed at strengthening the nation’s economy as well as homeland security and defense initiatives, also promises to make certain tax relief provisions permanent.
For the ag sector, total USDA expenditures are estimated at $95 billion in Fiscal Year 2009, which is approximately the same level as 2008. Roughly 76 percent of expenditures, or $72 billion in 2009, will be for mandatory programs that provide services required by law, which include many of the nutrition assistance, commodity, export promotion and conservation programs.
USDA's discretionary programs account for the remaining 24 percent of expenditures, or $23 billion in 2009. Discretionary programs include the Women, Infants and Children (WIC) Program; rural development loans and grants; research and education; soil and water conservation technical assistance; management of National Forests and domestic marketing assistance.
Update on Economic Stimulus Bill: The Senate failed to approve their version of an economic stimulus package this week. The House overwhelmingly approved its stimulus bill, H.R. 5140, on January 29th, but the Senate worked to assemble a more aggressive approach which failed to achieve the necessary 60 votes to advance.
Senate Majority Leader Harry Reid (D-Nev.) has said he wants to send a final version of the bill to the President’s desk by February 15th. The Senate is likely to consider a modified version in coming days.
NCBA sent a letter last week to Senate Finance Committee leaders supporting certain provisions being considered as part of an Economic Stimulus package. NCBA expressed support for a provision that increases the depreciation deduction limitations under section 179 from $128,000 to $250,000 with a corresponding increase in the phase-out threshold from $510,000 to $800,000. NCBA also voiced support for the special depreciation allowance and Net Operating Loss (NOL) carry back rules as important tools for small businesses.
NCBA Asks Congress to Reject “Managed Trade” Proposal: NCBA, along with 37 other agriculture and food groups, sent a letter this week to Congress opposing legislative language which would manage the trade of sugar with Mexico.
“Adopting managed trade with Mexico would effectively amend the free trade provisions of NAFTA by instituting export and import restraints,” says the letter. “Moreover, this managed trade proposal contains other international trade violations that could subject the United States to challenge and unravel the free trade opportunities that the U.S. agricultural sector worked so hard to achieve.”
“This proposal could set a dangerous precedent,” says NCBA’s Director of Legislative Affairs Stacey Satterlee. “Furthermore, this kind of political maneuvering could open the door for Mexico to enact similar policies at the detriment of other U.S. commodities. We must protect the lucrative trading relationship we have established with Mexico under NAFTA.”
Senators Continue Call for Action on Korean Trade: Senator Sam Brownback (R-Kansas) asked U.S. Trade Representative Susan Schwab to find a way to fully reopen the South Korean market to U.S. beef imports. “It is past time that our trading partners around the world realize that U.S. beef is the safest and of the highest quality in the world,” said Brownback. “I will continue fighting for a full resumption of U.S. beef shipments to South Korea.”
Brownback’s conversation with Schwab comes on the heels of similar communications between Schwab and Senator Max Baucus (D-Mont.), who promised to stall the U.S.-Korea Free Trade Agreement in the Finance Committee until Korea lifts the beef ban.
The Senators and industry officials agree that any new protocol conditions with South Korea must result in commercially viable trade, meaning full market access to all U.S. beef – boneless and bone-in – from cattle of all ages based on OIE guidelines. A protocol must also establish criteria to fairly assess U.S. beef imports and to resolve conflicts on a case-by-case basis should they arise.
Farm Bill Conservation Programs: NCBA and 31 additional cattle and environmental organizations sent a letter to House and Senate Ag Committee leaders regarding the Grassland Reserve Program (GRP) in the House and Senate Farm Bills.
NCBA is urging that the Farm Bill maintains a strong GRP and outlined support for the following priorities:
- increase the GRP acreage to two million acres with no fiscal cap. At a minimum, keep the 1.34 million acres as directed by the