July 21, 2005

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).

CAFTA: The final vote for the U.S. Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) is expected to occur in the U.S. House of Representatives next week. CAFTA is a great trade deal for cattle producers, breaking down trade barriers and offering immediate access for our Prime and Choice products. The time is now for cattle producers to call, write, meet with, somehow contact Representatives in their state and urge support for CAFTA.

The agreement passed the Senate on June 30 by a vote of 54-45. Also on June 30, the House Ways and Means committee passed the House version of the bill, H.R. 3045 giving the House just 15 more days to vote. For more information about beef and CAFTA or how to contact Congress, visit hill.beef.org/cafta, www.beefusa.org, or contact Michelle Reinke mreinke@beef.orgor Tanya Augustson taugustson@beef.orgor 202-347-0228.

President Speaks on CAFTA: With NCBA representatives in the crowd, President Bush today re-iterated his support of CAFTA, speaking to free trade supporters during an event sponsored by the Hispanic Alliance For Free Trade: "By eliminating barriers to exports from our country, CAFTA will help keep the U.S. economy growing. In other words, this is a jobs program… exports from Central America into the United States face almost no tariffs... [CAFTA] levels the playing field, which makes this a good deal for America's farmers and small business owners and manufacturers… It is important that we pass this piece of legislation. It's in our economic interests, it's in our national security interests that the House of Representatives join the United States Senate and pass that CAFTA bill, which I'll proudly sign on behalf of America's workers and small businesses and those of us who love and cherish democracy."

Cattlemen Fight Back on Death Tax: The Senate could vote on full and permanent repeal of the Death Tax next week. NCBA members continue to urge their Senators to support full and permanent repeal. Various state affiliates, NCBA members and past Young Cattlemen’s Conference (YCC) participants are working to help educate the media and policymakers and the media about how cattlemen have been impacted by the Death Tax. In response to an article inaccurately characterizing farmers and ranchers as not being affected by the Death Tax, a number of cattlemen have sent letters and are helping NCBA efforts in Washington D.C. to push for full and permanent repeal. This participation sets an example for other to follow and illustrates that change REALLY occurs first in the grassroots. Spread the word far and wide—the Death Tax has had long-term ramifications for most of us, and permanent repeal is the only way to escape this unfair tax on the American dream. Below are just a few victims’ voices from across the country. If your family has suffered with the Death Tax in any way, the time to speak out is NOW!

Paxton Ramsey: "I am a fourth generation cattle producer from a 101-year-old ranch in Devers, Texas. I have two children that I am doing all I know to do to continue to improve and increase the value of this ranch for this up and coming fifth generation. My Grandmother has just turned 90 and is doing very well. However, if something happens to her, the taxes that the third, fourth, and fifth generation will endure will most likely force us to sell quite a bit of land in order to pay them off, leaving us with less land to operate. The less land we have to operate, the less beef we can provide this country and the less chance my children, and not to mention the children of thousands of other ranches and farms, will have to make an honest, productive living on our family operation. The Death Tax is destroying farmers’ and ranchers’ chances to continue to provide for their families and for this country in an already difficult industry."

Mark Frasier: "I am a family rancher from Fort Morgan, Colorado. Years ago, the tax was created to restrict the generational transfer of property, to prevent us from becoming a nation of feudal lords and serfs.  It served no purpose then and it remains pointless today. An effective life-long plan to deal with the Death Tax costs thousands of dollars as ranchers contort the family business to remain under an arbitrary line.  Worse yet, those dollars are not available to hire new workers or reinvest and keep the ranch healthy and productive.  The risk is very real, since left unchecked, current law will expire in 5 years and leave even modest family farms and ranches exposed to tax rates as high as 55 percent. The needs of our government have traditionally been funded by taxes on productive assets and the gain they produce.  Why nominate a successful business person for a special contribution on the event of his or her death?  It's time for the Death Tax to die."

Chris Christensen: "I can remember when I was in high school we got an assignment to write a letter to our Senator about something we were passionate about. I wrote about the immorality of this tax. I have been trying to tell the story of this terrible tax for almost my entire life. Our family’s Christensen Ranch in Hisdale, Montana started in 1911 with my great grandfather. In 1971, my grandfather Ray died. The ranch was solely in his name, and my mother had to pay a Death Tax. A year to the month later my grandmother Emma passed away. The ranch was passed down to my dad, who had to once again pay a Death Tax on the same land. Then, in 1978, his father was diagnosed with cancer, and he passed away 2 months after the diagnosis. The ranch was left to my mom Donna, me—I was 14 at the time— and my younger brother. We once again had to pay the tax on the same land. At this point, we almost lost the ranch. We had to re-mortgage multiple times and had to sell cattle. Each time we thought we were done paying the interest rates and loans and we would be able to profit and grow again, something else would happen. I have three children. I hope it is possible for them to inherit and run the ranch some day as a family. But I just don’t know if that will be possible unless the Death Tax is fully repealed."

Lisa Hefner: "I know from first hand knowledge that I had to sell everything of value when my grandfather left the ranch to me. That meant he and his father’s 100 years of perfecting genetics in a herd of cattle, work that can not be replaced, had to be sold first. Then, all the equipment had to be liquidated. These were the two ways to raise the cash needed to pay the estate tax. The land could not sell for $50.00 an acre but the value was $250.00 an acre. I am a 5th generation rancher from Canadian Valley Ranch in Seminole, Oklahoma and hope to pass the ranch onto the 6th generation. The Death Tax stops us as parents in creating a future for our children, and as a mom that is very important to me. I spent all my life living and learning the cattle business on the ranch that was given to me, only to have to sell the most valuable asset that my forefathers could leave me."

Bill and Kathy Rhea: "For 129 years our family has had a strong commitment to agriculture. Rhea Cattle Company lies among the rolling hills of eastern Nebraska. To our family, agriculture is not just about making a living, it is about a way of life. Strong family roots, pride in the land and the hard work that is required of the living off the land, heritage that runs as deep as the rich, brown soil, these are the pieces of agriculture that give us a truly special way of life. We must get rid of the Death Tax. We went through this in 1986 when my husband's mother died. When my husband and I die, our son, who's involved with the operation, will have a very difficult time paying the taxes and maintaining the business at the level it is. He would probably have to downgrade in size and lay off employees. The Death Tax is unfair because while we have assets, we don't have income necessarily commensurate with the assets we have, which a lot of people do not understand."

Larry Barthle: "Our family was first struck by the Death Tax back in the early 1970's when both my grandfather and uncle passed away within a short period of each other. We had to sell 1,200 acres of the ranch. Every penny went to pay the taxes assessed to us and we still had to take out a loan for a balance that wasn't covered. Not one cent was used for anything except taxes. My two brothers, Mark and Randy, and I own and operate this multi-generational family cattle ranch in San Antonio, Florida."

Boyd Spratling: "Our family runs a fourth generation cattle operation in northeastern Nevada and we are very concerned about the stability of agriculture. The Death Tax is destructive for us because ranches and farms are very capital-intense operations. We have a lot invested through generations of modest living, invested in our cattle, our land, and our equipment and have very close margins that we live on. One of the most important ways to stabilize family agriculture is to permanently repeal the Death Tax. When we lose a family member, we are actually forced to re-buy our own ranch. That means repurchasing the ranch every other generation, essentially. This Death Tax burden greatly increases the indebtedness. Permanent repeal of this tax is probably one of the most important things we can do to stabilize the industry. When we pass to the next generation, we're not talking about trust fund kids. We're passing operations to someone that has worked all their life on the land. They may now be well into their 50s, now receiving a ranch, having worked there and built that operation all their life. Now those same people have to repurchase their own ranch from the government, and I just think that's the ultimate injustice."

Jack Turnell: "The historic Pitchfork Ranch just west of Meeteetse, Wyoming was founded in 1878. My grandson is sixth generation on the ranch, going back to the 1800s. Back in 1922, we almost lost the ranch because of the Death taxes. The Death Tax damages wildlife and open spaces, since land is sold off to pay the tax. Especially in places like the Rocky Mountains where the land is very valuable. It's sold and chopped up into 35 acre ranchettes or developments. It's going to affect us down the road and will be the deciding factor whether or not we're going to keep our ranches. Why should the government take so much of what my own forefathers and I built with our hands, and sweat, and blood? Most of my neighbors, most Wyoming ranchers and their grandsons aren't going to be here in the future if the Death Tax is still around. They won't be able to afford to keep the ranch unless they sell most of the ranch to pay the tax. Then, there won't be much left, so... it's a huge problem within the industry. Most families have sold out. So, to hang on to what we have is very important to me. I want my grandkids to be able to work the land. But I don’t know if it will happen. You have to have a lot of stamina to survive in ranching."

ESAP Award WINNERS Announced: The 2005 National Environmental Stewardship Award Program (ESAP) Selection Committee announced July 20 the seven regional winners of the 15^th annual ESAP Award. Sponsored by Dow AgroSciences, LLC and USDA’s Natural Resources Conservation Service and administered by NCBA, this prestigious annual award program recognizes cattle producers whose stewardship practices are inventive, cost-effective and contribute to environmental conservation. These families are actively working to protect and improve the environment because they know environmental stewardship and good business go hand-in-hand, and their efforts serve as examples for our industry.

The 2005 Regional ESAP Winners are:

• Region I: Li’l Ponderosa Enterprises in Carlisle, Pennsylvania
  Nominated by Pennsylvania Cattlemen’s Association
  
• Region II: Lightsey Cattle Company in Lake Wales, Florida
  Florida Cattlemen’s Association
  
• Region III: Faris Farms in Mount Ayr, Iowa
  Nominated by Iowa Cattlemen’s Association
  
• Region IV: Richards Ranch in Jacksboro, Texas
  Nominated by the Texas and Southwestern Cattle Raisers Association
  
• Region V: Simms Cattle Company LLC in McFadden, Wyoming
  Nominated by Wyoming Stock Growers Association
  
• Region VI: Prather Ranch in Fall River Mills, California
  Nominated by California Cattlemen’s Association
  
• Region VII: Gates Angus Ranch in Coldwater, Kansas
  Nominated by Kansas Livestock Association

The ESAP selection committee consists of past winners, university faculty, federal and state government agencies, conservation and environmental organizations. This year’s regional award winners will be recognized at the Cattle Industry Summer Conference at the "Western Swing" Event, Thursday, July 28. The national winner will be selected among the seven regional winners and will be announced at NCBA’s Annual Convention in February 2006. (Note: Detailed releases and PHOTOS of the seven families are available, contact NCBA’s Washington office at 202-347-0228.)

House Leaders Urge USDA Support of Private Animal ID Program: Key members of the House Ag Committee sent a letter to USDA Secretary Mike Johanns July 20 requesting implementation of a private sector-based national animal identification system. NCBA has led the effort to implement such a system for livestock producers because it wants to protect producer rights and confidentiality. 

The letter, signed by Chairman Bob Goodlatte (R-Va.), and Reps. Robin Hayes (R-N.C.), Tom Osborne (R-Neb.), Mike Pence (R-Ind.), Randy Neugebauer (R-Texas), Virginia Foxx (R-N.C.), and K. Michael Conaway (R-Texas) tells Johanns, "There has been a disappointing lack of consideration of a private sector-based approach to the animal identification challenge…We think private animal ID systems will speed the process of implementing a national ID program, enhance U.S. markets and add value to U.S. livestock."

Cattlemen to Discuss Animal ID at Issues Forum – July 28: Cattlemen from around the country can participate in a discussion on the animal ID issue at next week’s Cattle Industry Summer Conference in Denver. The Animal ID Issues Forum is scheduled for July 28 and will consist of three consecutive hour-long sessions from 9:00 a.m. to 12:00 noon (Mountain time). Find more information on NCBA’s efforts to implement a national animal identification system here.

Canadian Trade Update: The U.S. District Court in Billings, Montana announced this week they are vacating the oral hearing in the R-Calf vs. USDA case that was scheduled for July 27. Specifically, the order states:

On July 14, 2005, the 9th Circuit Court of Appeals lifted the preliminary injunction that blocked implementation of the BSE minimal risk regions rule which allows for the importation of certain cattle and beef products from Canada. Immediately following the ruling, U.S. and Canadian officials began finalizing certification and inspection procedures, and on Monday, July 18, the first load of slaughter cattle (35 animals) from a Canadian feeder crossed the border on its way to a packer in Pennsylvania.

Although concerns remain among U.S. cattlemen that this development could adversely impact the U.S. cattle market, an analysis of economic factors indicate the reopening will be less disruptive than some think. According to Cattle-Fax, the number of Canadian cattle crossing the border will be minimal due to "record-large" imports of boxed beef from Canada, indicating the beef is arriving "in the box" as opposed to "on the hoof." As we begin to see some moderate imports of live cattle, we’ll also see an eventual drop in the amount of boxed product, making the net impact on supply rather modest.

In addition to the above-mentioned rational, other factors will discourage a large influx of cattle from Canada, such as:

• The Canadian beef industry has increased its slaughter capacity nearly 15,000 head per week since May of 2003 which mitigates the need to ship cattle over the border for processing.
  
• The Canadian cattle feeding industry inventory is current and slaughter weights are down from last year.
  
• Current exchange rates favor cattle staying in Canada.
  
• Due to an abundance of feed and forage, the cost of gain in Alberta feedlots, where 85 percent of Canadian cattle are fed, is less than in the U.S. This combined with open pen space strongly suggest that Alberta feedlots will be willing and able to bid aggressively for Canadian feeder cattle.
  
• Except for 2002, the United States has never imported many feeder cattle from Canada. This is not expected to change, given that Canada’s feeding industry can handle them and is positioned to buy them.

Chile Resumes Trade: Ag Secretary Mike Johanns announced July 19 that Chile is lifting its ban on U.S. beef and beef products from animals less than 30 months of age. "I applaud the Chilean government for making trade decisions based on internationally accepted scientific standards," said Johanns. "This is one more step toward normalized international trade in beef. USDA is working hard to normalize trade with all of our beef trading partners, both exporting and importing, based on scientifically-sound, internationally-recognized standards which protect both human and animal health." In 2003, the United States exported $5.3 million worth of beef and beef products to Chile. Chile imposed a ban on U.S. beef and beef products on Dec. 24, 2003.

Crawford Confirmed: The U.S. Senate approved July 18 the nomination of Lester Crawford to be Commissioner of the Food and Drug Administration (FDA). He has been the acting commissioner of the FDA since March 2004 when former commissioner Mark McClellan left the agency. Previously, Dr. Crawford was Deputy Commissioner at FDA and the Administrator of USDA’s Food Safety and Inspection Service.

Dale Hall as FWS Director: Cattlemen are applauding President Bush's selection of Dale Hall to serve as Director of the U.S. Fish and Wildlife Service. A 27-year career employee, Hall has served in Albuquerque, N.M. as the Southwest Regional Director of the Service since 2001. "Dale Hall has shown an awareness of the issues ranchers face in grazing cattle on public lands," says NCBA Director of Federal Lands Jeff Eisenberg. "He is a proponent of multiple use and he understands the need to balance environmental and conservation needs with sustainable use of our resources." After the official nomination is made by the President, Hall must be confirmed by the U.S. Senate.

Five Nations Beef Conference Update: NCBA Chief Economist Gregg Doud, NCBA President/Texas cattle producer Jim McAdams and Iowa cattle producer/former NCBA President Wythe Willey were in Alberta, Canada July 11-15 for the Five Nations Beef Conference. Cattle producer associations from the United States (NCBA), New Zealand (Meat & Wool New Zealand), Mexico (Confederacion Nacional de Organizaciones Ganaderas), Canada (Canadian Cattlemen’s Association) and Australia (Cattle Council of Australia) discussed key industry issues such as animal ID and international standardization and harmonization of animal health and trade standards. Following these in-depth trade policy discussions, the group agreed to continue to support further market liberalization for beef including:

Summer Conference: The cattle industry summer conference takes place next week, July 26-30 in Denver. The cattle industry comes together twice a year to discuss current issues as a group, to work on programs and initiatives, and to set the course for multiple policy initiatives that NCBA will address in the coming months. Look for Summer Conference coverage in next week’s Cattlemen’s Capitol Concerns. The CCC will be sent out Thursday, July 28 from Denver! For media inquiries during summer conference, contact the NCBA press room at 303/352-2425 or visit our web sites at www.beefusa.org and http://hill.beef.org for updates!

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