Cattlemen's Capitol Concerns
June 19, 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 would like to include NCBA’s logo, contact us at 303-694-0305.

NCBA Files Comments in Support of RFS Waiver Request: The Environmental Protection Agency (EPA) is accepting comments through June 23 on the petition filed by the State of Texas to reduce by 50 percent the Renewable Fuels Standard (RFS) mandating production of grain-based ethanol in 2008. The reduction would trim the mandate to 4.5 billion gallons of feedgrain-based ethanol, from the current 9 billion gallons. This mandate - which is scheduled to expand to 15 billion gallons by 2015 - was included as part of the Energy Independence and Security Act of 2007 (EISA) that passed in December 2007.

In keeping with its member-driven policy on renewable energy development, NCBA filed comments today in support of the waiver request. While NCBA recognizes that the RFS is only one of many factors behind skyrocketing grain prices, cattlemen believe the waiver should be granted in light of current grain supplies and troubling crop conditions.

“NCBA does not believe that issuing a partial waiver of the Renewable Fuels Standard (RFS) will immediately reverse commodity price escalation, nor do cattle producers claim that it will single handedly address the difficult marketing environment that currently exists for our industry,” says NCBA Chief Executive Officer Terry Stokes in his comments. “But, the RFS is clearly one factor contributing to higher feed prices.”

NCBA notes that 25 percent of 2007’s record corn crop was processed to produce ethanol. That percentage will likely be much higher this year, as corn acres have been reduced and spring crop progress has been extremely slow. Grain harvest projections recently received another major setback as a result of catastrophic flooding in critical areas of the Corn Belt.

As one of the criteria for granting a RFS waiver, EPA must consider the issue of economic harm caused by the RFS. In its comments, NCBA emphasizes that ethanol production driven by the RFS is not only creating hardships for livestock producers, but for consumers and other industries as well.

“As corn and other grain prices continue to rise, buoyed by the RFS, the national economy is severely harmed, causing substantial losses in many industries and contributing to food price inflation and overall higher inflation rates,” Stokes adds. “Next year’s higher mandate will bring about even greater economic harm as the beef industry begins to contract and retail prices rise substantially as a result.”

While NCBA policy supports the development of alternative energy sources and the overall goal of energy independence, cattlemen want to see a greater emphasis on fuels produced from cellulosic, non-feedgrain sources. NCBA maintains that until grain-based ethanol production operates in a climate that is less driven by federal mandates and government subsidies, the nation will continue to see extremely slow development of alternative fuel sources.  

For more information on this proceeding, visit: www.epa.gov/otaq/renewablefuels/rfs-texas-notice.pdf.

Finally! Farm Bill Passes Via Veto Override: On June 18, both houses of Congress voted to override President Bush’s veto of the Farm Bill. The Senate overrode the veto by a vote of 80 -14. Earlier in the day, the House voted to override by a vote of 317 – 109. A clerical error omitting the Trade Title from the Farm Bill that was passed last month necessitated full re-passage of the bill, followed by another veto and override vote. The override was the final step in completing the 2008 Farm Bill, allowing the rulemaking process to begin for the newly enacted provisions of the legislation.

Overall, NCBA is pleased with the final legislation, as it includes several positive provisions for the cattle industry. These include clarification and simplification of livestock record-keeping requirements for mandatory Country-of-Origin Labeling (COOL), which is set to take effect this fall. The bill also moves the grandfather date for domestic livestock under the COOL law from Jan. 1, 2008, to July 15, 2008.

The Conservation Title provides additional funding for the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) - conservation programs that have benefited many cattle operations, as well as the general public.

Cattlemen also support a provision of the Farm Bill that allows for meat processed at state-inspected plants to be shipped to customers across state lines – a practice currently permitted only for federally inspected facilities. This will allow many small processing plants the opportunity to grow their business presence, and could increase local marketing options for cattle producers.

NCBA also applauds the inclusion of a permanent ag disaster aid program. Under this program, farmers and ranchers who purchase Non-insured Agricultural Program (NAP) coverage could be eligible to receive compensation for extreme forage or livestock losses resulting from disasters such as drought, wildfires and floods.

Also, the new Farm Bill does not place any new restrictions on livestock producers in the marketing or promotion of their cattle, or place restrictions on ownership of cattle that could reduce the number of buyers in the marketplace.

Provisions of the Farm Bill that NCBA considers negative include a two-year extension of the ethanol import tariff, payment caps on individual EQIP projects, and income caps for certain producers that have significant non-farm income. These setbacks, however, do not offset the many positive aspects of the bill.

Trade with Korea Now Delayed More than a Month: More than a full month has now passed since the originally announced date (May 15) for resuming beef trade with South Korea. Due to protests and political unrest in Korea, the market opening has been postponed several times – with no clear timetable in sight for resumption of trade.

News reports this week suggest that Korean President Lee Myung Bak has pledged a prohibition on beef imports from cattle more than 30 months of age – an outcome that appears to be growing more likely by the day. But with discussions set to continue between the two countries on Friday, no changes have been officially announced to the terms agreed upon in April. This agreement proposes to open the Korean market to beef from cattle of all ages, as long as specified risk materials are removed. However, the overwhelming majority of beef shipped to South Korea in the past was from cattle under 30 months of age, even though no age restrictions were in place prior to 2003.

Regardless of the age of the cattle from which it is derived, U.S. beef is absolutely safe. This is ensured by a system of interlocking firewalls that include: the 1989 ban on imported meat and bone meal from ruminant animals; the 1997 ban on feeding ruminant meat and bone meal to ruminant animals; the enhanced surveillance program of high-risk animals that proved BSE was essentially non-existent in the U.S. herd; and the fact that specified risk materials are removed from every bovine animal processed in the United States. These steps are in accordance with World Organization for Animal Health (OIE) guidelines, and this is why BSE poses no health threat whatsoever to consumers.

House Ag Appropriations Markup Held Today: The House Appropriations Committee’s Subcommittee on Agriculture, Rural Development, FDA and Related Agencies held a markup of the Ag Appropriations bill earlier today.  Unfortunately, the subcommittee has not released the text of this bill - but it was voted out of committee by unanimous consent, and with no amendments. NCBA is watching this proceeding very carefully, especially with regard to provisions related to animal identification and food safety. The proposed bill would allocate $20.623 billion for agriculture and FDA-related programs.

Weather Wreaking Havoc on Midwest as Spring Planting, Crop Progress Further Slowed: Volatile spring weather has delivered persistently heavy rain and catastrophic flooding to many parts of the Midwest, including areas in and around the Mississippi River corridor. In addition to the tremendous damage to homes, businesses, and infrastructure throughout this region, wet field conditions are creating enormous problems for farmers attempting to plant spring crops.

This week’s USDA crop progress report paints a dark picture for this fall’s corn crop. A week ago, only 60 percent of this year’s crop was rated good or excellent, compared to 77 percent last year. This week’s report is even more bleak, with only 57 percent of the crop now rated good or excellent.

Cattle producers in the region are dealing with the direct consequences of this inclement weather. But as the wet conditions persist further into the month of June, all cattlemen could be impacted by severe reductions in corn acreage and yield.

CRP Changes May be More Likely in Light of Current Conditions: The large amount of Midwest crop acreage that is either flooded or in very poor condition is leading to a growing sentiment in Washington toward allowing farming activity on Conservation Reserve Program (CRP) acres. Some farm-state lawmakers are suggesting to USDA that allowing crops on CRP acres could boost grain and feed supplies, by offsetting some of the acres lost to flooding or persistently wet conditions.

Court of Federal Claims Issues Mixed Result, but Awards Significant Compensation in Property Rights Case:  Wayne Hage, who was a public lands rancher on the Humboldt-Toiyabe National Forest, first filed a complaint in 1991 alleging the U.S. Forest Service management of the forest resulted in a taking of his property rights in the grazing permit, the forage, ditches, and  water.  The resulting case - Hage vs. U.S.  – raised a number of significant property rights issues involving the use of federal lands.  A decision issued June 6 by the Court of Federal Claims is the fifth and final decision the trial-level court will issue in this case.  It is unknown at this time whether the government will appeal any portion of the decision.

The plaintiff owned water and ditch rights on National Forest System lands, the use of which was blocked by Forest Service actions.  As a result, the court found the agency’s actions rose to the level of a taking for which it must pay compensation.  The court also ruled that the plaintiff was entitled to recover the cost of certain improvements to the property. However, the court found that the Forest Service owes no compensation for any loss suffered as a result of the termination of the grazing permit.

Final Week for Cattle Industry Summer Conference Early Registration: Pre-registration is still open for the 2008 Cattle Industry Summer Conference July 15-19 in Denver, but early registration ends Wednesday, June 25. For the second year in a row, the beef and dairy industries will team up for an educational session to kick off the conference. The Beef-Dairy Animal Care and Quality Assurance Symposium will highlight joint issues and crisis management efforts coordinated between the two industries.

Attendees will also receive an update on the work of the Nutrient Rich Foods Coalition, including collaborative efforts in completing a new scientific index, successful thought leader outreach and education, and promoting the importance of high-quality protein in the diet.

The following day, the Beef Industry General Session will focus on current cattle industry conditions and challenges. Industry experts will discuss methods cattlemen can use to deal with today’s record-high operating costs and difficult business climate. The general session will be followed by the Cattlemen’s Beef Board Update Session, as well as issues forums conducted by the NCBA Policy Division and NCBA’s Federation of State Beef Councils Division.

The Cattle Industry Summer Conference also offers cattlemen the opportunity to attend NCBA regional caucus meetings and NCBA policy committee meetings. These sessions provide an update on industry issues affecting NCBA members, as well as the status of many legislative and regulatory policy priorities in Washington, D.C.

The event draws to a close on Saturday, July 19, with meetings of the Cattlemen’s Beef Board and the NCBA Board of Directors. Full registration and hotel information is available at: www.beefusa.org/convsummerconference.aspx.

Busy Month for State Affiliate Meetings, NCBA President: June has been a very busy month for summer meetings of NCBA state affiliates, including several to be addressed by NCBA President Andy Groseta. This week Groseta spoke to the Florida Cattlemen’s Association Convention in Marco Island, Fla. He now heads to the Michigan Cattlemen’s Association Summer Meeting in Alpena, Mich., for a Friday address.

Don't Miss the Award-Winning NCBA’s Cattlemen to Cattlemen:  On this week’s edition – airing June 17 through June 22 -learn more about fly control on your operation from sponsor Bayer Animal Health.  You will also see some great new beef products that are now available in both retail and foodservice outlets.  Plus, Cattlemen to Cattlemen takes a spin around the Caterpillar Skid Steer Obstacle Course!

In the program airing June 24 through June 29, Cattlemen to Cattlemen brings you some of our favorite stories from sponsor Fort Dodge Animal Health.  Experts from Fort Dodge provide critical information about maintaining proper herd health, and they’ll have tips on de-worming your cattle.  Plus, Cattlemen to Cattlemen provides tips on how to effectively communicate beef industry messages, and we spend a day in the life of a Minnesota cattleman.

NCBA’s Cattlemen to Cattlemen on RFD-TV provides weekly news and features for cattle producers across the country. It airs every Tuesday at 8:30 p.m. Eastern time, with repeat episodes on Wednesdays at 10:30 a.m. and Sundays at midnight (all times Eastern). It is also available online at www.CattlementoCattlemen.org. The program’s sponsors include Purina Mills, Fort Dodge Animal Health, Dow AgroSciences, Bayer Animal Health and McDonald’s. 

For more information or to check out past episodes, visit www.cattlementocattlemen.org.