Cattlemen's Capitol Concerns
May 17, 2007

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 in your reprint, contact our office at 202-347-0228.

Ranchers Cheer Committee Approval of STOPP Bill:  The House Agriculture Committee took another step today towards remedying a situation caused by a 2005 U.S. Supreme Court decision which gave government bodies the authority to condemn or convert property if commercial development of the property could yield a higher economic value.  In the case of Kelo v. the City of New London, the Supreme Court’s ruling upheld the authority of state and local governments to use eminent domain to seize private property for commercial economic development purposes. 

NCBA has staunchly supported efforts in Congress to rectify this situation.  “The Court’s decision is deeply troubling to anybody who believes in civil liberties and limited government,” says Colin Woodall, NCBA’s executive director of legislative affairs.  “What happens when the government decides that a local community needs a strip mall more then it needs the farms and ranches that currently occupy the land?”  Protecting private property rights is one of the founding principles of NCBA dating back to 1898, and NCBA policy supports Congressional action to remedy the ill affects of the court ruling. 

H.R. 926, the “Strengthening the Ownership of Private Property Act of 2007,” also known as the “STOPP Act,” was reintroduced in the 110^th Congress by Rep. Stephanie Herseth Sandlin (D-S.D.).  It was unanimously approved by a committee vote earlier today. This bill would prohibit Federal economic development assistance to states or local subdivisions that use eminent domain to obtain property for private commercial development use or fails to pay the relocation costs to the displaced persons. 

NCBA Applauds Introduction of Interstate Shipping Bill in House:  A bill introduced in the U.S. House of Representatives this week would allow state-inspected processing plants to ship beef across state lines just like federally inspected plants.  On May 15, Reps. Earl Pomeroy (D-N.D.) and Roy Blunt (R-Mo.) and 15 other cosponsors introduced H.R. 2315, the New Markets for State-Inspected Meat and Poultry Act of 2007. 

Federal law requires USDA to inspect all meat products. In the 1960s Congress created state inspection programs that are mandated to be “at least equal to” the federal inspection program.  Perishable products – including milk and other dairy items, fruit, vegetables, and fish – are freely shipped across state lines after state inspection. But standard meat products, like poultry, beef, and pork, are prohibited from interstate commerce, despite decades of meeting or surpassing the federal inspection standards. This bill would remove that prohibition.

NCBA members support the legislation as a way for state-regulated businesses to compete in interstate commerce and a great opportunity for cattle producers and small local businesses to market branded beef products. “It’s unfair that smaller beef producers are not able to ship and sell their products outside their own state when interstate sales of other food products aren’t restricted at all,” says Colin Woodall, NCBA’s executive director of legislative affairs.  “This outdated policy hurts many of our country’s small businesses who deserve an equal right to compete in the national market.”

U.S. Cattlemen See Light at the End of Korea’s Beef Trade Tunnel:  For the past two weeks, industry contacts have been reporting to NCBA that Korean interest in booking U.S. beef purchases has been high. USDA's Weekly Export Sales Report released today confirms this by reporting that a remarkable 7,200 metric tons (mt) – equal to 15.9 million pounds or about 400 container loads – in reported beef sales was made to Korea during the May 4-10 time period.

Comments indicate private sectors in both countries have become more understanding of the protocols and procedures necessary to facilitate beef trade between the United States and South Korea, and today's USDA report certainly backs this up. Indications are that all or nearly all major U.S. beef exporters are in the process of resuming sales to Korea of deboned beef from cattle less than 30 months of age. It is important to note that Korea still does not permit the importation of any U.S. bone-in beef or beef from older animals.

Korea’s renewed interest in U.S. beef has already generated tremendous additional value. At a value estimated between $2.50 and $3.00 per pound, these reported sales to Korea are worth somewhere between $40 to $48 million, with the majority of these sales involving just three cuts: chuck rolls, brisket and (deboned) short ribs. Industry analysts knew significant sales were afoot because wholesale prices for these cuts rose dramatically over the past two weeks with Choice chuck short ribs currently going for $2.64/lb vs. $1.50 in April (in May ’03 these were worth $2.45/lb) and short plate (short rib) at $3.06/lb vs. $1.76 in April. Industry analysts calculate that the reopening of the Korean market to deboned beef has added about $31 per head to the value of every finished steer marketed in the United States over the past 3-4 weeks.

All indications are that Korea plans to begin the necessary steps to complete its regulatory process which would fully normalize U.S. beef exports once the World Organization for Animal Health (OIE) grants a “controlled risk” status for the United States next week.

Japan Beef Trade Update:  A team of Japanese auditors is in the United States this week and next conducting inspections of U.S. beef processing plants and reviewing processing and exporting procedures.  Successful completion of this team’s visit is expected to facilitate an end to Japan’s requirement that every box of beef imported from the United States be inspected. According to the U.S. Meat Export Federation (USMEF), a more streamlined inspection protocol in Japan possibly double U.S. beef exports to Japan.

USMEF reports that U.S. beef and beef variety meat exports to Japan continue to hover at 2,500 mt per month. For January-March 2007, export volume totaled 7,975 mt with a value of $38.6 million.

Trade Statistics Show Solid Improvement in U.S. Beef Exports:  USDA's Weekly Export Sales Report indicates a net weekly beef export sales figure of 12,200 metric tons (26.9 million pounds) for the week ending May 10. These net weekly export sales, as reported by USDA, were the biggest so far this year and have been larger on only four other occasions since November of 2003. For comparison, USDA's pre-BSE net weekly beef export sales in 2003 averaged about 13,500 mt.

In addition to Korea (see “U.S. Cattlemen See Light at the End of Korea’s Beef Trade Tunnel” above), solid sales continue to several countries. In its weekly report for the period of May 4th-10^th, USDA reported net beef sales of: 2,300 mt to Mexico, 1,400 mt to Canada, 700 mt to Japan, 200 mt to Hong Kong, 200 mt to the Netherlands, and 200 mt to Taiwan.

Export shipments for the May 4-10 time frame totaled 8,100 mt and included Mexico (4,800 mt), Canada (1,500 mt), Japan (700 mt), Taiwan (300 mt), and Hong Kong (300 mt).

Other statistics to note:

-- A 19 percent volume increase in U.S. beef and beef variety meat exports to Canada during the first three months of this year more than offset the unchanged volume of 80,222 mt to Mexico, the top market for U.S. beef.

-- U.S. beef muscle-meat exports to the European Union were impressive, with one of the largest monthly shipments within the last 6 years. Through March, volume increased 53 percent to 919 mt and 29 percent in value to $4.2 million.

-- The Middle East continues to be an exceptional market for U.S. beef variety meat and a growing market for U.S. beef as combined exports increased 48 percent to 22,985 mt compared to the first quarter last year.

This news combined with the traditional pre-Memorial Day beef purchasing by retailers is providing for solid beef demand fundamentals.

OIE Meetings to Start May 20:  The World Organization for Animal Health (OIE) Scientific Commission is scheduled to meet next week and vote on classifying the United States as “controlled risk” for BSE.  The controlled risk classification recognizes that OIE-recommended, science-based mitigation measures are in place to effectively manage any possible risk of BSE in the cattle population.  This recommendation provides strong support that U.S. regulatory controls are effective and that U.S cattle and products from cattle of all ages can be safely traded in accordance with international guidelines, due to our interlocking safeguards.  NCBA anticipates that this move could pave the way for expanding trade with some of our most important foreign beef markets including Japan, Korea, China and Russia.

Iowa State University Releases Biofuels Study:  Capitol Hill and media briefings were held this week to discuss findings of a new study outlining the impacts of rising corn prices and expanding U.S. ethanol production.  The study, “Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets,” was released by the Iowa State University Center for Agricultural and Rural Development. 

“What we’ve learned from this study is that there are serious consequences associated with an increased ethanol-usage mandate,” says NCBA Chief Economist Gregg Doud.  “After policymakers read this study, our question to them is:  How do you plan to address the loss in cow-calf producers' income if we increase the feedgrains-based fuel mandate and we don't produce a record corn crop?”

The study analyzed a policy of an increased ethanol-usage mandate of 14.7 billion gallons with a low-yield/short-crop scenario.  Under this scenario, corn prices would increase 42 percent above baseline levels. 

"The additional feed costs associated with increasing the price of corn from $3.50 to $4.50 per bushel on a 750 lb steer decreases its value to the rancher by $100/head when the finished product (steer) is worth $90/cwt,” says Doud.

“This could drive many producers right out of the cattle industry.  All we’re asking for is the ability to compete on a level playing field with the ethanol industry for that bushel of corn. Market forces must be given the opportunity to function, and policymakers need to carefully consider the negative implications that can be brought upon cattle producers as a result of continued government interference in the marketplace.” 

The study was funded in part by NCBA, the American Meat Institute, Grocery Manufacturers/Food Products Association, National Chicken Council, National Grain and Feed Association, National Oilseed Processors Association, National Pork Producers Council, National Turkey Federation and North American Millers Association.  The study is posted online on the Iowa State University’s website at www.card.iastate.edu/publications.

Superfund Bills Update: Cattlemen across the country are continuing to urge support for a pair of bills that will clarify that livestock manure is not considered a Superfund material under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and Emergency Planning and Community Right-To-Know Act (EPCRA). 

There are now 113 co-sponsors in the House for H.R. 1398, with five new cosponsors signing on since last week.  They are Reps. Sanford Bishop (D-Ga.), Mike Pence (R-Ind.), Dave Weldon (R-Fla.), Ron Lewis (R-Ken.), and Mary Fallin (R-Okla.).  There are 20 co-sponsors for S. 807 in the Senate, with two new cosponsors signing on this week!  They are Senators Sam Brownback (R-Kan.) and David Vitter (R-La.).

This is a priority issue for America’s ranchers!  Continue contacting your senators and representatives by phone, fax or email, and urge them to sign-on!  Download our full-color fact sheet on this issue at www.beefusa.org.

Death Tax Bill Update:  NCBA cattle producer-members are still looking for ways to ease the onerous burden of the Death Tax.  NCBA has worked tirelessly on this issue for decades because of the hardship it places on America’s farming and ranching families who wish to pass on their operations to the next generation. 

NCBA is urging support for H.R. 1586, legislation introduced on March 20^th by Rep. Mac Thornberry (R-Texas).  If passed, this bill would result in full and permanent repeal of the Death Tax.  The bill currently has 72 co-sponsors with Rep. Peter Hoekstra (R-Mich.) signing on late last week!

NCBA urges its cattle producer-members to contact their congressional representatives by phone, fax or email, and urge them to support legislation to repeal the Death Tax on America’s farmers and ranchers!  Download our full-color fact sheet on this issue at www.beefusa.org.

Renew TPA Today: Cattle producers are urging Congress for renewal of Trade Promotion Authority (TPA).  Unless reauthorized, TPA is set to expire on June 30. This "fast-track" authority is extremely important when, after years of negotiations, final trade agreements are ready for passage. TPA assures that after trade agreements are finalized, Congress cannot make last-minute, special interest concessions or amendments. Such activities destroy long-negotiated, collective and intricate agreements between nations as well as our representatives’ ability to negotiate in good faith.

From NCBA’s perspective, however, the strongest selling point for an extension of TPA is the fact that Australia has recently entered into FTA negotiations with Japan. Without TPA, U.S. cattlemen will be left standing on the sidelines while other countries take over our top markets.

With the recent news in Congress announcing a bipartisan consensus on trade policy and pending free trade agreements, we urge bipartisan work on renewal of TPA before its expiration. Between 1994 and 2002, when the President did not have TPA, America’s foreign competitors took advantage of opportunities to expand their presence in the international marketplace. The rest of the world was moving forward and signing trade deals that excluded the United States. We will continue to urge Congress for renewal of this important international trade legislation before the looming deadline! Call your Senators and Representatives TODAY and urge them to RENEW TPA!

Chief Ag Trade Negotiator Announces Resignation:  U.S. Trade Representative Susan C. Schwab has announced the departure of Chief Agriculture Negotiator Richard Crowder.  “We commend Ambassador Crowder’s relentless commitment to breaking down trade barriers for U.S. cattle producers, and he will most certainly be missed,” says NCBA Chief Economist Gregg Doud. “In particular, his efforts to expand access for U.S. beef in the United States-Korea Free Trade Agreement (KORUS FTA) and the developments he made for U.S. agriculture in negotiating Russia’s WTO Accession will both go down in history as monumental milestones for our industry.”

USDA and USTR have announced that Joseph W. Glauber, a distinguished economist and international agricultural trade expert, will step into Ambassador Crowder's role as lead agriculture negotiator for the World Trade Organization (WTO)'s Doha Development Round. Dr. Glauber will take the position of Special Doha Agricultural Envoy at the office of the U.S. Trade Representative.

Don't Miss NCBA’s Cattlemen to Cattlemen: Tune into NCBA’s Cattlemen to Cattlemen on RFD-TV at 10:00 a.m. (Eastern time) this Saturday for a feature interview with the Director of the FDA's Center for Veterinary Medicine, Dr. Stephen Sundlof about cloning cattle. Plus – news about the latest trade issues, boxed beef prices and their impact on cattle prices, and more.  From the Cattle Learning Center, Dr. Kenton Morgan of Fort Dodge Animal Health explains how preventive measures taken now can help cattlemen maintain strong herd health throughout the summer months.

On next week’s Cattlemen to Cattlemen episode, beginning Tuesday, May 22^nd, we’ll cover the latest market news and updates from Washington, D.C., and we’ll head to Colorado State University to learn more about how value is being added to the beef carcass. Look for a special animal health segment with tips on controlling horn flies. Plus, we'll preview some exciting new beef products hitting supermarket shelves right now.

NCBA’s Cattlemen to Cattlemen on RFD-TV provides weekly news and features for cattle producers across the country. The show airs Tuesdays at 8:30 p.m. and is rebroadcast Wednesdays at 4:30 a.m. and 12:30 p.m., and Saturdays at 10 a.m. All times are Eastern. Make sure YOU tune into NCBA’s Cattlemen to Cattlemen on channel RFD-TV. For more information or to check out past episodes, visit www.cattlementocattlemen.org.

Media Contact:

Tanya A. Camarra or Karen Batra at 202-347-0228, tacamarra@beef.org or kbatra@beef.org.