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

Farm Bill Moves Closer to Final Passage, Without Packer Ownership Ban: The livestock title of the Farm Bill was finally brought up for consideration during a late-night meeting of the conference committee that concluded on May 2.  The House conferees receded from their position of addressing livestock issues in a miscellaneous title, and agreed to include a livestock title as found in the Senate version. This left the Senate’s proposed ban on packer ownership of livestock more than 14 days before slaughter as the only outstanding issue in the livestock title to be addressed by the members of the conference committee. 

After debating this provision, the Senate voted down the ban on packer ownership by a resounding voice vote. Because it failed on the Senate side, no House vote was necessary and the packer ownership ban was removed from the Farm Bill.  In addition, the proposed Office of Special Counsel provision – another provision of the livestock title opposed by NCBA – had been removed from the Farm Bill.

A private meeting of the conferees was held May 6 in an attempt to wrap up the committee’s work on the Farm Bill. No further formal conferences are likely at this point, as the respective chairmen attempt to finalize the conference report. The final report could emerge later this week, but is more likely to be released early next week. At that point, the biggest hurdle remaining for the Farm Bill is whether President Bush will sign it before the current extension expires on May 16. The President has threatened to veto the legislation if his Administration finds it too costly or lacking in free-market policy reforms. If the President vetoes the Farm Bill and Congress does not have the votes for an override, agricultural policy will revert to the 1949 permanent law, or Congress may choose to pass a long-term extension of the 2002 Farm Bill. 

One of the more controversial aspects of the Farm Bill – and one that could affect the chances of a veto - is the question of whether to limit direct payments to farmers over a certain adjusted gross income threshold. Also still to be determined is whether Congress will apply these income limits to conservation payments. The bill provides an additional $4 billion for conservation programs, including $1.1 billion for the Conservation Stewardship Program (CSP) and $2.4 billion for the Environmental Quality Incentives Program (EQIP). The conference committee took action with regard to the total funds available for an EQIP contract, limiting individual EQIP contracts to $300,000 over six years.  However, the Secretary of Agriculture may grant a waiver for environmentally significant projects, which would boost that number to $400,000 over six years.  

Other key developments from the Farm Bill conference committee include the following:

Renewable energy:  The Farm Bill presently offers a mixed result for the cattle industry with regard to renewable fuels. The current 51-cent-per gallon ethanol blender tax credit is set to be reduced by 6 cents. Some of the savings generated by that reduction will be used to help fund an increase in the cellulosic ethanol credit to $1.01 per gallon. These tax credit changes are designed to provide a greater incentive for ethanol plants to move more quickly toward cellulosic production.

On the negative side, the Farm Bill includes a two-year extension (through 2010) of the current 54-cent per gallon ethanol import tariff, which had been set to expire at the end of this year. NCBA member policy supports allowing the tariff to expire as scheduled. The tariff limits access to a potential fuel source during a time of great need, and insulates grain-based ethanol production from market competition.

Permanent ag disaster program: Sens. Max Baucus (D-Mont.) and Kent Conrad (D-N.D.) championed inclusion of a $3.850 billion permanent disaster aid program. For producers that proactively seek to protect themselves from losses by purchasing non-insured agricultural program (NAP) coverage, this program will provide assistance to help compensate for extreme forage or livestock losses resulting from disasters such as drought, wildfires and floods. 

Country-of-origin labeling (COOL): The Farm Bill contains language that makes implementation of mandatory Country-of-Origin Labeling (COOL) more flexible for both producers and the meat industry, and moves us closer to having a COOL law under which USDA can write its rules. The Farm Bill language provides for the same four-tier labeling system that was passed as a part of the House farm bill back in July 2007, but the grandfather date for domestic livestock has been moved from January 1, 2008 to July 15, 2008.

State-inspected meat gains interstate sales access: The Farm Bill will also allow for meat processed at state-inspected plants to be shipped to customers across state lines – a practice currently permitted only for federally inspected facilities. NCBA policy supports this legislation, as it will help level the playing field for some small meat processors, allowing them an opportunity to grow their business presence and increasing local marketing options for some cattle producers.   

Renewable Fuels Mandates Continue to Draw Increased Scrutiny: Members of Congress continue to voice major concerns with regard to the massive renewable fuels mandates passed last December within the Energy Independence and Security Act of 2007 (EISA). Last week, the Joint Economic Committee held a hearing to focus on the issue of rising food costs, and the impact of renewable fuels mandates on food prices drew criticism from several committee members.

On May 6, the House Energy and Commerce Committee’s Subcommittee on Energy and Air Quality held a hearing entitled, “Renewable Fuels Standard: Issues, Implementation and Opportunities.” In a letter submitted by NCBA Chief Executive Officer Terry Stokes, NCBA highlighted the impact of record-high grain prices on the livestock industry, and called for a reevaluation of the increases in the Renewable Fuels Standard (RFS) mandated by EISA.

“Ethanol and the RFS are not solely to blame for this precarious situation. Other factors including the value of the dollar, elevated energy costs, increased international demand for grain and meat products, and the weather certainly play a role in determining food and feed costs,” Stokes said. “But demand pressure from the RFS is also an important contributor, and it is the only factor that Congress can control. In light of the commodity supply and price issues we are now facing, NCBA urges you to reevaluate the mandate schedule established in EISA.”

Energy and Commerce Committee Ranking Member Rep. Joe Barton (R-Texas) expressed a similar position in the opening statement he provided at the hearing.

“I’m going to be looking at legislation to simply restore the Renewable Fuels Standard that we enacted in EPAct 2005 while we study its impact on food, fuel, and other economic factors,” Barton said. “Let’s end the overreach and enact an interim policy that our constituents and hungry people around the world can live with as we determine the realistic contribution that we can gain from renewable fuels.”

This issue is expected to draw further attention today, as the Senate Homeland Security & Governmental Affairs Committee holds a hearing entitled, "Fuel Subsidies: Is There An Impact On Food Supply And Prices?"

Senate Subcommittee to Examine Proposed JBS-Swift Acquisitions: The Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights is holding a hearing today on “Concentration in Agriculture and an Examination of the JBS-Swift Acquisitions” (meaning the proposed acquisitions of Smithfield Beef and National Beef by JBS-Swift).  The witness list includes Douglas Ross, special counsel for agriculture in the Justice Department’s Antitrust Division, who also addressed NCBA members on this issue at the NCBA Spring Legislative Conference. Other scheduled witnesses include JBS-Swift Chief Executive Officer Wesley Batista and U.S. Premium Beef CEO Steve Hunt.

NCBA policy supports a thorough review of these proposed acquisitions by the Justice Department and other relevant federal agencies. But it is important to keep this examination focused on packing industry concentration and the potential impact on livestock producers’ ability to compete in a free and fair market.

Beef Industry Responds to HSUS Video: In a press conference held today, the Humane Society of the United States (HSUS) released information regarding apparent neglect of livestock at four auction markets. In response, the beef industry issued a statement from Ashby Green, D.V.M., NCBA vice president of producer education, highlighting the beef industry’s extensive work - in cooperation with the nation’s livestock markets - to prevent such incidents. These efforts include distribution of more than 2,000 cattle care and handling training videos to the nation’s 1,250 livestock markets and other cattle sales locations, as well as veterinarians who work with these operations. The industry is also in the process of conducting hands-on staff training sessions at livestock markets, led by cattle handling experts.

“We are committed to working with every segment of the food production chain to ensure all livestock are treated humanely, and we strongly support strict compliance with and enforcement of all state and federal animal welfare laws,” Dr. Green said. “Appropriate cattle care includes close supervision of cattle health and wellbeing. We believe it’s important to promptly attend to animals that appear non-ambulatory.”

To read the full statement, please visit www.beefusa.org. For more information on the beef industry’s commitment to animal care and handling, visit www.BeefFromPastureToPlate.org.

New Life for Colombia Trade Agreement?: The U.S.-Colombia Trade Promotion Agreement was derailed last month when the House of Representatives voted to remove the required deadline of 90 legislative days for an up-or-down vote that has always been included in Trade Promotion Authority. However, Cabinet members are reportedly in discussions with House leadership to revive the opportunity for a vote on the agreement prior to November elections.

NCBA supports prompt consideration and passage of the agreement, because it would begin the process of reducing massive tariffs currently assessed on U.S. beef shipped to Colombia. While U.S. beef exports to Colombia face tariffs as high as 80 percent, most Colombian goods already enter the United States duty-free under the Andean Trade Preference and Drug Eradication Act.  

Cross Species Emergency Preparedness Media Day: The beef, dairy and pork industries are hosting an emergency preparedness workshop for agricultural trade media today at the USDA-APHIS Emergency Operations Center in Maryland. This workshop is part of an ongoing effort by communicators from these species groups, who have been meeting to advance and coordinate emergency response plans since the 2001 foot-and-mouth disease (FMD) outbreak in the United Kingdom. Animal health experts from APHIS will discuss emergency measures and procedures that will be activated in the event of a serious animal health emergency – such as an outbreak of FMD. Media will also receive a full demonstration of the Emergency Operations Center, and USDA public affairs staff will discuss the role of the media in keeping livestock producers and the general public informed in the event of such an emergency.

Don't Miss NCBA’s Award-Winning Cattlemen to Cattlemen:  In the Cattlemen to Cattlemen episode airing May 6-11, Duane Lenz of Cattle-Fax discusses beef prices and inventories as we move toward the summer grilling season. We hear from a Nevada rancher about the impact the Death Tax has had on his operation, and key members of Congress offer their thoughts on the importance of Death Tax relief.

Industry Experts, NCBA Leaders Featured on NCBA’s Cattlemen to Cattlemen:  Upcoming special editions of NCBA’s Cattlemen to Cattlemen will depart from the regular format, in favor of in-depth panel discussions moderated by Cattlemen to Cattlemen reporter Kevin Ochsner. The program airing May 13-18 will be sponsored by Dow AgroSciences, with experts on hand to answer questions about weed and brush control, as well as efficient pasture management. The following week (May 20-25), experts from Fort Dodge Animal Health will offer advice on effective parasite control.

A panel of NCBA officers will be featured on the program airing May 27-June 1. NCBA President Andy Groseta will share his goals and vision for NCBA and the beef industry. Policy Division Chairman Bill Donald discusses trade, tax and environmental issues, and the need for cattlemen to be active in advocating NCBA policy on Capitol Hill. Federation Division Chairman Alan Albright discusses recent successes achieved by the Beef Checkoff Program, and the challenges facing the industry as it strives to build beef demand.

NCBA’s Cattlemen to Cattlemen 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. 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:  Joe Schuele at jschuele@beef.org or call 303-850-3360.

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.

Joe Schuele

NCBA Communications Director

National Cattlemen's Beef Association

303-850-3360

jschuele@beef.org