Fact, Reason Used To Protect Cattle Producers in Post-BSE Regulation Frenzy

The nation’s leading cattlemen’s organization has again demonstrated its worth to members by standing up for the interests of producers following the finding of bovine spongiform encephalopathy (BSE) in the U.S. late last year.

Following the Dec. 23, 2003, discovery of a single cow with BSE in Washington state, the National Cattlemen’s Beef Association (NCBA), which is the largest multifaceted marketing and membership organization in the industry, was prepared to respond.  And it did, with impressive results.

Uncharted Territory

The discovery of BSE threw the U.S. cattle industry into seemingly uncharted territory.  Markets continue to react to the unprecedented finding, and U.S. producers are dealing for the first time with new safety regulations and the restriction of key export markets.  

On one hand, with funding provided by America’s beef producers through their $1-per-head beef checkoff, NCBA immediately put an exhaustive communications plan into action that put accurate information about BSE out to consumers, media and producers.  These efforts, conducted on behalf of the Cattlemen’s Beef Board and state beef councils, were able to maintain consumer confidence in the safety of U.S. beef. 

And on the other hand, with NCBA member dues, the organization went to work without delay to address the closing of export markets and the impact of new government regulations designed to eliminate the disease from this country.

The U.S., since 1997, has had a triple firewall in place to guard against BSE.  Measures include import bans from countries known to have BSE, a ban on feeding ruminant derived protein supplements to cattle and an aggressive surveillance and testing system.  The U.S. surveillance system is designed to prevent the introduction and spread of BSE, rather than look for the disease once it has been established.  As such, the U.S. risk of BSE incidence or spread has been judged extremely low by impartial scientists.

To address the international trade challenge, NCBA immediately began working with USDA and Bush Administration trade officials and with the U.S. Meat Export Federation (USMEF) to reopen export markets as soon as possible.  Canadian and Mexican officials, with trade and policy incentives of their own, have been receptive to working out the details to resume trade. 

But two other critical export markets for the U.S., Japan and South Korea, have their borders closed thus far.  NCBA leaders have joined with government and USMEF representatives to meet with agents of those countries, both in this country and theirs, to discuss methods for resolving differences and getting borders open.

These discussions have found that cultural and production differences make communication difficult.  South Korea, for instance, has had no BSE, so neither their trade officials nor their consumers are familiar with the disease or the science involved.  Negotiations with officials in Japan, where significant BSE has been found, are hampered by their view of the science, the statistical risks as they exist in the U.S. cattle population vs. the Japanese population and the significant size difference between the cattle industries in Japan and the U.S.

These differences were important factors in Japan instituting a requirement to test every animal slaughtered.  While supporting the USDA proposal to considerably increase testing among higher-risk U.S. animals, NCBA opposed testing the entire cattle herd.  BSE has never been found in an animal less than 30 months of age.  That makes the tactic of testing the entire U.S. cattle population – of which the majority is under 30 months of age – an inefficient and ineffective means of ensuring the safety of our herd.

Adding pressure for settlement, however, are the thousands of Japanese consumers and their food industry suppliers who are frustrated at the lack of U.S. beef.  Most stockpiles of U.S. beef have long since run out, forcing the removal of key menu items from restaurant chains that have built important parts of their business on U.S. beef. 

Balancing Regulations

In addition to working on improving international trade – which represents about 10 percent of the total U.S. beef production – NCBA has been actively representing cattlemen during rule changes affecting slaughter and testing. 

One of the first responses of USDA officials was to eliminate "downer cows" or non-ambulatory animals from the food supply.  While the numbers of cattle involved is not huge, the lost revenue will still probably amount to more than $50 million annually.  In further increasing the level of safety, the list of Specified Risk Materials (SRMs) that must be removed and eliminated from the food chain at slaughter has been lengthened.  That will increase costs to processors by about $100 million a year, according to Cattle-Fax calculations, and consequently decrease revenue to cattlemen.  The loss of Advanced Meat Recovery technology could cost another $15 million per year.

Other costs, like changing the status of cattle judged older than 30 months in the fed slaughter supply and increased testing levels, are much more difficult to estimate.  The 30-month rule is complicated by the fact that dentition as a basis of estimating cattle age is a problematic methodology.  NCBA, through its contract with the Cattlemen’s Beef Board, is coordinating checkoff research that would determine the accuracy of dentition and identify other means of accurately assessing animal age.

The USDA in mid-March announced increased testing of higher-risk animals, which NCBA supported in order to verify the accuracy of U.S. statements that our cattle herd is at low risk of contracting BSE.  Faster testing technologies are being evaluated and approved by USDA, and NCBA fully supports the USDA position that any preliminary positive samples be confirmed by internationally recognized methods, such as Immunohistochemistry or IHC and that proprietary business information be handled in a confidential manner.

USDA has licensed two tests and will approve others over time.  The cost to test each animal, including lab and processing fees, is about $30 per head.  Only one U.S. lab is approved to run the test and it has a two-week turnaround time and limited capacity.

Total cost estimates for implementing new BSE regulations could run up to nearly $300 million – with many of these costs ultimately borne by the U.S. cattle industry.  These costs are being incurred to protect both the domestic and export market now.  Future further steps to satisfy export customers are possible, too.

Ultimate Goals

Even before the single-case discovery the industry was doing what science indicated was prudent.  But to further enhance safety, as well as cement positive consumer confidence, the cattle industry, through NCBA, has agreed that a certain amount of additional reinforcing of the firewall is justifiable.  But just how far the industry should go beyond sound science to satisfy the perceptions of big export customers like Japan and South Korea is another question.  NCBA is working to balance that equation and help producers understand the potential impact of the measures put in place to protect cattle health and the safety of the food supply.

One way to improve the safety of the U.S. animal herd is the ability to trace back problems that occur.  NCBA is involved with the U.S. Animal Identification Program, a task force of more than 40 organizations working to create a framework for an animal identification system that will serve the needs of cattlemen and their customers. 

Early on in the BSE incident, USDA indicated that one response would be to make a national animal identification system a priority.  USDA has since indicated it favors phasing in a system beginning in the fall of 2004, with further implementation in 2005. 

There are many details to work out involving premises identification, the tagging of cattle, data handling and privacy issues.  Regulatory and data system infrastructure will most likely be taxpayer supported through government services.  The cattle industry and associated commerce channels will also incur costs and whether there will be government assistance for any of these costs is unknown at this time. 

NCBA will be involved throughout the process to create a useful, practical, fast response system at the most reasonable cost to U.S. producers.  The goal is for NCBA to help assure that the benefits of an animal identification program exceed the costs to cattlemen through enhancing or protecting the health of the U.S. cattle herd.