News Releases

Date: 3/30/2006

Title: Johanns Updates Cattlemen on BSE, Animal ID, Trade Issues

WASHINGTON - U.S. Agriculture Secretary Mike Johanns addressed members of the National Cattlemen’s Beef Association (NCBA) March 29 on several issues critical to the beef industry. The delegation of about 400 cattle producers has gathered in the nation’s capital this week for the NCBA Spring Legislative Conference.

Johanns provided an update on the case of BSE that was confirmed March 13 in an Alabama stock cow. Further examination of the cow has confirmed that it was at least ten years old. The age of the animal, along with the fact that this is only the second confirmed BSE case among over 650,000 animals tested in USDA’s enhanced BSE surveillance program, has helped reassure the public of the extremely low prevalence of BSE in the United States.

“This clearly, clearly demonstrates the health of the U.S. herd,” Johanns said. “Americans understand this. Consumption of beef remains very strong.”

Johanns also cited a recent report by the Food and Agriculture Organization of the United Nations that found BSE cases are declining worldwide at a very rapid rate. These results are proving the effectiveness of safeguards adopted in the United States many years ago.

“You can eliminate BSE from the face of the Earth, and we’re doing it,” Johanns said.

But Johanns acknowledged the BSE case has caused concern with some key trading partners such as South Korea, which had planned to reopen its market to U.S. beef in coming weeks.

“I would be less than candid if I did not share that this is somewhat of a setback with regard to South Korea,” he said. “But not a day goes by that we are not in consultation with the South Korean government.”

Johanns said it is USDA’s objective to not only reopen the South Korean market to boneless beef soon, but also to bone-in products that have historically comprised much of the beef exported to that nation.

With regard to Japan, which reopened its market to U.S. beef in December 2005 but closed it again in January, Johanns said a meeting earlier this week with Japanese officials left him somewhat encouraged. But he shared with Japan’s ambassador to the United States that, “we are growing impatient for resumption of beef trade.”

Johanns added that the difficulty incurred when tracing the animal’s origin and history has underscored the need for a national animal identification system.

“It is critical that the U.S., like other nations, have this in their trade arsenal,” he said. “Australia is aggressively marketing traceability to gain an advantage. Competitors are out there saying, ‘We’ve got I.D. They don’t.’”

In response to a question from Utah cattleman Tim Munns, Johanns said it is still USDA’s goal to have full participation in a national identification system by 2009. But he emphasized that today the system remains voluntary, and he shares NCBA’s desire to achieve participation voluntarily, rather than by government mandate. NCBA policy calls for voluntary, market-driven participation by producers in an industry-led animal movement database that protects their confidential information.

“Our hope, which I think is the same as yours, is to bring the system along and hit the benchmarks on a voluntary basis,” Johanns said. “But I just think it’s going to be absolutely necessary. Because of the retail market and foreign competition, nobody can afford to be left behind.”

The group was also addressed by USDA Under Secretary for Farm and Foreign Agricultural Services J.B. Penn and Chief Economist Keith Collins. Penn provided a global outlook of the progress made in restoring U.S. beef exports. He reported that Mexico is now accepting bone-in beef from the United States, and that this market is now reopened to almost all U.S. beef products. USDA is now working on an agreement that would allow U.S. producers to export breeding cattle to Mexico.

Penn expressed optimism about Russia, once the seventh-ranked market for U.S. beef and the top market for U.S. exports of beef liver. He said Russia wants entry into the World Trade Organization, and the United States has made resumption of beef trade a requirement. Penn added that China is also a market with tremendous potential, and beef trade will be an area of focus in upcoming meetings with the government of China.

Collins provided a forecast of market conditions in 2006, saying USDA expects a fairly strong year for the livestock industry. He said gross income for cattle producers may decline slightly from 2005, but should still be up approximately 30 percent from 2002.     

Collins said domestic beef demand “remains robust,” citing that beef production in January and February was up 5 percent from the same period in 2005. While he noted significant progress in rebuilding overseas demand, total beef exports remain far below 2003 levels. He forecasts exports of about 900 million pounds in 2006 – 30 percent more than last year, but still down from 2.5 billion pounds in 2003.

“That’s the equivalent of 2 million head of cattle left on the table,” Collins said.

The early months of 2006 have seen a big increase in feedlot placements, especially of animals weighing less than 600 pounds. Collins attributed this in large part to drought conditions that have plagued certain regions of the country. But he added that this will probably lead to greater beef production only through the summer of 2006, not in the later months of the year. So overall, Collins was not predicting any major fluctuations for the cattle industry in 2006.

“If the rest of agriculture looked like cattle, I’d get a lot fewer phone calls,” Collins said.

The NCBA Spring Legislative Conference resumes today with cattlemen paying personal visits to their members of Congress on Capitol Hill. NCBA members will be stressing the need for Endangered Species Act reform, permanent repeal of the Death Tax and reasonable, science-based environmental regulation. The conference concludes Friday morning.

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