1
Debilitating Effects of Recently Weakened U.S. Livestock Disease Protections and USDA’s New Animal ID Scheme: A
Solution in Search of a Problem
Presented toSouth Dakota Stockgrowers Association Members
by
Bill Bullard, CEO, R-CALF USA
September 22, 2011
2
The United States Is the Largest Beef Producer and
Largest Beef Consumer in the World
Our Reputation of Producing the Healthiest Cattle and the Safest, Most Wholesome Beef Is Contingent on Maintaining the Highest Possible Health and Safety
Standards, But . . .
3
The United States Has Weaker BSE Import Requirements for
Beef than Most Major Beef Importing Countries
4
2011 BSE Requirements Imposed by Major U.S. Export Markets
R-CALF USA
Source: USDA-FSIS Index of Export Requirements for Meat and Poultry Products Country & Import
Rank Age Restriction Commodity Restrictions
Mexico #1
Less than 30 months No ground meat.
Japan #3
20 months or younger No ground beef, processed beef, head meat, finely textured beef, or mechanically separated meat.
South Korea #4
Less than 30 months Cattle must be born and raised in the United States, or imported from a country deemed eligible by the Korean government to export beef or beef products to Korea, or raised in the United States for at least 100 days.
Hong Kong #5
Less than 30 months
No ground beef, bone-in beef, edible offal, or beef derived from advanced meat recovery systems.
Taiwan #6
Less than 30 months No ground beef or internal organs. Cattle must be born and raised in the United States, raised in the United States for at least 100 days prior to slaughter, or legally imported into the United States from a country deemed eligible by Taiwan to export deboned beef to Taiwan. Beef or beef products of cattle from Canada fed less than 100 days prior to slaughter in the United States is limited to deboned beef derived from animals less than 30 months of age.
Vietnam #7
Under 30 months
Russia #9
Under 30 months The beef and beef byproducts must be derived from cattle raised in the United States. Ground red meat, packaged in bulk form or in the form of meat patties, is prohibited.
United Arab Emirates
Under 30 months Ritual: Islamic Halal Slaughter requirements apply.
Singapore Under 30 months Only Fresh/frozen boneless beef derived from animals less than 30 months of age is eligible. Beef derived from cattle imported from Canada is not eligible.
5
Numerous Countries that Accept U.S. Beef Continue to Ban Canadian Beef
U.S. EXPORT MARKETS CLOSED TO CANADIAN BEEF 26 countries continue to ban Canadian beef due to BSE. The following 10 countries accept U.S. beef; but, according to information provided by the Canadian Food Inspection Agency, do not allow Canadian beef:
Chile Dominican Republic
Haiti Jamaica
South Korea Kuwait
Malaysia Peru
Saint Lucia Ukraine
Sources: USDA, FSIS, Index of Export Requirements for Meat and Poultry Products,
undated, (accessed September 16, 2011). Canadian Food Inspection Agency, Summary of the Situation with Foreign Markets relative to BSE as of November 5, 2009 (latest available information), available at http://www.inspection.gc.ca/english/fssa/meavia/man/ch11/annexre.shtml, accessed September 16, 2011.
6
The United States Has Weaker Disease Import Standards for Cattle than Many, If Not Most,
Cattle Importing Countries
7
BSE Age Restrictions
COUNTRIES WITH STRICTER THAN U.S. AGE REQUIREMENTS FOR IMPORTING CANADIAN CATTLE
COUNTRY AGE RESTRICTIONS ON CANADIAN CATTLE Algeria Cattle must be less than 36 months of age Barbados Cattle must be born after Dec. 31, 2003 Egypt Slaughter cattle must be less than 24 months of age European Union Cattle must be born after date of last indigenous BSE case Lebanon Cattle must be under 30 months of age Republic of Croatia Cattle must be born after date of last indigenous BSE case South Korea Cattle must be born two years after effective enforcement
of feed ban Switzerland Cattle must be born after date of last indigenous BSE case Tunisia Cattle must be born after July 1, 2001 Source: Canadian Food Inspection Agency Export Program, Veterinary Health Certificates, Bovine, available at http://www.inspection.gc.ca/english/anima/heasan/export/bovine/bovine.shtml
8
In Return for Having Among the Weakest of Disease Import Standards, the U.S.
Cattle Industry Is:
• Subject to a Scientifically Determined, Increased Risk of Introducing BSE into the U.S. Cattle Herd, which Presents a Hazard to both Livestock and Humans.
– USDA’s risk modeling for its over-30-month rule (OTM Rule) predicts the U.S. would import between 19 and 105 BSE-infected cattle from Canada, which would subsequently produce BSE infections in 2 to 75 U.S.-born cattle over a 20-year period. (See 72 Fed. Reg., 1109, col. 2; 72 Fed. Reg., 53347, col. 1.)
9
In Return for Having Among the Weakest of Disease Import Standards, the U.S.
Cattle Industry Is:
• Suffering from the Continual Reintroduction of Other Dangerous Diseases Into the United States.
– The USDA’s Office of Inspector General (OIG) reported in 2006 that 75 percent of bovine TB cases detected during the previous five years by U.S. slaughter surveillance originated in Mexico and were detected in 12 U.S. states. The OIG explained that because Mexican cattle spend many months on U.S. farms and ranches prior to slaughter, each bovine TB case is potentially spreading the disease in the United States. In addition, the OIG stated, “Until additional controls are added, APHIS cannot reasonably expect to achieve its goal and eradicate TB when it is being imported into the United States each year.(See OIG Report No. 50601-0009-Ch, September 2006, at iii,19, 20.)
10
In Return for Having Among the Weakest of Disease Import Standards, the U.S.
Cattle Industry Is:
• Suffering Significant Financial Losses Resulting from the Importation of Higher-Risk Canadian Cattle.
– USDA estimates that the cost to U.S. cattle producers, for the privilege of being exposed to a heightened risk for BSE from Canadian cattle and beef, would be over $66 million per year (or approx. $1.3 million each week), for which no compensation can be obtained from anyone. (See 72 Fed. Reg. 53,356, col. 1.)
11
Correlation Between U.S. Calf Prices and Canadian Cattle Imports
Relationship Between U.S. Calf Prices and Canadian Live Cattle Imports
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
-Sep
t 10
Nu
mb
er o
f Im
po
rted
Can
adia
n C
attl
e
$90.00
$95.00
$100.00
$105.00
$110.00
$115.00
$120.00
$125.00
$130.00
$135.00
Kan
sas
Ste
er P
rice
Per
Hu
nd
red
wei
gh
t
Slaughter Steers and Heifers Feeder Steers and Heifers Slaughter Cows and Bulls 5-6 cwt. Kansas Steer Price
Data Source: USDA FAS, AMS and K-State Research and Extension R-CALF USA
2011 avg through August: $149.53
12
Consumers Both Here and Abroad Know that Canada Has a Higher BSE Risk
• The U.S. Centers for Disease Control and Prevention (CDC) states:
As of March 2011, 19 BSE cases in Canadian-born cattle have been identified, 18 in Canada and 1 in the U.S. Of these 19 cases, 13 were known to have been born after the implementation of the 1997 Canadian feed ban ; 12 of these 13 were born after March 1, 1999. This latter date is particularly relevant to the U.S. because since a USDA rule went into effect on November 19, 2007, Canadian cattle born on or after March 1, 1999 have been legally imported into this country for any use. One of the 19 Canadian-born BSE cases was reported in an animal that was most likely born before or possibly very shortly after implementation of the 1997 feed ban. Based on the known or most likely year of birth, an average of 1.4 cases of BSE occurred among the group of animals born each year in Canada from 1991 through 2004. The highest reported number of cases by birth year in a single year, 3 BSE cases, occurred in 2000, 2001 and 2002. The most recently reported case extends the period of BSE transmission in Canada through at least the latter half of 2004. (citations omitted)
http://www.cdc.gov/ncidod/dvrd/bse/, downloaded Sept. 21, 2011.
To reduce any risk of acquiring vCJD from food, concerned travelers to Europe or other areas with indigenous cases of BSE may consider either avoiding beef and beef products altogether or selecting beef or beef products, such as solid pieces of muscle meat (rather than brains or beef products like burgers and sausages), that might have a reduced opportunity for contamination with tissues that may harbor the BSE agent.
http://www.cdc.gov/ncidod/dvrd/vcjd/risk_travelers.htm, downloaded Sept. 21, 2011.
13
Incubation Periods Have Not Lengthened in Canada as In Europe, Where BSE Spread Is
Thought to be Under ControlLifespans of Known BSE-Positive Canadian-Born BSE Cases
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Nu
mb
er o
f B
SE
Cas
es
Case # 7
Case # 12
Case # 3
Case # 9
Case # 1
Case # 2
Case # 4
Case # 5
Case # 6
Case # 10
Case # 13
Case # 16
Case # 11
Case #15
Case # 8
Case # 14
Case # 17
Case # 18
Case # 19
14
Canada Has Significantly Reduced Its Annual BSE Testing
Canada's Annual BSE Testing and Results
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
To
tal
Cat
tle
Tes
ted
An
nu
ally
Annual Tests 3710 23550 57768 55420 58177 48808 34618 35655 25445
2003 2004 2005 2006 2007 2008 2009 2010 2011 -Aug
2 BSE Positives
5 BSE Positives
3 BSE Positives
4 BSE Positives
1 BSE Positive
0 BSE Positives
2 BSE Positives(1 Imported to U.S.)
1 BSE Positive
1 BSE Positive
15
Canada Has Significantly Reduced Its Monthly BSE Testing
Canada's Monthly BSE Testing
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Nu
mb
er o
f C
attl
e T
este
d E
ach
Mo
nth
2008 6227 5587 5747 6713 5726 3908 2593 1966 2244 2500 2669 2928
2009 3507 3285 3592 3900 2991 2729 2294 2009 2170 2596 2719 2826
2010 3536 3195 4015 3806 3105 2905 2405 2105 2388 2371 2925 2899
3-Yr Ave (05-07) 5310 5325 6511 6773 5820 4531 2890 2660 3029 3337 5456 5479
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
16
In Return for Having Among the Weakest of Disease Import Standards, the U.S.
Cattle Industry Is:
• Suffering a Global Trade Deficit in the Trade of Cattle, Beef, Beef Variety Meats and Processed Beef.
17
Long-Term Global Trade Deficit in Cattle, Beef, Beef Variety Meat and Processed Beef
($16 Billion Cumulative Cost)U.S. Global Trade Balance
Live Cattle, Beef, Beef Variety Meat, Processed BeefR-CALF USA, Sept. 21, 2011
HS-6 Digit
-5,000,000
-4,000,000
-3,000,000
-2,000,000
-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Val
ue
in 1
000
Do
llars
Exports 3,637,193 648,298 1,136,658 1,758,309 2,304,207 3,208,976 3,060,897 4,133,409 3,176,308
Imports 3,553,119 4,232,467 4,779,442 4,867,587 5,296,271 4,957,138 4,141,458 4,530,722 2,797,944
Trade Balance 84,074 -3,584,169 -3,642,784 -3,109,278 -2,992,064 -1,748,162 -1,080,561 -397,313 378,364
2003 2004 2005 2006 2007 2008 2009 2010 Jan-Jul 2011
18
Trade With Canada and Mexico Contributes More than Half to the U.S. Trade Deficit
($9.9 Billion Cumulative Cost) U.S. Trade With Canada and Mexico
Live Cattle, Beef, Beef Variety Meat, Processed BeefR-CALF USA, Sept. 21, 2011
HS-6 Digit
-2,000,000
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Val
ue
in 1
000
Do
llars
Exports 1,057,030 517,943 870,385 1,315,186 1,461,557 1,686,586 1,533,304 1,558,281 1,149,845
Imports 1,788,316 1,796,693 2,394,262 2,611,919 2,907,845 2,843,198 2,294,563 2,823,453 1,568,873
Trade Balance -731,286 -1,278,750 -1,523,877 -1,296,733 -1,446,288 -1,156,612 -761,259 -1,265,172 -419,028
2003 2004 2005 2006 2007 2008 2009 2010 Jan-Jul 2011
19
Increased Exports 2009-2010
2009 2010
Partner Product Value Value Amount of Increased Value
World Total 020230 - Bovine Boneless Froz 719,079 1,146,145 $427,066
World Total 020130 - Bovine Boneless Fr/C 1,502,278 1,724,773 $222,495
World Total 020220 - Bovine Bone In Froz 157,313 369,268 $211,955
World Total 010210 - Bovine Live, Pure 40,048 114,993 $74,945
World Total 020629 - Bovine Offal Froz 142,639 209,149 $66,510
World Total 020621 - Bovine Tongues, Froz 45,155 75,448 $30,293
World Total 020622 - Bovine Livers, Froz 88,227 118,592 $30,365
World Total 160250 - Bovine Meat, Prep 113,052 135,324 $22,272
World Total 020610 - Bovine Offal Fr/Ch 45,931 59,463 $13,532
World Total 020110 - Bovine Carcass Fr/Ch 5,588 13,124 $7,536
World Total 021020 - Bovine Meat, Salted 5,281 7,875 $2,594
World Total 020210 - Bovine Carcass Froz 4,734 4,956 $222
World Total 010290 - Bovine Live 18,745 17,752 -$993
World Total 020120 - Bovine Bone In Fr/Ch 172,827 136,549 -$36,278
Grand Total 3,060,897 4,133,409 $1,072,512
20
Using Weaker U.S. Disease Import Standards to Leverage the Reopening of
Export Markets Is Deplorable
• USDA Has a Duty to Prevent the Introduction of Dangerous Diseases Into the U.S. (see 7 U.S.C. § § 8301 (1), 8303 (a)(1)) and Performance of that Duty Is Essential to Restoring the United States’ Lost Reputation of Maintaining the Healthiest Cattle Herd in the World, which Reputation Was the U.S. Cattle Industry’s Competitive Advantage
21
USDA and the OIE Are Incapable of Accurately Evaluating the Risk of FMD
Outbreaks in Foreign CountriesCountry/Region Date Declared FMD Free Date of FMD Outbreaks
Region within Argentina July 2000 August 2000
March 2001
Region within Uruguay October 2000 April 2001
Region within Republic of South Africa
April 2000 September 2000 November 2000
South Korea December 2009 January 2010
Japan 2001 April 2010
Region within Paraguay May 2011 September 2011
22
USDA has Failed Its Mission to Prevent the Introduction and Spread of TB
• “Each year 1-2 [TB] infected animals per 100,000 animals imported from Mexico are identified through slaughter detection or epidemiologic investigations.” (APHIS’ March 2011 report on TB pathways).
• In 2010, 1,221,111 Mexican Cattle were imported into the U.S. Based on APHIS’ own estimate, we likely introduced between 12 and 24 TB infected cattle in 2010 alone.
• USDA wants U.S. cattle producers to manage these diseased cattle with its new mandatory animal identification scheme.
23
History Shows that Exports Do Not Drive Live Cattle Prices Paid to Farmers and
Ranchers
R-CALF USA
Relationship Between Export Volumes and Fed Cattle Prices
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Exp
ort
s: B
illi
on
s o
f P
ou
nd
s
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
Fed
Cat
tle
Pri
ces
(per
cw
t.)
Imported Canadian CowDetected with BSE
Canadian-U.S. FreeTrade Agreement
Effective Date of NAFTA
Thirteen Years of Depressed Prices
Source: USDA-ERS
24
Long-Run Domestic Price Depression Coincides with Increased Cattle Imports that Have Recently Introduced
TB and Classical BSE into the United States
RELATIONSHIP BETWEEN CATTLE IMPORTS AND FED CATTLE PRICES
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Nu
mb
er o
f C
attl
e Im
po
rts
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
Fed
Cat
tle
Pri
ces
(per
cw
t.)
Canada-U.S. FreeTrade Agreement
Effective Dateof NAFTA
Record Live Cattle Imports from Mexico
BSE Detectedin Canada
Source: USDA-ERS2009 Estimated
R-CALF USA
25
The Solution Is To Address The Problem, Not The Problem’s Symptoms
• The problem’s symptoms include loss of consumer confidence in the health and safety of U.S. cattle and beef products, reduced consumption of U.S. beef, severe restrictions on U.S. beef exports, and depressed prices for U.S. cattle farmers and ranchers.
• The problem is that the U.S. maintains disease import standards that are too weak to prevent the introduction of dangerous diseases, and everyone knows it.
26
The Solution
• USDA Must Restore for U.S. Livestock, Livestock Producers, and the People of the United States Its Previously Weakened Disease Import Restrictions and Endeavor to Achieve the Highest Possible Level of Protection Against the Introduction and Spread of Animal Diseases.
27
Priority Action: In Descending Order of Priority
• Immediately dedicate all available resources to prevent the introduction and spread of foreign animal diseases in the United States.
• Immediately Reverse the OTM Rule that Allows the Importation into the U.S. from Canada of Older Cattle, and Beef from Older Cattle, that Harbor the Highest Risk for BSE.
After the OTM Rule is Reversed:
• Require Canada, and any other country with BSE cases born after their respective feed bans, to test all slaughtered cattle over 30 months of age (OTM) for at least one-year prior to considering the resumption OTM beef.
• Assist U.S. beef packers in the voluntary testing for BSE.
• Cease all efforts to implement a mandatory animal identification system – which is designed to manage other countries’ animal disease problems after they enter the United States – and redirect all resources currently deployed for animal identification to strengthen our disease protections at our borders, including increased testing of imported livestock.
28
Additional Actions• Require all cattle imported into the U.S. from Mexico to be tested for
bovine tuberculosis (TB), directed to designated feedlots, and held in those feedlots until they are ready for slaughter.
• Require all cattle imported into the U.S. from any country with known TB or brucellosis reservoirs, in either livestock or wildlife, to be tested for TB and brucellosis prior to entering the United States.
• Reverse the recently promulgated “regionalization” scheme that allows the importation of cattle or beef from countries with ongoing disease outbreaks by carving out a specific region or zone within those countries and designating products in that region eligible for export to the United States.
29
What’s at Stake? The Disconnect Between Domestic Cattle Prices and Retail Beef
Prices Will Worsen
Source: Dr. Robert Taylor, Auburn University R-CALF USA
Black: Cattle PricesRed: Retail Beef Prices
30
What’s At Stake? The Domestic Cattle Industry Will Continue to Shrink even as
Consumption Increases
Source: USDA FAS, NASS R-CALF USA
Number of Beef Cattle Operations vs Domestic Beef Consumption
700
800
900
1,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
No
of
Bee
f C
attl
e O
per
atio
ns
(Th
ou
san
ds)
24,500
25,000
25,500
26,000
26,500
27,000
27,500
28,000
28,500
Do
mes
tic
Bee
f C
on
sum
pti
on
in
Po
un
ds
(Th
ou
san
ds)
Domestic Beef Consumption No. of Beef Cattle OperationsSource: USDA FAS, NASS R-CALF USA
31
What’s at Stake? The U.S. Cattle Cycle Will Disappear
USDA NASS, Agricultural Statistics Board
Total U.S. Cattle Inventory and Beef Cow Inventory, January 1
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
125
130
135
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Cat
tle
Nu
mb
ers
(Mil
lio
ns)
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
125
130
135
Total Beef Cow Inventory Total Cattle Inventory
Start 4-Year Liquidation
Start 8-Year Liquidation
Start 14-Year Liquidation
R-CALF USASource: USDA-NASS
32
What’s at Stake? Domestic Beef Producers Will Continue Losing their Share of the Total
Available Beef Supply
Source: USDA ERS R-CALF USA
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Total Domestic Production
0123456789
10111213141516171819202122232425262728293031
Bil
lio
ns
Po
un
ds
Origins of the United States' Beef Supply
Total Available Beef in U.S. Market
14 % of All Available Beef was Imported
in 2010
10 % of All Available Beef was Imported
in 1985 13 % of All Available Beef was Imported
in 1996
Imported Beef
Beef from Imported Cattle
Data Source: USDA-ERS
Beef produced exclusivelyfrom cattle born and raised in the United States
R-CALF USA
33
What’s at Stake? Domestic Beef Production Will Continue to Lag Behind
Domestic Beef Consumption
Source: USDA ERS, FAS R-CALF USA
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
2000
2002
2004
2006
2008
2010
Imported beef and beef from imported cattle
0123456789
101112131415161718192021222324252627282930
Bil
lio
ns
Po
un
ds
Domestic Consumption in Excess of Domestic Production1962-2010
Widest spread in history of industry, 2004-2007
Imported Beef and Beeffrom Imported Cattle
Total Domestic BeefConsumption
Consumption Increasesafter 1993
Source: USDA FAS, ERS
Beef Produced Exclusivelyfrom Cattle Born and Raisedin the United States
R-CALF USA
34
What’s at Stake? The Domestic Cattle Industry Will Continue to Shrink and Hollow Out Rural Communities all Across America
Source: USDA-NASS R-CALF USA
75,000
Loss of U.S. Livestock Operations 1980-2010
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
Type of Livestock Operations
Nu
mb
er o
f U
.S.
live
sto
ck O
per
atio
ns
1980 1,272,950 667,000 335,270 120,000
2010 742,000 60,460 62,500 81,000
>100 Hd 72,000 12,060 16,000 5,022
Beef Cattle Swine Diary Sheep
42% Loss
91% Loss
81% Loss 32% Loss
Source: USDA-NASS R-CALF USA
35
The Present and Future Viability of the U.S. Cattle Industry Is Wholly Dependent on the Ability of U.S.
Cattle Producers to Maintain a Healthy Cattle Herd. This is Fundamental. And, this Is
Fundamentally Impossible if USDA Persists in Its Support of Inadequate Disease Protections that Encourage the Introduction of Cattle Diseases
from Foreign Sources.
We Respectfully Urge USDA to Immediately Change its Present Course and Begin
Aggressively to Protect our Borders from the Introduction and Spread of Avoidable Animal
Diseases
36
R-CALF USAP.O. Box 30715
Billings, MT 59107406-252-2516