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By David Bowser LA JUNTA, Colo. — The U.S. cattle industry is torn on a number of issues. Perhaps nowhere was that more apparent than earlier this year when the heads of two disparate livestock organizations debated each other here on the plains of Colorado. Terry Stokes, CEO of the National Cattlemen's Beef Association, met Bill Bullard, CEO of R-CALF USA, at what was initially supposed to be a county cattlemen's meeting. After word spread through the countryside, however, the audience was filled with cattlemen from Colorado, Kansas, Nebraska, Oklahoma, Wyoming, New Mexico and Texas. Many were members of R-CALF, but NCBA was also represented in the audience. Questions from the audience covered a variety of subjects, generally centering on BSE, animal identification, packers and country of origin labeling. The first question faced by Terry Stokes of the National Cattlemen's Beef Association and Bill Bullard of R-CALF USA concerned BSE and opening the Canadian border. The U.S. closed its border to Canadian cattle and beef following the report last May of one dairy cow in Alberta with bovine spongiform encephalopathy, BSE or "mad cow" disease. Since then the federal government has opened the border to limited trade and is proposing several changes. Stokes said he agrees with the USDA position with regard to opening the border with Canada. "They used science and they based decisions upon science and the level of risk that's outlined in the Harvard Risk Assessment and based on the guidelines of the OIE, which is the international science-based organization," Stokes said. The issue is not about limiting reopening, Stokes added. It's about how decisions are made. "We need a basis for making those decisions," he continued, "such that we take the politics out of the decision-making process and focus specifically on science. Whether it's six months or a year, it's about using science, because that's what's going to be used as Japan makes its decision about reopening its borders to us." But the USDA decision is one R-CALF opposes. Bullard said the zero risk policy that R-CALF favors is based in science. "We used science to develop the policies that we presently have," Bullard contended. "Our present policy is zero risk with any country that has an indigenous case of BSE. "We've always viewed our cattle industry as being too important to accept anything but zero risk since 1989." That policy was stated in 2001, following a three-year scientific review of risk assessment by Harvard University. The university said two factors have elevated United States resistance to BSE, Bullard said. "Number one is the feed ban that we put in place in 1997," he said. "Number two, the policy that we do not accept any imports from a country that is not free of BSE." Bullard insisted that there is no scientific basis for an industry like the cattle industry accepting anything greater than a zero risk policy with Canada. That is consistent, he said, with OIE guidelines, which currently classify Canada as BSE "moderate risk". "We have never traded with a country with moderate risk," Bullard continued. "Our industry is too valuable. BSE is too damaging. The prudent thing to do is follow the science that we presently have, not to pick and choose what kind of science you want to use in making such an important determination." Bullard also opined that even if the slate were wiped clean — if no BSE had been discovered in Canada — the U.S. still should keep its borders closed, with no imports or exports. That, he said, would favor U.S. cattlemen. "At least since 1961," he said, "you have not produced enough beef to meet domestic demand." The U.S. is the world's largest producer of beef, he noted, and U.S. producers sell to the world's largest beef-consuming nation. "You don't produce enough, and haven't for 40 years, to meet that domestic model," Bullard said. "If you close the borders, you will be in a very favorable economic situation." A free trade agreement doesn't benefit U.S. cattle producers, Bullard insisted. The free trade ideal, he said, is a deregulated trade environment where the global markets would belong to the low-cost producer. "We realize that's impossible," Bullard said. "You are not the low-cost producer. You're the high quality producer. You produce the best beef in the world, and you do it out of the very best of conditions." Bullard said R-CALF would embark upon seeking fair trade agreements. "One that recognized the unique marketing characteristics of our industry," Bullard continued. "One that must recognize that we're a producer of a perishable product." He said the market is extremely sensitive to interference. "You have a relatively narrow window of time to market your fed cattle before it starts to degrade in quality," Bullard said. "If that's not recognized in a meaningful way in trade agreements, you lose. So we need to have special safeguards." He said the U.S. needs to continue imposing tariff rate quotas. It's the only way, he claimed, to provide "adult supervision" on trade coming into the United States. "Remember in 1995 when Mexico sent 1.2 million head of cattle to the United States?" Bullard asked. "They had to do it. Widespread drouth, the devalued peso, economic turmoil. They had nowhere to go. They came into our markets. You got hurt financially because they flooded the market." There were no safeguards to protect U.S. cattle producers, he said, and a fair trade agreement needs to be include such safeguards. "Clearly, we need to sell part of our product overseas," Stokes countered. "We've talked about trade surplus and the fact that we have a $3.5 billion trade surplus. You know why? Where are we going to sell hides if we don't have the marketplace for hides? Where do we sell variety meats? You don't have to be a low-cost producer to export." Stokes said the U.S. averages $1.66 per pound on all beef products that it exports, and $1.22 on what it buys as imports. "When you look at the opportunity, we have the best product in the world," Stokes said. "I agree with Bill. We're the best at what we do in producing a high-quality, grain-fed product. It's wanted in all parts of the world." Stokes said, however, that cattle producers have to realize that 96 percent of the population of the world is outside the United States. "The global marketplace provides opportunity for added value," Stokes insisted. "If it didn't, we would not have had a drop in the price of our product when BSE was identified and other countries closed their markets to us." "Last year, the most devastating event took place in this country," Jan Lyons, a Kansas cattle producer and president of NCBA, said from the floor. "It could have wiped out every single one of us. We could not have been able to continue our operations. I'm talking about BSE." She said she is proud of NCBA for its work to combat the problem and publicity. "NCBA stood very tall on this issue," Lyons said. She insisted the zero risk standard that Bullard talked about is not based in science. "Zero risk said that any country that has BSE, even an imported case, is a risk country," Lyons said. "That includes the United States. Why in the world would we be willing to give up that three-plus billion dollars that we've had an opportunity to achieve through exports? It does not make sense to me. It does not make sense to my children or my grandchildren, who want to stay in business, who want to this industry to grow. The only way this industry will grow is if we have exports. I ask you, why do you give that up with your zero risk policy?" "We have had a zero risk policy since 1989," Bullard repeated, "and we continue to have a zero risk policy for E. coli outbreak and other listeria-type diseases. We have adopted a zero risk policy for those diseases that bear the potential to devastate our industry." In adopting such a policy, Bullard said, the scientific community recognizes different categories of risk. The world organization for animal health, the OIE, establishes such categories for different countries. The United States and Canada were both BSE provisionally free prior to May 20, when a cow was diagnosed with BSE in Canada. "The OIE recognizes that a country that has only a case of BSE in an imported animal is not adversely affected," Bullard said. "That's why in 1993, when Canada had its first case of BSE, we didn't respond, nor did other export countries as they did to us, because Canada immediately announced that the animal was imported from Great Britain." BSE is not a contagious disease, Bullard pointed out; it is an infectious disease. "As a result of that," he continued, "science said an imported animal coming into your borders that has BSE does not adversely affect your position. We remain BSE provisionally free under the categories of the OIE." Canada fell from provisionally free status, he said, to moderate risk with the discovery of BSE in a native animal. "It fell two grades, from minimum risk to moderate risk, because it had its first case of indigenous BSE and because Canada has not had its feed ban imposed for eight years," Bullard said. "The precise reason why we're BSE provisionally free and not BSE free is because we first have to meet the criteria of having a feed ban in place for eight years. Ours went into effect in 1997. We have two years to go." Bullard contended that R-CALF's policy of zero risk does not adversely affect exports. "We could open our borders to Canada right now if we agreed to test every animal sent to them," Bullard said. "They can't have zero risk policy because they have BSE." The European Union, he added, cannot adopt a zero risk policy because they have BSE. "The zero risk policy would prevent them from trading with member countries," Bullard said. "They're in a very different position than the United States. The United States does not have an indigenous case of BSE. Until we do, we should not be assuming the risk that the other countries that do have it." Stokes said there are ways of dealing with BSE other than adopting a policy of zero risk. "I'm not talking about how we resume trade with Canada, but how other countries are going to trade with us," Stokes said. If the U.S. resumes trade with Japan, he said, it will be with beef products from cattle under 30 months of age. There are ways, however, in which animals over 30 months can be processed and, using scientific techniques, can provide product with no risk of BSE. "There are a lot of factors that come into play that we have to look at in the production of BSE-free product," Stokes said. That includes the removal of brain, spinal cord and intestines, and assessing risk materials. "All of those things come into play," Stokes said. "It's not a yes or no decision." It's about having preventive methods in place, he said. "When you look at the OIE guidelines," Stokes continued, "they have to really measure to address each one of those risks, and nothing in the OIE guidelines prohibits any trade with countries known to have BSE." Stokes said it's important that the U.S. look closely at the process. Colorado veteran rancher Tom Spencer said he wants to brand Canadian cattle with a "C", the same way Mexican cattle are branded with an "M" when they come into the U.S. Stokes said NCBA doesn't have a specific policy stating that the organization supports branding imported cattle. "I know we've been doing that with Mexican cattle for a long time," Stokes conceded. Bullard said he thinks branding imported Canadian cattle is a good idea. "We should have done it a long time ago," he said. There are worldwide diseases that have the potential to devastate the cattle industry, he said. "We should have embarked upon a process of clearly being able to differentiate all imported livestock," Bullard insisted. The branding of Mexican livestock on the jaw was instituted because of concerns about tuberculosis coming across the border. "We should have it for Canada and all other cattle that are imported into the U.S.," Bullard said. "We should have had that in the early 1980s when Canada was importing cattle from Great Britain." Bullard said he doesn't like the road the U.S. cattle industry is heading down. "We need to change," Bullard opined. "Change is difficult." There is a time in history when truth has to rise above the comfort, Bullard said, and say it is time for a change. He said NCBA represents the status quo. "The road that we're on is the continuing erosion of competition and continued packer control," Bullard charged. "The only way to register your position for change is to do something different. R-CALF provides the choice to those of you who feel that we've been on the wrong course. The choice is yours. It's a free country." Among the differences between the two organizations is their policy regarding testing of cattle for BSE. Both say they favor increased testing. The issue is what cattle should be tested. Stokes said NCBA supports increased testing on high-risk animals. Bullard indicated all cattle should be tested in response to calls for such testing by the nation's trading partners. Testing should not be done on animals under 30 months, Stokes countered. Citing the guidelines lay down by OIE, Stokes said there is virtually no risk in cattle younger than 30 months. (The 30-month rule assumes that BSE does not occur in younger animals, but both Japan and Europe have reported cases in animals younger than that. — Ed.) "The golden rule of business is, if you are not responsive to your customers’ desires, you will not be successful," Bullard said. "We are in the very unenviable position of having to prove a negative. We do not have indigenous BSE in this country." He said USDA's characterization of the cattle industry puts producers in a position where cattlemen have to prove their cattle do not have BSE. "Let's do it," Bullard challenged. "Let's begin a program for a period of time, perhaps two years, to determine whether or not there is BSE in the United States." In the meantime, he said, the U.S. has already implemented the mitigation measures used by other countries that have had BSE. "We can assure the public it will be safe to eat beef," Bullard said. He said if the U.S. does not comply with the requests of overseas markets for more testing, it is going to be difficult to regain those markets. Bullard said the U.S. should never have lost those markets in the first place. He said USDA should have disclosed the fact that the cow with BSE discovered in Washington state last December was imported from Canada. The market was unnecessarily overreacting to the situation, he claimed. Bullard said that while the USDA did a superb job in assuring consumers what the relative risk of BSE was negligible, and in maintaining the domestic marketplace, it did a terrible job for the United States live cattle industry. Instead of promptly providing factual information known to it, Bullard contended, USDA allowed domestic and international markets to overreact. "Now, we find ourselves below ground zero," he said. "We're behind where we should have been." Bullard reiterated his call for increased testing. "We should begin testing," he insisted. "Our organization is looking at testing every animal over 24 months of age for a period of about two years." The two-year period is important, he said, because the Harvard risk analysis suggests that since the U.S. feed ban was in place in 1997, and since BSE has an eight-year incubation period, in two years the U.S. should be beyond the incubation period for BSE. "We must assume that the United States has properly enforced the feed ban," Bullard said. "After two more years, there should not be any problems with BSE for a country like the United States that does not have indigenous BSE agents." Bullard said the industry's reaction to December's report of BSE in the U.S. was well executed and what he expected. "We've depended upon the contributions of our checkoff dollars which were specifically for the purpose of helping the market promote our product," Bullard said. "We knew they had a strategic plan in place in the event of this. It was practiced May 20, when the Alberta, Canada, case developed. "We realized then that we had a significant opportunity to maintain consumer confidence. We, like the NCBA, participated in giving interviews to the Wall Street Journal, CNN, major media, on a daily basis, a day and night basis." Bullard said the U.S. has some serious, stringent and effective safeguards, and that is why the U.S. since 1989 does not import from countries that have BSE. "The number-one priority from our position was in maintaining consumer confidence," Bullard said. "We also wanted to recognize that we had an absolute obligation to the U.S. producer to ensure the steps that were taken were not going to be detrimental to the industry." He said R-CALF's focus was on why USDA wasn't exposing the fact that the U.S. BSE case was found in a Canadian cow. "In fact, on Dec. 26, after hearing a report from the state of Washington that this cow had a permanent eartag, we sent a message to Undersecretary Bill Hawks and said, 'We understand that you know this is a Canadian cow,'" Bullard said. "'If you have that information, you must disclose it now in order to mitigate the damage that has accrued to our producers.' The next day, Dec. 27, USDA announced that fact." Stokes said NCBA was at the forefront of responding to the May 20, report of a cow with BSE in Canada. It was not only a program funded through the beef checkoff, he said; it was part of NCBA's responsibility as an industry leader. The same was true, Stokes said, in December when BSE was reported in the U.S. "We were before the consumer, assuring them that we had a safe and wholesome product and we had measures in place as an industry," Stokes said. "Because the industry was there, because we were a major part of it, we maintained consumer confidence. "In fact," he continued, "today, consumer confidence is at 91 percent that the product they eat is safe from BSE. "On that particular day, within 15 minutes of when we found out, we were in front of over 120 media folks, getting that message out so that they could communicate it to the consumer," Stokes said of the December BSE report. He said he wanted to make sure consumers had faith in a safe and wholesome product. Stokes said he disagrees with Bullard over whether the USDA did a good job. "I think they did an admirable job," Stokes said. He said the industry doesn't need to be questioning the integrity of the USDA if everyone is trying to maintain consumer confidence. |
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