13, 2005 The earlier-than-normal outbreak of vesicular stomatitis (VS) in the Southwest has grown to include 29 confirmed cases in horses from 23 premises in six counties representing three states, according to USDA’s Animal and Plant Health Inspection Service as of June 6. The counties infected with the disease so far are Maricopa, Pinal and Yavapai counties in Arizona; Grant and Luna counties in New Mexico; and Travis County in Texas. Five more infections were confirmed over the week ending June 5, one of those infections was confirmed in Texas. However, it was in a horse that was recently transported into the state from Arizona, according to officials from the Texas Animal Health Commission (TAHC). Three of the 23 infected premises—two in Arizona and one in New Mexico—have been released from quarantine due to animals not showing additional symptoms 30 days after being treated. This year’s first VS cases were confirmed April 27 in two horses in New Mexico. That was the earliest confirmed infections in documented history by two months, animal health officials said. State veterinarian offices have urged producers to take note of livestock shipping and handling requirements that other non-infected states may have imposed. “A number of states and countries impose strict testing, permitting and inspection requirements for livestock that originate from VS-affected areas or states. Check with the state or country of destination before hauling livestock from Texas,” said Dr. Bob Hillman, head of TAHC and the Texas state veterinarian. Hillman also said the clinical signs of VS mirror those of hoof-and-mouth disease (HMD). Horses are susceptible to VS, but not HMD. However, both diseases can affect cattle, sheep, goats, swine, deer and a number of other species. “When sores or blisters are seen in HMD-susceptible animals, we must immediately rule out an introduction of HMD,” Hillman said. “When horses have lesions, a VS test rules out other possible causes for blisters and sores, including toxic plants, chemicals or poison.” The disease has had a history of occurring very sporadically in the U.S., with outbreaks generally following a 10- to 15-year cycle. In l982-83, the country suffered its worst recorded VS outbreak, when infection was confirmed on 617 premises in nine states—Arizona, New Mexico, Colorado, Utah, Wyoming, Idaho, Montana, Nebraska and South Dakota. Subsequent outbreaks occurred in l995, l997 and l998 but were limited to Arizona, New Mexico, Colorado and Texas. Last year, Texas had 15 cases, New Mexico 80, and Colorado 199. Colorado and other neighboring states have not yet been hit by the disease. However, state animal health officials have said the lingering wet weather conditions this spring have left the possibility for an even greater outbreak of the disease very likely. Livestock owners and private veterinary practitioners are urged to report suspected cases of VS to their respective state livestock health regulatory agency. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

13, 2005 A World Trade Organization (WTO) trade dispute panel recently ruled in favor of the U.S. in a dispute with Mexico over tariffs that had been levied against U.S. beef since April 2000. The WTO panel found that Mexico’s imposition of anti-dumping duties breached international trade rules and called on Mexico to abide by them, particularly lifting the tariff schedule on beef from U.S. beef exporters. The official report favoring the U.S. was released publicly last Monday, even though both countries were made aware of the decision late last month, sources said. In 1998, Mexico’s government ruled that U.S. beef exports were injuring Mexico’s domestic cattle/beef market and that a tariff rate schedule would be implemented against U.S. beef. In April of 2000, a final tariff rate schedule was released that ranged between 7-80 cents per kilogram—3.2-36.5 cents per pound. The varying tariff schedule was based on company and type of product. The biggest impact related to duties on U.S. beef going into Mexico was felt by small- and medium-sized processors, particularly those in close proximity to the border. Those processors were grouped into an “all other” category of U.S. beef exporters and were subject to paying the highest tariff rates for any product they sent across the southern border. The largest U.S. beef processors and exporters were mostly slated to pay the lowest tariffs set by Mexico. The U.S. filed its claim of unfair tariff implementation in 2003, citing flawed data that Mexican authorities used to calculate the alleged damage to its own producers. Mexico partially lifted its tariff rate schedule on U.S. in March of 2004, however, it wasn’t nearly enough to satisfy the U.S. In addition, that decision was made as a result of a finding of wrongdoing by a North American Free Trade Agreement (NAFTA) panel and not from the WTO. The only tariffs that would be lifted would be on Select and Choice carcasses; tariffs on boxed boneless and bone-in product were still in place. The bone-in issue is a moot point right now due to the international ban of U.S. bone-in beef due to BSE concerns. Mexico’s commerce and trade secretariat has indicated they will appeal the decision, meaning that a second WTO panel will take up debate on the issue, probably sometime early next year, sources close to the issue said. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

13, 2005 A promising pre-harvest, live animal pathogen reduction technology could receive a stronger look from government regulatory and meat industry officials after scientists have found that it doesn’t jeopardize the health of consumers because of potential residue fears. Efforts to reduce deadly pathogens in meat have most recently included utilizing compounds that would rid animals’ systems of bacteria before they are slaughtered and taken through the rest of the processing system. One of the most promising pre-harvest, pathogen-reducing food safety technologies in cattle is the use of sodium chlorate in drinking water and/or feed a few days before cattle are loaded and transported to the packing plants. However, use of this feed additive has not been approved by regulatory organizations because it is not known whether significant enough residues are present in edible tissues of treated animals and create a human health risk. Earlier this year, research indicated that moderate to heavy sodium chlorate doses do not result in a level of meat residue harmful to humans. In the final report of the research finished this past April, Agricultural Research Service (ARS) researcher David Smith said that residue levels were not high enough to represent a health risk to humans who consume meat from animals treated with sodium chlorate. “Results of this study indicate that further development of the product is warranted because residues of the parent compound were fairly low and because the major metabolite, chloride, is naturally present in all life forms,” he said. Sodium chlorate is said to be most effective when offered to cattle three to five days prior to being shipped to packers. It kills and results in “sloughing” of dangerous bacteria, specifically E. coli O157:H7, from the stomachs of cattle. Researchers said the compound is a common sense approach to meat safety because the more bacteria that is removed from an animal’s system prior to it entering the plant, the less bacteria there is to contaminate meat once an animal is slaughtered and eviscerated. They did say, however, that more emphasis needs to be put on rinsing the hair and hide of animals upon entering the processing facility because the more bacteria that is excreted the more bacteria contamination there is on the skin and hair of individual animals. Additional research is scheduled, however, officials with the Food and Drug Administration (FDA) told WLJ last week that the preliminary study concerning sodium chlorate will probably give them enough impetus to move on with preliminary probes into granting the product certification for use as a feed additive at the feedlot level. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

13, 2005 — ‘Immediate’ implementation voted against. The rift between country-of-origin labeling (COOL) proponents and opponents widened to cavernous proportion last week after the U.S. House of Representatives voted in favor of continuing to delay the implementation of a mandatory labeling program. House members voted 240-187 against a proposal, introduced by Rep. Denny Rehberg, R-MT, to remove current language delaying implementation of mandatory COOL past Sept. 1, according to House staff members. The debate and vote on the issue was part of last Wednesday’s discussion and passage of a full ag appropriations package, which was passed—with the COOL delay included—by a vote of 408-18. Voting in favor of Rehber’s amendment were 145 Democrats, 41 Republicans and 1 Independent, while 52 Democrats and 188 Republicans voted to continue to delay program implementation. House members and Washington, DC, lobbyists said last week’s action means the earliest a mandatory COOL program could be implemented would be September 2006. As expected, reactions to last Wednesday’s activity were widely variant, with labeling proponents crying foul and program dissenters sighing relief. A large majority of House members from “northern tier” farm states said last week’s vote against Rehberg’s amendment was a major blow to the profitability of domestic U.S. cattle producers, because it allows imported product to receive the same marketing opportunities as U.S. beef. In his comments on the House floor last Wednesday Rehberg talked about the success of mCOOL for fish and read a quote from Texas Agriculture Commissioner Susan Combs, which said, “Texas loves to buy Texas products, and this way they'll know they're getting the quality they love, in turn sales will increase, providing a boost to Texas shrimp producers, and the state's economy.” “The same could be said for U.S. cattle producers and consumers,” Rehberg said. Additional proponents cited packers not wanting to deal with additional rules as the primary deterrent to getting a mandatory program implemented. “The large meatpackers have rallied to kill this program because they don’t want American consumers to discover how much meat in the grocery case is actually imported,” said Rep. Stephanie Herseth, D-SD. Rehberg said that he is concerned about the practices of southern state cattle producers who bring in cattle from Mexico, and the fact that they are benefitting from cheap prices they pay for those cattle. “It’s time we send a message to those who are standing in the way, and allow us the opportunity to tell the American consumer that, ‘born, raised and processed in America’ means something,” he said. However, opponents of mandatory labeling continue to site additional costs to the entire industry as being very prohibitive. House Agriculture Committee Chairman Bob Goodlatte even went out on a limb last week and projected that a mandatory meat labeling program would result in producers having to incur at least another $10 per head in costs, if not more. “It will make our producers less competitive with foreign meat producers, not more competitive,” Goodlatte said. Rep. Henry Bonilla, R-TX, said that not only would mandatory labeling add more costs, but he said it would open up the industry to a lot more possible litigation and would jeopardize producers’ privacy. “This would present a nightmare,” he said. Goodlatte has introduced separate legislation that would repeal country-of-origin labeling on meat permanently. Similar legislation has been introduced in the Senate, being led by Sens. John Cornyn, R-TX, and Blanche Lincoln, D-AR. The Senate had yet to take up ag appropriations discussion as of press time last Thursday. It is expected, however, to begin debate before the end of the second full week of June. Language delaying the implementation of mCOOL is expected to be discussed and voted on by Senate members for inclusion in the appropriations package. However, there appears to be much more support for a mandatory program in that branch of Congress. If the Senate keeps Sept. 1 mCOOL implementation, then the issue will be decided in an ag appropriations conference committee made up of both Senate and House members. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

13, 2005 — Granting of Canadian filings a surprise. — Arguments slated July 13. The Ninth Circuit Court of Appeals last week accepted a large number of amicus curiae briefs—also known as “friend of the court” briefs—in the appeal of an approved preliminary injunction banning the reopening of the U.S. border to Canadian live cattle. The court was also asked to reexamine an earlier request for intervener status in the late July permanent injunction hearing regarding Canadian beef and live cattle. While several U.S. groups, on both sides of the issue, were expected to have their written opinions taken into account by the court, there was some surprise when the Canadian Cattlemen’s Association (CCA), the federal government of Canada and Alberta Beef Producers (ABP) had their “friend” briefs accepted. Amicus curiae briefs permit those affected by the outcome of a case to provide relevant information for consideration by the judge or judges deciding the matter. Legal experts said that a lot of courts won’t allow non-U.S. entities to have much say in domestic U.S. lawsuits, particularly when the litigants are both domestic and the case impacts a domestic industry. “We're very encouraged that the (appellate) court granted CCA and other groups that will be impacted by the outcome of this case the opportunity to have input,” said CCA President Stan Eby. “The economic future of CCA members, the cattle producers of Canada, will be hugely impacted by the outcome of both the appeal of the preliminary injunction, and the hearing on a permanent injunction that will be held in U.S. District Court for Montana.” Last Tuesday, both CCA and ABP filed an appeal in the Ninth Circuit asking for its request for intervener status in the permanent injunction case to be reinstated. The permanent injunction case is scheduled for oral arguments July 27 in the U.S. District Court of Montana, Billings. CCA's brief says that CCA has both a significant economic interest in the outcome of the proceeding, and an equal and related interest in how the U.S. structures and implements its BSE regulations. The briefs also argue that Judge Richard Cebull abused his discretion by “failing to accord deference to the voluminous and scientifically substantiated record entered by USDA, while at the same time adopting, often verbatim, unsupported and inaccurate conjecture offered by R-CALF (United Stockgrowers of America).” Other groups in favor of resuming cattle and beef trade with Canada who had their amicus briefs granted last week included the National Cattlemen's Beef Association, American Farm Bureau, American Meat Institute, and National Meat Association. Sixty-seven state, regional and national organizations have filed an amicus brief in favor of keeping the injunction in place. Lead organizations in that filing included the Organization for Competitive Markets, the National Farmers Union, Consumer Federation of America, Public Citizen and a very large group of state and regional producer organizations that make up the Cattlemen’s Competitive Market Project (CCMP). Oral arguments on the injunction appeal have been set for July 13 in Seattle, WA. The three-judge panel to hear the arguments has not yet been selected, however, they could be known sometime during the first week of July, according to an appellate court clerk. The hearing on the permanent injunction request is scheduled to begin July 27 in Billings, MT. Unlike the preliminary injunction, which bans just Canadian live cattle from entering the U.S., the permanent injunction request includes a ban on all Canadian beef from crossing the U.S./Canada border. Several sources said it would be unlikely that Cebull would rule on the permanent injunction on the same day oral arguments concluded. However, legal experts said they didn’t expect him to rule on the temporary injunction on the same day as oral arguments were presented, which he did. Cebull reinstated the ban on Canadian live cattle on March 2, five days before USDA’s final rule regarding cattle imports from “minimal BSE risk” countries was scheduled to go into effect. R-CALF cited several shortcomings, including a lack of “scientific facts” and public health concerns, in the final import rule, with which Cebull agreed. The clerk with the appellate court said that CCA and ABP’s appeal for intervener status in the permanent injunction request had not gone through the judge allocation process last week and would probably not be ruled on until early- or mid-July. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

13, 2005 — $3-plus jump noted. — Market demand also better. A significant jump in the primary indicator for feeder cattle price trends at the beginning of the month caught the attention of both market analysts and cash market participants alike. The reason behind that jump, however, was a combination of market indicators and a change in mathematical formulas and not just an increase in demand for feedlot-ready cattle. The Chicago Mercantile Exchange feeder cattle index on June 3 was $114.37 per cwt, a $3.29 jump compared to the previous day. That was called the largest jump in that figure in the history of the feeder index calculations. While there were indications from auction barns that demand and prices for feeder cattle were both stronger late that week, a change in the index’s formula added more to that increase, analysts said. Beginning June 2, the CME feeder index started utilizing prices from 600-850 pound steers, compared to the previous range of 700-850 pounds. Adding lighter-weight cattle to the formula raised the index’s average price because prices for those cattle are naturally higher than their heavier-weight counterparts. “The formula changed to include a much wider price range, with all of the addition coming on the top side,” said Lance Zuhrmann, M&Z Livestock Analytics. “That skewed the index quite a bit on the first day.” Another change to the formula included widening the class of cattle to medium and large 1s and 2s, compared to just medium and large 1s previously. The formula will still be based on the price of cattle sold in the 12 primary feeder cattle states, mostly Plains and southern states that have over 100 auctions reporting. However, market analysts also said that the tremendous jump in prices was indicative of an increase in both demand and prices paid for cattle during the first few days of June. “Particularly in some northern states we’ve seen a lot of graze-out wheat cattle hitting the market and they’re are in demand by feedlots,” said Randy Blach, lead economist with Cattle-Fax. “We’re also seeing a lot of grazing optimism and that is leading to increased interest in cattle that could still go to pasture the rest of this spring and summer. It wasn’t just the change in formula that jumped cattle prices, but also an improvement in the market itself.” Other market sources added that day-to-day price fluctuations in the CME index could be much wider in the future than they were under the old formulation because there are a lot more $3-5-and-larger price changes in lighter weight cattle than there are in the heaviest weight of feedlot placements. The new formulation will be used to close out hedges on feeder cattle futures contracts starting with August. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

20, 2005 ConAgra’s Q4 earnings to slump ConAgra Foods, Omaha, NE, said earnings for its fiscal 2005 fourth quarter will be lower than expected primarily due to continued weak profitability in the company’s packaged meats operations. Those operations continue to be negatively impacted by high protein input costs coupled with inadequate pricing management, the company said. The company recently made several significant personnel changes in its packaged meats operations and expects those changes, along with better pricing management, aggressive cost-savings initiatives, and SKU rationalization, to improve the packaged meat operations over time. The company plans to cut about 1,000 jobs from its total work force of 37,000; the company forecasts that could save about $100 million annually. The company will also merge its packaged meats and deli operations. Greater Omaha receives QSA from USDA Greater Omaha Packing Co. received Quality System Assessment (QSA) approval from USDA, which qualifies the company to export to customers in Japan when that market is reopened to U.S. beef products. The QSA signifies that a processor has ties with ranchers and feeders who maintain careful feed, age and genetic records of its cattle, and gives such companies an advantage when the border reopens. Harris Ranch Beef Co., Brawley Beef Co. and Packerland Co. have received similar designations. Pennsylvania firm recalls beef Murry’s Inc., Lebanon, PA, recently voluntarily recalled approximately 63,850 pounds of frozen ground beef products, produced last year, because of potential contamination of E. coli O157:H7. All of the products subject to recall contain the production code “40104” and the establishment number “EST. 516A” inside the USDA seal of inspection. The frozen ground beef products subject to the recall include frozen packages of ground beef patties and meatballs with the item codes 06716, 63101, 01357, and 01340 within their labels. All suspect products were produced on April 1, 2004. The recall was made public last week, after FSIS officials indicated there was a food-borne illness in New Jersey apparently linked to the products now being recalled. State beef brand close to reality South Dakota's Agriculture Department has filed emergency rules for its South Dakota Certified Beef initiative, putting the program one step closer to becoming a reality. The emergency rules establish the legal authority for the state to administer the voluntary SDCB program in an effort to create a trademarked high-end niche market for South Dakota ranchers, feeders and processors. The program will use similar guidelines to those developed by the USDA for its national animal identification program. A public hearing needs to be held on the issue, and the program could become reality 20 days after. Washington plant burns down An accidental fire recently destroyed the Larry Jackson Meats processing plant, Kelso, WA. The meat processing area and coolers were either heavily damaged or destroyed, and all the meat in the plant at the time of the fire was lost. However, a nearby propane tank, car and house were spared. It took crews more than one hour to get the blaze under control, in part because the nearest fire hydrant was about four miles away. Fire crews had to truck water to the site, and about 25 people helped fight the fire. The owner of the plant had turned a propane burner off, but officials believe it was placed too close to the wall and may have already started to burn. The plant underwent a $100,000 renovation in 2000 to expand the 30-plus-year-old business to serve hunters as well as livestock producers. New BSE case confirmed in Czech Republic Final tests have confirmed a nineteenth case of bovine spongiform encephalopathy (BSE) in the Czech Republic, an official said. Jan Bazant of the state veterinary authority said that tests for BSE were positive of a four and a half-year-old cow slaughtered last week at a farm in Lodenice, 187 miles east of Prague. Another 250 cows from the farm will have to be slaughtered as a precaution. The Czech Republic’s first case of the brain disease was reported in June 2001. The last previous case was confirmed in April. Nigerian bull arrested for murder A bull that stomped a Nigerian bus driver to death in the capital city of Lagos was arrested by a group of Nigerian police and is being held in a city jail. “Do you know what it takes to arrest a mad cow?” one policeman told a local paper. The bull also injured several bystanders before it was taken into custody. The police were trying to find the bull’s owner, who could face criminal charges for failing to keep the bull under supervision. Quaker Maid gets financing iCapital Finance Inc., Irvine, CA, has arranged $8 million in financing for Quaker Maid Meats, Reading, PA. iCapital has been working with Quaker Maid to investigate the opportunities set forth by the Community Renewal Act of 2000 and more specifically the utilization of New Market Tax Credits since February. The New Market Tax Credit Program permits taxpayers to receive a credit against Federal Income Taxes for making qualified equity investments in designated CDE's. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period. Quaker Maid has been in business since 1960. It is a family-owned S-corporation with two existing meat processing plants and plans for a third plant in the near future. Evans acquires processing plant Evans Foodservice Inc., Swartz Creek, Michigan, acquired specialty meat processor and distributor Otto W. Leibold and Co., Flint, Michigan. Leibold is a USDA-inspected processor of fresh beef, pork, veal, and game. S. Scott Solesby, senior vice president at Evans, said the acquisition “was an attractive opportunity for us because it enabled us to accelerate our growth in center-of-the-plate (products), with which we were struggling a little bit." The acquisition could add 15-20 percent to Evans' bottom line, he added. Solesby said the accounts acquired through the acquisition would enable the company to expand and penetrate the market deeper. Quick monitor of Washington Farm and Trade Policy Issues Washington, D.C., lobbyists and congressional staffers say Mike Sommers is expected to replace Chuck Conner as White House agriculture advisor to the president. Sommers, who currently is chief of staff for Rep. John Boehner, R-Ohio, is expected to start his new position around mid-July. Sommers first joined Boehner’s staff in 1999 as a legislative assistant. Boehner is chairman of the House Education Committee and also the senior Republican on the House Agriculture Committee. Conner left the White House to become deputy secretary of agriculture. © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

20, 2005 The Beef Promotion Operating Committee has recommended a $50 million Cattlemen’s Beef Board (CBB) budget for fiscal year 2006, reflecting a slight decrease from the $50.5 million budget for fiscal 2005. The Beef Board, which administers the national checkoff program, projects revenue of $45.4 million for fiscal 2005, plus $4.6 million to be available from current program budgets as a result of projects costing less than originally estimated. The breakdown of the budget recommendation, which must be approved by the full Beef Board and USDA before any funds are expended, includes the following budget elements: promotion, $25.5 million; research, $7.3 million; consumer information, $5.8 million; industry information, $1.35 million; foreign marketing, $5.1 million; producer communications, $2.2 million; evaluation, $230,000; program development, $120,000; USDA oversight, $200,000; and administration, $2.25 million. The 2006 fiscal year begins Oct. 1, 2005. “We looked carefully at challenges and opportunities in the marketplace to determine what areas we need to emphasize to give cattlemen the best return on their checkoff dollar,” said Al Svajgr, a producer from Cozad, NE, and chairman of CBB and the Beef Promotion Operating Committee, which met in Kansas City June 8-9, 2005. “With the recent decision from the Supreme Court that our checkoff program is constitutional, we wanted a budget that will continue concentrating on building demand for beef. It allows us to do this through a combination of promotion, research and information programs that aim to keep beef at the center of the plate.” The recommended research budget for fiscal 2006 represents an increase in funding for additional market research in such areas as developing “kid-friendly” beef product concepts, as well as strategies to integrate beef enjoyment and nutrition messages and enhance program concepts for ground beef. Meanwhile, the committee is recommending slight decreases in the budgets for consumer information, industry information and foreign marketing, based both on increased research needs and on generally tight revenues. In the coming stages of the fiscal 2006 budgeting process, the full Beef Board will be asked to approve the budget at its meeting in Denver in late July. Joint industry advisory committees and subcommittees also will meet in Denver to prepare recommendations for specific program proposals that are funded with that budget. Those proposals will be considered by the Operating Committee in September, before the Oct. 1 beginning of the fiscal year, and must finally be approved by USDA before any checkoff dollars may be spent. Funds from the Beef Board for national checkoff programs will be augmented by $10.3 million in voluntary contributions from state beef councils to their national Federation of State Beef Councils, a division of the National Cattlemen’s Beef Association (NCBA). In addition to the budget recommendation for fiscal 2006, the Operating Committee recommended approval of the following amendments to the current fiscal 2005 budget: • Reallocation of $25,000 in producer communications funding from the producer communications program contracted through NCBA to fund additional activity for the “Beefmobile.” NCBA requested reallocation of the funds based on an abundance of requests for Beefmobile visits to events and auction market sales. The funds were made available from other producer communications efforts managed by NCBA coming in under budget. • A request from the U.S. Meat Export Federation (MEF) to reallocate about $44,000 in Beef Board funding originally planned for beef-promotion programs in China to promotion programs in the Middle East, based on the continued closure of the Chinese market to U.S. beef products and the re-opening of the Egyptian market. • A request from MEF to transfer about $880,000 in Beef Board funding previously approved for retail and menu promotions in Japan to programs for trade and educational activities in the same country. Because the market is not yet open to U.S. beef, MEF said there is less imminent need for promotion in retail and menu promotion and more to be used to prepare importers there for the market reopening and to reassure consumers about the safety and quality of U.S. beef. — WLJ © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

20, 2005 — UK test results expected late June. — Testing protocol breach suggested. A sample of brain matter from a “downer” cow collected last November was retested for BSE earlier this month and came back positive for the brain-wasting malady. Officials with USDA’s Animal and Plant Health Inspection Service (APHIS) were awaiting confirmatory testing from a British lab to determine if the animal was indeed infected with the disease. Producer groups last week were very critical of USDA’s announcement concerning the BSE test, saying that surveillance protocol was breached when an announcement was made prior to final test results being received from Great Britain. On June 10, USDA Secretary Mike Johanns and USDA chief veterinarian Dr. John Clifford said the agency’s Office of Inspector General (OIG) requested earlier that week that three beef samples previously determined to be negative for bovine spongiform encephalopathy, but showing “preliminary inconclusive” results after a rapid test, be reassessed using a different type of test. One of those three retested samples came back positive, and efforts were being made last week to get that sample shipped to Britain where the final test would be conducted. Preliminary inconclusive means that the original rapid test came back with a positive result. However, a confirmatory immunohistochemistry test on all three preliminary inconclusive test samples from last year showed the disease did not exist in those animals. OIG came back to USDA early in the week of June 6 and requested that APHIS scientists retest the three preliminary inconclusive samples with a different test, called the “Western blot.” USDA officials said that past assessment of both the IHC and Western blot tests have shown them to be equal in their accuracy and effectiveness in determining presence of BSE. Why OIG made the request was not disclosed by USDA or APHIS officials. “OIG, which has been partnering with APHIS, the Food Safety and Inspection Service, and the Agricultural Research Service by impartially reviewing BSE-related activities and making recommendations for improvement, recommended that all three of these samples be subjected to a second internationally recognized confirmatory test....Of the three samples, two were negative, but the third came back reactive,” said Dr. John Clifford, chief veterinarian for USDA. He added that the animal in question was a 10-12 year old “downer” cow, that did not meet criteria for being processed into human food or animal feed. The animal also was born prior to the 1997 feed ban restricting use of ruminant meat-and-bone-meal (MBM), which means the animal could have received feed contaminated with the agent responsible for BSE. “Regardless of the outcome (of the confirmatory test in Great Britain), it is critical to note that USDA has in place a sound system of interlocking safeguards to protect human and animal health from BSE, including a ban on specified risk materials from the human food supply,” Clifford said. “In the case of this animal, it was a non-ambulatory animal and as such was banned from the food supply. It was processed at a facility that handles only animals unsuitable for human consumption, and the carcass was incinerated.” Criticism launched at USDA Futures and cash cattle markets last week were both directly impacted by USDA’s decision to announce the Western blot test results, and producer organizations were upset because USDA went against normal protocol to wait to announce any results until final tests are completed. In a letter to U.S. Agriculture Secretary Mike Johanns, Jim McAdams, president of the National Cattlemen’s Beef Association (NCBA), said, “We expect a full explanation of the circumstances that caused OIG to recommend additional testing of previously identified BSE negative animals. While NCBA has supported the surveillance program and its intent, these most recent actions by USDA and the OIG do not increase the safety of U.S. beef, nor do they improve the health of the U.S. cowherd, but instead put the industry at greater economic risk. “We call upon USDA to clearly communicate the scientific basis for the protocol that they will follow, and the time frame that the industry can expect to bring this current issue to resolution. It is important not to communicate the results of this situation until they are definitive. To prevent further economic uncertainty in the market, USDA should not release intermediate test results or additional information that is not final and conclusive in nature.” State and regional producer groups had additional concerns about USDA’s recent actions, including the following questions: • Why did USDA not announce the change in surveillance protocol prior to accepting OIG’s recommendation to retest using the Western Blot test? • Is the IHC test still considered the “gold standard,” and why was the extra Western blot test not done last November? • Why was the suspect sample “enhanced” to complete the test? According to the Nebraska Cattlemen Inc. perception is that the sample was concentrated last November to achieve a “weak positive.” • How is USDA preparing for a confirmed positive or a negative test result from the Weybridge, England, laboratory? USDA officials said they would not give any more details on the situation until final test results were received from the British laboratory. Those results are expected to be known right around the end of the month. APHIS scientists said it would take at least two weeks from June 10, before results would be known. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

20, 2005 — Legal protections to be in place next month. The Bureau of Land Management (BLM) last week announced the public release of a final environmental impact study (EIS) that confirms upcoming grazing rule changes will produce long-term benefits for public rangelands and not be a detriment to wildlife habitat or recreation in the future. “This environmental-impact analysis underscores grazing’s role as a vital use of public lands in the rural West,” said Rebecca Watson, assistant secretary for Land and Minerals for BLM. “The new rules will improve BLM’s management of public-lands ranching, an activity that not only supports rural economies but also preserves open space and wildlife habitat in the rapidly growing West.” BLM Director Kathleen Clarke said the EIS, published in the June 17 Federal Register, shows that grazing if managed appropriately provides long-term benefits to federally-managed rangelands. “These benefits include increased vegetation along stream banks, which will reduce soil erosion and provide more habitats for wildlife,” Clarke said. “Under the new regulations, the BLM’s grazing-management decisions will be based on better information about rangeland conditions and utilize information from those that are most closely linked to the land.” The new grazing regulations, to be published in the Federal Register next month, aim to improving BLM’s working relationships with ranchers on federally-managed lands, according to Clarke. “The revisions reflect the agency’s commitment to managing the public lands for multiple uses, including grazing, while ensuring the health and productivity of these lands,” she said. The revisions include continuing the role of BLM’s Resource Advisory Councils (RACs), which are composed of citizens across the West who advise and make recommendations to the agency on federal land issues. The revised regulations will also leave intact the rangeland-health standards and guidelines developed by the RACs. The new rules also work to improve the agency’s working relationships with those holding BLM grazing permits and leases; advance the bureau’s efforts in assessing and protecting rangelands; and addressing legal issues while “enhancing administrative efficiency.” Of particular focus, are changes in protocol concerning legal challenges of grazing on federal lands. Under the new rules, people or organizations challenging a specific grazing situation will need to bring factual proof of damage being done to the land in question, and not just allege that damage is being done or that there is “a threat of damage” looming, BLM officials said. “In the past, the court’s have accepted grazing permit challenges on the basis that someone or a group of people think damage could happen if the practice of grazing livestock is allowed to continue,” a BLM spokesperson told WLJ. “Under the new rules, that isn’t enough to gain standing. Those with the allegations have to come forward with facts and not just opinion or conjecture.” In addition, the new regulations will continue to require that the bureau consult with the interested public and users of public lands on key matters, such as developing or changing grazing-activity plans; planning rangeland-improvement programs; and developing reports that are used as the basis for BLM decisions affecting grazing permits or leases. The final EIS is posted on BLM’s Web site at www.blm.gov/grazing. BLM officials said that when the final grazing rules are published next month, they will be implemented immediately. They did not say for sure that a comment period would be reopened over the first 30-45 days of the new rules being in place, however, that is a possibility. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.