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Monday, January 31,2005

KAY’S KORNER: Facts have been lost to self-interest

by WLJ
It’s about time those folk who want to keep our border closed to Canadian cattle came clean. They’re not really interested in science or consumer confidence in the U.S. beef supply. They just want to keep making as much money as they’ve made since the border closed on May 20, 2003. Cow-calf producers have just enjoyed the best two years of profits in at least the last 30 years (according to data from the Livestock Marketing Information Center). That’s unless their operation was badly hurt by the drought that still lingers in parts of the western U.S. So it’s understandable they see a border reopening as a threat. What I object to is that people can’t be honest about it. Since USDA published its final rule on January 4 to reopen the border to Canadian feeder and fed cattle, I’ve heard just about every convoluted argument about keeping the border closed that I could have imagined. I didn’t hear anyone complaining about the border closing suddenly in 2003. Yet packers and cattle feeders who relied on Canadian cattle to help them stay in business were immediately impacted and have been since. We’ve seen at least three cattle slaughter plants close because of the loss of Canadian cattle. They didn’t complain because they recognized the border needed to be closed for a time. So why is it so difficult for people to understand that at some point, the border needed to reopen again. Unfortunately, USDA muddied the reopening issue by taking a step-by-step approach. That never made sense to me. Once USDA had established that the Canadian cattle and beef supply was safe, strictly according to scientific criteria surrounding BSE safeguards, then full trade should have resumed in all cattle and beef products. That way, any impact on markets would have been spread as evenly as the impact of a 100 percent border closure was. Instead, we have a final rule that contains a bizarre contradiction. It allows in beef from Canadian cattle 30 months of age and over but not the cattle themselves. USDA tied itself in knots on this because it was concerned about antagonizing R-CALF who had already successfully sued it last April. Yet R-CALF has sued USDA again anyway. We also have packers suing USDA over the contradiction. And we have NCBA on the other side demanding the beef part be withdrawn. Yet USDA isn’t going to change a word of the final rule unless a court forces it. If it agrees to remove or change any part of the rule, it would play right into R-CALF’s hands over its latest lawsuit. USDA would be admitting its rule is not based on science and a judge would probably agree with R-CALF that the rule is arbitrary and capricious. Also lost in the clamor are some basic facts. First, the BSE measures introduced by the U.S. and Canada since the 1980s are very similar. Both countries’ measures as they stand today are virtually identical. The most notable is the removal of specified risk material (SRMs) from all cattle. These are the materials that are believed to possibly harbor the early elements of BSE. It’s very important to realize that the removal of SRMs is the best way to protect consumers from being exposed to the human form of BSE. And the proper disposal of those SRMs means none of this material will find its way into cattle feed and thus be a threat to cattle. Much has been made of Canada’s third BSE cow being born after the feed ban. The facts are these. In both Canada and the U.S., there was a grace period whereby producers could keep using feed produced before the bans took effect. The bans were on producing ruminant feed with any ruminant-derived material in it. Some people now say the government should have banned the use of all feed produced before the ban. But imagine the screams of protest if that had been suggested. In 1997, there wasn’t the same urgency about BSE there is today. Second, forcing producers to destroy feed would have been a huge financial hardship. And it would have been impossible to enforce. The fact is, the U.S. could just as easily as Canada have a BSE case of an animal born after the 1997 feed ban. Many tons of feed produced before our ban were used on U.S. farms for at least a year after the ban. What would opponents of a border reopening say if the U.S. announced such a case tomorrow? As for the argument that reopening the border will hurt the U.S.’s chances of resuming beef exports to Japan, that’s nonsense. Japan has made it clear it is not an issue. In fact, Japan may begin accepting Canadian beef before it accepts U.S. beef, based on how talks between the two countries’ Prime Ministers went the week before last. That sure would undermine arguments about how unsafe Canadian beef and cattle are. The bottom line is that producers are protecting their bottom lines. Southern Plains cow-calf operation returns in 2004 exceeded $140 per cow, according to LIMC, up from $85 in 2003.These profits are blinding some people to the reality that the border will reopen, and that the sooner it does, the faster the U.S. market can return to normality.

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Monday, January 31,2005

Letters

by WLJ
Of course it’s politics I’m a long-time reader of WLJ, and I’ve become increasingly disappointed in its position on BSE and the Canadian border. Pete’s Jan. 10 column dismisses R- CALF’s safety concerns with the assertion that such concerns merely mask what for R-CALF is really “a market issue”; that it really is a “simple philosophy of protectionism.” Pete further argues that with “92 percent of the world’s population outside the U.S., …the marketing opportunities would be rich….” To Pete’s credit, his Jan. 17 column, coming on the heels of the most recent BSE case, had a softened tone. There are two issues: the science underlying BSE and the issue of “protectionism.” They should not be lumped together as Pete initially attempted. First, an observation regarding Pete’s population argument. While correct on his number, he ignores the fact that America controls over 40 percent of the world’s wealth. Why else would Canada, Australia, Brazil, China and the rest of the world want access to our small eight percent of the world’s population? Products are not purchased by raw demographics but by wealth. As to “protectionism,” what’s wrong with it? America became a global power by practicing “protectionism.” From Jefferson to Teddy Roosevelt, this nation’s leaders were mostly “protectionists.” Lincoln declared, “give us a protective tariff, and we will have the greatest country on earth.” Teddy Roosevelt had no use for academic “free trade” theoreticians “who have confined themselves to study in the closet; for the actual workings of the tariff has emphatically contradicted their theories.” What have been the fruits of the “free trade” theoreticians? They have destroyed America’s arsenal of manufacturing which Churchill credited with having been the deciding factor in the second World War. They have taken agriculture from a trade surplus to a trade deficit. They have transformed America from the world’s greatest creditor to the world’s greatest debtor. Global trade is about low cost production. American agriculture is not the low-cost producer. We live in a litigious society and have the overall highest tax/regulatory burden on the planet. If government chooses to ignore the crisis of litigation while at the same time burdening its producers with workman’s compensation, an overall tax burden approaching 50 percent, and a host of environmental strictures, it cannot then bid us compete with producers not saddled with like burdens. Taking C.S. Lewis out of context, “we castrate and bid the gelding be fruitful.” We worship at the altar of “free trade” yet refuse to debate trade issues, derisively dismissing critics as “protectionists.” Free trade cannot be abstractly discussed solely on the basis of Ricardo’s theory of comparative advantage. Exchange rates, labor and environmental standards all must enter into the discussion. As to science, the OIE requires that a meat and bone meal feed ban must be effectively enforced for eight years in order for a country to be designated a “minimal risk.” USDA petitioned OIE for a relaxation of the eight-year period but its request was denied with the observation that “one of the most important conclusions of the recent OIE expert group is that the scientific basis used in the present Code is still valid.” USDA ignored the OIE, concluding instead that a seven-year ban exceeds the BSE incubation period.” Further, it is unclear whether Canada has effectively enforced its ban even for seven years. The Canadian Food Inspection Agency’s 2004 study found that 71 percent of Canadian manufactured feed labeled “vegetable only” in fact had undeclared animal protein. Canadian investigations have also revealed that potentially 2,000 head of cattle may have been exposed to BSE-contaminated feed as a consequence of rendering the May 2003 BSE cow. Surely, Pete you would concede that the foregoing are legitimate science questions and not merely a facade masking market issues. While his Jan. 17 column acknowledges that R-CALF has some “compelling points,” Pete also concludes that some points “may be a bit of a stretch.” He particularly points to the issue of TSE prions and hamster research, arguing that if the research “was so compelling why hasn’t it been utilized more, since this thing is supposed to be ‘science based.’” Bottom line—BSE epidemiology is not well understood at this point. Dr. Stanley Prusiner, Nobel Prize winner in medicine for his discovery of prions, was asked his opinion of our efforts to control BSE. His response, in a word, “terrible.” Therein lies the nub—the border issue is “supposed to be science based.” USDA’s actions are not science based but are political decisions. Wetland regulation, the Endangered Species Act, global warming and Kyoto, the refusal to drill ANWR and upgrade this nation’s refinery capability, are not decisions based on science. They are all political decisions as is USDA’s rule attempting to reopen the Canadian border. Since the decision isn’t going to be made on science, what we really need is a good debate on “protectionism” and its role in the future of America’s production of beef. Sincerely, Jay Platt St. Johns, AZ Safe North American beef Dear Editor, I would first like to commend you on your coverage of BSE, I find it to be very informative, and it is a refreshing change to read a newspaper that gives an impartial view on the issues between Canada and the U.S. and that shows more than just R-CALF's point of view. I was very interested to read the letter to the Editor titled "Shoot, Shovel, and Shut-up" from Corey Gall in Tripp, SD, and the comments that his/her uncle had passed on concerning Premier Klein telling ranchers and farmers they should "shoot, shovel and shut-up " about any possible sick animals. I'm not sure where this uncle gets his news from, but it is over a one-and-a-half years out of date. Ralph Klein made that remark in September of 2003 at a weekend meeting in Montana for Premiers of the Western Provinces and U.S. Governors. Mr. Klein said later that he didn't mean for his remark to be taken as advice literally, but simply that if the owner of the first BSE confirmed cow had done just that, (as many cattle producers do when they have a sick animal that they know will not get better) the border wouldn't have closed to exports. In lieu of the following three cases, it would have happened anyway, but Mr. Klein is not known throughout Canada for his subtleties, and his frustration with the whole situation got the better of him that day, but even Mr Klein realizes that there is a problem that needs to be dealt with and not acknowledging it would be suicide for the beef industry in Canada. I do believe that Canada needs to be in 100 percent compliance with their feed ban in order for the rest of the world to believe them when they say they are within guidelines and that their beef is safe. I do, however, question how the U.S. can point their fingers and yell and scream when it was reported in your paper that of the 110 samples taken and found to be contaminated, over half were imported and that some of these were from the U.S.? Canada is also relying on other countries feed that they import to be safe and within the guidelines in order for decisions based on science to be applied concerning BSE. I know I will have no problem eating beef in Alberta when I go home to visit my family this summer, and I don't know any other Canadian that will. Sincerely, Kathy Falkenstine Bellevue, ID

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Monday, January 31,2005

Johanns asked to listen to whistleblower

by WLJ
Eighteen farm, consumer and public interest groups last Wednesday delivered a letter to new Agriculture Secretary Mike Johanns, expressing concern about the apparent retaliation against the chairman of the National Joint Council of Food Inspection Locals (NJC), who recently made disclosures covered by the Whistleblower Protection Act about the U.S. Department of Agriculture's (USDA) rules on bovine spongiform encephalopathy (BSE). On Dec. 8, NJC chairman Charles Painter sent a letter on behalf of the the government meat inspectors' union to the USDA's Food Safety Inspection Service (FSIS), outlining concerns about the removal of "specified risk materials" (SRMs) from cattle and FSIS inspectors' ability to enforce the export requirements for products destined for Mexico. SRMS are the nervous system tissues believed to be most likely to carry the infectious prions that cause BSE. Among his concerns: 1) Plant employees are not correctly identifying and marking animals over 30 months old, which means plant employees and government personnel further down the line are unaware that numerous parts should be removed as SRMs and these high-risk materials are entering the food supply, and 2) Production line inspectors are not authorized by the USDA to take actions when they see plant employees sending products that do not meet export requirements past the point on the line where they can be identified and removed. Rather than addressing the issues raised, USDA reacted to the letter by directing extraordinary resources to targeting the NCJ chairman and other regional union presidents: • On Dec. 23, an FSIS compliance officer appeared unannounced at the home of Painter while he was on annual leave to question him about the allegations in the letter. • On Dec. 28, Painter received a notice from FSIS that he was under formal investigation. • On Jan. 6, Painter was ordered to Washington, D.C., to be questioned for three hours by FSIS. • On Jan. 7, seven regional council presidents for the NJC also were ordered to appear in Washington, D.C., on Jan. 11 for an interview. "Mr. Painter offered this information to the USDA because he was concerned that the agency's inadequate policy could put consumers in danger," said Wenonah Hauter, director of Public Citizen's food program. "The USDA should have been grateful, but it chose to attack the whistleblower instead of attacking the problem. Secretary Johanns has emphasized that USDA employees should be treated with 'equality, dignity, and respect.' We urge him to live up to those words and stop this retaliatory investigation of Mr. Painter." In his letter, Painter did not identify specific plants where reports had come from because he did not know. In fact, he chose not to learn the identity of the plants, so that he would not be forced to disclose this information, which could allow the agency to take retaliatory action against the inspectors assigned to these plants. "This case presents a classic example of the value and necessity of whistleblowers," the letter from the public interest groups said. "The concerns outlined by Mr. Painter's letter are of vital interest to consumers, especially in light of recent announcements of the discovery of two more cases of mad cow disease in Canada and the agency's intent to re-establish imports of live animals from Canada. The public has the right to know that the reality inside meat plants is not the same as the picture being painted for the media by USDA officials in Washington, D.C." The groups urge Johanns to immediately investigate this incident and to reconsider the decision to initiate a formal misconduct investigation of Painter. The USDA also should take steps necessary to establish an environment inside FSIS that encourages employees to disclose issues of waste, fraud or threats to public health, the groups said. The groups signing onto the letter include: the American Corn Growers Association, Cancer Prevention Coalition, Center for Food Safety, Community Nutrition Institute, Consumer Federation of America, Consumer Policy Institute/Consumers Union, Creutzfeldt Jakob Disease Foundation, Inc., Family Farm Defenders, Government Accountability Project, Global Resource Action Center for the Environment, Institute for Agriculture and Trade Policy, Iowa Farmers Union, Lane County Food Coalition, Organic Consumers Association, Public Citizen, Safe Tables Our Priority, The Humane Society of the United States and the Weston A. Price Foundation. — WLJ

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Monday, January 31,2005

National Animal ID on Internet

by WLJ
The U.S. Department of Agriculture's Animal and Plant Health Inspection Service announced Jan. 26 the launch of a new Web site to inform stakeholders about the national animal identification system (NAIS). The Web site, available at http://www.usda.gov/nais, is designed to be a one-stop resource to facts about NAIS. "We hope our stakeholders will visit the site frequently to find out the latest news about the NAIS from a national perspective," said APHIS Administrator W. Ron DeHaven. "It will be updated regularly as new information becomes available." In addition to providing national news, the site provides contact information for state and tribal animal health authorities. The states and tribes are responsible for providing premises under their purview with a nationally unique identification numbers—the starting point of the NAIS. All states should be able to assign nationally unique premise identification numbers to locations where animals are managed or held by mid-2005. Over time, APHIS plans to add to the new Web site resources targeted to specific species and industry-segment groups. Currently, NAIS working groups comprised of industry and government representatives have been established for cattle and bison, sheep, swine, poultry, horses, llamas and alpacas, deer and elk, and livestock markets and processors. In implementing the NAIS, USDA's goal is to provide animal health officials the ability to identify all animals and premises that have had contact with a foreign or domestic animal disease of concern within 48 hours after discovery. As an information system that provides for rapid tracing of infected and exposed animals during an outbreak situation, the NAIS will help limit the scope of such outbreaks and ensure that they are contained and eradicated as quickly as possible. With the recent passage of the Fiscal Year 2005 Consolidated Appropriations Act, APHIS will receive approximately $33 million for NAIS implementation. USDA also transferred $18.8 million from its Commodity Credit Corporation to APHIS during fiscal year 2004 to support the NAIS.

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Monday, January 31,2005

Northern feds softer; southern trade slow

by WLJ
— Calves, yearlings both slide downward. Widening negative packer margins associated with significant declines in boxed beef prices resulted in northern fed cattle trade being $2-5 softer and southern cattle feeders still holding out for at least steady money through last Thursday. In addition, fed cattle supplies were starting to build up, particularly in Kansas and Texas, giving packers the idea they may be able to wait a week more and buy fed cattle cheaper. Dressed trade started up in Nebraska on Wednesday at mostly $140, and by Thursday midday trade had concluded with the last activity at $138-139. Limited live trade ranged between mostly $86-88, with some isolated reports of $89. No trade at all was being reported in Kansas or Texas, and analysts didn’t expect it to happen, if at all, before Friday midday. Packers were showing negative margins of $20-25 per head last Thursday, and prospects for even bigger losses appeared imminent as boxed beef prices continued to trend downward. Between last Monday and Thursday, Choice boxed beef had lost $5.89 per cwt and Select declined $6.37. As of noon Thursday Choice beef was at $146.46, and Select was at $140.93. Much of that decline was said to be the result of very lackluster U.S. beef demand during the weekend of Jan. 21-23. That sluggishness was due to the Noreaster storm that hammered the eastern seaboard and Midwest. In addition, analysts said that seasonal beef demand has been below normal and that packers aren’t needing very many cattle at all to keep up with retail beef movement. According to the analysts at HedgersEdge.com, packers only need to process 565,000 head of cattle per week to keep up with current domestic beef demand. For the week ending Jan. 22, 587,000 head of cattle were processed, meaning that more beef was produced than could be consumed. That weekly slaughter level is 60-70,000 head below “normal.” Through Thursday, last week’s slaughter volume was 471,000, 24,000 more than the same period the week prior. Several sources said slaughter for the week could end up over 600,000 head and that could result in packers getting out of the fed cattle market even more during the first couple weeks of February. However, retail sources with stores in the eastern third of the U.S. indicated that consumers will pick up their beef buying pace during the next couple of weeks. In addition, the New England states and Pennsylvania could see a run on beef demand as a large majority of football fans stock up on beef products for their “Super Bowl” parties. “That could create more empty meat case space that we will need to fill up during the first half of next month,” one eastern retailer told WLJ. Live cattle futures spent most of last week narrowly mixed as they were waiting on cash cattle trade for direction. The February contract stayed below $90 for the week, closing Thursday at $89.25, up 12 points. April closed Thursday at $87.65, while June was at $82.30. The fact that cash had been trading at a slight premium to futures most of the winter was giving prospective cattle sellers optimism that $90 was attainable. Analysts said, however, other indicators would say otherwise. Feeders, stockers struggling Feeder and stocker cattle prices both trended downward last week with lighter, more immature calves showing $2-7 declines and heavier grass cattle and yearlings losing mostly $1-3, compared to two weeks ago. Yearlings were softer last week due to a lack of support from feeder cattle futures, the bearish Jan. 1 Cattle-on-Feed Report, and animals being of poorer quality. In addition, several northern and eastern auctions cited inclement weather as deterring demand for all types of cattle. “Market adjustments are occurring due to lower feeder cattle futures beyond the spot month. Quality has been average to attractive, with feeder cattle in medium flesh. Calves in thin to medium flesh conditions,” said the market report from Oklahoma National Stockyards, Oklahoma City. That barn still had over 14,500 head move through their facility, but prices were called mostly $3-6 softer on all classes of cattle. Officials with Joplin Regional Stockyards, Joplin, MO, reported prices $2-5 softer and said, “Quality of light calves under 600 pounds not as attractive (compared to week prior). An unfavorable on-feed report and lower cash fed cattle and futures markets probably added to the price decline.” March, April and May live cattle futures contracts all closed below the $100 mark last Wednesday and Thursday. Only two contracts were over $100 last Thursday—January at $104.17 and August at $100.02. While there are a few cattle feeders showing slight profits on cattle being marketed right now, most are still in the red $30-50 per head, if not a little more. That is deterring most feeders from getting in the feeder cattle market at anywhere near steady prices, analysts said. Uncertainty surrounding the Canadian border issue is also weighing on the minds of prospective feeder cattle buyers. If the border reopening is delayed, several sources expected a rally in feeder calf prices about March. However, if it isn’t, then a further slide is being projected. The extent of that possible downtrend was not being forecasted last week. While stocker operators weren’t expected to be directly impacted by the border situation, some market analysts said demand for grass cattle was being minimized because of stocking rates already being larger than the previous five years and that most stocker operators were hoping to buy cheaper calves in the spring. “If the border does open to Canadian feeder cattle, U.S. feedlots will probably try to get some of them heavier, more mature cattle rather than bringing in lighter U.S. calves that will require more time, and expense, on feed,” a Midwest market analyst told WLJ. “That means more calves will be available for grass placement, and they may be bought for less money than right now.” During Superior Video Auction’s annual “Bellringer” auction held Jan. 19-21, the Friday calf auction appeared to be softer on calves for April delivery or later. In most instances, those cattle were $7-10 behind calves sold for immediate or February, early March delivery. Calves for immediate delivery ranged between $2 softer to $3 stronger, compared to average prices earlier that same week. The CME feeder index, for 700- to 850–pound steers, closed Wednesday at $105.15, compared to $106.36 the previous week. — WLJ

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Monday, January 31,2005

Preliminary injunction to be filed

by WLJ
The CEO of R-CALF USA announced last week the group will file a request during the first week of February for a preliminary injunction to stop USDA from lifting its ban on imports of Canadian live cattle. Bill Bullard indicated the group will file for the preliminary injunction in U.S. district court in Montana. The injunction will ask the court to delay U.S. entry to Canadian live cattle and additional beef products, which is currently slated to begin March 7. Once R-CALF's injunction is filed, USDA will have three weeks to file a response as to why their Final Rule should be allowed to be implemented as planned. After the USDA files its brief, R-CALF will then have five days to respond. Bullard expects a hearing on the preliminary injunction to be the first week in March, right before the ban is scheduled to be lifted. Earlier this month the rancher group filed a suit for a permanent injunction on lifting the Canadian live cattle ban. Bullard spent the first part of last week in Washington, DC, meeting with aides for both the Senate and House Agriculture Committees in an effort to get congressional action against USDA's Final Rule. Citing the fact that three cases of BSE have been confirmed within Canada’s borders and the lone U.S. case goes back to a Canadian-born animal, Bullard called Canadian cattle a “health threat to herds in the U.S.” He said it should not be up to R-CALF to stop USDA from allowing Canadian cattle in, but said the Montana-based rancher group is moving forward with the preliminary injunction in case Congress does not act. USDA banned Canadian cattle in May, 2003, after Canada reported its first case of BSE. Canada exported 1.6 million head of cattle in 2002 and 491,000 head through May 2003, before the U.S. enacted the ban on Canadian cattle. The exact date when the preliminary injunction filing was not released.

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Monday, January 31,2005

R-CALF meeting: Resolutions await vote

by WLJ
— Policy moves come official in early March. Members of R-CALF USA in attendance at the group’s annual convention in Denver tentatively passed several resolutions focused on preventing BSE infection of the U.S. cow herd and food supply. There was also policy proposed on international trade. Policy will be made official upon all members of the group having an opportunity to vote via mail ballot on the various resolutions. Under R-CALF’s rules, members not attending the annual convention have 45 days from the time policy is crafted to vote. The most prominent resolution passed by convention attendees was one demanding USDA immediately withdraw its interim rule declaring Canada a “minimal risk” country for BSE. The resolution went on to say USDA should revert back to a 1989 standard preventing all cattle from countries where BSE is known to exist from entering the country. A resolution also passed the floor demanding 100 percent of imported cattle and beef be required to meet all sanitary and phyto-sanitary rules, under international guidelines. From the area of international trade, the group tentatively passed a resolution asking Congress to remove the U.S. from membership in the World Trade Organization (WTO) this year. A reauthorization vote for WTO membership is scheduled later this year. Proponents of that policy said the WTO undermines individual countries sovereignty by mandating trade policies. Members also passed a resolution supporting a U.S. Food and Drug Administration ban on animal protein in all livestock feeds in order to avoid any cross-contamination and prevent the potential spread of BSE. A resolution was also passed asking USDA to allow voluntary testing for BSE at USDA-approved facilities. Proponent cited support of Creekstone Farms and several other smaller beef processors that have expressed interest in testing all of the animals they slaughter in order to gain access to export markets, particularly Japan. R-CALF USA members also showed their continuing distrust in mandatory animal identification, by passing policy supporting existing identification methods, specifically branding and dangle ear tags. Several R-CALF members said there would be a lot more extra expense added to the industry by new identification regulations and that there were a lot of possible liability issues looming. Several officials with the group didn’t anticipate a lot of negative votes on any of the policies drafted during the convention because they were brought up by members after extensive discussion with many other members of the organization.

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Monday, January 31,2005

Simmental Association converts EPD

by WLJ
The American Simmental Association's Percent Retail Cuts EPD will be converted to a Yield Grade (YG) EPD in the Spring 2005 Sire Summary. The ASA Board of Trustees' decision to change the Percentage Retail Cuts EPD to a Yield Grade EPD was prompted by the fact that Yield Grade is the currency the industry deals in when quantifying the relative meat yield of carcasses. "Yield Grade and Percent Retail Cuts function much like Fahrenheit and Celsius-measuring the same thing, though on a different scale," says Dr. Wade Shafer, Director of Performance Programs at ASA. "The new EPD, however, more directly reflects the way carcass data and grids define carcass cutability, or meat yield." As with all EPDs, YG is expressed as a deviation. Unlike its predecessor, however, negative values are desirable. To use it, one must keep in mind that it is in yield grade units. Therefore, lower is better. For example, a bull with a -.33 YG EPD would be expected to sire offspring that are 1/3 of a yield grade better (lower) than a zero bull. If zero bulls sired an average yield of 3.0 in a particular environment and management system, offspring of a -.33 bull would be expected to have an average yield grade of 2.67 (1/3 of a yield grade better/lower). For more information about YG EPDs or our Spring 2005 Sire Summary, please visit our website at www.simmental.org, or call Dr. Wade Shafer at 406/587-4531. — WLJ

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Monday, January 24,2005

Beef Bits

by WLJ
National beef packers report first quarter results National Beef Packers reported a net loss of $4.4 million in the first quarter ended Nov. 27, as sales dipped very slightly, from $1.058 billion to $1.051 billion. In the first quarter a year ago, the company showed a net profit of $19 million. Chief Executive John Miller blamed the declining results mainly on the closure of the Canadian and Japanese borders. The Canadian border closing has deprived the market of about 1.5 million cattle, leading to short supply and higher prices for live cattle, even as Canada ships the equivalent of over a million cattle to the United States in the form of low—priced boxed beef. The company announced last week that it was cutting back on slaughtering until supplies and prices improve. Australia gains more Japan share Australian beef overtook Japanese domestic beef in terms of market share in 2004, making up 50 percent of total market volume. The Japanese Ministry of Agriculture, Fisheries, and Forestry announced that 290,000 metric tons of Australian beef was supplied to Japanese consumers between January and September 2004. Japanese domestic beef made up 260,000 metric tons, or 44 percent of total beef in 2004. In 2003, 37 percent of the market share was accounted for by domestic beef, 32 percent by Australian beef and 30 percent by U.S. beef. In 2004, Australia sent record volumes of beef to Japan, with a total of 393,471 tons exported. BSE prevention in North America meeting NMA co-hosting a meeting with other industry groups on "BSE Prevention in North America: An Analysis of the Science and Risk" on January 27 at the Omni Shoreham Hotel in Washington, DC. The purpose of the conference is to discuss the current BSE situation in North America and to identify and analyze options that may be needed to further reduce BSE risk. The conference will result in a better understanding of the science and risk associated with BSE prevention measures implemented in North America. The conference is designed to provide information for United States and Canadian governmental agencies and other interested parties to make informed risk management decisions. SD checkoff proposed Even as the Supreme Court considers whether the mandatory national beef checkoff program is constitutional, South Dakota Stockgrowers Association members have indicated the desire to start a similar voluntary program. With the new program, producers would contribute 50 cents every time they sell a calf. Instead of going to promote generic beef, that money would be used for producer priorities. “It's a self–help program for U.S. producers to have exactly what they need which is legislation input and advocacy at the national level, as well as the research and then the grassroots push from the producers so it ties those things in together and gives U.S. producers a voice,” said association executive director Carrie Longwood. Plumrose USA plans expansion Officials at Plumrose USA are planning an expansion to add new meat slicing lines to the company's facility in Booneville, MS. The plant is currently running three shifts and has recently added 80 new jobs and two slicing lines. The facility slices sandwich meats, including beef products. Work on the 30,000- to 40,000-square-foot addition will begin in October and is expected to be complete in early 2006.

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Monday, January 24,2005

Canada releases feed findings

by WLJ
Random tests conducted by the Canadian government recently discovered that four brands of Canadian cattle feed were in violation of the nation’s ban on animal protein in cattle feed. With the increasing number of cases of BSE being discovered in Canada, the Canadian Food (CFIA) Inspection Agency and two U.S. trade teams are taking a more thorough look into the compliance with the 1997 ban on ruminant-to-ruminant feeding. In total, 110 samples were collected between January and March of 2004. Microscopic examinations of these samples distinguished animal material in 66 of the 110 samples. Sergio Tolusso, CFIA’s feed program coordinator, said in some of these cases, animal material was found in feed ingredients such as cereals and cereal screenings that could be used in feeds for ruminants. In the other cases, animal materials were detected in feedstuffs manufactured for ruminants such as beef and dairy cattle feeds, as well as sheep. Because of these results, Canadian officials decided to inspect feed mills. Upon completion of the inspections, Tolusso said, “There were some cases where it was more likely than others that it could be ruminant protein.” Tolusso later said with the test they used (feed microscopic analysis), they could not positively identify the protein material as bovine, or any species, therefore no feed was recalled. CFIA is still looking into the test results and plans to release more detailed information on their findings in the next week or two. In the meantime, Tolusso said, “We are looking at four cases where we thought it (the protein material) could be material of ruminant origin.” Canada is not entirely to blame for these discovered violations. According to Tolusso, 45 of the samples they took were of imported origin, and some of those feeds did originate in the U.S. “We have some information on the source of the feeds,” said Tolusso. “As this was not a compliance exercise, our approach to get information was to contact the feed importers and get them to approach their suppliers (exporters) for additional information. We are still in the process of compiling that information.” When asked if Canada will continue to import feed from those suppliers, Tolusso replied, “Unlike the FDA action against Canadian feed exporters in 2003, we do not have any immediate plans to sanction any feed exporters on the basis of the findings of this test trial.” Canada does have plans to ban the use of bovine specified risk material in all feed, not just in feed labeled for cattle and sheep. This proposal is out for public comment, but has not yet come into effect. Similar to the U.S., Canada did ban the use of ruminants in feed for cattle and other ruminants in 1997. This is known as the ruminant-to-ruminant feed ban, but Canadian feed mills were still allowed to use these products in feed for chicken and pigs. Chicken and pig remains can also be fed to cattle. Micheal McBane, a member of the lobbyist group Canadian Health Coalition, told the Canadian press, “Even after confirming cases of BSE, we’re still not cleaning up the feed system. We’re basically playing Russian roulette and for what benefit? The export market has been closed and we’re still being caught with contaminated feed.” Tolusso down-played the idea that any of this feed could lead to the spread of BSE in Canada. He said there was little risk that the ruminant remains in the tainted feeds were infected with BSE because the incidence of the disease in Canada is low. Furthermore, Tolusso explained that comprehensive inspections of feed mills are conducted once a year. A spokeswoman for federal Agriculture Minister Andy Mitchell, Christine Aquino said regular inspections and audits of the country’s 550 feed mills have shown “a very high compliance” with the feed ban. Tolusso said the detailed report of their feed testing trial will be posted on their website www.inspection.gc.ca when it is available.

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