NMPF Says Latest Canadian Mad Cow Case Yet Another Example of Why Live Animal Importation Shouldn't Resume

The most recent case of mad cow disease in Canada, discovered earlier this month in a 66 month-old cow in British Columbia, is yet another illustration of why the U.S. government should not reopen its border to Canadian animals for breeding purposes, NMPF said last week.

In a letter sent to Agriculture Secretary Mike Johanns, NMPF said that there are still questions about the effectiveness of the feed ban designed to prevent the introduction and spread of bovine spongiform encephalopathy, or BSE. Even though Canada has prohibited the feeding of mammalian tissues to its cattle since 1997 (as has the U.S.), there have been seven cases of BSE in animals born since then, including five born after the date that the USDA has determined that Canada has been effectively enforcing the feed ban, March 1, 1999. The USDA is considering allowing animals born after that date to be exported to the U.S. for breeding purposes.

"The enforcement of the 1997 feed ban does not appear to be effective in preventing the spread of BSE in Canada," wrote Jerry Kozak, President and CEO of NMPF in the letter. Allowing Canadian cattle to be imported to the U.S. "has the high probability" of introducing a BSE-infected animal, he said.

All five of those recent BSE cases "could have been exported to the U.S. under the rule that the USDA is about to adopt," Kozak said.

"And once those animals would have been discovered to have BSE, the headlines would have been 'U.S. discovers another case of mad cow disease,' not 'U.S. imports another Canadian animal with mad cow,'" Kozak said. "Their problems, once exported to the U.S., become our cattle industry's problems, and we need better assurances on Canada's feed ban practices before we open ourselves up and make ourselves more vulnerable," he said.

He noted that the first case of mad cow disease discovered in the U.S., in December 2003, was in an animal born in Canada. Yet the U.S. is still struggling to regain its normal export markets for beef more than three years after that discovery.

Because Canada's own government estimates that it will detect more cases of BSE in the next decade, NMPF believes that the USDA should not finalize regulations to allow animals for breeding or herd replacement purposes from Canada.

NMPF does not oppose importation of Canadian cattle for direct slaughter purposes, but the USDA "should not allow importation of live animals that could reside in the U.S. cattle population," the letter said. "Both domestic and export markets for U.S. producers will be disrupted" if additional BSE cases are discovered in the U.S., and those disruptions will have significant negative economic impacts that "will be borne by U.S. producers," Kozak said.

A copy of the letter sent May 7 to USDA can be found in the Animal Health section of www.nmpf.org.

NMPF Calls On USDA To Finally Implement Mandatory Auditing Protocols Under Development For Six Years

The recent revelation that nonfat dry milk prices were not accurately reported in monthly government surveys is evidence that the U.S. Department of Agriculture needs to do a more thorough, methodical job of reviewing the product pricing and inventory data it collects, according to NMPF.

The USDA said that the National Agricultural Statistics Service (NASS) had been collecting price data on nonfat dry milk sales that did not accurately reflect current market prices for the product. NASS officials will now go back 52 weeks to review pricing data for other nonfat dry milk sales in an attempt to clarify the veracity of its historic pricing data. Those reported prices are part of the information used to calculate the price that farmers receive each month in their milk checks.

NMPF said that the reporting error "is yet another example of why we need to finally implement mandatory auditing of product prices and inventories," according to Jerry Kozak, President and CEO of NMPF. "NMPF helped pass a law nearly seven years ago giving authority to NASS to mandate the reporting of this type of data, and it is unconscionable that it's taken another mistake like this situation to point out the need to get it implemented."

Back in October 2000, Congress passed legislation requiring the reporting of dairy product inventories and prices. The law gave the USDA the authority to require dairy manufacturing plants to report any data having an impact on product prices, including both sales and products stored in inventory. That data was to be subject to mandatory reporting and auditing. NMPF was the lead organization pushing Congress to pass a law giving the government additional product data collection capabilities.

But because of confusion and delays over the intent of the legislation, the NASS still does not have the full ability to audit such data, meaning the accuracy of its current reports may be suspect. Such was the case in 2000, when a warehouse reporting error resulted in a 32% miscalculation in domestic butter stocks. A similar situation occurred in 1999, when millions of pounds of cheese suddenly appeared in the NASS cold storage report. Both errors resulted in a sharp drop in farm-level milk prices.

"The sad thing is that the tools to prevent these types of gaffes already exist - it's merely a matter of putting them into use," Kozak said. "If there is anything good that can come from this debacle, it will be the implementation of the law that our industry asked for - and Congress passed - nearly seven years ago," Kozak said.

NMPF and the National Farmers Union sent a letter last week to Secretary Johanns urging him to use his authority under Section 32 of the Agricultural Act of 1935, to direct existing USDA funds for dairy producer indemnification once the overall impact on dairy producer prices has been determined.

NMPF Federal Milk Marketing Order Task Force Meets To Begin Identifying Key Issues To Improve System

NMPF's new campaign to improve the existing Federal Milk Marketing Order system got underway earlier last week in Chicago, as members of the NMPF Federal Order task force met to discuss what types of changes will most benefit dairy farmers and the cooperatives they own, along with milk processors.

The fourteen participants in this first task force meeting identified a number of areas of concern during the meeting last Tuesday. These include the Federal Order hearing process and the length of time it takes to process changes in the system, price discovery, transportation cost recovery, manufacturing costs and classified pricing.

"After hearing the task force members' individual concerns with Federal Orders, it is clear that there is lots of diversity of opinion within the group," noted Dave Fuhrmann, CEO of Foremost Farms of Baraboo, WI, and task force chairman. "This means it will be a challenge to come to agreement on everything. However, we must pursue reaching agreement where consensus is possible, because I believe cooperatives are impacted the most by Federal Orders and, therefore, have a vested interest in making the system work."

Fuhrmann noted that the task force members did all concur that the industry is better with the Federal Order system than without it, and their efforts would focus on building up the system, not dismantling it.

He also said that a self-help effort such as this one, undertaken by NMPF, "is preferable to a government-mandated one," which is what some in Congress are discussing. "What we do here will have a real-world impact on the dairy sector," Fuhrmann said.

The task force agreed that deadlines need to set for the Federal Order hearing process. All members expressed concern over the length of time it takes from point at which a request for a hearing is filed with USDA, to a final decision being issued. The ongoing hearing examining Class III and IV manufacturing allowances is an apt illustration of how long such hearings can take, task force members agreed.

A significant part of the meeting was spent talking about price discovery options. At its next meeting in June, this pricing issue will be explored by task force members in greater depth, with outside experts being invited to present their thoughts on the speed and efficacy of how prices are set by the system.

"Our members understand that NMPF and its member cooperatives don't exist in a vacuum when it comes to the Federal Order system," said Jerry Kozak, NMPF President and CEO. "The plan is to expand participation in this process to others in the industry, with the goal of being able to move forward with improvements to the Federal Milk Marketing Order system in a year."

NMPF Representative Explains That Animal Welfare, Farmers' Economic Success Are Related

A dairy farmer and veterinarian from North Carolina told the House of Representatives last Tuesday that "what's good for cows is good for our business," and urged Agriculture Committee members not to include specific animal welfare regulations in the upcoming 2007 Farm Bill.

Dr. Karen Jordan of Siler City, North Carolina, who is vice chairperson of the NMPF Animal Health committee, told the House panel that dairy farmers' care of their herds is not just a moral imperative, but also pays dividends, since healthy, comfortable cows perform more effectively. Jordan, who milks cows on a farm with her husband and also owns a veterinary practice, said that "dairy farmers recognize that proper animal care practices lead to production of high quality milk."

"Too often, people not familiar with, or those with an ideological bias against livestock production, assume that farmers can afford to be cavalier about the health of their herds," Jordan said. "To the contrary, today we understand more than ever how interconnected animal well-being and economic well-being are, for farmers and their cows."

Jordan said that in 2002, NMPF published a comprehensive technical reference guide called Caring for Dairy Animals, which address all the key elements of dairy cattle care based on current scientific research. The guidelines, which also feature a checklist by which a farm can be audited, have been recognized by food marketing organizations that have often asked farms and ranches to adopt quantifiable animal care practices.

Those guidelines have been widely disseminated within the dairy industry to farmers, veterinarians, animal nutritionists, dairy cooperative staff, and others who interact regularly with farmers, Jordan said.

She said that the dairy industry also supports new research into animal well-being. Jordan pointed out that numerous advances have been made in the past decade into cow comfort, such as improved climate control systems, animal housing, rubber flooring, and clean bedding. Routine herd health programs are also part of all dairy farmers' management practices, and farmers routinely use the services of veterinary and nutrition experts to keep their herds healthy.

Jordan asked the Agriculture Committee members to avoid being swayed by emotionally-driven but factually-suspect pleas for specific animal welfare regulations in the next Farm Bill, stating that in most cases, such laws would be redundant to current practices, or not based on scientific research.

"Every day all dairy farmers, regardless of the size of their operation, invest a great deal of time and resources to ensure their cows are provided the best health care, housing conditions, and proper nutrition," Jordan said.

A full copy of Dr. Jordan's testimony can be found in the Animal Health section of www.nmpf.org.

Immigration Reform Deal In The Works

Negotiations continue in an effort to advance a comprehensive immigration reform bill in the 110th Congress. The Agriculture Coalition for Immigration Reform (of which NMPF is a member) will have a fly-in on Wednesday, May 16th with lawmakers being urged to include the AgJobs provisions in any immigration legislation considered by the Congress. Agriculture does appear to have broad support and understanding amongst lawmakers. Senate Majority Leader Reed, has scheduled the last 2 weeks of May for bringing an immigration bill to the Senate Floor. The Majority Leader plans to bring the bill from last year as a "placeholder" to the Floor, a move which has angered many Republicans. The next two weeks will be critical. NMPF members are encouraged to contact their Senators and Representatives to adopt the AgJobs legislation this year.

EPA Proposes to Extend Compliance Deadlines for NPDES CAFO Permits

Last week, the Environmental Protection Agency (EPA) announced a proposed rule to extend the compliance deadline for newly defined CAFOs to seek National Pollutant Discharge Elimination System (NPDES) permit coverage and for permitted CAFOs to develop and implement a nutrient management plan.

Currently, the deadline for these CAFOs to seek permit coverage and develop a plan is July 31, 2007, but EPA is proposing to extend the compliance deadline until February 27, 2009. This proposed extension is needed for EPA to complete their rulemaking to respond to the decision of Second Circuit Court in the 2005 Waterkeeper Alliance et al. case.

Because EPA has not yet promulgated the final NPDES CAFO rule, the proposed deadline of February 27, 2009, would provide additional time for producers to comply with the new rule and for States to adjust their regulatory programs.

NMPF is supportive of this new proposed deadline, and will be submitting comments to EPA encouraging the agency to adopt the proposed deadline of February 27, 2009. This proposed rule will be open for a 30-day comment period and comments must be submitted by June 11, 2007. For more information, visit the Federal Register notice.

WTO Issues Statement on Doha Negotiations

At the end of April, the Chairman of the WTO Agriculture Negotiating Committee, Crawford Falconer, issued a "challenge paper" intended to spur forward movement in the WTO Doha Round negotiations. This paper focused on several of the key areas of discussion, including specific topics within the realms of export competition, market access and domestic support. Ambassador Falconer attempted to narrow down the range of ideas currently on the table to those that he felt remained within the realm of possibility, given various countries' key goals and sensitivities. He also offered suggestions in some areas about potential paths forward.

Falconer announced that he intends to write a second paper on the remaining topics in the agricultural negotiations that were not addressed in his first text. He then plans to draft a subsequent paper on the full range of issues after receiving feedback from WTO members on the ideas put forth in the earlier two papers. Countries are now reviewing the April text and analyzing what it might mean for the negotiations as they move forward in the coming months.

Foot and Mouth Online Survey; Farmers' Input Needed

Livestock producers throughout the nation are asked to participate in an online survey to gather data on animal movements and husbandry practices that will be used in a simulation model to predict the impact of a foot-and-mouth disease outbreak, as well as determine the best strategies for containment.

This project is being conducted by School of Veterinary Medicine at the University of California-Davis, in collaboration with the National Center for Foreign Animal and Zoonotic Diseases (FAZD), and is supported by the USDA and the Department of Homeland Security.

According to Dr. Tim Carpenter, director of the study, "the online survey will allow us to develop a model based on real, up-to-date data for animal movements and current practices that could determine how the disease spreads. Only livestock producers can provide us with this information. This model would put the U.S. at the forefront in preparedness for not only foot-and-mouth but also other foreign animal diseases."

CADMS guarantees that all the information will be kept confidential and will only be used for modeling purposes. The online survey can be found at: www.cadms.ucdavis.edu/adm/index.php?id=2

Associate Member Focus: DTB Associates, LLP

DTB Associates, LLP, brings substantial knowledge of international markets, expertise in trade policy matters, and many years of front-line negotiating experience. In 2006, DTB joined forces with AgRisk Management, an agricultural consultancy firm in Ames, Iowa, to carry out policy and economic analyses on issues related to international trade agreements, trade disputes and domestic agricultural policies

DTB's representative is Paul Drazek, who can be reached at 202-661-7095. You can learn additional information about DTB Associates by accessing their website.