Saturday, February 26, 2005

The Politics of Beef

The Politics of Beef
The American Meat Institute, a powerful lobbying group based in Washington, D.C., wants the border between the U.S. and Canada opened immediately. Their members, the largest packers and processors in the U.S., are becoming financially exhausted at paying historically high prices for their raw materials.

Standing four-square against that position is R-CALF, a feisty group of mostly Western cattlemen who love those high prices and fear the specter of B.S.E. entering the American food supply. Their members are more than ready to slap on their Stetsons and gallop into the U.S. Senate to make their case.

Asked about the U.S. government’s decision to allow Canadian beef to re-enter the American market, Bill Bullard, R-CALF’s C.E.O., said “Under U.S.D.A.’s Final Rule, U.S. beef going to Canada will be subject to greater restrictions than Canadian beef coming to the United States despite the fact that all of the cases of B.S.E. in North America have been in cattle born and raised in Canada.”

“This is an asymmetry that is not explained by science, so we will ask U.S.D.A. to explain it in court,” growled Bullard.

In court, he will be sitting nose-to-nose with Patrick Boyle, the C.E.O. of the American Meat Institute. Smooth and urbane, Boyle is a Washington insider and an expert at the political wars that rage inside the beltway. This will be a boots and suits battle: tough guys wearing Tony Lama cowboy boots vs. tough guys in pin-striped Brooks Bros. suits.

In direct opposition to R-CALF, Boyle’s association filed a motion on January 28 seeking a preliminary injunction against the U.S.D.A. attempting to immediately end what’s left of the 18-month ban on Canadian cattle.

Filing the suit, Mark Dopp, A.M.I.’s senior vice president for regulatory affairs and general counsel, said “This ban is causing drastic and permanent economic consequences on both sides of the border, hurting hardworking Americans and Canadians while serving no valid purpose.”

The ban was scheduled to be lifted March 7, just in time to drop high beef prices to more consumer-friendly levels a few months later when millions of backyard grills are fired up and a flock of potential voters start their annual summertime burger binge. From a politically correct point-of-view, the price (of beef) had better be right.

During a late January meeting with the senate Ag committee, newly appointed U.S.D.A. Secretary Mike Johanns was grilled over the issue of reopening the Canadian border and a few senators used some extreme BTU’s in the process. Senator Mark Dayton (D-Minnesota) turned the flame to max output over the inconsistency of allowing meat from cattle over 30 months of age into the country, while blocking the importation of live animals over that age.

Several senators joined Dayton in demanding the rule be fairer to American processors, whose U.S. operations could be gutted by the transfer of harvesting facilities to western Canada, a move that would transfer a significant number of American jobs north of the border.

After collecting additional comments, the Senate Agriculture Committee will decide whether to hold further hearings on the issue before the border opens, pending any interceding legal decisions, of course.

Re-establishing the export business with other countries, especially with Japan, our largest trading partner, is another matter. According to Lynn Heinze of the U.S. Meat Export Federation, export volume was down 76% through November. “Of our three major markets (Japan, Mexico, Korea) only Mexico is allowing imports from the U.S. Export value dropped from $3.6 billion to $718 million.”

The Japanese waited 14 long months before grudgingly accepting the idea that a revised U.S. grading system might be, according to Secretary Johanns, “an appropriate means to determine the age of cattle.”

Accepting the revised standards means the Japanese buy into the technical idea that we can determine the age of the animals in our herd and a 20 month maximum on an animal’s age is an accurate way to remove any threat of B.S.E. from the food supply.

It's a step, not a resolution,'' said James Hodges, president of the American Meat Institute. It marks an end to the technical discussions, but Japan still has to go through their internal political process to allow the import of animals.''

According to Steve Kay, publisher of Cattle Buyers Weekly, using the carcass maturity method, an inspector grades an animal and its age using several technical characteristics. They include the amount of cartilage in the vertebrae, color of the vertebrae and curvature of the ribs.

As part of the negotiations, the U.S. showed Japanese officials results of a study where the carcass maturity method scored 3,338 head of cattle as A40 or less and all were less than 20 months of age.

Agreeing with Hodge’s view of the political landscape, Kay said “the U.S. is still several months away from resumption of exports.'”

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