The closure of the border is necessary to mitigate both the potential damage the live cattle market might sustain and to maintain consumer confidence in the nation’s beef supply following USDA’s announcement of the suspected BSE case, says Leo McDonnell, president of R-CALF United Stockgrowers of America.
“We view this request as an essential step in preserving our domestic market and protecting consumer confidence,” he says.
According to USDA’s chief veterinarian Ron DeHaven, the bovine spongiform encephalopathy (BSE) infected cow connected to a Washington state dairy was among 74 dairy cattle imported from Canada in 2001. The cow entered at East Port, Idaho and originated from a herd in Alberta, Canada.
“By establishing that the cow was imported from Canada, the U.S. should be considered BSE-free under international animal health standards,” says Fred Stokes, president of the Organization for Competitive Markets. “BSE-free status should result in our beef export customers resuming trade with the U.S. We expect that the markets should reflect this in a positive manner in the coming week.”
McDonnell says the U.S. has long known that imported cattle and imported feed remain the primary source of BSE introduction into the U.S. The U.S. had instituted rigorous safety protocols to prevent the disease from contaminating the U.S. cow herd beginning in the late 1980s and in the mid-1990’s.
“Our primary safeguard for preventing the disease from occurring in the U.S. was the 1989 ban on all meat and bone meal from the United Kingdom and the 1997 ban on feeding meat and bone meal to domestic cattle,” he said. “We’re approaching the outer-limits of the BSE incubation period with our six-year-old feed ban, meaning the disease is not likely to originate within the U.S. cattle herd,” he said.
The Lincoln, Neb.-based Organization for Competitive Markets says it is statistically likely that the diseased cow was from Canada, which should allow the U.S. to remain BSE-free under the Terrestrial Animal Health Code of 2003 generated by the Office of International Epizootics (OIE).
The OIE is an intergovernmental organization based in Paris, France, which was created in 1924 and now has 165 member countries. The OIE rules on animal health are the closest thing to controlling authority on international health rules that exist in the world today, according to commodity groups.
“The code says that a country can maintain its BSE-free status despite the discovery of a diseased animal if the animal was imported and all calves of the diseased animal are disposed of,” says Michael Stumo, legal counsel for the Organization for Competitive Markets. “It would seem that the steps remaining to re-establish American BSE-free status are doable in the very short term. USDA may also have to track down the other 73 cows and, if any are infected, their progeny. This latter step would go beyond the OIE rules, however.”
Because a country’s BSE risk status is based on whether an infected animal is of domestic or foreign origin, McDonnell says a permanent country of origin marking on all imported products, including livestock would have been beneficial in this instance. “The USDA would have known at the point of slaughter if this cow was imported and the industry would have known almost immediately if the U.S.’s BSE risk status would be affected,” he said.
McDonnell explains that the marking of imported products would also aid the USDA in focusing its investigation as it would know whether to focus domestically or internationally. “If this is an imported cow, the suspension of imports by U.S. trading partners would be unjustified by the international scientific standards of the OIE and cattle prices would not likely have fallen so quickly or abruptly. The industry needs to know if this possibility remains valid or if it should be ruled out,” he says.
“This incident makes clear that the USDA and the administration was wrong to oppose country of origin labeling on behalf of the meat packers and their surrogates,” says Stokes. “We need to implement labeling as planned in September 2004 so consumers have information about where their food comes from. This holds true whether the BSE cow was of U.S. or Canadian origin.”
To date Japan, Mexico, South Korea, Canada, Russia, Taiwan, Hong Kong, and China have banned imports of American beef and beef products as a result of USDA’s December 23 announcement that a dairy cow in Washington had tested positive for BSE. The Pacific Rim is a small but economically significant market for U.S. beef. Japan alone buys 32 percent of U.S. beef exports, and total U.S. beef exports represent approximately 10 percent of U.S. beef production, at a value of $2.6 billion in 2002.
Groups like R-CALF USA are asking the government to take specific actions to mitigate any economic backlash that may occur to U.S. producers while the market continues applying a worst-case scenario to the single case of BSE before the facts are even on the table.
“We have asked that the border be closed to all imports of cattle, beef and raw and manufactured feed and that the $1.50 daily limit of the Chicago Mercantile Exchange be reinstated pending the completion of the USDA’s investigation of this case,” says McDonnell.
“These are prudent and reasonable steps the U.S. can take to ensure the economic viability of our independent cattle producers during this investigation.”
The Organization for Competitive Markets says it also it disappointed that the USDA did not make public note of the probability the cow was from Canada as the markets began crashing in the cattle futures trading pit at the Chicago Mercantile Exchange.
“What we are witnessing is a knee-jerk, emotional response in markets that are extremely vulnerable to over-reaction to incomplete information and rumors,” says Stokes. “Futures markets have a significant effect on live cattle prices. If the USDA would be clearer on the Canadian-origin possibility while cautioning the market not to react until the information was in, a portion of the market losses could be stemmed.”
Shortly after USDA’s announcement that the Washington state dairy cow testing positive for BSE was imported from Canada, the National Cattlemen’s Beef Association began strongly urging the United States’ trading partners to reopen their borders to U.S. beef exports.
Terry Stokes, CEO of the National Cattlemen's Beef Association says, “We applaud USDA for their rapid progress on this investigation and their collaborative efforts with the Canadian Food Inspection Agency to seek its swift conclusion. This investigation must be USDA’s top priority. To that end, we are requesting an indefinite extension on the final comments regarding the opening of the Canadian border to live animal trade until the investigation is complete.”
“All decisions concerning re-establishment of trade for beef exports must be based on sound science,” he says. “Standards set by the international animal health body (OIE) recognize that meat can be safely traded from countries that have identified cases of BSE. If U.S. trading partners require additional and precautionary assurances, USDA’s Beef Export Verification program put into place after the May 20, 2003, Canadian BSE announcement allows our trading partners to isolate product from Canadian animals.”
Stokes adds, “While BSE is not found in muscle meat and the central nervous system tissue from this cow did not enter the human food chain, we do export variety meats, including central nervous system tissue, to other countries where these products are diet staples or delicacies. The Beef Export Verification program allows our trading partners to be assured that U.S. beef products remain safe for their consumers, just like it is for American consumers.”