Oversight on the Importation of Canadian Beef

The Subcommittee will conduct a hearing to examine the U.S. Department of Agriculture (USDA) final rule on importing Canadian beef from animals older than 30 months of age.

Testimony

Ron DeHaven

Administrator, Animal and Planet Health Inspection Service

U.S. Department of Agriculture

Read statement

Testimony

Ron DeHaven

Testimony of Dr. Ron DeHaven, Administrator

Animal & Plant Health Inspection Service (APHIS)

U.S. Department of Agriculture

Before the

Senate Committee on Commerce, Science, and Transportation

Subcommittee on Trade, Tourism, and Economic Development

Field Hearing on Trade in Canadian Cattle

Bismarck, North Dakota

February 21, 2007

Chairman Dorgan, thank you for the opportunity to be here today to provide you information on my Agency’s proposed rule to amend the minimal risk region regulation for bovine spongiform encephalopathy (BSE) to allow the importation of ruminants over 30 months of age from minimal risk regions. Currently, only Canada has received that designation.

In developing this proposal, we very carefully reviewed all the scientific information available to us and built upon the extensive analysis we conducted in writing the initial minimal risk region regulation. Our regulatory actions are consistent with the guidance on BSE provided by the World Organization for Animal Health, or the OIE. The OIE guidelines, which I will describe further in a moment, promote safe trade in live animals and animal products based on how countries manage the known risk factors associated with the disease.

Our proposal, which remains open for public comment until March 12, is appropriate from both a scientific and practical standpoint and I appreciate the opportunity to share information with you on both these fronts.

USDA’s Minimal Risk Region Regulation

As you know, in January 2005, USDA published a final rule that established conditions for the importation of live cattle younger than 30 months of age and certain other commodities from minimal risk regions for BSE. A minimal-risk region can include a region in which BSE-infected animals have been diagnosed, but where sufficient risk-mitigation measures have been put in place so that the importation of ruminants and ruminant products will present a minimal risk of introducing BSE into the United States. This rule designated Canada as the first minimal-risk country recognized by USDA.

Before discussing our current proposal, let me go back and discuss the central role science played in the development of the regulation, particularly with regard to the rigorous evaluation of risk.

Since the discovery of the first case of BSE in Great Britain in 1986, we have learned a tremendous amount about this disease. That knowledge has greatly informed our regulatory systems and response efforts.

We have learned that the single most important thing we can do to protect human health regarding BSE is the removal from the food supply of specified risk materials (SRMs)—those tissues that, according to the available scientific evidence, could be infective in a cow with BSE. USDA’s Food Safety and Inspection Service (FSIS) enforces this ban domestically and ensures that all countries exporting beef to the United States comply with the SRM ban. Likewise, the most significant step we can take to prevent the spread of BSE and bring about its eradication in the animal population is the ruminant-to-ruminant feed ban. It is because of the strong systems the United States has put in place, especially these two essential firewalls, that we can be confident of the safety of our beef supply and that the spread of BSE has been prevented in this nation.

USDA has conducted a comprehensive risk analysis to support the January 2005 regulatory changes, and updated the analysis when the comment period was re-opened and again when the rule was made final. This analysis drew on findings from the Harvard-Tuskegee BSE risk assessment, findings from the epidemiological investigation of BSE in Canada, information on Canadian BSE surveillance and feed ban, and history of Canadian imports of cattle and meat and bone meal from countries known to have BSE.

The results of that analysis confirmed that Canada has the necessary safeguards in place to protect U.S. consumers and livestock against BSE. These mitigation measures include the removal of SRMs from the food chain supply, a ruminant-to-ruminant feed ban, a national surveillance program, and appropriate, science-based import restrictions. Additionally, the extensive risk assessment conducted as part of USDA’s rulemaking process took into careful consideration the BSE prevalence in Canada and that Canada could identify additional cases of BSE.

OIE Guidelines

As I mentioned earlier, international standards as defined by the OIE served as a reference in developing the minimal risk region regulations and they continue to guide our proposed actions.

These international standards are used by national veterinary authorities to prevent the introduction of animal diseases, such as BSE, while avoiding unjustified trade barriers. The OIE recommends the use of risk assessment to manage human and animal health risks of BSE. OIE guidelines, based on current scientific understanding, recognize that there are different levels of risk in countries or regions, and suggest how trade may safely occur according to the levels of risk.

As we’ve moved forward in issuing the proposed changes to the minimal risk region regulation, our risk assessment continues to include careful consideration of the entire risk pathway—all of the steps, in both Canada and the United States, that must occur for BSE to be spread to an animal here in the United States. APHIS conducted a thorough risk assessment and found that the risk to the United States presented by allowing these additional animals and commodities from Canada is negligible.

Proposed Changes to the Minimal Risk Region Regulation

Our current proposal, published in the Federal Register on January 9, 2007, would expand the scope of the 2005 rule to facilitate fair, science-based trade, consistent with international standards as defined by the World Organization for Animal Health, or the OIE.

Specifically, the rule proposes allowing the importation of live bovines for any use born on or after, March 1, 1999; blood and blood products derived from bovines, collected under certain conditions; and casings and part of the small intestine derived from bovines.

As I will discuss further in a few moments, March 1, 1999, is the date we have determined to be the date of effective enforcement of the ruminant-to-ruminant feed ban in Canada.

I’ll note here that meat and meat products from animals of any age, with specified risk materials removed, were addressed in the January 2005 final rule that established the minimal risk region classification. In March 2005, APHIS published a notice of a delay of applicability of certain provisions of that rule. This delay affected only meat and meat products from animals 30 months of age or older. If the proposed rule published on January 9 is made final, it would be consistent to lift the delay and also allow the importation of products derived from animals over 30 months of age into the United States.

Again, the public comment period on these proposed actions opened January 9, and will close on March 12, 2007. I encourage all stakeholders to be a part of our decision-making process by providing feedback through submission of public comments.

Analysis of Risk to U.S. Animal Health

APHIS completed a comprehensive risk assessment to evaluate the risk presented by allowing the additional commodities outlined in the January 2007 proposal to be imported from minimal risk regions. The risk assessment breaks down the possible pathways for the establishment of BSE in the U.S. cattle population into a series of steps and analyzes the likelihood of these steps in the process. It is important to note that the impact of any specific step depends on its relationship to the other steps in the pathway. In other words, one individual step can not be considered to represent the entire risk pathway.

As part of the risk assessment, we estimated the prevalence of BSE in the standing adult cattle population of Canada with the same methods that we recently used to estimate the prevalence of BSE in the United States. We then used this current estimate of prevalence to help assess the likelihood that BSE would be introduced into the United States over an extended period of time. We chose to evaluate what could happen over the next 20 years, assuming that the proposed rule would apply into the foreseeable future.

First we looked at the most likely scenario. Given that Canada has had a feed ban in place since 1997 and evidence indicates that the implementation of a feed ban results in decreasing BSE prevalence, the most likely scenario is that BSE prevalence in Canada will continue to decrease over the next 20 years.

This decrease, combined with the mitigative effects of our import requirements and the fact that the majority of imports from Canada are young animals that pose little risk of harboring BSE due to the disease’s lengthy incubation period, would continuously decrease the possibility that infected animals would be imported over the 20-year period. Under this scenario, then, the likelihood of BSE exposure and establishment in the U.S. cattle population as a consequence of importing infected Canadian cattle is negligible.

We then considered other less likely scenarios that may over-estimate the overall risk. In these less likely scenarios, we assumed that BSE prevalence in Canada would remain constant during the next 20 years.

This would mean the continued detection of infected animals – born after the implementation of the feed ban – during the entire 20-year time frame. Even with these less likely scenarios, our assessment indicates that BSE will not be spread or become established in the United States as a result of the proposal.

The majority of imports from Canada are expected to be less than two years of age at the time of import. With the expectation that BSE prevalence will continue to decrease, and the mitigative effects of both the import requirements and the young age of animals at the time of import, the likelihood of a BSE positive animal being imported is minimal. In addition, the series of strong risk mitigation measures in place in our country would make it highly unlikely that the disease would infect a U.S. animal.

Analysis of Risk to U.S. Public Health

Although our risk assessment was conducted to evaluate animal health risks, we did use one model in our assessment to also consider possible impacts on public health. The results of this model also indicated that these potential impacts are extremely low.

As you know, public health in the United States is protected through slaughter practices, including the removal of specified-risk materials, and the ruminant-to-ruminant feed ban.

In conclusion, for all commodities considered under the current proposal, the risk of BSE infectivity is negligible and the disease will not become established in the United States. This is true even if Canada identifies additional cases of BSE and even if infected animals were to be imported to the United States.

BSE Cases in Canada

From the time of detection of the first native case of BSE in Canada in May 2003, 10 cases of Canadian-born BSE-infected cattle have been identified. Nine of these cases have been detected in Canada, and the other case was in a native-born animal exported to the United States, which tested positive for BSE in December 2003. The most recent case was detected in a mature bull from Alberta on February 8, 2007.

Right from the start, we’ve had an excellent working relationship with Canada that has enabled us to participate directly in several of their epidemiological investigations and receive all of the information we have needed to conduct the various risk analysis and regulatory work I’m discussing with you today.

All of the cases of BSE in Canada, save for the most recent, are considered in our prevalence estimate. However, let me stress that the model used for that estimate is much broader than simply evaluating the number of cases detected. As mentioned previously, we used that same model in our estimate of the prevalence of BSE in the United States. That analysis documented the fact that identifying additional cases of BSE over time does not significantly impact the overall estimate of prevalence, because the model incorporates a wide range of epidemiological information and assumptions. The same principle would apply to our use of the model in estimating the prevalence in Canada – i.e., the identification of additional cases would not significantly change the prevalence estimate.

We also recognize that there have been cases in animals born after the date proposed in our regulation as when the feed ban was effectively enforced. Let me say that these cases are not unexpected, nor do we consider such diagnoses in any way to undercut our conclusion that March 1, 1999 can be considered the date of effective enforcement of the feed ban in Canada. Let me also say that this is an area in which I invite all interested stakeholders to contribute to our decision-making process and provide us with their comments before March 12.

Experience worldwide has demonstrated that, even in countries with a feed ban in place, BSE has occurred in cattle born after a feed ban was implemented. No regulatory effort can ensure 100 percent compliance or avoid human error. But such isolated incidents do not contribute to further significant spread of BSE, especially when considered along with the series of other strong risk mitigations in place.

Our risk assessment acknowledges that BSE is present in Canada at this time. From a practical standpoint, however, the risk to the United States via trade in animals and products is negligible.

OIE guidelines recognize that trade can be conducted safely with countries that have BSE present in their cattle population. Our proposed rule is consistent with these guidelines. I want to emphasize again that our risk assessment considered the entire risk pathway – all of the series of risk mitigations in place. The proposed requirement – only allowing imports of live bovines born on or after March 1, 1999 – is one step in the process that effectively decreases the risk.

Canadian Feed Ban

I’d like to say a few more words about the ruminant-to-ruminant feed ban in Canada and our evaluation regarding its effectiveness.

Similar to the United States, Canada has had feed ban regulations in place since August 1997.

The Canadian Food Inspection Agency (CFIA) has conducted a comprehensive epidemiological investigation into each of the BSE cases found in the country. In each instance, appropriate measures have been taken to identify and remove any birth cohorts (animals born within a year of the affected animal and that could possibly been exposed to the same feed at the same time) that were still alive. Each investigation also included a detailed examination to determine the possible feed exposure source. In those instances where noncompliance events occurred, CFIA has instituted enforcement investigations for regulatory violations.

Finally, as part of the original minimal-risk rule, an evaluation was done that concluded Canada’s feed ban is effectively enforced. This conclusion was based on consideration of the regulations in place and the statutory authority for those regulations, adequate infrastructure to implement the regulations, and evidence of implementation and monitoring. In our January 9 proposed rule, we gave additional consideration to defining when full implementation and effective enforcement of the Canadian feed ban was achieved. Full implementation occurred after completion of an initial (or practical) implementation period and after sufficient time elapsed to allow most feed products to cycle through the system. For Canada, this practical implementation took approximately 6 months, and then 12 months was considered sufficient time to allow products to cycle through the system, given cattle management practices in that country.

In following the OIE guidelines for trade in live animals, we therefore identified March 1, 1999, as the date when Canada’s feed ban was effectively enforced. We are not defining effectively enforced to mean 100 percent compliance, however, or that there is no possibility for isolated incidents/human error throughout the process. Nor does it mean that no affected animals will be born after this date—again, despite feed bans in many countries, affected animals continue to be found, but at a declining rate.

International Trade

USDA’s efforts to reopen export markets to U.S. beef remain a top priority. We believe that the most effective way of promoting harmonized international beef trade is to base our own policies in sound science, and to encourage our trading partners to also base their import requirements on science. Our proposed changes to the minimal risk region regulation are another positive step forward in this regard.

In regard to trade, Secretary Johanns has said on numerous occasions that our actions must be undertaken with the utmost deliberation, using science as the basis. In the absence of that science, sanitary and phytosanitary (SPS) restrictions will be used arbitrarily by some nations, without any basis of protecting human or animal health.

I want to be very clear that while protecting human and animal health must remain our top priority, I know that we can seek to return to normal patterns of international commerce by continuing to use science as the basis for decision making by U.S. regulatory authorities and our trading partners.

Conclusion

Senator, these proposed actions are an important move in our efforts to promote fair, science-based trade practices. I am confident in saying that we can take this next step while at the same time protecting American agriculture and maintaining confidence in the U.S. beef supply.

I am happy to answer any questions you have regarding the issues I’ve raised in my testimony.

Thank you again for the opportunity to be here today.

Witness Panel 2

Leo McDonnell

Former President and Founder

R-CALF USA
Read statement
Witness Panel 2

Leo McDonnell
United States Senate

Committee on Commerce, Science, and Transportation

Written Statement of Leo R. McDonnell, Jr.

Columbus, Montana

Regarding

Implications of the USDA’s Proposed Rule on Importing Canadian Cattle and Beef from Animals Older than 30 Months of Age

on behalf of

Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA)

Bismarck State College

February 21, 2007

Chairman Inouye, Vice Chairman Stevens, members of the Committee, I am Leo McDonnell. My wife and I own and operate Midland Bull Test, which is a bull genetic evaluation center in Columbus, Montana, and we ranch in both Montana and North Dakota. Bulls from our test center have been sold in both the domestic and international market and we are cow/calf producers as well as seed stock producers. I am also proud to be a member of the Ranchers-Cattlemen Action Legal Fund – United Stockgrowers of America (R-CALF USA), an organization that I co-founded in the late 1990s. Our organization has worked tirelessly on behalf of the American cattle producer. Our focus has been on protecting and promoting the interests of independent cattle producers, and it is from that perspective that I speak to you today. I appreciate the opportunity to provide comments on this issue as it is very important to the cow-calf operators, backgrounders, stockers and feeders that constitute the heart of this country’s cattle and beef industry.

Background

            After the December 2003 detection in Washington State of a Canadian-born cow infected with bovine spongiform encephalopathy (BSE), over 50 export markets closed their borders to U.S. beef and in 2004, U.S. beef exports fell to a 19-year low.[1] While the U.S. has since struggled to negotiate even limited access for U.S. cattle and beef exports to foreign markets, the domestic market has been thrown open to a much broader range of imports from abroad, including imports from Canada where 10 native cases of BSE have so far been detected. As a result, the U.S. cattle industry experienced its third consecutive year of substantially reduced exports in 2006, with the U.S. running a significant trade deficit in cattle and beef estimated at $2.7 billion. At the conclusion of 2006, U.S. beef exports remained at less than half their 2003 volume.[2]

            Since late 2003, the U.S. border was closed to all but boneless Canadian beef derived from cattle less than 30 months of age – a product the World Organization for Animal Health (OIE) considers suitable for trade regardless of a country’s disease status.[3] However, in mid-2005, the USDA further opened the Canadian border to both imports of live cattle less than 30 months of age and an expanded scope of beef products from cattle less than 30 months of age.[4]

Within six months of the border’s reopening to live cattle, domestic live cattle prices began to plummet. Fed cattle prices in the U.S. fell from $96.50 per cwt. in December 2005 to $79.10 per cwt. in May 2006, a decline of $17.40 per cwt.[5] Cattle producers who sold their fed cattle during this period suffered losses conservatively estimated by USDA within the range from $4.08 per cwt. to $12.93 per cwt., or $49 to $155 per head.[6]

R-CALF USA believes that USDA’s existing BSE policies are contributing greatly to the ongoing losses experienced by U.S. cattle producers, and we seek the assistance of Congress to correct these existing policies. Notwithstanding the dire need to reverse existing BSE policies, the USDA’s recently proposed OTM Rule assures that current problems will be made far worse for U.S. cattle producers.[7] The OTM Rule would allow the importation of live Canadian cattle born after March 1, 1999, certain Canadian beef products immediately, and the full scope of Canadian beef products from cattle over 30 months of age at some point thereafter.

USDA’s inability to fully restore lost export markets during the past three years, which has caused substantial harm to the U.S. cattle industry, is directly attributable to inappropriate BSE policies now in effect, and the proposed OTM Rule will only worsen the current situation for the following reasons:

A.     The proposed OTM Rule does not required Canada to implement the practices that other BSE-affected countries are using to successfully reduce the incidence of BSE and protect consumers.

Canada Has a Weaker Feed Ban

Canada has a weaker feed ban than other BSE-affected countries, and, because the U.S. imports Canadian beef and cattle nonetheless, the United States continues to experience difficulty in both restoring lost markets and gaining new ones. Under current U.S. policies, Canada is required to maintain only the most basic of feed bans - a feed ban determined by other BSE-affected countries to be insufficient to control the disease. The feed bans of the European Union (EU) and Japan, for example, are much more restrictive as they ban all ruminant material, including blood, from all animal feed. Canada bans only ruminant material, with the exception of blood, from only ruminant animal feed. While Canada has announced intentions to begin strengthening its feed ban in July 2007, the long incubation period of BSE (approximately 5 years)[8] necessitates a lengthy period of disease surveillance following implementation just to determine if the improvement is successful.

Canada Has an Inferior BSE Testing Program

In addition, Canada has an inferior BSE surveillance program when compared to other BSE-affected countries, and, because the U.S. imports Canadian beef and cattle nonetheless, the United States continues to experience difficulty in both restoring lost markets and gaining new ones. Under current USDA policies, Canada is not required to test all high-risk cattle for purposes of determining the prevalence of the disease and to ensure that all symptomatic cattle are removed from both the human food chain and animal feed chain. In contrast, Japan tests all high-risk cattle and all cattle entering the human food chain. The EU tests all high-risk cattle over 24 months of age and all OTM cattle entering the human food chain.[9]

Canada, however, has only a voluntary BSE testing program and is testing fewer cattle than many BSE-affected countries with much smaller herd sizes.[10]   Despite Canada’s detection of BSE in younger cattle, including a 50-month old cow, Canada does not recognize the value of testing healthy cattle at slaughter. This stands in sharp contrast to the EU’s experience, which caused the EU to begin testing all healthy slaughtered OTM cattle since 2001.[11] The EU detected 113 positive BSE cases in healthy slaughtered cattle in 2005.[12]

Canada Practices the Least Restrictive SRM Removal Policies

Canada practices the least restrictive specified risk material (SRM) removal policies when compared to other BSE-affected countries, and, because the U.S. imports Canadian cattle and beef nonetheless, the U.S. is experiencing difficulty in both restoring lost markets and gaining new ones. The proposed OTM Rule would subject Canadian cattle less than 8 years of age (cattle born after March 1, 1999) only to the same SRM removal policies adopted in the United States – a country unlike Canada that has detected only two atypical cases of BSE in cattle over 10 years of age. Thus, Canadian cattle less than 30 months of age will have only their tonsils and distal ileum removed, while only OTM cattle will be subject to the broader SRM removal requirements. However, the EU removes the broader list of SRMs from all cattle over 12 months of age and Japan removes the broader list of SRMs from cattle of all ages.

It is counterintuitive to expect that Canada’s weaker feed ban, its inferior testing regime, and its less restrictive SRM removal policy are helping to restore consumer confidence in Canadian beef sold directly from Canada or Canadian beef sold from the United States. Current trade challenges clearly demonstrate this concern: South Korea, for example, which was the third largest U.S. beef importer in 2003,[13] continues to demand that U.S. slaughter plants segregate U.S. cattle from Canadian cattle in their production lines to ensure that no Canadian beef is included in their U.S. beef imports;[14] and, recent headlines from the ChinaDaily/Xinhua News Service stating “Beijing Confiscates Canadian Beef on Fear of Mad Cow Disease,” further exemplifies the trade challenges associated with Canadian beef.[15] Because Canada’s feed ban is weaker, its BSE testing regime inferior, and its SRM removal policy less restrictive than those of other BSE-affected countries, which includes countries that import U.S. beef, the proposed OTM Rule will only worsen the unfavorable situation that already exists and should be withdrawn.

B.     The proposed OTM Rule, like the USDA’s existing BSE import policy, does not comply with international BSE import standards established by the OIE.

The OTM Rule Does Not Comply with the OIE’s SRM Standards

The OIE has in the past and continues today to recommend that SRMs from cattle originating in a BSE-affected country not be imported for the preparation of animal feed or for the preparation of fertilizer.[16] Current U.S. BSE policies ignore this recommendation and SRMs removed from live Canadian cattle currently entering the U.S. are free to enter the U.S. non-ruminant animal feed system as well as fertilizer production.[17] While this failure to follow OIE recommendations is most likely already contributing to the ongoing difficulty in restoring lost beef markets and gaining new ones, the proposed OTM Rule would significantly aggravate this failure.

            The proposed OTM Rule, because it would allow the importation of animals from a BSE-affected country with an unknown prevalence of BSE, would necessarily allow the importation of the entire list of SRM’s contained in each animal. Until and unless the U.S. begins to follow international standards by expressly banning SRMs originating in Canadian cattle from the preparation of all animal feed and fertilizer, the USDA is not in compliance with OIE standards, and its demands to the international community to follow international standards will not be taken seriously.

The OTM Rule Does Not Comply With the OIE’s Feed Ban Standards

            Canada has so far confirmed four BSE cases born after the implementation of its 1997 feed ban, with three cases born years after (one in 1998, two in 2000, and one in 2002).[18] A recent Dow Jones Newswires report regarding Canada’s 10^th case of BSE in a native animal, which was confirmed on February 7, 2007, suggests that this latest case was also born after the feed ban (in the year 2000).[19] This would make a total of five positive BSE cases, or half of all native Canadian cases, born after the implementation of the Canadian feed ban. Whether there are 4 or 5 positive cases among Canada’s 10 native cases that were born after the implementation of the Canadian feed ban, it is clear that the empirical evidence available to this Committee shows several truths:

1.      Canada’s known BSE prevalence has increased since 2003.

2.       Canada’s 1997 feed ban was not effective in preventing the spread of BSE.

3.       Canada's system of BSE control measures and "interlocking safeguards" have not succeeded in preventing or eliminating its BSE problem. This shows that USDA's reliance on such systems to protect the United States against imported BSE is unwise: they simply do not work well enough to accomplish this goal.

4.       Canada's BSE problem is ongoing. It is not confined to a few old cattle infected before the control measures were implemented (one of USDA's optimistic assumptions in re-opening the border in 2005). The data show that Canada's BSE problem persists and shows no immediate signs of diminishing.

5.       Canada's prevalence rate of BSE is large enough so that there is close to 100% probability that continuing to import cattle from Canada will result in some BSE-infected cattle being imported into the United States.

These facts show that the USDA’s proposal to allow OTM cattle, replete with the entire list of SRMs and the entire scope of bovine products from animals up to 8 years of age, into the United States is inconsistent with the OIE’s international BSE import standards. The OIE makes clear that beef from cattle originating in a BSE-affected country that does not have an effectively enforced feed ban, i.e., a feed ban that does not reduce the prevalence of the disease, is to be derived only from cattle that have the entire, expanded list of SRMs removed if the cattle are over 12 months of age. Because the proposed OTM Rule would require the removal of the entire, expanded list of SRMs only in animals over twice this 12-month age limit, i.e., at 30 months of age, the OTM Rule does not comply with OIE standards.[20]

Moreover, the OIE specifically states that cattle selected for export from a BSE-affected country should be born at least two years after the country’s feed ban was effectively enforced (for a country like Canada with an undetermined BSE risk)[21], or at least born after the date that the feed ban was effectively enforced (for a country unlike Canada with a controlled BSE risk).[22] The USDA’s proposed OTM Rule that would allow the importation of Canadian cattle born after March 1, 1999, despite multiple cases of BSE detected in cattle born long after that date, clearly violates this OIE standard, regardless of whether Canada is considered a controlled or undetermined risk.

The OTM Rule Is Inconsistent with OIE Testing Requirements

The USDA proposed OTM Rule is further inconsistent with OIE testing standards. Canada does not perform, and the OTM Rule would not require, sufficient testing of Canadian cattle to meet even minimal OIE testing standards. As a minimum, the OIE testing standards require a country like Canada to test 187,000 consecutive targeted cattle (with a BSE risk equal to that in the “Casualty slaughter, age between 4 and 7 years” subpopulation in Table 2), and be found BSE-free to be confident that the BSE prevalence is not more than 1 in 100,000.[23] However, Canada has tested only 143,528 total cattle during the combined years of 2004, 2005, 2006, and including up through February 12, 2007, with 8 positive BSE cases detected during this period.[24] While this empirical evidence shows that Canada’s BSE prevalence is much greater than 1 in 100,000, Canada must increase its BSE testing significantly before any accurate estimation of the true magnitude of Canada’s BSE problem can be made either by the U.S. or by international beef importers. Until this is done, the U.S. should not consider any relaxation of current BSE import restrictions, and the proposed OTM Rule should be withdrawn.

Standing in stark contrast to Canada, the U.S. has tested approximately 800,000 cattle since June 1, 2004, and has detected only two atypical cases of BSE, both in cattle over 10 years of age.[25] Given the distinct difference between the BSE risk profile of Canada, when compared to the United States, the effect of existing BSE policies, which would be further aggravated by the OTM Rule, is to unjustly burden the U.S. cattle industry with the stigma of Canada’s more serious BSE problem.

It is counterintuitive to expect that the OTM Rule that violates the OIE’s SRM standards, that does not comply with the OIE’s feed ban standards, and that is inconsistent with the OIE’s BSE testing standards would help to restore consumer confidence in Canadian beef sold directly from Canada or Canadian beef sold from the United States. Because the proposed OTM Rule would be inconsistent with the OIE’s SRM standards, feed ban standards, and testing standards, the proposed OTM Rule would only worsen the unfavorable situation that already exists and should be immediately withdrawn.
1. As reflected by the OTM Rule, the U.S. does not have a coherent, comprehensive strategy for resuming beef exports, building new markets, fully protecting animal health, and supporting consumer confidence in the safety of U.S. beef.
R-CALF USA recommends that Congress issue a formal directive to the USDA to ensure that the U.S. develops an aggressive, coherent, and comprehensive BSE strategy for resuming beef exports, building new markets, fully protecting animal health, and supporting consumer confidence in the safety of U.S. beef. The Animal Health Protection Act empowers the Secretary of Agriculture to take action to prevent "the introduction into or dissemination within the United States" of animal diseases from other countries. Until recently, USDA policy had recognized that: "Preventing the introduction of BSE into the United States is critical."[26] But USDA has now abandoned the congressional mandate to prevent the introduction of a devastating disease, BSE, and proposes to rely only on measures to mitigate the dissemination of the disease once it has entered the United States. R-CALF USA believes that Congress must now intervene to ensure this important congressional mandate is followed and offers the following 7 principles for Congress’ consideration:
Allowing OTM Canadian cattle and beef into the U.S. will further harm the United States’ ability to fully restore lost export markets. After three years of allowing Canada – a country where BSE is known to have circulated years after implementation of a feed ban – to have access to the U.S. market, the U.S. share of the global beef market has fallen from 18 percent in 2003 to an estimated 7 percent in 2006. [27] The export markets that have reopened have imposed stricter conditions on U.S. beef exports than what the U.S. requires on Canadian imports, and several export markets continue to ban U.S. exports that contain beef from Canadian cattle.
The full magnitude of Canada’s BSE epidemic is still unfolding, but it is already much greater than what USDA has asserted and assumed. BSE has now been detected in 10 Canadian-born cattle. If media reports that indicate the latest case was born in 2000 are correct, then half of Canada’s known cases were born after Canada implemented its feed ban. This evidence demonstrates that Canada’s feed ban was not effective in preventing the spread of BSE in either its feed system or cattle herd.
Cattle over 30 months of age that originate in a BSE-affected country have an inherently higher risk for transmitting BSE. As recently as January 2005, the USDA stated that the two most important factors in determining risk were the age of the cattle and the effect of the feed ban. Now that the feed ban is known to be ineffective, the 30-month age limit remains as the most important factor in minimizing the risk of introducing BSE into the U.S. from Canada.
As previously recognized by the Food and Drug Administration, and as recognized by international BSE experts, current BSE mitigation measures are inadequate to address the increased risk associated with OTM cattle and beef from Canada. The Food and Drug Administration, the Canadian Food Inspection Service, and international BSE experts all have acknowledged the need to strengthen the feed bans implemented in both the U.S. and Canada to prevent the spread of BSE. However, neither country has yet implemented improvements to their respective feed bans.
Allowing OTM Canadian cattle and beef into the United States will immediately harm the United States’ international disease risk profile. The United States has a more favorable BSE risk profile than Canada. Canada cannot possibly meet the OIE standard for a country with a negligible BSE risk, which requires that the youngest BSE case must be born more than 11 years ago.[28] However, because the U.S. has only detected BSE in two native animals, both born well before the feed ban and the youngest of which was estimated to be 10 years of age on February 28, 2006, the U.S. will likely meet the international standard to be considered a negligible BSE risk country if it does not mix Canadian cattle and beef with U.S. cattle and beef.
The financial losses to U.S. cattle producers will likely be severe if the United States allows OTM Canadian cattle and beef into the U.S. market while most export markets remain closed. The USDA grossly underestimated the negative financial impact that actually occurred to U.S. cattle producers following the 2005 resumption of Canadian cattle imports. The USDA underestimated the price decline that U.S. producers experienced in the domestic fed cattle market by a factor of nearly three. Domestic fed cattle prices, which USDA predicted would fall by as much as $6.05 per cwt.,[29] actually fell by $17.40 per cwt. during the 5-month period from December 2005 through May 2006. Mandatory country-of-origin labeling must be implemented in the United States so both domestic and international consumers can differentiate beef produced exclusively from U.S. cattle from beef produced from Canadian cattle, before any further relaxation of current U.S. import standards is even considered.
The risks from OTM beef imports were not properly evaluated in either the 2003 or 2004 risk analyses, and the 2005 delay on OTM beef imports posted in the Federal Register does not include a risk analysis based on the new findings of multiple cattle with BSE born after Canada’s ban on meat and bone meal. Also, there is concern that the risk analysis of OTM beef and OTM cattle, when combined, will be much higher than separate analyses. That would also be the case if OTM beef and cattle are combined in an economic impact analysis.

Conclusion

            For the reasons described above, the USDA’s proposed OTM Rule is premature and should be immediately withdrawn. It is inconsistent with the applied practices in other BSE-affected countries; it is inconsistent with OIE standards; and it does not contribute to any cohesive, comprehensive U.S. strategy to restore lost markets, build new markets, fully protect animal health, and support consumer confidence in the safety of U.S. beef.

            R-CALF USA respectfully requests that Congress take steps to cause the immediate withdrawal of the OTM Rule as well as steps to ensure the immediate development of a comprehensive BSE protection strategy and enforcement of the congressional mandate to prevent the introduction of BSE into the United States.

I sincerely appreciate this opportunity to share R-CALF USA’s views with you on this important issue and I would be happy to answer any questions that you may have.

Respectfully Submitted,

Leo R. McDonnell, Jr.

R-CALF USA Founder and Past President

[1] Table 5, Total U.S. Beef and Veal Exports, Red Meat Yearbook (94006), U.S. Department of Agriculture, Economic Research Service, available at http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1354.

[2] See Cumulative U.S. Meat and Livestock Trade, Livestock and Meat Trade Data, Livestock, Dairy, and Poultry Outlook Tables, U.S. Department of Agriculture, Economic Research Service, available at http://www.ers.usda.gov/Data/MeatTrade/Data/AnnualLivestockTable.xls; see also Table 5, Total U.S. Beef and Veal Exports, Red Meat Yearbook (94006), U.S. Department of Agriculture, Economic Research Service, available at http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1354.

[3] Terrestrial Animal Health Code – 2006, World Organization for Animal Health (OIE), at Article 2.3.13.1. (1)(g).

[4] See Bovine Spongiform Encephalopathy, Minimal-Risk Regions and Importation of Commodities; Final Rule and Notice, Federal Register, Vol. 70, January 4, 2005, at 460-553.

[5] Choice Beef Values and Spreads and the All-Fresh Retail Value, USDA-Economic Research Service, available at http://www.ers.usda.gov/Data/meatpricespreads/Data/beef.xls, downloaded on December 19, 2006.

[6] High Plains Cattle Feeding Simulator, United States Department of Agriculture, Economic Research Service, available at http://www.ers.usda.gov/Publications/LDP/xlstables/High%20Plains%20Cattle%20Feeding%20Simulator%20Nov06%20R.xls.

[7] See Bovine Spongiform Encephalopathy; Minimal-Risk Regions; Importation of Live Bovines and Products Derived from Bovines; Proposed Rule, Federal Register, Vol. 72, No. 5, at 1102-1129, hereafter OTM Rule.

[8] Federal Register, Vol. 70, No. 2, Final Rule, January 4, 2005, at 475.

[9] See Report on the Monitoring and Testing of Ruminants for the Presence of Transmissible Spongiform Encephalopathy (TSE) in the EU in 2005, European Commission, ISSN-583X, at 5.

[10] Table B5, Total Positive Cases Per Number of Cattle Tested or Present in the Adult Cattle Population (>24 months of age), Report on the Monitoring and Testing of Ruminants for the Presence of Transmissible Spongiform Encephalopathy (TSE) in the EU in 2005, European Commission, ISSN: 1725-583X, June 20, 2006, at 17. (France, with an adult cattle population of over 10 million cattle tested over 2.5 million head and detected 31 positive BSE cases in 2005; the Netherlands, with an adult cattle population of only 1.7 million cattle tested over 517,000 cattle and detected 3 positive BSE cases in 2005. In contrast, Canada with an adult cattle population of approximately 6 million cattle tested fewer than 60,000 cattle and detected 2 positive BSE cases in 2005; in 2006, after again testing fewer than 60,000 cattle, Canada detected 5 positive BSE cases.)

[11] The TSE Roadmap, European Commission, Brussels, COM(2005 322 Final, July 15, 2005, at 7, 8: “The detection of BSE in healthy slaughtered cattle in 2000 indicated the need for active monitoring which was introduced in the whole community in the beginning of 2001. The active monitoring programme became fully operation in July 2001 and still includes: The testing of all risk animals over 24 months of age (fallen stock, emergency slaughtered animals and animals with clinical signs at ante-mortem inspection); The testing of all healthy slaughtered bovine animals above 30 months of age (a total of 10 million cattle per year).”

[12] Table B12, Testing on Healthy Slaughtered Bovine Animals, Report on the Monitoring and Testing of Ruminants for the Presence of Transmissible Spongiform Encephalopathy (TSE) in the EU in 2005, European Commission, ISSN: 1725-583X, June 20, 2006, at 26.

[13] See Cumulative U.S. Livestock and Meat Trade, Livestock, Dairy, and Poultry Outlook Report, U.S. Department of Agriculture, Economic Research Service, March 23, 2004, available at http://usda.mannlib.cornell.edu/usda/ers/LDP-M//2000s/2004/LDP-M-03-23-2004.pdf.

[14] Use of Cattle Legally Imported from Canada Within the EV Program for the Republic of Korea, U.S. Department of Agriculture, Agricultural Marketing Service, August 29, 2006, available at http://www.ams.usda.gov/lsg/arc/KoreaCanadianCattle.pdf.

[15] Beijing Confiscates Canadian Beef on Fear of Mad Cow Disease, China Daily/Xinhua News Service, Sunday – February 18, 2007.

[16] Terrestrial Animal Health Code – 2006, Article 2.3.13.13 (1), (2), (3).

[17] See Importation of Certain Commodities from BSE Minimal-Risk Regions (Canada), Environmental Assessment, October 27, 2006, U.S. Department of Agriculture, Animal and Plant Health Inspection Service, at 7. (Both FSIS and FDA have implemented regulations that prohibit the use of SRMs in human food and other products, including dietary supplements and cosmetics.)

[18] See Completed Investigations, Canadian Food Inspection Agency, available at http://www.inspection.gc.ca/english/anima/heasan/disemala/bseesb/comenqe.shtml.

[19] CFIA: Latest Canadian BSE Case Likely Born in 2000, Dow Jones Newswires, CattleNetwork Today, February 8, 2007.

[20] Terrestrial Animal Health Code – 2006, OIE, Article 2.3.13.11. (2)(a).

[21] See Terrestrial Animal Health Code – 2006, OIE, at Article 2.3.13.8.

[22] See Id. at Article 2.3.13.7.

[23] See Surveillance for Bovine Spongiform Encephalopathy, Terrestrial Animal Health Code – OIE – 2006, Appendix 3.8.4.1, Tables 1 and 2.

[24] See BSE Enhanced Surveillance Program, Canadian Food Inspection Agency, available at http://www.inspection.gc.ca/english/anima/heasan/disemala/bseesb/surv/surve.shtml#num.

[25] BSE Testing Results, U.S. Department of Agriculture, Animal and Plant Health Inspection Service, September 1, 2006, available at http://www.aphis.usda.gov/lpa/issues/bse_testing/test_results.html; See also BSE Ongoing Surveillance Program, U.S. Department of Agriculture, Animal and Plant Health Inspection Service, available at http://www.aphis.usda.gov/newsroom/hot_issues/bse/surveillance/ongoing_surv_results.shtml.

[26] See, e.g., Federal Register, Vol. 62, December 16, 1997, at 65,747, 65748.

[27] Livestock and Poultry: World Markets and Trade, U.S. Department of Agriculture, Foreign Agricultural Service, Circular Series, DL&P 2-06, October 2006, available at http://www.fas.usda.gov/dlp/circular/2006/2006%20Annual/Livestock&Poultry.pdf

[28] Terrestrial Animal Health Code – 2006, OIE, Article 2.3.13.3. (3)(b).

[29] Economic Analysis Final Rule, Bovine Spongiform Encephalopathy: Minimal Risk Regions and Importation of Commodities, U.S. Department of Agriculture, Animal and Plant Health Inspection Services, December 20, 2004, at 24.
Mark Huseth

President

North Dakota Stockmen's Association

Read statement

Witness Panel 2

Mark Huseth

Testimony on the Implications of the U.S. Department of Agriculture's Final Rule on Importing Canadian Beef from Animals Older Than 30 Months

Hearing of the Interstate Commerce, Trade and Tourism
Subcommittee of the Senate Committee on
Commerce, Science and Transportation

By Mark Huseth, McLeod, North Dakota
President of the North Dakota Stockmen's Association

Bismarck State College, Bismarck, North Dakota

February 21, 2007

Good morning, Sen. Byron Dorgan and members of the Senate Interstate Commerce, Trade and Tourism Subcommittee.

My name is Mark Huseth. My wife, Eileen, and I ranch in partnership with our adult sons on our third-generation family operation near McLeod, N.D., in the Sheyenne River Valley. I have the privilege of representing cattle producers like myself from across this great state this year as the president of the North Dakota Stockmen's Association. It is on their behalf that I appear before you today.

Those forward-thinking cattlemen and cattlewomen formulated policy back at our 2005 Annual Convention in anticipation of this very proposed rule, which would expand allowable Canadian imports to include live animals 30 months and older. The Stockmen's Association's member resolution opposes any further expansion of Canadian beef trade until the United States receives assurances from Canada and its other trading partners that, if trade is expanded and a problem is detected in a foreign-born import, that the animal's country-of-origin, not the U.S., will suffer any resulting trade sanctions.

The resolution also calls for an orderly market transition plan to be put in place before the border is opened further, so a sudden supply shock doesn't cripple the domestic market.

Nearly two years later, those stipulations have not been satisfied, and so our opposition to the proposed rule holds true still today.

Before I go further, I want to emphasize that we are not opposed to the U.S. Department of Agriculture's (USDA) proposed rule because of food safety concerns. That's because Bovine Spongiform Encephalopathy, as you know, is not a contagious disease, and the mode of infection is through the consumption of feed contaminated with abnormal prion protein. The United States' ruminant feed ban and other harvest measures, like the removal of all specified risk materials (the only things capable of carrying the disease), have proven effective in identifying sick animals and keeping them out of the food supply. We're confident in these industry- and government-implemented firewalls to maintain the level of food safety and consumer confidence that we work so hard for and are so proud of.

At the same time, the North Dakota Stockmen's Association views the liberalization of Canadian trade as premature. That's because we are still suffering the consequences of the Canadian-born cow diagnosed with BSE in our country in December 2003. That lone animal, commonly referred to as "the cow that stole Christmas," changed the U.S. beef industry. More than three years later, we are still working to recover important global beef markets and customer confidence that were snatched away that Dec. 23.

Before we open the border wider and possibly exaggerate the problems we already have, we have to make sure that we protect our domestic cattle producers from unintended harm - to ensure that they have the opportunity to make an honest living without the threat of another country's cattle collapsing their market and driving them out of business.

Our members ask that USDA's proposed rule not be adopted until the following conditions have been met:

1) The United States receives, in writing, guarantees from Canada and all its other beef trading partners that any disease problem identified in a foreign-born, imported animal in the United States be considered the problem of its country of origin. In addition, any trade sanctions those countries impose because of the disease situation be on that country of origin. The United States, on the other hand, would not suffer the kind of trade backlash it still is recovering from since the first case of BSE in 2003. Likewise, the World Organization of Animal Health, or OIE, recognizes the United States with its same low-risk health status if the disease occurs in an imported animal.

2) USDA develops and implements an orderly market transition plan before expanding the scope of cattle and beef imports from Canada. This would involve gradually accepting in such imports so as not to overload our country's supply and crash those markets. We think this is especially critical to preserve our already-overloaded slaughter cow and slaughter bull processing facilities, particularly in the Northern tier, where many Canadian cattle would likely be sent. You can imagine the impact when you add the estimated 545,000 cull cows and 66,000 cull bulls and stags that would enter this country each year over a five-year period if the proposed rule is adopted. That would lead to an annual decrease in beef prices of $4 per hundredweight, or $50 per 1,250-pound cow. Multiply that by an average of 140,000 cull cows sold by North Dakota producers each year and you arrive at a $7 million impact per year to cattlemen and women from our state alone. We can't afford to do that.

3) Before entering the United States, all Canadian cattle are permanently identified with a universal hot-iron brand that designates them as Canadian cattle. The brand would preserve the cattle's identify through slaughter and make it crystal clear where they originated. Tattoos, on the other hand, cannot be read at a glance and can fade over time. Consequently, we do not support tattoos as an identification means for these imported animals.

4) A further evaluation of the Canadian feed ban be conducted in light of the most recent BSE cases detected there. While USDA has determined that Canada has a robust inspection program, that overall compliance with the feed ban is good and that the feed ban is reducing the risk of transmission of BSE in the Canadian cattle population, they did identify a "possible exception" in the ban with mineral mixes produced with ruminal meat and bone meal before the feed ban took effect. Maybe a mandatory recall of such mixes could help curtail the number of cases there.

We empathize with our Canadian neighbors and the situation they are in. We know what they are going through, because we're in a similar situation ourselves.

The North Dakota Stockmen's Association has always supported fair trade and maintained that our producers can compete and win in the global beef market, because of the superior cattle and beef we raise in this country. We look forward to expanding our trade with Canada in the future. However, now is not yet the time, and, in order for our beef trade with Canada to be fair, the steps we outlined today must be taken before USDA's rule is implemented.

We appreciate the chance to share our perspective with you today and the fact that you have recognized this issue as the important one it is. Thank you.

I would be happy to address any questions that you may
have.
Roger Johnson

Agricultural Commissioner

North Dakota Department of Agriculture

Download Testimony (40.32 KB)
Elwood Barth

Secretary and Board Member

North Dakota Farmers Union

Download Testimony (62.24 KB)

Hearings

Testimony

Ron DeHaven

Witness Panel 2

Leo McDonnell

Mark Huseth

Roger Johnson

Elwood Barth

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