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Industry Update

Total testing could cost cattle producers big
U.S. cattlemen could end up paying $30 per head or more if testing 100% of cattle for bovine spongiform encephalopathy (BSE) would become standardized, says Gregg Doud, National Cattlemen’s Beef Association (NCBA) chief economist.

In an NCBA news release, Doud said the increased expense to producers includes all costs, such as kits, labor, shipping, holding, laboratory fees and other expenses. Processing costs would also increase, resulting in lower cattle prices across the board, he reports.

Doud said 100% testing for BSE would become the standard if individual companies like Creekstone Farms Premium Beef were allowed to export such product to Japan. Once exception was provided to one company, it would become standard in all export and, most likely, domestic markets, he said in the release.

Costs associated with a total-testing standard would mostly fall on producer’s shoulders, Doud reported, and allowing individual companies to test for BSE would increase the chances of false test results, causing market volatility.

The economist also cautioned against allowing individual companies to determine trade policy using marketing strategies, noting the dangers of non-science based regulations. "The result would be different rules for every country, which would be chaos and limit U.S. beef exports."

Two weeks ago, the U.S. Department of Agriculture (USDA) denied Creekstone’s proposal to voluntarily test 100% of its cattle for BSE. The Arkansas, Kan.-based beef processing facility sought USDA approval for the plan so it could resume exports to Japan and South Korea.

In a letter to the USDA last week, John Stewart, Creekstone’s chief executive officer (CEO), and Bill Fielding, chief operating officer (COO), noted their disappointment with USDA’s conclusion and the company’s intent to challenge the decision as it considered legal action. The processing facility, the letter stated, loses approximately $200,000 per day.

Russian cattle culled for FMD
Approximately 900 head of cattle were scheduled to be culled yesterday in the Amur region of eastern Russia after type ‘O’ foot and mouth disease (FMD) was discovered in approximately 87 cattle at a dairy farm near Tambov, various news sources reported.

The BBC reported that the entire surrounding village was being quarantined to stop the spread of the virus. Emergency workers were expected to burn and bury all carcasses from the herd and disinfect the premises. In the meantime, MosNews, a Russian newspaper, reported yesterday that the Ukraine has announced a ban on all milk and meat products from Russia.

The United States does not currently import beef from Russia.

Study shows wetlands on rise
The National Resources Inventory (NRI) released a report today announcing that farmers and ranchers produced a net increase of 131,400 acres of wetlands from 1997-2002. Secretary of Agriculture Ann Veneman announced the findings of the report, commending farmers and ranchers nationwide for their stewardship efforts.

Wetland increases due to agricultural practices totaled 182,600 acres, located mostly in the Corn Belt and Delta States where farmers and ranchers created or improved wetland areas through government programs like the Wetlands Reserve Program (WRP), Conservation Reserve Program (CRP) or the Conservation Reserve Enhancement Program (CREP). A loss of 51,200 acres brought the number to 131,400; however, the report showed wetland losses slowing dramatically throughout the past half century.

In addition to preserving wetlands — areas that help protect water quality, provide natural flood controls, prevent erosion and support wildlife — farmers and ranchers, in cooperation with federal agencies, this year applied conservation practices to more than 4 million acres of cropland, planted 261 million trees and shrubs, created 477,000 acres of conservation buffers, and improved irrigation water management on almost 2 million acres.

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