USDA plans meet further resistance

March 7, 2005 — Following last week’s news of failed U.S. Department of Agriculture (USDA) attempts to open the Canadian border came more setbacks for the agency.

On March 3, just one day after the U.S. District Court for the District of Montana granted an injunction blocking the reopening of the Canadian border, the Senate passed a resolution turning down USDA’s final rule in a 52-to-46 vote. The rule had suggested opening the border beginning March 7 to imports of Canadian live cattle less than 30 months of age. Now, on the day originally scheduled for trade with Canada, the agency’s proposed rule appears to be entering what could be months of tentative legislative and court battles.

Secretary of Agriculture Mike Johanns immediately expressed his disappointment with the Senate’s resolution (S.J. Res. 4), saying the action undermines U.S. efforts to promote science-based regulations, complicates negotiations to reopen foreign markets and perpetuates the economic disruption of the beef and cattle industry.

Reaffirming his confidence in USDA’s stance, Johanns vowed that he would work with the U.S. House of Representatives to prevent passage of the resolution and to continue aggressive efforts to reopen international markets. As of late last week, the House hadn’t scheduled a vote; however, a Statement of Administration Policy (SAP) released by the Executive Office of the President noted President Bush’s strong opposition to the resolution. According to the statement, even if S.J. Res. 4 passed through the House, the President would veto the bill.

As expected, the Senate’s decision, coupled with reaction from the White House, triggered numerous responses from industry organizations both for and against the legislation; however, one of the most intriguing responses came from the cattle market. According to a weekly cattle outlook released by Glenn Grimes and Ron Plain of the University of Missouri, live cattle futures contracts responded favorably to the news, closing higher on both Wednesday and Thursday last week. The five-area daily weighted average price for steers for harvest also jumped, up $3.21 from a week earlier. Steers sold on a dressed basis averaged $5.26 higher than the week before, and the choice carcass cutout value was up 3.6¢. Feeder cattle prices were also mostly steady to stronger, the report stated.

by Crystal Albers, Angus Productions Inc. assistant editor

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