The
Milkweed
Dairy’s best information and insights
Issue No. 432 • July 2015
Vilsack Drops Huge Bomb: Approving Beef
Imports from FMD-Infected Brazil & Argentina
by Jim Eichstadt
Secretary of Agriculture Tom Vilsack has
committed the unthinkable: Approving the
importation of fresh (chilled or frozen) beef from
northern Argentina and a region of Brazil, two
countries infested with dreaded Foot-and-Mouth
Disease (FMD). The approval poses a deadly
threat to the health and welfare of U.S. dairy cattle, beef cattle, pork, sheep, goats, and other
clover-hoofed animals.
This action came despite the strongest possible protests of virtually all U.S. beef producers. The
new trade rules, which take effect by September 1,
2015, risk exposing U.S. livestock herds to one of
the most highly contagious and economically devastating diseases known to agriculture..
USDA’s Animal and Plant Health Inspection
Service (APHIS) announced its decision on the two
controversial proposals on June 29, 2015. The two
final rules were published July 2 in the Federal Register and take effect August 31, 2015 for Brazil and
September 1, 2015 for Argentina. The Milkweed
warned of the pending decision last month in a pageone article headlined “USDA Approval of Brazilian
Beef Imports Coming Soon.”
The immediate economic costs of the decision
are potentially huge. A surge of imports from Brazil
and Argentina could depress domestic beef markets
at a critical time when U.S. cattle numbers are slowly beginning to recover from a 60-year low. Ranchers and other cattle producers are slowly recovering
from years of severe drought that devastated foundation herds in the beef cattle-rich Southwest. The
drought followed decades of low prices that financially devastated thousands of smaller, independent
operations.
FMD: extremely contagious and costly
FMD threatens all cloven-hoofed livestock,
including cattle, hogs, sheep, and goats, and many
common wildlife species, including deer and
armadillos. The FMD virus is very rugged and survives in refrigerated and frozen infected meat. The
virus is easily spread over wide areas by people, animals, vehicles, water, air currents, and other carriers
FMD spreads quickly. Wind may carry the virus 50
miles a day. Infected herds must be destroyed and at
huge economic and emotional cost to affected
regions.
The full economic costs of an FMD outbreak
in the U.S. are much higher than the immediate loss
of infected livestock. Economic cost estimates range
from $37 billion to hundreds of billions of dollars,
plus an immediate halt to all U.S. livestock and
dairy product exports (see below).
Continued on page 6
Shame
onyou,
you,Secretary
SecretaryVilsack!!!
Vilsack!!!
Pooh on
“All-Milk Price” DOESN’T Include Deducts!
by Pete Hardin
As 2015 has progressed, a lot of head-scratching has taken place among dairy farmers who signed
up for USDA’s new Dairy Margin Protection Program (DMPP). Why was the “All-Milk Price” – the
benchmark measure of the income portion of the
price-cost program – so high?
DMPP was billed as a “safety net” program to
protect producers’ net margins. But the JanuaryFebruary 2015 DMPP segment paid out only half a
cent per hundredweight to producers who’d contracted for the maximum $8.00/cwt. level of “protection.” The March-April program paid out about
$.50/cwt. at the $8.00 level. (Another source of
frustration for dairy producers who’d contracted
with DMPP: payments were reduced by 7.3% due to
federal budget sequestration rules.)
Getting answers about how the “All-Milk
Price” is calculated was a tough pull for The Milkweed. This publication’s original suspicions that
various marketing deductions from producers’ milk
Weather Map Confirms Wet Field Conditions Across Corn Belt
checks were not factored into USDA’s “All-Milk
Price” were accurate. We reprint the following
question submitted to USDA and the response from
a high-level USDA media spokesperson.
Questions: Which of the following items are
included in calculating the All-Milk Price? 15cent/cwt. dairy promotion checkoff? Milk hauling
charges? Stop charges? Fuel price surcharges? Coop dues? Marketing losses/co-op reblends (the Capper-Volstead Act allows cooperatives to “reblend” or
pay their members less than the monthly federal order
minimum blend price requirement applying to privately-owned milk buyers) Quality premiums/deductions? Any other items not listed above?
USDA’s Answer: The All Milk Price estimate is a gross price before deductions for items
such as the checkoff, hauling, fuel surcharges,
stop charges, Co-op dues, the CWT program,
capital retains, and any state specific dairy pro-
Continued on page 2
This issue mailed on July 10, 2015
25 JUN 2015 - 02 JUL 2015
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(Name)
Source: http://www.cpc.ncep.noaa.gov/products/Drought/Monitoring/weekly-total-SM-anom.shtml
The latest surface hydrology map from the National Weather Service’s Climate Prediction Center
shows soil moisture conditions across the U.S. in early July. The various shades of green indicate excess
precipitation in the central and eastern Corn Belt states of Iowa, Missouri, Illinois and Indiana. Soggy corn
and soybean fields in these key grain-producing states helped send grain futures to the highest levels in
months. The map also confirms the wet field conditions in Nebraska and Colorado observed during the
mid-June crop tour story on page 7 of this issue. See page 12 for range of crop photos.
(Firm)
(Address)
(City, State, Zip)
Vilsack Drops Huge Bomb: Approving Unsafe Beef Imports, con’t
Continued from page 1
Industry groups blast decision
Vilsack’s decision to allow the imports despite
the FMD threat was roundly denounced by U.S. beef
industry across the broad political spectrum. Many
cattle producers view the unsafe imports as a dire
threat to the nation’s animal agriculture: the equivalent of a potential nuclear attack on U.S. food security and the national economy.
R-CALF USA has led grass-roots beef producer efforts to oppose APHIS efforts to allow unsafe
beef imports. CEO Bill Bullard has been in the vanguard, warning of the extreme risks posed by the
FMD threat to U.S. animal agriculture. RanchersCattlemen Action Legal Fund, United Stockgrowers
of America, headquartered in Billings, Montana, represents independent U.S. cattle producers.
“Finalizing rules that the Secretary knows will
lower U.S. cattle prices, lower U.S. beef production,
and increase the risk of infecting the U.S. cow herd
with FMD demonstrates the Secretary’s blatant disregard for USDA’s mission,” Bullard said June 29.
“The effect of these rules will be to further
erode the economic condition of Rural America and
reduce economic opportunities for independent
ranchers, which is exactly the opposite of what the
Secretary should be doing,” Bullard said.
Approval of the APHIS proposals compelled
the National Cattlemen’s Beef Association (NCBA),
the free-trading, conservative industry group with a
history of close ties to the big meatpackers, to condemn the decision in the strongest possible terms.
“FMD is a highly contagious and devastating
disease, not just for the cattle industry, but for all
cloven-hoofed animals and it can be introduced and
spread through the importation of both fresh and
frozen products,” NCBA President Philip Ellis in a
June 29 press statement. He further blasted:
“This rule violated the federal rulemaking
process, violated Executive Orders mandating scientific integrity in rulemaking, circumvented the ongoing Government Accountability Office’s review of
the risk analysis process, and withheld critical information from stakeholders. Our office actually
received over 600 pages of documents relevant to
Brazil in Portuguese and over 25 percent of the documents for Argentina were posted to the Federal Register in Spanish, neither with any translation available. No one should have to learn a second language
to review a proposed U.S. government regulation,”
said Ellis, a cattleman from Chugwater, Wyoming.
Regions defined
The new rules allow fresh (chilled or frozen)
beef exports from the regions of Brazil and Argentina that APHIS claims are free from FMD infection.
The region of Brazil is defined as the States of Bahia,
Distrito Federal, Espirito Santo, Goias, Mato
Grosso, Mato Grosso do SuI, Minas Gerais, Parana,
Rio Grande do Sul, Rio de Janeiro, Rondonia, Sao
Paulo, Sergipe, and Tocantins), according to USDA.
APHIS defines Northern Argentina as the
region “located north of the Patagonia Region; the
Patagonia Region includes the region located south
of the 42nd parallel known as Patagonia South, and
the region immediately north of the 42nd parallel
known as Patagonia North B.”
“Regionalization,” is a flawed concept developed under the World Trade Organization to circumvent livestock sanitation non-tariff trade barriers by
localizing and minimizing the areas defined as
infected. Regionalization makes little sense for
Brazil and Argentina, which have long histories and
ongoing cases of FMD infection in their cattle populations. The approved regions border other areas
inside and outside their national borders where FMD
infections remain active and uncontrolled. The FMD
virus can be transmitted by deer and other wildlife
populations that move uncontrolled between infected areas and the regions approved to export beef to
the U.S. (See sidebar story – USDA: History of
Failed Foot-and-Mouth Disease “Regionalization”.)
Decision politically timed
Approval of the APHIS beef import rules –
6 — The Milkweed • July 2015
which had been stuck in limbo for 14 months after
the second public comment period ended April 22,
2014 – was timed to coincide with Brazilian President Dilma Rousseff’s June 30 official state visit to
the White House. Reports said the beef import decision was intended to encourage Brazil’s cooperation
as the Obama administration works to expand trade
throughout the region. (Rousseff is struggling with a
10% public approval rating at home, and apparently
“This rule violated the federal rulemaking process, violated Executive Orders mandating scientific integrity in rulemaking, circumvented the ongoing Government Accountability Office’s review of the risk analysis
process, and withheld critical information
from stakeholders. Our office actually
received over 600 pages of documents relevant
to Brazil in Portuguese and over 25 percent of
the documents for Argentina were posted to
the Federal Register in Spanish, neither with
any translation available. No one should have
to learn a second language to review a proposed U.S. government regulation.”
—NCBA President Philip Ellis
needs all the help she can get.)
One of the leading beneficiaries of the decision
will be Sao Paulo, Brazil-based JBS SA, the world’s
largest meatpacker. JBS and its U.S. subsidiary are
poised to reap huge profits importing South American beef at a time when domestic retail beef prices
are at near-record highs. JBS describes itself as “the
largest animal protein company in the world with
production platforms and facilities in countries
including the United States, Canada, Mexico, Australia, Brazil, Argentina, Uruguay and Paraguay…”
Politics trumps science
Critics blasted President Obama’s crass decision
to allow politics to overrule sound science in reversing longstanding sanitation standards so vital to
domestic livestock health and national food security.
Critics charge the APHIS rules were approved
for purely political reasons to expedite “Free Trade”
agreements, rather than sound science, which is cited
as the basis for trade decisions in the era of the World
Trade Organization and the global economy. In this
case, APHIS approved regionalized fresh beef
imports from Brazil and Argentina despite the continuing presence of the active FMD infections in the
cattle herds in both countries and their neighbors.
APHIS also failed to conduct thorough in-country
inspections and to ensure adequate safeguards are in
place to protect U.S. livestock from FMD risks, they
said.
The weakening of U.S. livestock import sanitation rules shows just how much President Obama is
willing to sacrifice to secure two regional “Free
Trade” agreements – the Trans-Pacific Partnership
(TPP) and the Transatlantic Trade and Investment
Partnership (T-TIP).
Import timeline uncertain
Industry observers say it remains unclear when
the first fresh beef imports could begin arriving on
U.S. shores from Brazil and Argentina under the new
rules. A separate USDA agency, the Food Safety
Inspection Service (FSIS), will first have to certify
meatpacking plants in each country before imports
can begin. Observers expect FSIS to be under heavy
political pressure from the White House to make the
deal happen.
R-CALF’s Bill Bullard offered this view: “We
understand that both rules are expected to go into
effect on or before September 1, 2015. We believe
Argentina is further ahead than Brazil for obtaining
Food Safety Inspection Service’s certification, but
we are unsure exactly when we can expect shipments
to begin flowing to the United States.”
Pawns for Free Trade
U.S. livestock producers are dangerously being
used as pawns in the White House’s push to expand
“Free Trade” as a cornerstone of President Obama’s
legacy. Final approval of the APHIS beef import
rules is a key part of the Obama administration’s
broader push to conclude secure new “Free Trade”
agreements in the Pacific and Atlantic regions “Free
Trade” agreements during his second term. Congress
passed Trade Promotion Authority legislation on June
24, clearing the way for the White House fast-track to
conclude negotiations under TPP and T-TIP. The
authority, also known as “Fast-Track,” the two trade
agreements would then be subject to up-or-down
votes in Congress, with no amendments allowed.
Continued on page 7
USDA: History of Failed
Foot-and-Mouth Disease “Regionalization”
Following is a detailed list of USDA’s past
failures to successfully implement regionalized
meat imports from nations infected with Footand-Mouth Disease (FMD). The following points,
adapted from a question-and-answer piece featuring Bill Bullard, CEO of R-CALF USA, were
originally published in the March 2014 issue of
The Milkweed. R-CALF USA has led the U.S.
beef industry’s efforts to protect domestic livestock herds from foreign animal diseases.
Question: How has USDA’s policy of
“regionalization” affected U.S. livestock producers in the past?
Bullard: In 1997, USDA undertook a major
overhaul of our U.S. animal health regulations
and adopted the regionalization scheme as its new
policy which it said would be in conformity with
the World Trade Organization. By sheer luck U.S.
livestock herds have not yet been exposed to
Foot-and-Mouth Disease from regions within
countries that USDA had declared free of FMD,
but which nevertheless experienced FMD outbreaks. As shown below, the USDA does not have
the ability to accurately assess the risk of FMD in
countries with histories of FMD outbreaks,
including countries where FMD had not been
reported for nearly a decade:
• About three months after USDA regionalized Argentina and concluded that Argentina’s
outbreak of FMD was “well controlled,” USDA
was forced to abandon regionalization through an
emergency action in response to new, widespread
FMD outbreaks in Argentina.
• About four months after USDA regionalized Uruguay and concluded the risk of FMD was
limited to only one region in Uruguay, USDA was
forced to abandon regionalization through an
emergency action in response to new, widespread
FMD outbreaks throughout Uruguay.
• About two months after USDA regionalized the Republic of South Africa and concluded
that the country’s outbreak of FMD was “well
controlled,” USDA was forced to abandon regionalization through an emergency action in response
to widespread FMD outbreaks in the Republic of
South Africa.
• Less than a month after USDA declared
South Korea free of FMD, and after USDA concluded the country had everything in place to
maintain South Korea as free of FMD, USDA was
forced to abandon its effort to lift FMD restrictions for South Korea due to numerous new outbreaks of FMD in South Korea.
• Nine years after APHIS declared Japan
free of FMD, APHIS was forced to take emergency action to ban beef imports from Japan due
to numerous outbreaks of FMD that began in that
country in April 2010.
Based on the foregoing examples, the
USDA is playing a highly risky game with the
health of the U.S. cattle herd and unless the
agency’s regionalization policy is reversed, that
game is likely to result in an inadvertent, though
avoidable, introduction of a foreign animal disease.