January 31, 2007

 

Ethanol, trade policies seen topping debate list of US cattle convention

 

 

As members of the US National Cattlemen's Beef Association (NCBA) gather this week in Nashville, Tennessee, for their 2007 annual convention, policies concerning ethanol and trade are likely to top the list of debate topics, an NCBA official said.

 

Joe Schuele, association director of trade media, did not say which policy would top the list of importance for cattle producers attending the conclave. It's also difficult to predict what kind of policy might emerge.

 

However, as the US ethanol industry grows, its demand for corn rises proportionately, and the cost to cattle feeders rises. March Chicago Board of Trade corn prices closed Wednesday at US$4.00 a bushel, up from US$2.55 1/2 on Sep 15, but off the Jan 18 high close of US$4.12 1/4.

 

Some state affiliates feel incentives that funnel corn into ethanol production have gone overboard or at least are out of date, Schuele said. There are concerns that there isn't enough value being placed on other uses of corn such as feed for livestock.

 

Beef trade issues also are expected to be a major issue with convention attendees, Schuele said. Frustration over South Korea's policies of zero tolerance for bone chips in shipments of boneless beef has been an effective trade barrier since the border was opened officially Sep 8.

 

South Korea banned US beef in December 2003 when the US found its first case of bovine spongiform encephalopathy, or mad cow disease.

 

All US beef shipments to South Korea have been rejected because of minute chips or cartilage fragments, and one later was confirmed to have had dioxin residues as well. It has become apparent to many cattle producers that South Korea has no intention of allowing US beef to enter the country, Schuele said.

 

US government negotiators currently are trying to hammer out a comprehensive free-trade agreement with South Korea. But without an agreement on US beef that would allow some level of trade, the issue doesn't seem to have a lot of traction in Congress, Schuele said.

 

There likely will be little to recommend a free-trade agreement with South Korea to NCBA convention attendees without an agreement on US beef, Schuele said.

 

Other trade issues will also garner the attention of delegates.

 

The USDA's Food Safety and Inspection Service currently is accepting comments about a proposed rule that would open US borders to cattle that are older than 30 months of age from countries that are deemed to be at minimal risk for BSE. This proposed policy already has sparked debate in cattle country as producers raise concerns about its implications for US beef trade or US herd health.

 

For most NCBA members, the concern isn't so much that expanded trade would create any herd health or food safety problems, Schuele said. But some are concerned whether other countries are abiding by similar fair-trade principles or whether other trade partners will accept expanded trade if the US allows older cattle, which are thought to have a greater risk of having BSE.