The domestic U.S. beef industry is operating at the whim of many global factors, whether stemming from our northern neighbors or trading partners across the globe. Despite recent setbacks with the marketing of U.S. beef around the world, opportunities exist today for U.S. cattle producers to capitalize on recent positive market signals, if producers and industry members will take the necessary steps.

Beef industry leaders from the U.S. and Canada discussed the state of the industry with members of the Iowa Cattlemen’s Association during a joint Beef Products and Cattle Production Committee meeting at the ICA winter conference, Dec. 8, in Des Moines.

In addition to the situation surrounding the re-opening of the Japanese border to U.S. beef, trade agreements and regulations with nations ranging from Saudi Arabia to Canada are all factoring into the business of producing beef in the U.S.

Coming just days before the Japanese border opened after a Japanese Food Safety Commission committee ruled that U.S. beef is as safe as its own, that market’s re-opening and its effects on U.S. cattle producers was front and center among topics addressed as Mike John, National Cattlemen’s Beef Association president-elect, visited with ICA members.

“Although it’s taken way too long, we’re thankful to be getting beef into Japan. We’re working with the U.S. Trade Representatives to get Japan to follow a science-based approach. We will move forward with Korea, and obviously opening the Japanese border will help that happen,” John said Dec. 8. “The bad news is we have to jump through some specific hoops to do so.”

Asian beef market re-entry

Opening the Japanese market, while a monumental accomplishment after the politically driven process leading up to the announcement, will definitely improve market conditions domestically, but don’t expect the change to be immediate. According to Jamie Willrett, Illinois cattleman and chairman of the NCBA Foreign Trade Committee, the process of getting U.S. beef will take some time, and once it’s there, there is no guarantee it will be 100-percent accepted. Consequently, the reflection of the border opening in the domestic beef market is unknown.

“It will take 17 to 21 days to get there. That’s the time it will take to hit the shelves, and they will want a guaranteed supply,” Willrett said. “What value Japan’s consumers are willing to place on U.S. beef products will determine how much value comes down the chain to producers.”

The resumption of beef trade with Japan, as John said, should help move along negotiations with other trading partners that shut off their importation of U.S. beef after a case of bovine spongiform encephalopathy was discovered in Washington state two years ago. Progress should beget more progress, Willrett said, not only with existing markets but the development of new ones.

“Korea is not moving as fast as we would like, but all the news is generally positive. We certainly anticipate a first-quarter re-opening there as well,” he said. “Maintaining existing markets is a top priority, but opening new markets is also a priority. Progress is being made. There’s the desire out there in the EU to change phytosanitary regulations to allow more importation of U.S. beef. The European Union could become the second largest market for U.S. beef.”

North, Central American trade issues

Meanwhile, a hemisphere away from Japan and Korea, North and Central American trade relations will also weigh upon the U.S. beef industry in the coming year.

First and foremost will be an agreement to open the door to more live cattle to cross the Canadian border into the U.S., Willrett said. Primarily, the U.S. Department of Agriculture will be working on a rule to allow cattle over the age of 30 months to be imported into the U.S. from Canada. The “over-30” rule will be ready for implementation sometime within the next year.

“This is not a food safety issue,” Willrett said. “We see that it’s been a process of bad science and knee-jerk reactions.”

Passage of the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) was strongly supported by NCBA, and Willrett said keeping trading partners true to the agreement will be a challenge, but will be undertaken in the next year.

“CAFTA dictates zero tariffs in any free trade agreement. That’s why CAFTA was so important, and why we supported it so strongly,” he said. “Any ‘phytosanitary regulations’ used to keep product out will have to go down.”

Animal ID system progress

In terms of ensuring access to global markets for U.S. beef, one factor in the coming year will be the progression of the national animal identification system. During the two-day ICA winter conference, producer-members had the opportunity to sign up for premise ID numbers. The issue of fostering the establishment of an ID system, at least among Iowa producers, is a top priority. As such, a general resolution expressing ICA’s support of a national animal ID system from 2005 was approved for continuation through 2006 policy.

“Whereas national animal identification is important to insure beef safety and traceability of the nation’s beef, and whereas the Iowa Cattlemen’s Association has been an industry leader in animal identification, therefore be it resolved that the Iowa Cattlemen’s Association support a standardized and mandatory national cattle ID system,” according to the ICA policy handbook.

More and more Iowa cattle producers are beginning to sign up for premise numbers. Yet a logjam is being created, not by producers’ actions, but the lack of government preparedness for handling premise number applications, according to Scott Heater, Wapello County cattle producer and ICA district vice president. Heater applied for his 15-digit premise ID last September, but has yet to receive registration confirmation from the U.S. Department of Agriculture. In order for all animals to be identified by the current January 2008 deadline for the system’s implementation, now is the time to become part of the system.

“We really need to get some action on this ID issue. We can’t continue talking about it,” Heater said Dec. 9. “We have this rule that will make it mandatory in January of 2008, and we need to realize calves being born now will be marketed around then. So, we need to be getting premise ID numbers now.”

John, NCBA president-elect, said regardless of whether the ID system is in place and fully functional by the deadline, the issue isn’t one of adhering to a policy calendar. Rather, it boils down to an issue of food safety. This underscores the necessity to get premise ID numbers early.

“The bottom line is if we have a hoof-and-mouth disease outbreak, we’d better be able to trace it to somebody,” John said. “I see no reason not to get an ID number. There could be a TB outbreak in Missouri, or something like that, and 60,000 people might all try to get premise IDs at the same time. That would crash the system.”

For producers who may be scared away from the task of obtaining a premise ID on a basis of cost, John said the fact the private sector will be responsible for managing the data will make it as cost-efficient a system possible.

“There is a commitment by the industry to keep the cost below 25 cents per head. That is a realistic number,” he said. “The best part, with private industry managing the system, is the cost will be as low as possible because there will be competition.”

Jeff Caldwell can be reached by phone at 515-280-5405 or by e-mail at jcaldwell@mchsi.com. For more information on the Iowa Cattlemen’s Association, call 515-296-2266 or go online to www.iacattlemen.org.