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98–459 PDF 2005

S. HRG. 109–040

EXAMINING THE EFFECTS OF BOVINE

SPONGIFORM ENCEPHALOPATHY (BSE) ON U.S.

IMPORTS AND EXPORTS OF CATTLE AND BEEF

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

FEBRUARY 3, 2005

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry

(

Available via the World Wide Web: http://www.agriculture.senate.gov 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

SAXBY CHAMBLISS, Georgia, Chairman 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

JAMES M. TALENT, Missouri 

CRAIG THOMAS, Wyoming 

RICK SANTORUM, Pennsylvania 

NORM COLEMAN, Minnesota 

MICHEAL D. CRAPO, Idaho 

CHARLES E. GRASSLEY, Iowa 

TOM HARKIN, Iowa 

PATRICK J. LEAHY, Vermont 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

BLANCHE L. LINCOLN, Arkansas 

DEBBIE A. STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

MARK DAYTON, Minnesota 

KEN SALAZAR, Colorado

MARTHA SCOTT POINDEXTER, Majority Staff Director 

DAVID L. JOHNSON, Majority Chief Counsel 

LANCE KOTSCHWAR, Majority General Counsel 

ROBERT E. STURM, Chief Clerk 

MARK HALVERSON, Minority Staff Director 

(II) 

(III)

C O N T E N T S 

Page

HEARING(S):

Examining the Effects of Bovine Spongiform Encephalopathy (BSE) on U.S. 

Imports and Exports of Cattle and Beef ............................................................ 01

Thursday, February 3, 2005

STATEMENTS PRESENTED BY SENATORS 

Chambliss, Hon. Saxby, a U.S. Senator from Georgia, Chairman, Committee 

on Agriculture, Nutrition, and Forestry ............................................................. 01

Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member, Committee 

on Agriculture, Nutrition, and Forestry ............................................................. 02

Coleman, Hon. Norm, a U.S. Senator from Minnesota ........................................ 08

Crapo, Hon. Mike, a U.S. Senator from Idaho ...................................................... 07

Dayton, Hon. Mark, a U.S. Senator from Minnesota ........................................... 06

Lincoln, Hon. Blanche, a U.S. Senator from Arkansas ........................................ 36

Lugar, Hon. Richard, a U.S. Senator from Indiana .............................................. 04

Nelson, Hon. E. Benjamin, a U.S. Senator from Nebraska .................................. 05

Roberts, Hon. Pat, a U.S. Senator from Kansas ................................................... 06

Salazar, Hon. Ken, a U.S. Senator from Colorado ................................................ 32

Talent, Hon. James, a U.S. Senator from Missouri .............................................. 29

Thomas, Hon. Craig, a U.S. Senator from Wyoming ............................................ 06

WITNESSES 

Johanns, Hon. Michael, Secretary, United States Department of Agriculture, 

Washington, DC, accompanied by Keith Collins, USDA Chief Economist; 

and Ron DeHaven, D.V.M., Administrator, USDA Animal and Plant Health 

Inspection Service ................................................................................................ 09

APPENDIX 

PREPARED STATEMENTS: 

Harkin, Hon. Tom ............................................................................................ 42

Allard, Hon. Wayne .......................................................................................... 72

Burns, Hon. Conrad ......................................................................................... 75

Cantwell, Hon. Maria ....................................................................................... 76

Craig, Hon. Larry ............................................................................................. 79

Crapo, Hon. Mike ............................................................................................. 50

Johanns, Hon. Michael ..................................................................................... 57

Lincoln, Hon. Blanche ...................................................................................... 53

Lugar, Hon. Richard ......................................................................................... 43

Salazar, Hon. Ken ............................................................................................ 55

Thomas, Hon. Craig ......................................................................................... 51

DOCUMENT(S) SUBMITTED FOR THE RECORD: 

Baucus, Hon. Max ............................................................................................ 88

Cochran, Hon. Thad ......................................................................................... 90

Donald, Bill ....................................................................................................... 92

Santorum, Hon. Rick ........................................................................................ 84

Stabenow, Hon. Debbie .................................................................................... 86

Page

IV

QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD: 

Chambliss, Hon. Saxby .................................................................................... 96

Harkin, Hon. Tom ............................................................................................ 97

Baucus, Hon. Max ............................................................................................ 130

Coleman, Hon. Norm ........................................................................................ 120

Conrad, Hon. Kent ........................................................................................... 132

Crapo, Hon. Mike ............................................................................................. 116

Lincoln, Hon. Blanche ...................................................................................... 128

Salazar, Hon. Ken ............................................................................................ 124

Santorum, Hon. Rick ........................................................................................ 141

Stabenow, Hon. Debbie .................................................................................... 144

Thomas, Hon. Craig ......................................................................................... 110

(1)

EXAMINING THE EFFECTS OF BOVINE 

SPONGIFORM ENCEPHALOPATHY (BSE) ON 

U.S. IMPORTS AND EXPORTS OF CATTLE 

AND BEEF 

THURSDAY, FEBRUARY 3, 2005, 

U.S. SENATE,, 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY,, 

Washington, DC. 

The Committee met, pursuant to notice, at 11:02 a.m., in room 

SD–226, Dirksen Senate Office Building, Hon. Saxby Chambliss, 

[Chairman of the Committee], presiding. 

Present or submitting a statement: Senators Chambliss, Lugar, 

Roberts, Talent, Thomas, Coleman, Crapo, Harkin, Lincoln, Nelson, 

Dayton, and Salazar. 

STATEMENT OF SAXBY CHAMBLISS, A U.S. SENATOR FROM 

GEORGIA, CHAIRMAN, COMMITTEE ON AGRICULTURE,

NUTRITION, AND FORESTRY 

The CHAIRMAN. The Committee will come to order. 

The purpose of the Senate Committee on Agriculture, Nutrition, 

and Forestry’s hearing today is to hear testimony regarding the impacts of bovine spongiform encephalopathy, BSE—that is the last 

time you are going to hear anything other than ‘‘BSE’’ because I 

do not think we can pronounce it again; I know Senator Roberts 

cannot, so we do not want to give him a chance—on trade and cattle and beef products in North America as well as the rest of the 

world. 

We are honored to have the Honorable Mike Johanns, our new 

Secretary of Agriculture, here to testify today. It was less than a 

month ago that this committee held a hearing on the confirmation 

of this Secretary and favorably reported his nomination to the full 

Senate. Mr. Secretary, we welcome you back today. We are pleased 

to have the Secretary here and look forward to his testimony on 

this important matter. 

I cannot emphasize enough how important this complex issue is 

to our livestock industry. I would like to briefly mention three 

issues that I believe are involved with this situation. 

First is jobs. Having the border closed with Canada for the past 

year has already cost our country job losses in slaughtering facilities in Iowa, Nebraska, Ohio, Mississippi, and Idaho. If the border 

continues to remain closed for too much longer, we will be seeing 

many more permanent job losses in other States, including my 

State and probably at least a dozen more. Many of these jobs have 

2

moved to Canada. More will likely follow if a satisfactory resolution 

cannot be reached soon. 

Second is export demand. Having our export markets in Japan 

and elsewhere closed to U.S. beef will certainly have a negative impact on our market here in the U.S. Japan was importing over $1 

billion worth of U.S. beef annually prior to our first domestic case 

of BSE. Having trade resume with Japan is critical to the longterm economic success of our beef producers and processors. 

Last is sound science. It has never been more important to use 

sound science to guide decision-making. As we have learned all too 

often, when countries stray from sound science as a basis for making decisions that affect trade, we end up with arbitrary, artificial 

barriers that are even harder to overcome. Many countries have 

used bogus claims to prevent U.S. poultry products from being imported. Usually it is done under the guise of protecting their domestic poultry supply or protecting consumer food safety. It ends 

up being an artificial barrier to trade, usually designed to protect 

a domestic producer group from our exports. 

We have to be very careful about having legitimate and sound 

science as the foundation for all the decisions in this area if we 

want to be credible regarding our commitment to sound science in 

the international trade world. 

Before I recognize my Ranking Member, my friend Senator Harkin, for his comments, I would like to add one other thing. While 

we hope today’s hearing will be as comprehensive and as helpful 

as possible, I do not expect Secretary Johanns to be able to answer 

every question about every issue, because I know there are some 

issues that are not quite ripe enough for final answers today. 

For instance, the U.S. Government Accountability Office will 

soon be completing its follow-up review of the FDA’s feed ban implementation. The FDA itself has a pending rule-making on to 

these matters. USDA’s Office of Inspector General will be releasing 

a report later this month pertaining to some of USDA’s administrative actions with respect to beef imports. Currently, two lawsuits 

are pending against USDA regarding this situation. I only mention 

these to show that I see a need for this committee to probably have 

a subsequent hearing or briefings on some of these matters as they 

become timely. 

At this time I will turn to my friend Senator Harkin for any comments he has to make, followed by any statements that other members wish to make at this time. Senator Harkin. 

STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM 

IOWA, RANKING MEMBER, COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

Senator HARKIN. Thank you very much, Mr. Chairman, for calling this hearing. I again welcome the new Secretary and congratulations again on your speedy confirmation here and your swearingin by the President. We certainly are delighted that you are here 

today to talk about this very important issue. 

As you know—and I will get into this in the questions—Mr. Secretary, a number of us sent you a letter the other day about this 

because this is a big concern, of course, in my State and, as the 

chairman has said, all over the country. We need to review this 

3

final rule that is supposed to be effective March the 7th defining 

BSE minimal risk region and that would allow live cattle and expanded beef trade with Canada. 

This minimal risk rule raises questions not just about expanding 

beef and cattle trade with Canada. There are also questions about 

the effectiveness of anti-BSE measures in the U.S. and Canada, 

and also broader U.S. efforts on our two-way trade, as the chairman mentioned, especially with Japan and South Korea. 

I guess what bothers me is that the USDA—and you speak about 

it in your prepared statement, Mr. Secretary, about using sound 

science as the basis for making decisions. We all agree on that. 

USDA says it is relying on OIE guidelines for defining what is 

minimal risk. The rule ignores OIE standards in key respects. 

My question is: Is the Department saying that OIE is not science 

based? I would like to know what this Department is saying about 

that. If we are going to rely on science and if we want to be in a 

global trading environment, it seems to me that the O.I.E are the 

recognized world reference body. What I see is that we are backing 

down from their recommendations in this proposed final rule. 

We need to reconsider adopting the OIE guidelines fully unless 

you can show us that they are not science based; and that we ought 

to work with our major trading partners using these guidelines as 

a reference to have a comprehensive common framework for deciding whether a country has minimal risk standards. 

Some of us also believe that we should maintain the ban on beef 

from cattle over 30 months of age, and we are also calling to delay 

the March 7th effective date until these concerns are addressed. It 

just seems, finally, that USDA departures from the OIE guidelines 

seem very likely to complicate our goal—our goal of restoring trade 

with Canada. They are our friends, our neighbors, our allies. We 

love Canadians. They have just got to get their house in order. Second, it complicates our efforts to develop this common framework 

with other trading partners around the world to establish true 

minimal risk status. 

These are the areas that I will be covering with you, Mr. Secretary, in the question-and-answer period when we get to it. Again, 

I compliment you. Thank you for being here today. I know this is 

a tough issue, but it is one that concerns the health and safety of 

our people, and it concerns our international relations in terms of 

export markets, too. 

Thank you, Mr. Secretary. Thank you, Mr. Chairman. 

[The prepared statement of Senator Harkin can be found in the 

appendix on page 42.] 

The CHAIRMAN. Thank you, Senator Harkin. 

At this time I will open it up to any statements that any of our 

committee members wish to make, but before doing so, let me say 

that we have had a number of requests from other members of the 

Senate, not members of the committee, to testify today or submit 

testimony, and we are going to accept written testimony today from 

a number of other Senators. Senator Harkin and I will make a 

joint decision later on with respect to future hearings as to whether 

Senators will be allowed to come testify or whether we are just 

simply going to ask for written testimony from members. 

4

At this time I will turn to Senator Lugar for any comments he 

might want to make. 

STATEMENT OF HON. RICHARD G. LUGAR, A U.S. SENATOR 

FROM INDIANA 

Senator LUGAR. Thank you very much, Mr. Chairman, and thank 

you for this hearing on BSE. Thanks to the Secretary for your appearance. 

The proposed opening of the Canadian border on March 7th has 

fueled much debate in the United States cattle industry and, likewise, concerns have been raised regarding our ongoing inability to 

export beef to Japan. I am interested in learning more today about 

how these situations may cause negative, long-term changes in our 

agricultural infrastructure markets and the security of our food 

supply. 

Because the United States is the world’s foremost economic 

power and the country with the most open markets, trade agreements that open other markets to our goods are very much to our 

advantage. That is why with respect to BSE it is both important 

to resume beef trade with partners we typically export to, like 

Japan, while also abiding by those same standards and resuming 

trade with the country that typically exports to us, Canada. For the 

United States economy to grow, we cannot passively depend on 

selling only to our domestic markets, which is essentially the precedent we will create by prohibiting trade through non-scientifically 

based protections. 

Ninety-seven percent of the world’s population and 67 percent of 

the world’s purchasing power is located outside the United States. 

We must compete aggressively in the growing world economy, and 

we must not surrender our trade advantage in our own hemisphere 

by allowing industry to shift by employing protectionist measures. 

I am keenly aware that many cattle producers are fearful that a 

large number of Canadian cattle will flood domestic markets, severely diminishing returns on their own animals. I believe USDA 

originally predicted that nearly 2 million cattle may become available to our market should the ban be lifted. Others have suggested 

these numbers are incorrect and that the number is more likely to 

be in the range of 900,000 animals. 

Regardless, it is very important that this committee understand 

what may happen to our own markets when the Canadian border 

is open and work to mitigate any severe market fluctuations that 

could occur. However, I do not hold the belief that we should maintain a closed border based primarily on the interest of stimulating 

market prices, while as a Nation we are strongly advocating the acceptance of many of our agricultural products elsewhere based on 

scientific standards. To abandon that approach in this situation severely undermines our position across the board. 

I am also aware of the food safety concerns associated with resuming cattle and beef trade with Canada, and I am hopeful that 

the hearing today will address the issue and apprise the committee 

what the USDA will do to ensure the public safety. The security 

of our food supply is of the utmost importance, and our trade agreements must ensure that our food supply remains the safest in the 

world. 

5

In addition, I hope the committee is able to ascertain what is 

happening to our domestic cattle infrastructure as a result of our 

closed Canadian border and inability to export meat to Japan. I 

have great concern that by not resuming cattle trade with Canada 

we are shifting our processing capacity to that nation. I am concerned that while the U.S. beef industry is closed out of Japan, 

other nations will begin to supplant us as a high-quality beef provider. 

There are many challenges facing this committee concerning the 

issue of BSE. I look forward to working with all members of the 

committee to ensure a vibrant domestic cattle industry and a safe 

food supply for our citizens. 

I thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

[The prepared statement of Senator Lugar can be found in the 

appendix on page 43.] 

Senator Nelson. 

STATEMENT OF HON. E. BENJAMIN NELSON, A U.S. SENATOR 

FROM NEBRASKA 

Senator NELSON. Thank you, Mr. Chairman. Mr. Secretary, welcome to the committee once again. I appreciate very much your diving into the most difficult issues early on, and thank you for your 

commitment. 

You will learn, as you testify before this committee and other opportunities that will be there, that no matter how many times it 

has been said before, if I have not said it, it probably has not been 

said. A little bit of repetition will occur in spite of our efforts to be 

brief and original. 

You have already heard the nontariff trade barriers that are 

being suggested and how we need to deal with those. The chairman 

has alluded to chicken wars and other kinds of trade challenges 

that we face. What we need to do here is focus, as I know you are, 

on sound science, but we also must be mindful of the trade implications of reopening the market to live cattle from Canada. 

You are also aware of the inconsistency that is impacting the 

U.S. beef industry by permitting boxed beef or processed beef to 

come from Canada as imports. We have a terrible inconsistency 

there that has caused many producers and processors to say it is 

either open to both or how can you have it open to one and not the 

other if it is sound science that we are concerned about and legitimizing some of the questions that have been raised about the Canadian processing as it relates to feeding their live cattle. 

You are faced with dealing with exports, a trade issue. You are 

faced with food safety, sound science, and at the same time some 

consistency as it relates to the American market. Those are all 

challenges. I know that you are anxious to get to your statement, 

and we will not further delay that. Thank you for your commitment. 

The CHAIRMAN. Thank you, Senator Nelson. 

Senator Roberts, would you hit your button there, please? 

6

STATEMENT OF HON. PAT ROBERTS, A U.S. SENATOR FROM 

KANSAS 

Senator ROBERTS. Mr. Chairman, is it your desire that we go 

under the 5–minute rule? Then obviously go in the order of appearance. Would there be a second round? I have ten questions. I am 

not going to ask ten questions. I will submit six for the record. 

There will be four questions. Rather than making an opening statement, I would rather reserve my time for those questions. Could 

you provide that information as to a possible second round? 

The CHAIRMAN. Mr. Secretary, are you under a time constraint? 

Secretary JOHANNS. I am not, other than this afternoon, at 3:30, 

I fly to San Antonio to be with the cattlemen tomorrow. 

Senator ROBERTS. I can assure the Secretary that my questions 

are not going to last to the degree that it would interfere with your 

plane, unless, of course, your answers would be that long. I do not 

anticipate that. 

The CHAIRMAN. My reason for the question is that since this is 

such a sensitive issue, I want to give every member of the committee a full opportunity to ask all their questions. 

Senator ROBERTS. We will be operating under the 5-minute rule, 

or 6 or 8 or what? 

The CHAIRMAN. The 5-minute rule with as many rounds as it 

takes to get all your questions in. 

Senator ROBERTS. The only other observation I would say is, Mr. 

Secretary, you have two excellent shotgun riders to your right and 

left, and Dr. Collins and Dr. DeHaven do an excellent job. 

The CHAIRMAN. Senator Dayton. 

STATEMENT OF HON. MARK DAYTON, A U.S. SENATOR FROM 

MINNESOTA 

Senator DAYTON. Thank you, Mr. Chairman. 

Mr. Secretary, this, as the record should show, is not a policy of 

your creation, but you have inherited it. It continues the very unfortunate pattern in U.S. trade policies of harming American businesses and workers and shifting production and jobs to other countries. This policy that has been proposed creates a dream world for 

Canadian producers and processors and nightmares for American 

cattle producers, processors, and the workers in those industries. It 

is no wonder then that they are increasingly cynical toward and 

distrustful of their government. Today it is imperative, and we still 

have the opportunity, to put this Federal Government policy back 

on the side of Americans rather than foreigners. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Thomas. 

STATEMENT OF HON. CRAIG THOMAS, A U.S. SENATOR FROM 

WYOMING 

Senator THOMAS. Thank you, Mr. Chairman. Obviously, I do not 

have much new to say, but I simply want to reinforce what has 

been said here, that the safety of our food, of course, is our biggest 

concern, and we are all concerned about that. We have some of the 

best and safest in the world, of course, and we want to keep it that 

way. 

7

We are very concerned about the rule and what will happen to 

it in the future. Senator Burns and I, and Senator Thune, are 

going to introduce a bill this afternoon that would have some impact on it, as a matter of fact, and would not allow the beef over 

30 months of age to come over and so on. That will be something 

we will have to all work at together. 

I guess one of the real issues is to make a determination on the 

Canadian compliance with ruminant feed and the BSE safety 

measures and so on. This obviously in our industry is one of the 

most important things that we have to deal with. You understand 

that. I hope that, if nothing else, we can take a long look at the 

present regulation and hopefully to get some expansion of time or 

eliminate it, one or the other. Thank you for being here, and we 

will be talking with you about it. 

[The prepared statement of Senator Thomas can be found in the 

appendix on page 51.] 

The CHAIRMAN. Senator Crapo. 

STATEMENT OF HON. MIKE CRAPO, A U.S. SENATOR FROM 

IDAHO 

Senator CRAPO. Thank you, Mr. Chairman, Senator Harkin, and 

thank you, Secretary Johanns, as well as Dr. Collins and Dr. 

DeHaven, for being here with us today. 

With the final rule to reopen the U.S. border to live cattle trade 

in Canada due to go into effect March 7th, this is an opportune 

time for us to discuss the effects of the BSE issue on cattle and 

beef trade. Secretary Johanns, I know you understand the importance of this issue to the cattle producers, processors, and the communities that we represent, and I look forward to the discussion 

today. 

There have been many challenges in dealing with the unfortunate discoveries of BSE, and one very critical challenge has been 

with regaining our foreign markets. I commend you for the efforts 

that you have already put forward during your short time as Secretary of Agriculture to regain our export markets, and I was 

pleased to see that you asked the Japanese Government to set a 

date for the resumption of U.S. beef trade. Frankly, the Japanese 

trade issue is directly related to the Canadian trade issue that we 

are dealing with here, and I would appreciate all of the strong effort and aggressive push you can make to make sure that we resume Japanese trade. We all hope that date comes swiftly, and 

ideally before March 7th. 

Due to Idaho’s geographic location, Idahoans have benefited 

greatly from trade with the Pacific Rim countries, and prolonged 

closure of the Asian market hurts the Idaho producers and our 

economy. Many are looking to you to continue to push to get our 

markets open, and I look forward to the day when the U.S. can 

once again ship our beef products to these markets. 

Additionally, the continued absence of our key export markets 

has contributed to the suspension of domestic beef processing operations in the United States, including processing here in Idaho. I 

understand the chairman mentioned that. I am holding a press release right now from Tyson indicating that they are continuing the 

closure of their operations in our area. 

8

This is very concerning because it not only results in a loss of 

jobs and revenue for our economy, but it also decreases the processing options for cattle producers. This results in cattle producers 

being forced to ship greater distances, driving up production costs. 

Far too many American companies and cattle producers are suffering similar problems, and I have concerns and questions about 

an aspect of the rule that I feel could make this problem worse. 

Senator Thomas has just referred to it. Specifically, I am concerned 

with the portion of the rule that provides for the import of beef 

over 30 months of age, even though cattle over 30 months of age 

will not be allowed to be imported. 

It is inconsistent to ban cattle over 30 months of age while allowing in boxed beef over 30 months of age. When the U.S. border was 

open for the importation of beef products under 30 months of age 

but not cattle to be processed at U.S. plants, a vast opportunity 

was created for Canada to increase their beef processing capacity 

for export of beef products to the United States. Canada seized this 

opportunity and reportedly increased their processing capacity by 

20 to 30 percent. U.S. cattle producers and our economy are impacted as domestic processing capabilities are squeezed and shifted 

above the border. This problem is poised to be expanded upon 

through broadening the scope of products to be imported from cows 

that are banned from importation. I would note—I doubt that you 

have seen it yet, but the entire Idaho delegation has sent you a letter today expressing these concerns and expressing our hope to 

work with you on correcting this and some other aspects of this 

rule. 

I have further questions regarding this matter that I will raise 

during the questioning portion of the hearing. Again, I welcome 

you here today and look forward to the discussion. 

Thank you, Mr. Chairman. 

[The prepared statement of Senator Crapo can be found in the 

appendix on page 50.] 

The CHAIRMAN. Senator Coleman, we are departing from normal 

procedure and giving all members an opportunity for an opening 

statement, if you would like to make any comments, you may do 

so at this time. 

STATEMENT OF HON. NORM COLEMAN, A U.S. SENATOR FROM 

MINNESOTA 

Senator COLEMAN. Thank you, Mr. Chairman, just briefly. 

First, it is a great pleasure to have the Secretary before us, and 

I know he is working hard already. 

I am going to start by associating myself with the comments of 

my colleague from Idaho, Senator Crapo, both in regard to the concerns about Japanese trade and simply getting the market open 

and saying that I—and I share his belief that this issue of opening 

the market to Canada is in a way tied to what we have to do with 

the Japanese. Each and every day that the market is closed to a 

place like Japan and South Korea, what happens is we have a huge 

competitor like Australia, and they are not sitting back, and they 

are the main beneficiary, and they are grabbing an even larger 

share of the world market. It is going to fight to keep that. 

9

Even if we get this done—and every day that we lose is a day 

that hurts our producers—we are going to have a battle. We are 

going to have to work like heck to regain what we lost, and it is 

going to be tough. 

I associate myself with the comments of my colleague from 

Idaho. This may be when we have just got to get it done. Maybe 

the President personally has to get involved. We have to get this 

done. 

I also associate myself with the concerns raised about importations of beef over 30 months old while banning cattle. I would 

hope—and I will follow this up during my question period. You 

know, have we analyzed this? Have we looked at the economic impact that this has? What is your assessment, Mr. Secretary? We 

need to understand that. 

There are a number of concerns. I am someone who believes in 

trade. I am someone who believes that we have to in the end rely 

on sound science. That is what this is about, sound science. I want 

the folks who are part of our export opportunities to operate that 

way and we have to operate that way. That is critical. We have to 

get these markets open, and we have to get them open soon. 

I look forward to your testimony. Thank you, Mr. Secretary. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Mr. Secretary, again, we welcome you, and as with Senator Roberts, we recognize you have two of our long-time experts in their 

respective areas with you. Dr. Collins and Dr. DeHaven, we appreciate you being here in support of the Secretary. 

Mr. Secretary, we will turn it over to you, and we look forward 

to your comments. 

STATEMENT OF HON. MICHAEL JOHANNS, SECRETARY, 

UNITED STATES DEPARTMENT OF AGRICULTURE,

ACCOMPANIED BY KEITH COLLINS, CHIEF ECONOMIST, 

UNITED STATES DEPARTMENT OF AGRICULTURE; AND RON 

DeHAVEN, ADMINISTRATOR, ANIMAL & PLANT HEALTH

INSPECTION SERVICE, UNITED STATES DEPARTMENT OF 

AGRICULTURE 

Secretary JOHANNS. Chairman Chambliss, Senator Harkin, members of the committee, thank you for holding this very important 

hearing today, and thank you for giving me the opportunity to testify. As has been noted, accompanying me today are Dr. Keith Collins, USDA’s Chief Economist; Dr. Ron DeHaven, the Administrator of USDA’s Animal & Plant Health Inspection Service. I will 

be calling on them for help in working through your questions. I 

do ask that my full statement be included in the record. 

Before I begin, if I might, I would like to take this opportunity 

to say thank you to all of you for your professionalism, your courtesy extended to Stephanie and me during my recent confirmation 

process. I appreciate the close, positive working relationships that 

we have begun forging, and thanks to the diligence of this committee, it was an honor and a privilege for me to be the first Cabinet member that was confirmed during President Bush’s second 

term. It is therefore a pleasure to return today for my first hearing 

as Secretary. 

10

I have said frequently that addressing BSE issues, especially as 

they relate to trade disruptions, would be my top priority as Secretary. I have also heard from this committee quite clearly on this 

topic, and I believe very strongly, that we are all on the side of 

American agriculture. The committee and your constituents have 

also posed some very useful, valid questions that deserve thorough 

examination, which I hope this hearing will provide. 

The actions that the U.S. Department of Agriculture and the 

Federal Government are taking in regard to BSE are potentially 

precedent-setting and could affect international trade patterns for 

years to come with important economic implications for our cattle 

producers in the entire beef industry. Therefore our actions must 

be taken with the utmost deliberation, using science as the basis. 

In the absence of that science, sanitary and phytosanitary or SPS 

restrictions will be used arbitrarily by many nations without any 

basis of protecting human or animal health. Accordingly, this hearing could not be more timely. 

I want to be very clear that while protecting human and animal 

health must remain our top priorities, I am confident that we can 

seek to return to normal patterns of international commerce by 

continuing to use science as the basis for decision-making by U.S. 

regulatory authorities and our trading partners. 

Almost exactly a year ago, Secretary Veneman appeared before 

this committee to discuss BSE. In the time since then much has 

transpired. A scientific international review team was convened to 

review our response to BSE. A greatly enhanced surveillance program was designed and established. Our laboratory infrastructure 

was greatly expanded. A minimal risk rule aligning the U.S. with 

international standards was proposed and finalized. 

Let me briefly discuss USDA’s enhanced surveillance program, 

which began June 1, 2004. Our goal is to test as many high-risk 

cattle as possible in 12 to 18 months. The plan was reviewed by 

an international scientific review team which characterized it, and 

I am quoting here, ‘‘comprehensive, scientifically based and 

address[ing] the most important points regarding BSE surveillance 

in animals.’’

If we test 268,500 animals we will be able to detect the presence 

of as few as five targeted, high-risk cattle with BSE at a 99 percent 

confidence level. To date, some 8 months later, more than 200,000 

animals have been tested, all of which have been negative. 

The role of producers, renderers and others in helping obtain 

samples of high-risk animals has been indispensable to the success 

of the surveillance program. I might mention the cooperation we 

have received has been outstanding. Although additional positive 

may be found, the results so far are promising. 

On December 29, 2004, USDA announced the final minimal-risk 

rule, which designated Canada as the first minimal-risk region for 

BSE, and which will become effective, as you have noted, on March 

7, 2005. This rule is an important step in aligning U.S. policy with 

international standards. 

On January 2, 2005, Canada confirmed its second domestic case 

of BSE in a cow that was born in October 1996, the first since May 

20th of 2003. It was followed 9 days later by a third case, an 81–

month-old cow. 

11

On January 24, 2005, USDA dispatched a technical team to Canada. We sent the team to investigate the efficacy of Canada’s ruminant to ruminant feed ban because the animal was born shortly 

after the implementation of the ban, and to determine if there are 

any potential links among the positive animals. We have appreciated Canada’s cooperation and their willingness to assist in these 

efforts. 

The team is composed of experts from several USDA agencies, 

APHIS, the Agricultural Marketing Services, the Foreign Agricultural Service, and advisers from the FDA. We have been receiving 

regular updates from the team. We expect an analysis on the feed 

ban issues in mid February, and results from the epidemiological 

investigation by the end of March. This information will be critical 

as we consider whether any adjustments to current policies are 

warranted. 

As you are aware, USDA’s minimal-risk rule has come under 

legal challenge. We will continue to strongly defend the promulgation of the rule, which was transparent, deliberative and sciencebased. 

The final rule establishes criteria for geographic regions to be 

recognized as presenting minimal risk of introducing BSE into the 

United States. It places Canada in the minimal-risk category and 

defines the requirements that must be met for the import of certain 

ruminants and ruminant products from Canada. A minimal-risk region can include a region in which BSE-infected animals have been 

diagnosed, but where there is sufficient risk mitigation measures 

put in place to make the introduction of BSE in the United States 

unlikely. 

Because the rule permits the import of live cattle under 30 

months of age and ruminant products from older animals, it is useful to note the risk mitigation measures. They include: proper animal identification; accompanying animal health certification that 

includes information on individual animal identification, age, origin, destination and responsible parties; the movement of the cattle 

to feedlots or slaughter facilities in sealed containers; the prohibition on cattle moving to more than one feedlot in the United 

States; and the removal of specified risk materials from cattle 

slaughtered in the United States. 

We remain confident that the combination of all of these requirements, in addition to the animal and public health measures that 

Canada has in place to prevent the spread of BSE, along with the 

extensive U.S. regulatory food safety and animal health systems, 

provides the utmost protection to U.S. consumers and to livestock. 

USDA continues to monitor Canada’s compliance with its BSE 

regulations. In addition to the investigation that I have already 

discussed, USDA’s Food Safety and Inspection Service is continuing 

to work to ensure Canada’s compliance with the BSE requirements 

in the United States. 

I am aware of concerns with the portion of USDA’s minimal-risk 

rule that would allow meat from animals over 30–months of age to 

be imported from Canada, but continue the prohibition on the importation of live animals of the same age for processing in the 

United States. Some have suggested that going forward with this 

12

new rule will change the historical beef-trading patterns in North 

America to the detriment of U.S. packers. 

As Secretary of Agriculture, I believe that the marketplace 

should determine cross-border trading patterns. We must make 

every effort to avoid policies that favor one group of packers over 

another. Decisions, however, related to sanitary and phytosanitary 

measures must be based in science. 

I can assure you that I will be reviewing this issue very carefully 

in the days ahead as we move closer to the March 7 implementation date. 

I simply cannot emphasize strongly enough the central role of 

science in the entire process, particularly with regard to the rigorous evaluation of risk. Since the discovery of the first case of BSE 

in Great Britain in 1986, we have learned a tremendous amount 

about this disease. That knowledge has greatly informed our regulatory systems and our response efforts. 

We have learned that the single most important thing we can do 

to protect human health regarding BSE is the removal of SRMs 

from the food supply. Likewise, the most significant step we can 

take to prevent the spread of BSE and bring about its eradication 

is a ruminant to ruminant feed ban. It is because of the strong systems the United States has put in place, especially these two essential firewalls, that we can be confident of the safety of our beef 

supply, in that the spread of BSE has been prevented in this Nation. 

After Canada reported its first case of BSE in May 2003, USDA 

conducted a comprehensive risk analysis to review the potential 

threat that was posed. The initial analysis followed the recommended structure of the World Organization for Animal Health, 

or OIE, an drew on findings from the Harvard-Tuskegee BSE risk 

assessment; findings from the epidemiological investigation of BSE 

in Canada; and information on Canadian BSE surveillance and 

feed ban, and history of imports of cattle and meat and bone meal 

from countries known to have BSE. 

The results of that analysis, available, I might add, on the USDA 

website, confirmed that Canada had the necessary safeguards in 

place to protect U.S. consumers and livestock against BSE. These 

mitigation measures include the removal of SRMs from the food 

chain supply, a ruminant to ruminant feed ban, a national surveillance program and import restrictions. The extensive risk assessment conducted as part of USDA’s rule-making process also took 

into careful consideration the possibility that Canada could experience additional cases of BSE. 

In the risk analysis update for the final rule, USDA also considered the additional risk protection from new slaughter procedures, 

such as the prohibition on the use of downer animals for food. 

The OIE recommends the use of risk assessment to manage 

human and animal health risks of BSE. OIE guidelines, based on 

current scientific understanding, recognize that there are different 

levels of risk in countries or regions, and suggest how trade might 

safely occur according to the levels of risk. USDA used OIE as a 

basis in developing our regulations defining Canada as a minimalrisk country. 

13

While SPS regulations protecting human and animal health are 

the foremost concern, USDA also has examined the potential economic impacts of the minimal-risk rule and related BSE trade 

issues as required by Executive Order 12866. 

The cost benefit analysis conducted as a part of the final rule indicates that U.S. beef imports from Canada are projected to actually decrease slightly in 2005, as Canada shifts its slaughter capacity to lower-yielding older cattle not eligible for export to the 

United States. At the same time, imports of fed and feeder cattle 

under 30 months are expected to increase in 2005, which is expected to drive up U.S. beef production, reduce beef prices slightly, 

and consequently, reduce cattle prices. 

The precise economic effects will depend on the timing and the 

volume of cattle and beef imports from Canada. In addition, to the 

extent that we can continue to open markets that are currently 

closed to our beef, U.S. cattle price prospects will strengthen. 

U.S. market maintenance activities have been critical in helping 

restore our beef export markets. In 2003 the total export value of 

U.S. beef and ruminant products was $7.5 billion. After December 

23rd, 2003, 64 percent of that market was immediately closed. 

Today we have recovered well over a third of that, so that 41 percent of that market or 3.1 billion remains closed. Two countries, 

Japan with 1.5 billion and Korea with 800 million, account for 

three-quarters of the existing closures. 

As a leader in the critical Asian market, Japan is a vital market 

to reopen to U.S. beef exports. We are aware that the decision to 

resume trade in this market will set an important precedent for 

trade resumption in many other markets. Therefore, we have endeavored to use science in our ongoing efforts. Efforts to reopen 

this market have drawn on resources across the Federal Government, and I might add, at the highest political levels. As I had previously said, this issue has occupied much of my first few days as 

Secretary. Just last week I met with Ambassador Kato, and also 

wrote to my counterpart, Minister Shimamura, on the importance 

of this issue. At the same time, Ambassador Baker continues to 

press this issue with Government of Japan officials in Tokyo and 

other U.S. Government officials continue to contact their counterparts. 

These efforts are just the latest in many policy discussions and 

technical exchanges over the past 13 months. Indeed, the issue has 

been a major focus of direct discussions between President Bush 

and Japanese Prime Minister Koizumi. 

While we are focusing on Japan because of our important trading 

relationship and its leadership role in the region, we are also pursuing efforts to reopen all markets that are closed to us. We are 

actively engaged with Korea, Hong Kong, Taiwan, China, Egypt 

and Russia, and have specific actions under way in each market to 

get trade resumed. I would be pleased to provide members upon request additional detail on these and other secondary markets. 

While the progress that has been made has taken far longer than 

we had hoped, progress is indeed being made. I have stated that 

USDA, and indeed the entire U.S. Government, will exert every effort to resolve the matter at the earliest possible time. 

14

As traditional trade barriers such as tariffs are lowered, our 

focus to eliminate unjustified non-tariff barriers such as nonscience-based SPS regulatory measures become all the more important to maintain the flow of mutually beneficial trade. For USDA 

a common touchstone across these issues is the need to maintain 

consistency and predictability, to base our domestic regulations on 

science, and to encourage the use of science-based solutions within 

the international community. The United States has long been a 

leader in this regard, including negotiating the World Trade Organization agreement on the application of sanitary and 

phytosanitary measures during the Uruguay Round. 

Even before the discovery of a single case of BSE in the United 

States, USDA had begun talking with other countries about the 

need for international trade standards to keep pace with the 

science, and we will redouble our efforts in this regard. 

It is also critical that domestic trade rules reflect the current 

state of knowledge regarding BSE, and here the United States is 

leading as well. We are confident that trade can be resumed with 

countries where BSE has been discovered, contingent upon strong 

protections within those countries, as well as the robust and effective regulatory system those imports are subject to when they enter 

the United States. These facts are reflected in the minimal-risk 

rule. 

At the same time we will continue to work with our trading partners to ensure the ongoing strength of their own BSE protection 

systems, especially the removal of SRMs and the implementation 

of the feed ban. While trade opportunities are multiplying in an increasingly global marketplace, we must remain mindful of our 

paramount responsibility to protect the public health and animal 

health. 

In summary, I am confident that we are continuing to keep the 

protection of public and animal health foremost in our concerns. It 

is critical that we continue to use science as a basis for our decisions and regulations, and that the United States maintain its 

leadership role in advancing our scientific understanding of these 

kinds of SPS-related issues and appropriate science-based responses. 

Mr. Chairman, thank you once again for holding this important 

hearing. I would now be pleased to take any questions you or other 

members would have. Thank you. 

The CHAIRMAN. Thank you very much, Mr. Secretary. 

In May of 2003, when the first BSE case in Canada was discovered, a decision was made by the Department to close the border. 

I assume that decision was made on the basis of sound science. 

Would you explain what the position of the Department was that 

led to that decision and what has changed since that time which 

now compels the Department to change its mind and to reopen the 

border? 

Secretary JOHANNS. Mr. Chairman, as you know, this process has 

evolved now over an extended period of time. You referenced back 

to May of 2003. We might even reference back to the situation in 

Europe. 

During that period of time since May of 2003 we have learned 

so much more in this country in terms of what this disease is all 

15

about. Think about where we have come in that period of time. We 

put in place an aggressive surveillance system. Quite honestly, 

once the system was designed, I am not entirely certain we knew 

exactly what we were going to find. We knew we had a goal in 

terms of the number of cattle. We wanted to test at least 268,500, 

but we would test more within that 12– to 18–month period of 

time. As of today we have tested about 200,000, and we have not 

found a case of BSE. 

The other thing that I would mention is that we have also understood a lot more about managing the risk involved. If you look at 

the two points I emphasized over and over in my comments, the 

removal of SRMs, the feed ban, ruminant to ruminant feed ban, we 

have come to realize that they are far and away the most effective 

things we can do in terms of dealing with this risk. 

I will also share something with you. If you read the international standards, if there is one overriding message that comes 

out of that, it is the whole idea of doing the risk assessment and 

then managing that risk, and that has been a part of this process, 

so it would be based upon science. 

Now, there are others here with me. Dr. DeHaven was here during that process when I was not, and I would invite him to offer 

a comment to your question, but I would just summarize by saying 

the Department has paid attention, they have learned a lot. They 

have also referenced the standards. They have worked through the 

risk assessment process. A tremendous amount of information is 

available today that was not available back then. 

Dr. DEHAVEN. Mr. Secretary, thank you, and you have captured 

very effectively the actions and the basis for our actions since May 

of 2003. 

I would only emphasize that at the time that the Canadians discovered their first case on May 20th, 2003, indeed, our trade policy 

was based on really two categories of countries, those affected by 

BSE and those not affected. If a country was affected as Canada 

then became on May 20th, we in essence shut off all trade. That 

trade policy was not consistent with the OIE guidelines and not 

consistent with the science that we know about, so our activities 

since then have been toward bringing our trade policies more in 

line with the science, and obviously, more in line with the international guidelines. Indeed, the fundamental of the changes that 

we’ve made is based on that risk assessment that is done consistent with the OIE chapter. 

The CHAIRMAN. Thank you. The only thing I am not clear on relative to that, has there been any change in the practice or procedure on the other side of the border between May of 2003 and 

today? 

Secretary JOHANNS. There has. As you know, we have a team up 

there which I referenced, and a lot of publicity about the team that 

is there, but over that period of time, we have continued to work 

with Canada on issues, the feed ban, SRM removal. It is fair to say 

really in lock-step they have attempted to follow within the same 

time frame the very things that we were doing on this side of the 

border. Keep in mind that the ruminant to ruminant feed ban was 

put in effect in both countries on the same day. The SRM removals 

that are now occurring are the same really on both sides of the borVerDate 0ct 09 2002 11:34 Jun 15, 2005 Jkt 098459 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\98459.TXT TOSHD PsN: TOSH
16

der, and they have been very, very willing to work with us in terms 

of making sure that what we are doing here is mirrored there on 

the Canadian side. 

The CHAIRMAN. I understand that some folks, both in the U.S. 

and elsewhere, are advocating that the United States test every 

head of cattle slaughtered for BSE as a way to resume trade with 

Japan. I also understand that even though Japan tests all animals 

destined for the human food chain, many people think that the 

U.S. surveillance system is more effective at finding BSE. Can you 

discuss the differences between our system and testing every head 

of cattle slaughtered, and please give us what your thoughts are on 

a 100 percent testing scheme? 

Secretary JOHANNS. I will just jump in in terms of where your 

question leaves off. I do not believe that science would justify 100 

percent testing scheme. Again, if you look at what the international 

standards call for, they call for risk management, and I do not see 

any basis whatsoever in science for 100 percent testing of animals. 

It is just not justified under any standard I have read, any science 

I have read. It just simply should not be a part of the requirement 

to do business in the international marketplace with beef. 

The CHAIRMAN. Thank you. 

Senator Harkin. 

Senator HARKIN. Thank you, Mr. Chairman. 

Mr. Secretary, you today and the USDA prior to your coming, 

has often cited the OIE standards as the authority on BSE. With 

all of the measures recommended by OIE, whether it be the feed 

ban, surveillance or mandatory reporting of cattle with clinical 

signs of BSE, there are two crucial factors that make them effective 

safety measures. One, the amount of time the measures have been 

in place, and second, how well those measures have been complied 

with and enforced. 

OIE standards recommends that a feed ban needs to be in place, 

and effectively enforced for 8 years to confidently ensure minimal 

risk. Canada does not meet that standard. Why have we departed 

from the OIE standards if, in fact, the OIE standards are sciencebased? That is why I said in my opening statement, are you here 

today to tell us that the OIE standards are not science-based? 

Secretary JOHANNS. No. 

Senator HARKIN. Then if they are science-based why have we departed from them? 

Secretary JOHANNS. You are right. There are two items, the time, 

there is compliance. We definitely want to pay attention to those. 

We can agree, you and I, Senator Harkin, that they are sciencebased. They are not prescriptive. The standards are such that it is 

not a ‘‘thou shalt’’ sort of approach by the standards. The essence 

of what the standards are saying is look at it from a risk-based 

standpoint, and do a very thorough risk analysis, and make sure 

you are doing everything you can to deal with the risk that is presented. If you have one case of BSE in a country, the approach may 

be vastly different than if you have hundreds of cases of BSE in 

a country. How you approach that is you are given guidance in 

these standards. 

17

Your observation is correct in terms of the feed ban. We are a 

few months short. It would be 8 years in August if I am not mistaken. 

Senator HARKIN. That is true, but however, it has to be effective. 

We checked, at least my staff did, with the Canadians, and quite 

frankly, they have had their ban in place for about 7 years, it will 

be 8 years coming up here shortly. The fact is we do not know how 

effective it has been and whether it has been in full compliance. 

For example, I am told that Canada has been in 95 percent compliance for the last 3 years. What was it for the last 4 years, 5 years, 

6 years? Was it 80 percent, 70 percent, 50 percent? What standard 

do you, does the USDA use? The OIE, I thought, was pretty clear. 

It has to be effective. What, in your mind, is effective in terms of 

percent compliance? 

Secretary JOHANNS. It truly does depend on the risk analysis, 

and that is what the OIE calls for. The steps you take to deal with 

BSE in a country are interlocking steps. It would not be fair to pull 

one step out without looking at all of the other steps. The risk protection design depends upon the risk analysis. In this case, we have 

SRM removal, we have the ruminant-to-ruminant feed ban, which 

you are questioning about. We have the national surveillance programs in the two countries which are very similar, the import restrictions. Again, all of these things interlock together to put a plan 

together in terms of how you deal with the risk presented in that 

country. 

The essence of the international standards is that a country can 

have a BSE situation and a program is designed based upon what 

the risk analysis shows, and that is what the USDA did here, just 

a very careful, thoughtful risk analysis. 

Senator HARKIN. I understand that, and there are two other 

areas that I just want to get into briefly. The one is this feed ban, 

that we have departed from the OIE standards. 

Second, you talk about surveillance. Well, again, the OIE standard is that an effective surveillance plan must be in place for 7 

years. The final rule does not say that. The final rule just says a 

surveillance plan has to be in place. Do we really know how effective the Canadian system has been? Why does the final rule not 

specify the same 7 years that the OIE standard has set? 

Secretary JOHANNS. I am going to ask Dr. DeHaven to jump in 

here because he was part of this at a time when I was not. I see 

from his body language that he is anxious to add something to this 

discussion. 

Doctor. 

Dr. DEHAVEN. Thank you, Mr. Secretary. 

Indeed, we would not grant minimum risk categorization to a 

country unless we felt that their feed ban was effective, that their 

surveillance program was effective for an appropriate period of 

time. 

As the Secretary has mentioned, it is a comprehensive look at 

the entire system based on a number of redundancies, the fact that 

we start with import restrictions in Canada going back to the early 

1990’s, the feed ban that has been in place, as the Secretary mentioned, since August 1997. They have, in fact, had very effective 

surveillance in place in Canada since 1992 and have exceeded the 

18

OIE requirements, in terms of surveillance, for at least the last 7 

years. 

In fact, in calendar year 2004, the Canadians tested over 23,550 

of the same high-risk or target animals that we are testing. When 

you consider that in proportion to their adult cattle population 

versus the larger adult cattle population in the United States, in 

fact, their surveillance system would be at least comparable to the 

system that we have enacted since June 1st in this country, in 

terms of proportion of the adult cattle population. 

Again, it is a holistic look. The OIE guidelines are called guidelines for that very purpose. They are not intended to be prescriptive, but rather guidelines to help a country go through a comprehensive risk analysis, which of course was the basis for our final 

rule. 

Senator HARKIN. Thank you, Dr. DeHaven. 

Last, the third part of my question on departing from OIE standards has to do with the reporting and investigation of all cattle 

demonstrating signs of BSE. The OIE standard is compulsory. The 

final rule, basically, does not even address this at all on the reporting of cattle demonstrating signs of BSE. 

You take all three of those together, I understand what you say, 

Dr. DeHaven, that Canada has had a surveillance system, but I 

would turn the argument back around on you that one of these elements they may have done well, but the other two they did not do 

well. I am not certain they did all of them well. While their surveillance may have been done well, some of the other measures, we do 

not know about the feed ban and such, we do not know how effective they have been over the last 7 years. 

That is why I say—I would sum up, Mr. Chairman, I know my 

time is out—that it just seems, that if you add up all of the OIE 

recommendations, that if we were to adhere to them, that Canada 

might not be minimal risk. It would be more like a moderate-risk 

entity rather than minimal risk. I will come back to that later. My 

time is up. 

The CHAIRMAN. Senator Lugar. 

Senator LUGAR. Mr. Chairman, I would like to ask the Secretary 

just to think aloud in these areas. 

Clearly, the first bias of each Senator has to be food safety for 

the American people. Likewise, we are deeply concerned about food 

safety in our products for people around the world. You have been 

discussing that with the distinguished chairman and ranking member, and I am satisfied that USDA has given extraordinary thought 

to this and has provided a safe situation. 

Now, I would not say it is a bias, but my own personal enthusiasm would be to maximize trade with Canada, likewise with 

Japan, and likewise with every country around the world. I just 

think this is critical to American agriculture. Therefore, I am 

heartened by the fact that we may be regaining some trade with 

Canada, under the order of March the 7th of this year. 

We have already queried you about it, but I want to ask further 

about the opening up of the market to Japan, and I do so as a practical matter of the debate that is ensuing, if not with this committee, at least in the Senate, in which many Senators, having 

heard that as many as two million animals might come from CanVerDate 0ct 09 2002 11:34 Jun 15, 2005 Jkt 098459 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 C:\DOCS\98459.TXT TOSHD PsN: TOSH
19

ada to the United States March 7th and the border is open again 

or the modification that some think 900,000. I would say hang on 

here. Safety aside, if 2 million or 900,000 animals are suddenly 

coming in, and we are not exporting to Japan or we are even having problems with South Korea, which you have identified as a 

large part, a fourth or a third maybe, of our export market. This 

is bad news. Simply sort of hold the horses for a while or the cattle, 

as the case may be, and sort of wait this one out. 

Now, I am wondering to what extent you have coordinated in 

USDA with the State Department, with our Trade Representative, 

with the other agencies of our Government who have a national interest in this, in addition to an agricultural interest and, likewise, 

your own advocacy with regard to enhancement of trade, the movement of our agricultural products. Can you give us some idea of 

how you perceive your leadership in these areas and your coordination with others. 

Secretary JOHANNS. As I indicated in my confirmation hearing, 

I believe I have a key role, and I have every expectation that I will 

be at the table. We have already had a number of meetings and 

briefings at the USDA following my confirmation on trade issues, 

and we are already strategizing on how I can fit into these negotiations as quickly as I possibly can. If that literally requires my attendance in another part of the world to be at the table to advocate 

for agriculture, I will not hesitate to leave Washington and do exactly that. 

As you have probably seen from the articles, I walked out of the 

committee hearing. It did not matter who was asking the question, 

everybody was saying, at that time, Governor, what do you intend 

to do in terms of reopening Japan? I took that very, very seriously. 

As soon as I was sworn in, I asked for an immediate meeting with 

their Ambassador. We had a meeting. I talked about it publicly. I 

have talked to our Ambassador in Japan, a fine man, Ambassador 

Baker, and we talked at length about where they are at. I have indicated our willingness to do everything we can. 

The important point is this. Those of us who have been involved 

in trade policy, and many of you have been involved many more 

years than I have, know that, as the tariff issue has been resolved, 

in negotiation after negotiation or it is in the process of being resolved, we continue to bump into these issues relating to GMOs, 

and animal disease, and it just goes on and on. I just think this 

is such an important area that, without absolutely dogged determination, in terms of our focus on science and being ready to lead 

by example, this thing has just got the potential to bog trade down, 

whether it is beef or chickens or whatever it is. Every member 

could talk about issues in their area. 

The last thing I wanted to mention, and I hope there is a question on the economic analysis that was done, Dr. Collins did a very 

thorough economic analysis, he and his people, about what we 

might anticipate. There has been a lot of discussion in the last few 

days about that. He could offer some insight on that much more 

thoughtfully than I could. 

I see the lights flashing. That probably means I need to be quiet, 

but I hope we deal with that issue. It is an important issue, and 

our producers want to hear about that. 

20

Senator LUGAR. I agree. Thank you very much. 

Secretary JOHANNS. Thank you, Senator. 

The CHAIRMAN. Dr. Collins, is there anything you want to add 

to that at this point? 

Mr. COLLINS. Mr. Chairman, I will go ahead and take my cue 

and comment on this question of the impending backlog of cattle 

poised to come across the border. USDA was probably first out of 

the box to characterize what might happen because we are the ones 

that issued the rule. Of course, with any rule we issue of this magnitude, we have to do an economic analysis, and we did that with 

this rule. 

We indicated in our analysis that we thought in the 12 months 

subsequent to March 7th that we might have 1.5 to 2 million head 

of Canadian cattle come across the border. Unfortunately, from 

that characterization, it led people to believe that diesel trucks 

would be lined up eight deep on March 6th waiting to come across 

the border. We do not think that is the case. In addition to our assessment, as I said, which was the first out of the box, we have others, which you have mentioned, others from credible organizations 

that have suggested between 800,000 and a million might be a 

more appropriate number. That is a number for the calendar year 

2005. Ours was for the 12–month period beginning March 7th. The 

numbers come a little bit closer together when you adjust for those 

differences. 

Even so, our estimate was that Fed cattle prices in the United States would decline from $85 a hundred weight in 2005 to $82 a 

hundred weight. You could argue whether that is a large effect or 

a moderate effect. If the analyses that were done subsequent to 

ours that suggest 900,000 head are to come across the border, then 

that effect would even be smaller, that is encouraging for American 

cattle producers. 

Of course, since the time we did our analysis, we have learned 

more about the slaughter capacity expansion in Canada, we have 

learned more about the transportation constraints. There is reason 

to believe that the numbers might be smaller than what we had 

initially anticipated. Our analysis was done based on data that we 

had through the first 6 months of 2004, and here we are sitting 

now in the beginning of 2005, and we have learned a lot more. 

That is not to say there will not be an impact, but it could be characterized as a moderate impact. 

The CHAIRMAN. Thank you. 

Senator Nelson. 

Senator NELSON. Thank you, Mr. Chairman. 

Dr. Collins, I know it seems like it is a risk that is out there that 

might be an acceptable risk, but there are probably some producers 

and processors here who are not necessarily ready to take your 

risk, and we have to be very cautious and careful on that date. If 

you are right, perhaps the adjustment can be made. If you are 

slightly off, there are some folks in this room who are going to lose 

some money. The American market is going to be flooded at a time 

that we do not have an opening in the Asian markets at the same 

time. 

Let me say, Mr. Secretary, once again, you have inherited a 

Hobbesian Choice here. If you move one direction, you have created 

21

a certain situation; if you move the other direction to be correct, 

you have created another situation. I know you are aware of that. 

I know that we believe it is about sound science because we talk 

about it, but in 47 countries that have shut down American beef 

exports, I am not so certain it is about sound science, certainly not 

entirely about sound science. Sound science or the threat of BSE 

is, at times, good reason not to accept the market, but at other 

times it is just a very good excuse. That is why I am pleased, Mr. 

Secretary, you are going to work on these nontariff trade barriers 

because we are experiencing more than a slight amount of that. 

What I am concerned, though, is that until the Canadian feed 

issue is resolved satisfactorily, to the satisfaction of virtually every 

one of those markets, the cloud remains. The irony is Canada started the problem. We compounded it by inconsistent reaction, by 

shutting off live cattle, but permitting meat, Canadian meat to continue to come into the market. The result is that we are moving 

jobs to Canada, creating all kinds of processing and producer problems here in the U.S., and now correcting it threatens to flood the 

market, as Senator Lugar has said, but we continue to give pause 

to the Asian markets who capitalize on the food safety cloud caused 

by Canada in the first place. 

Now, it is too easy to blame Canada, so I am not going to do that, 

and I am not going to blame the Australians for being opportunistic 

to try to move into the markets they were losing. We need to accept 

the fact that we seem to have shot ourselves in the foot while aiming, by not stopping the Canadian meat from coming in at the 

same time, given the constraints we have had about BSE coming 

from Canada. 

What alarms me more is that we are about to do it again. I am 

not suggesting that it is not in our policy to try to consolidate the 

cattle industry, but if we wanted to do that, there probably would 

not be a better way to do that, to consolidate processing, to consolidate production. I know it is going to be very difficult to try to resolve this, but there is a lot on the line, and I am getting flooded, 

as I am certain you are, by people who are concerned that we even 

this out. 

My question is, and I have still got a minute-and-a-half here if 

we allow over 30–month cattle imports through rule-making, would 

it not make more sense to bring all this back together and do the 

rule-making for OTM cattle at the same time that we concern ourselves with continuing to permit OTM meat imports and resolve 

this all at once with one rule rather than having this totally inconsistent, creating dislocation for certain processors, threatening now 

to bring things in so that we would now create a flood in the market, dropping U.S. beef prices at a time when cattle producers and 

some people are making some money at it. 

Have you thought about putting it all under one rule-making effort? 

Secretary JOHANNS. Boy, you have touched on all of the issues. 

Senator NELSON. Well, I have all of these people touching on me, 

as you know. We are reaching out. 

Secretary JOHANNS. You have some excellent people there with 

you because you literally have hit on key issues. I would offer this 

thought. As you know, I was Governor back when we discovered 

22

BSE, in the one animal, the ‘‘cow that stole Christmas,’’ and we did 

everything——

Senator NELSON. He keeps on stealing. 

Secretary JOHANNS. Yes. We did everything we could to make 

sure that the right information was before the American consumer, 

and decisions were made by the USDA at that time, and I supported those decisions. We all did. I held a press conference on the 

24th. We found out about it the evening of the 23rd, and we were 

literally before the media on the 24th in encouraging consumers to 

hang in there, and they have. Gees, they have just been champions, 

and they are confident in what we are doing. 

The very issues that you touch upon are some of the reasons why 

pulling back the whole shebang, the whole rule, would cause me a 

great deal of concern. The industry will restructure. It just is the 

nature of the beast. It is the nature of the economy. The industry 

is restructuring. There is not any doubt about it. To what level? 

Gosh, we could have a whole separate hearing and probably debate 

that. What do I mean by that? You are seeing more processing in 

Canada. It is the jobs that you refer to. 

Your colleagues have also already referenced the fact that that 

is having an impact in their States, in their communities, and 

there is not any doubt about that. We can see that by the announcements from beef packers. I would just be very, very worried 

that this thing gets so far down the road, the industry so restructures, that by the time we get in, we have put our producers at a 

disadvantage. 

Then there is the other issue. If we believe that what we are 

doing is based upon good science, and when I look at the risk assessment, when I look at SRM removal, the ruminant-to-ruminant 

feed ban, the work that we have done in Canada, with their cooperation, and on and on, the very, very, very worrisome thing is 

that we just sent a signal to the international marketplace that we 

are playing by different rules than what we are articulating, and, 

Senator, that is just about as candid and bold as I can be about 

your question. It raises a whole bunch of concerns. 

Now, I have studied this up one side and down another, and I 

will welcome any advice I can get. I will listen to it and consider 

it, but that would be how I would just respond as directly as I can 

to your question. 

Senator NELSON. I agree with you that we ought to try to do 

things on an intellectually honest basis. I just wish others would 

join. I will play by their rules. I just wish they would play by ours. 

We have to look at this in a holistic fashion as to what the current 

imports are doing, but by expanding those imports what that could 

do to our export market. I know you are aware of that, and we will 

continue to work together. This is not a hostile environment. 

Secretary JOHANNS. No. 

Senator NELSON. We are all in the same boat. We are just trying 

to row in the same direction. 

Secretary JOHANNS. Yes. 

Senator NELSON. I thank you very much. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Roberts. 

23

Senator ROBERTS. Mr. Chairman, the distinguished Senator from 

Wyoming has important business on the floor. I am going to yield 

my time to him, with the understanding that I would be in the batting circle the next time the Republican opportunity comes up. 

The CHAIRMAN. Without objection. 

Senator Thomas. 

Senator THOMAS. Thank you very much. 

I guess, Mr. Secretary, and I know this is a complicated issue 

and a tough issue, but just to make it clear, what do you expect 

to have happen now on the 7th of March? What is the situation? 

What will be done? 

Secretary JOHANNS. Well, the rule is proceeding to that date. We 

do have a team in Canada that is looking at some very important 

issues in terms of the ruminant-to-ruminant feed ban and whether 

it is being honored. I will cue Dr. DeHaven up here. I asked for 

a briefing just before I walked in here, and he gave me a briefing, 

and I will ask him to give the same briefing to you. I will emphasize it is very preliminary. 

I am going to look at that information very closely. The other 

thing I have promised is that we will be absolutely transparent 

with that information. We will put it out there. We will get it over 

to this committee and——

Senator THOMAS. You do not know what the situation is going to 

be. You do not know whether this regulation will be put into place 

as it is or whether it will be changed or whether it will not and 

put into place. 

Secretary JOHANNS. It is on the road to implementation. I will 

say this, I will absolutely consider everything right up to that date 

because I believe that is my responsibility. You cannot, on one 

hand, send a group up there and say, ‘‘Take a look at this,’’ and 

then say, ‘‘By the way, I will not being paying attention to them.’’ 

I am going to be paying attention to them. 

Senator THOMAS. Oh, I understand. We have had quite a little 

time to take a look at it and know what is going on. You have all 

talked about what is happening and what you know, but you do not 

know enough yet to be able to know what you are going to do; is 

that correct? 

Secretary JOHANNS. Senator, I would not go so far as to say that 

because the USDA has done a ton of work in Canada. 

Senator THOMAS. I know, but you still do not where we are going 

or not sharing with us. 

Secretary JOHANNS. No, Senator. The data is out there, and the 

rule is moving forward and each day you can cross off the calendar. 

I do have a team, and I am going to consider their findings. I do 

not think you would expect anything less of me in terms of making 

sure that that is something I take a look at, and I intend to do 

that. 

Senator THOMAS. What do we know about Japan and Korea, assuming, as I assume now, that this regulation is going to go into 

place, what is their reaction to that? 

Secretary JOHANNS. In no discussion that I have had either with 

our Ambassador, their Ambassador or anyone associated with 

Japan has the topic of Canada or a quid pro quo been raised in 

those discussions. My discussions have been purely on where are 

24

we at with Japan, how quickly can we set a date and start moving 

beef into that marketplace again. 

Senator THOMAS. Or does not the decision with Canada make a 

difference to them? 

Secretary JOHANNS. I can offer my thought on that. Again, they 

have not raised the issue, but——

Senator THOMAS. That is what has caused us to be in the position we are in with them, is it not? 

Secretary JOHANNS. Here is what I would offer, Senator. I believe 

we have to be consistent in our presentation. If we are truly about 

basing our decisions upon the science that is available, the OIE 

standards, the risk analysis, the factors that we build into the system based upon a risk analysis, then I just think I feel very strongly you have to be consistent in your dealings with each other country, otherwise trade discussions become constantly entangled. 

Senator THOMAS. Yes, I understand, and I am not suggesting 

that that would make a difference, that you would tell them something different, but they can probably tell you now, at this point, 

if this rule goes into place, what will they do? 

Secretary JOHANNS. Canada has not been raised in any discussion, and you have people that have worked on this a——

Senator THOMAS. No discussion with Japan? 

Secretary JOHANNS [continuing]. With Japan. We have people 

that have worked on this. I will ask Dr. Collins to offer——

Senator THOMAS. Well, that is why they closed our trade. 

Mr. COLLINS. Senator, they closed the trade because they have 

not done the kind of work we have done. They have not done the 

risk assessment——

Senator THOMAS. They closed it because of the mad cow in Canada, correct? 

Mr. COLLINS. They closed it because they wanted 100–percent 

testing of the animals that we are going to turn into beef——

Senator THOMAS. I am sorry, guys, but all of this science stuff 

gets a little confusing, and we need to be a little more broad. That 

is the reason we are not dealing with Japan on the same basis we 

were. 

Mr. COLLINS. The finding of BSE is the reason. 

Senator THOMAS. Sure. That is what I am saying. 

Mr. COLLINS. OK. I got that. 

Secretary JOHANNS. Senator, if I could just add a clarification, 

just so our record is clear, my understanding is that the Japanese 

took the action not because of the first finding of BSE in Canada, 

it was the finding of BSE in the United States, which was many 

months after——

Senator THOMAS. Which was, also, Canadian. 

Secretary JOHANNS. It was. Just, again, so we are clear, they did 

not act on the finding of BSE the first animal in Canada, they 

acted on the situation December 23rd. 

Senator THOMAS. I understand the difficulty, but at some point, 

rather than talking about how many studies we are going to do, we 

have to have some—we are getting fairly close to the time when 

there is a decision is going to have to be made. It affects people, 

and people ought to have some idea of where you are, and where 

you expect to be, and where you hope to be. 

25

Thank you very much. 

Secretary JOHANNS. Thank you, Senator. 

The CHAIRMAN. Senator Dayton. 

Senator DAYTON. Thank you, Mr. Chairman. 

Mr. Secretary, you talk about using science in your decisions. 

There is health science, and there is economic science, and both are 

essential to a good policy. I am certainly glad that the Department 

has applied the best health science to this proposed policy, but your 

economic science is out of Mad magazine. You are going to allow 

Canadian operators to slaughter Canadian cattle over 30 months of 

age and export that beef into the U.S. market, but you are not 

going to allow American meat packers to slaughter Canadian animals that are over 30 months of age. The price of a Canadian animal I am told is now less than one-third that of a U.S. animal. Obviously, the large meat packers are going to shift their processing 

plants to Canada where they can literally make a killing and, in 

fact, that is what is already happening. 

Senator Crapo cited Tyson closing in Idaho. Tyson is reportedly 

also preparing to open an expanded 5,000–head slaughter operation in Alberta, Canada. Excel is, also, reportedly starting up a 

5,000–head slaughter operation in Canada, which will slaughter 

the smaller U.S. meat packers who will not be allowed to buy those 

much cheaper Canadian OTM animals, and they will go out of 

business in the United States, and those American jobs will be lost. 

Those American workers, our taxpayers, our citizens and constituents, and their families are going to be devastated by those 

closings and loss of jobs, and you call that a moderate impact. I 

find that ignorant and offensive to sit here in suits, your job is protected, your salary is secure, and call those people who are going 

to lose their jobs a moderate impact. It is wrong, and it is ignorant, 

and it is offensive to this committee and to the American people. 

This rule should be exposed as having been crafted by somebody 

as perfectly as could conceivably have been done to benefit the Canadian industry and to harm the American industry. The only 

American operators that are going to benefit are the large U.S. 

companies, like Tyson and Excel, who are being rewarded by our 

Government policy for shifting their plants and jobs from the 

United States and Canada. I do not blame them for following the 

economic logic, but it is nonsensical that our Government would 

adopt a policy that would reward them for taking jobs from Americans and passing them up to Canada, as your own analysis predicts 

in the regulation. 

I quote from the Federal Register final rule, ‘‘Allowing the 

United States to import Canadian beef from cattle slaughtered at 

more than 30 months of age would enable Canada to produce and 

sell much larger quantities of processing beef without fearing the 

significant price collapse that would likely occur if the entire additional product were only for the Canadian market.’’

The summary, your economic summary in your own analysis, 

says, ‘‘This final rule will cost U.S. cattle producers up to $2.9 billion over a period of several years.’’ You call that a moderate impact. This is huge for Minnesota. It is huge for other States. You 

know that. You are a Governor. I say, again, you walked into this. 

26

You inherited this. This is a disaster, and it is a disaster of the creation of this department. 

I am so tired of people who campaign for office or appointed to 

office with the ideology that Government does everything badly, 

and then when they are in office, they go out to prove themselves 

correct. They adopt policies that sever, that do damage to Americans and sever the trust that should exist between Government 

and its people, and then they point to their failures and say, ‘‘See, 

that proves Government does everything badly.’’

No wonder people, no wonder these producers, and workers, and 

business owners are just fed up to here with Government, and you 

are going to make it worse. You are going to cost them their jobs, 

and then we are going to talk about process and progress with the 

Japanese or the Koreans, which will go on, and on, and on, while 

all of this damage takes effect that you are forecasting in your own 

analysis. You say here today the industry will restructure. The industry is restructuring. Well, there is no doubt about that. Well, let 

us throw up our hands. There is nothing we can do about that. 

Well, here is something we can do about that. We can not adopt 

a policy that is going to reward that restructuring for taking jobs 

from Americans and giving them to the Americans. That is about 

as simple and basic as it gets. If the U.S. Government cannot figure out how not to do that, then we all ought to go home and save 

the taxpayers the money. 

This is crazy. It is crazy, and it is wrong, it is destructive, and 

I cannot conceive that you are going to adopt a policy that is this 

one-sidedly rewarding of Canadian operations, and businesses and 

their people at the expense of Americans and walk off into anywhere else in the world and talk about fair trade policy. Countries 

make trade policy in their own economic self-interest. This one, I 

do not know whose economic self-interest this is, as it relates to 

Americans, but it is not the folks that I hear from, and it is not 

many, except for the large operators. Again, I do not fault them for 

taking advantage of what you are doing for them, but I wonder 

why you are doing something that is so harmful to everybody else. 

Secretary JOHANNS. I am going to invite Dr. Collins to say a 

word, because the essence of your concern relates to the economic 

analysis, and I would like him to offer a few thoughts about it. 

Senator let me emphasize there is so much at stake here in 

terms of the international marketplace that our agriculture enjoys——

The CHAIRMAN. Excuse me. Mr. Secretary, let us let him quickly 

respond, if you will, and we need to move on. 

Secretary JOHANNS. That I could not agree with you more, that 

it is enormously important that we get this right and think about 

the long-term impact on the industry and the availability of marketplaces for the future. 

You are right, there is a lot at stake here, and I do not want anything that the USDA has said prior to my arrival or after to minimize those issues. 

Senator DAYTON. My time is up. This regulation is not right, Mr. 

Secretary, it is not right. 

The CHAIRMAN. Thank you. 

Senator Roberts. 

27

Senator ROBERTS. Thank you, Mr. Chairman. 

Welcome to the Agriculture Committee, Mr. Secretary. The 

USDA’s Office of Inspector General, in a recent briefing to staff reported three main concerns with APHIS and FSIS handling of the 

Canadian cattle and the beef product imported in the United States 

during the period of August 2003 through August 2004. The OIG’s 

three main findings in their audit were as follows. 

APHIS expanded the list of products approved for importation 

without public notice. Some of the products, tongues, are considered moderate-risk products, not the low-risk products mentioned 

in the Secretary’s announcement. APHIS and FSIS’s definition of 

certain beef products were not consistent. Further, the two agencies did not really communicate with each other regarding their efforts to monitor the Canadian beef imports; and finally, APHIS did 

not have sufficient internal controls to issue and monitor import 

permits. I am not pointing any figures. I would point out that Mr. 

DeHaven has been on board about 6 months. 

Mr. Secretary, in light of these disturbing findings by the Office 

of Inspector General, what steps will APHIS and FSIS and USDA 

take or have taken to assure the American consumer that the 

USDA has the ability to enforce and monitor the restrictions and 

the conditions in regards to regulating beef and imports when the 

trade with Canada finally does resumes? In addition, can you assure us that the USDA and the relevant agencies will not change 

the list of approved items without public notice and the notification 

of Congress? 

Secretary JOHANNS. Let me ask Dr. DeHaven to respond to the 

first part of your question in terms of those findings. 

Dr. DEHAVEN. Thank you, Mr. Secretary. 

Senator Roberts, the OIG report is still pending. We have reviewed a draft and will be submitting our final comments to that 

report in the very near future. Let me just address some of the concerns. 

As to the expanded list of products, we had a list initially of 

products that we considered to be of low risk that we would by permit allow into the United States from Canada, which we did so. 

That list at the time that we created it was not intended to be a 

complete list that we would never change, but rather that was the 

requests that we were getting, and comparing the requests for 

products that our importers wanted to bring in and that we also 

considered to be safe to bring in from a BSE risk standpoint. 

After that initial list was in place, in fact it included products 

like meat trimmings. We did then subsequently allow some of those 

products to be processed, recognizing that the processing in no way 

altered the risk relative to BSE. For example, meat trimmings that 

are subsequently ground is still the same meat trimmings, it has 

just been processed. We ensured that we had procedures in place 

that would make certain that that processed product in no way 

commingled or could be contaminated by other products that would 

not already be enterable prior to the processing. Tongues, while 

there may have been some discussion about it being moderate risk, 

are considered actually to be low risk. I would point out that we 

would allow tongues in under this minimal risk rule that we have 

simply published. 

28

Having said all of that, we would clearly acknowledge that while 

we do not feel that any of the products that we have allowed into 

the United States from Canada represented any kind of food safety 

or animal health risk. Clearly, the processes and the transparency 

that we went about in allowing those additional products was not 

what it should have been, and we——

Senator ROBERTS. The Secretary’s announcement was different 

from what was actually happening, which leads to public perception that is not in the best interest of the USDA. 

Mr. Secretary, we just had a meeting in Kansas where the head 

of the Animal Health Division of our State Government was asked 

a question about a national ID system. Where are we with a national ID system? He said it would take another year, and then 

made the remarkable statement that it would take 10 years by the 

time we could really fully implement this and have a national ID 

system where we would be able to trace every animal, given the 

industry, given all of the movement of all of these critters. Where 

are we with a national ID system? 

Secretary JOHANNS. The national ID system, I have actually 

pulled the team the already at the USDA, because again, as I said 

previously, I am a believer that the system is necessary. The premises ID will be ready sometime mid summer, and then in terms of 

animal ID, my hope is that we can move that along right behind 

that. Whether it will be 10 years, I cannot imagine it would be that 

long, Senator. From my standpoint I would find that unacceptable. 

We need to move that as quickly as we can within the finances that 

I have available to make it happen, but believe me, I see it as a 

very, very key component for the future of this industry. 

Senator ROBERTS. What is the top remaining hurdle to reopening 

the Japanese market? 

Secretary JOHANNS. I would say we have answered their technical questions. That has been going on for 13 months, and things 

arise, and we respond immediately. I just really think it is time 

now for the Japanese Government, at whatever level, to make the 

decision that this is going to be the date, and it literally is that decisionmaking that I believe has to occur for it to happen. That is 

where I see this process. There is nothing more, Senator, that we 

could possibly provide. We have been going through that now for 

many months before I arrived on the scene, and answered their 

questions and met their concerns, and I just really think it is a 

point now where somebody needs to make a decision that we are 

ready to set a date and get it done. 

Senator ROBERTS. Before any American or any person in Government says, 

[Japanese phrases] say American beef? 

[Japanese phrase], is that correct? 

[Laughter.] 

Secretary JOHANNS. Somewhere in all of that you lost me. 

Senator ROBERTS. Where is the beef? 

Secretary JOHANNS. Where is the beef? 

[Laughter.] 

Senator ROBERTS. Thank you very much, sir. 

The CHAIRMAN. You want to run through that one more time? 

[Laughter.] 

29

The CHAIRMAN. Can you say BSE in Japanese for us, please? 

Senator Harkin has a comment. 

Senator HARKIN. Mr. Chairman, thank you. I have to go to another meeting, but I just wanted to mention that Senator Baucus 

wanted to be here this morning, but is in Montana with the President. Also, Senator Conrad also is in North Dakota, same reason, 

with the President. I just ask permission, Mr. Chairman, to submit 

questions in writing to the Secretary to be answered? 

The CHAIRMAN. Certainly. 

Secretary JOHANNS. We will answer those very expeditiously. 

The CHAIRMAN. Without objection. I would say the same for Senator Burns, who also wanted to be here, but is with the President. 

Senator Talent. 

STATEMENT OF HON. JAMES TALENT, A U.S. SENATOR FORM 

MISSOURI 

Senator TALENT. Thank you, Mr. Chairman. 

Mr. Secretary, you have seen the frustration that we feel, and 

you know we are just reflecting what our producers are saying. It 

just seems like we are always the good guy. I do feel sometimes 

like we are in the middle of that Peanuts strip where Charlie 

Brown always trusts Lucy and Lucy always pulls the football away. 

[Laughter.] 

Senator TALENT. We are all waiting for everybody to do what we 

have been doing a long time in terms of sound science. Yet I understand your position, and I have to say that certainly in principle, 

I agree with it. When you are the biggest exporter in the world you 

have an interest other countries do not have in following sound 

science so that exports can go across the border. 

Now let me ask you to comment on a couple of things because 

so much of what I wanted to ask has been asked, which is a good 

thing. First of all, the comment has been made—Senator Thomas 

went into this, and I really sympathize with what he was saying. 

Is there any sign that sticking to sound science and moving toward 

a resolution where we allow the Canadian beef in is sending any 

signals to the Japanese where they might do the same thing with 

our beef? You said it has not come up, it does not look to us like 

doing what we are doing is helping us with them. 

Let me take the flip side of that. This is my gut instinct, that 

if we did not do it, would it hurt us with them? If I am Ambassador 

Zoellick and I am sitting across the table from them and it gets to 

the point where we are really demonstrably dragging our heels 

here with the Canadians, it does give them another excuse to delay 

yet again. I can just see that being tossed back at our people under 

those circumstances. It is incredibly frustrating, but my gut instinct is in that direction. Maybe you want to comment on that. 

Then let me switch to another point, another market. When I 

had a meeting in Kansas City with various people interested in agricultural trade and one of the representatives from the Chinese 

Council was there, and it was a very constructive meeting. He 

talked about his desire, their country’s desire to develop relationships and markets with us, and we talked about beef. I realized the 

potential of that market in particular for prices in the United 

States, because I believe once they really start tasting American 

30

beef, we are going to be in good position, and that is a great market. Are you looking at that? 

That is what I am looking at, beyond the current pricing situation for beef in the United States, beyond the restructuring here, 

do you have any sense that they are watching this, and that what 

we are doing here may have an impact on our ability to develop 

that market in particular long term, because that market is the 

prize for agriculture. We have seen what their imports of our beans 

have done to prices of soybeans in the United States, and really 

when we are just beginning to penetrate. The potential there is 

enormous. 

Comment on that if you would, or maybe Dr. Collins wants to. 

The potential for enhancing obstruction if we are seen as dragging 

our heels, the bad that may happen if we are seen that way. Then 

second, where the Chinese are on all this, if you would. 

Thank you, Mr. Chairman. 

Secretary JOHANNS. I will offer a couple of thoughts and then I 

will invite Dr. Collins to offer his observations. 

The first thing, I would be very worried about the very thing 

your question is directed at, and that is just handing in a bright 

package all tied in a bow, another excuse to delay discussions, to 

go back to square one in terms of opening the Japanese market. 

We keep pushing that the science justifies our beef going back into 

Japan, and I just would be very worried that if we send a contrary 

signal with our discussions and negotiations with any control, we 

are going to jeopardize those discussions. 

I will also again point out when BSE was found in Canada, 

Japan did not close our border. Our whole goal here is to deal with 

these issues in a way that recognizes risk and develops a plan to 

deal with that risk. 

China, I have been there a number of times as Governor, because 

I believe that that market has great potential, and whether that 

is beef or soybeans or any other product, there are a lot of people 

there, and I believe that we can provide the needs of those people 

relative to agricultural products, and again, in our discussions with 

them, I will guarantee part of what we deal with is the whole issue 

of science and making decisions based upon good science. 

Mr. COLLINS. The only thing I would add to that is it is fundamental that we follow the principles and recommendations of OIE 

and have a science-based return to normalcy in trade with Canada. 

That is a fundamental signal that we can send to other countries 

of the world, and that includes China. 

With respect to China, before suspension of trade, we were ex- porting about $550 million a year worth of ruminant and ruminant 

products. Today that market is about 88 percent open. They take 

things like hides and skins. They do not take very much fresh, frozen and chilled beef from us. It is a very small portion of their imports. They have not opened that part of the market yet. 

In negotiations with China, which Dr. Penn and others have led, 

China has raised many issues, technical issues, they have even 

raised non-meat trade issues as you might expect. There is a lot 

of pressure that still has to be put on China to move them forward. 

The potential there down the road, as you suggest, is immense. 

Senator TALENT. Doctor, thank you. 

31

Mr. Chairman, I want us to keep our eye on that ball because 

the practical potential for our producers, if they begin importing, 

as they progress economically, is huge. 

Look, Mr. Secretary, one of the consistent messages here is look 

at whether these discoveries in January are a basis for perhaps 

some modification or some delay in view of the fact that we may 

have been borderline in terms of the OIE guidelines anyway. Senator Harkin was sending that message, and it is a reasonable one. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Senator Crapo. 

Senator CRAPO. Thank you very much, Mr. Chairman. 

Mr. Secretary, I want to come back to two issues, and that would 

be the opening of the trade with Japan, as well as the question on 

the beef, live cattle over 30–months-old. 

With regard to the trade issue with Japan, the issue that I want 

to raise has been well covered, so I just want to make a quick 

statement. Understanding that you have said that we have basically done everything we need to do, and that is really not much 

more we can provide in terms of justification of opening the trade 

with Japan, it seems to me that we must apparently face a political 

issue as opposed to a science issue in getting this done. If I am correct about that, then I would simply suggest that we develop a 

strategy and a rather prompt course of action or action plan to elevate this to whatever level it needs to be elevated to even if that 

means that the President of United States has to deal with the top 

leadership in Japan or whatever it takes. It seems to me that we 

cannot let this languish. 

If you would like to comment on that, I would welcome. Otherwise, I will just make that as a statement and move on to the next 

issue. 

Secretary JOHANNS. Well, I agree with you. I absolutely believe 

that all of us have to be a part of this. I really felt the confirmation 

hearing sent an enormous signal, obviously. It certainly got 

everybody’s attention and that is what was talked about. When I 

met with the Ambassador from Japan I emphasized: Mr. Ambassador, it did not matter who is asking the question. This is of paramount importance. 

The other thing I would mention, we should not discount the fact 

that we have had an excellent working relationship with Japan for 

a long, long time, enormous amount of trade between the two countries. We need to make sure that we are laying the groundwork for 

that to continue. We just cannot get in the business, each of us, of 

trying to figure out how to negatively impact that. That will not 

serve anybody. It will not serve their people and it will not serve 

our people. 

The President has talked to the Prime Minister, as you know, 

very directly about this issue. I have enlisted the Ambassadors on 

both sides. I will enlist my Cabinet colleagues to do everything they 

can, and as I have said, if it would be helpful for me to catch the 

next flight to Tokyo, I am there. I am ready to go. I understand 

its importance. 

32

Senator CRAPO. I appreciate that, and you will know from the 

comments that you are getting here that you will have very strong 

support from this committee. 

Let us move quickly in the time remaining to the question of the 

portion of the rule that will allow live cattle over age 30 to be 

brought into the United States from Canada. You know the issue. 

It has been discussed with you at length here. It seems to me that 

your answer implies that notwithstanding the economic circumstances that have been pointed out, that there is some kind of 

sound science that justifies allowing live cattle over the age of—excuse me—allowing boxed processed cattle over the age of 30 

months into the United States, but not live cattle. 

I would like you to clarify that for me. If there is some science 

that is prohibiting us from correcting this very difficult problem, 

what is it? 

Secretary JOHANNS. The rule is based upon good science, and let 

me just reaffirm that. Let me specifically address the issue that 

you have raised, because as I started drilling down into this issue 

in asking for more information, the very issue that you are talking 

to me about popped up on my radar screen, and I said, ‘‘Gosh, is 

there consistency in what we are doing here?’’ I looked at the economic analysis that was done, and I even went so far as to ask for 

the Federal regulations in this whole area of economic analysis and 

how much leeway I have. 

As I indicated in my statement, it is an area I am taking a look 

at because some of the very things that you are raising are things 

that occurred to me as I have been working through this. Again, 

today I do not want to announce a conclusion because I do not have 

a conclusion. We do have some information that is headed my way, 

and I just think I owe it to the process to look carefully at that information, make sure I have everything before me. 

Senator, I encourage a continued dialog between you and I and 

other members of the committee that are concerned about this area 

of the rule because it is something I am taking a look at. 

Senator CRAPO. Thank you, Mr. Secretary. Actually, I am glad 

that you did not answer the question by saying, ‘‘Here is the 

science that justifies this distinction.’’ As I understand it, you are 

raising those same questions yourself and you are asking those 

questions, and you are going to pursue it. The answer is going to 

be that there is not a basis of sound science that would justify the 

rule the way it is currently written, and I hope to work with you 

in that regard. 

Secretary JOHANNS. I welcome that, Senator, thank you. 

Senator CRAPO. Mr. Chairman, I am going to leave as well, but 

I have a number of other questions. Are you going to allow us to 

submit written questions to be answered later? 

The CHAIRMAN. Yes. We are going to leave the record open for 

5 days. You will be able to submit written questions. 

Senator CRAPO. Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Salazar. 

STATEMENT OF HON. KEN SALAZAR, A U.S. SENATOR FROM 

COLORADO 

Senator SALAZAR. Thank you very much, Senator. 

33

Let me first say, Governor Johanns, thank you for coming before 

the committee to address this very important issue, and congratulations to you also on your unanimous confirmation in the U.S. 

Senate. It shows the kind of bipartisan support that this committee 

and this Senate does have, and the support that we have for agriculture. I wish you the very best I your years ahead leading this 

very important department. 

Let me second say I was disappointed in the President’s State of 

the Union in that he did not address agricultural or rural issue. 

From my point of view, that is a part of the forgotten America that 

needs to be addressed, and I know that you as former Governor of 

Nebraska know how important that part of our country, and we 

need to have more focus on agricultural and rural communities. 

Third, let me say with respect to this hearing and the issue that 

is before us today, what we are hearing from everyone is that we 

have a problem with this rule. It seems to me that what we ought 

to be doing is fixing the rule before we actually open the borders. 

I had a meeting with most of the agricultural leaders in my State, 

in Colorado this last Saturday, and that is their sense. There is a 

sense that there is a whole host of issues that are unanswered, 

many of which have been raised here with you today. Without 

going through all of those questions, the simple question as to how 

are you going to verify at the border which one of these 900,000 

animals plus are either 30–months or less, and on and on and on 

and on. I know that there are several organizations that are looking at also instituting litigation against the promulgation of the 

rule in March. 

I guess I would say this. Given the contentiousness of this issues, 

given the numerous questions that have been raised, given the advent of this new position for you as Secretary of Agriculture, it 

seems to me that it would be most prudent to go ahead and to 

delay the opening up of the border until such time as you can take 

the rule and give it a comprehensive review and address all the 

questions that have been asked, including the issue of the animal 

identification system and all the rest of the issues that we have 

talked about before. 

I do not understand why it is that we are at this point stuck on 

this date on the opening of the Canadian border, given the fact 

that we have so many questions that have been raised. 

[The prepared statement of Senator Salazar can be found in the 

appendix on page 55.] 

Secretary JOHANNS. A couple of observations, Senator. The rule 

has been making its way through the process for now many 

months. There was a comment period and then another comment 

period, and there were 3,300 comments, questions, concerns raised, 

and those were responded to. We will do everything we can to respond to the questions that are raised here, and hopefully do our 

very best to address those very, very promptly so you can get information to your constituencies. 

There really is a big picture here for this industry and for agriculture in general in our country. We are just an enormous exporter of agriculture products. In the State I came from, we were 

the fourth largest. Without good, sensible agricultural export policy, this agriculture industry is in very difficult shape. 

34

Because of what has happened here, this industry is restructuring in Canada. Like it or not, that is the way the economy 

works, that is the way industry works. Boneless beef is coming into 

this country by permit. It has for many, many, many months. It is 

about equal to where it was before all of this took place. Rather remarkably this industry is adjusting to that. 

What is happening? Well, to the extent that I can observe, it appears to me that the processing, the packing industry is growing 

in Canada, and that has an impact on a lot of people here in this 

country. I just worry, Senator, that if I make a decision here that 

we look back at 6 months from now or whatever, and say, ‘‘My 

goodness, the industry took off like a rocket, readjusted, and now 

it is forever changed to the detriment of the American producer,’’ 

then there is a lot of risk in terms of just simply saying, ‘‘Gosh, this 

is so hot to touch, I should not be touching it.’’

I look at all the factors. I look at the risk analysis. I look at our 

discussions with other countries. I look at our constant discussion 

with other countries, that we have to be science-based. I look at the 

economic analysis, and as I said to Senator Dayton, none of this 

do I take lightly. 

Senator SALAZAR. If I may, Governor, because my time is already 

up, Mr. Secretary Governor, I guess, because you have a dual title. 

Secretary JOHANNS. I am proud of either title. 

Senator SALAZAR. I do not think that the issue is going to go 

away at all when you implement the new rule in March and you 

open up the Canadian border. It seems to me that many of these 

issues are going to continue for a long time, and they are going to 

continue including in litigation. It would be best for the American 

producer and for the industry at large if you were able to take 

time, now that you are in your position as Secretary of Agriculture, 

and say all of these issues have been raised. This is a comprehensive way in which I am going to approach the lifting of the Canadian ban, the science that is going to go with it, the animal identification issues and all the rest of the issues that have been raised. 

Secretary JOHANNS. Thank you, sir. 

The CHAIRMAN. Senator Coleman. 

Senator COLEMAN. Thank you, Mr. Chairman. Mr. Chairman, I 

have some questions that I would like to be included for the record 

and have some responses. I apologize. I had to make a statement 

on the floor of the Senate. 

I would just raise, and I am not sure if the question has been 

asked, but I have some concerns about the disparity of treatment 

of beef over 30-months versus cattle. I am not sure whether the 

economic analysis has been conducted on that on the impact of that 

portion of the rule. I would raise that issue. I do have those concerns, but I have some other questions, Mr. Chairman, that I would 

submit for the record and like to have answered before we finish 

this matter. 

The CHAIRMAN. Certainly. 

Senator COLEMAN. Have we dealt with the question of the assessment of the impact of the rule and the disparity between dealing 

with live cattle versus——

Secretary JOHANNS. I will ask Dr. Collins because you have 

raised some issues that he has worked on specifically. 

35

Senator COLEMAN. Before he responds, I do want to say for the 

record, I want to thank Dr. Collins and his staff. You have been 

extraordinarily responsive, and from the perspective of my staff, it 

has been a pleasure working with them, and I did want to state 

that publicly, doctor. 

Mr. COLLINS. Thank you very much, Senator Coleman. 

Let me make a comment about the economic analysis. It has 

come up here and I have not commented on it since sort of the beginning of the hearing. It is important to understand that we have 

been reducing cattle numbers in the United States for 9 years. We 

are at a cyclical low in cattle slaughtering in the United States. In 

2003 we slaughtered 35-1/3 million cattle. Last year we slaughtered 32.8. This year, without opening up the border to Canada, we 

will slaughter 32.5. Without opening up the border to Canada, 

slaughter numbers are going now, capacity utilization is going 

down, packer costs are going up. We have a situation with no trade 

with Canada that the packing industry is under some stress. 

What this rule does is it takes another step in the return to normalcy with trade. We will import, by various estimates, 900,000 to 

1.8 million head of cattle. Those are cattle that will be killed in the 

United States. Those are cattle that packers will be able to use to 

increase their capacity utilization, lower their labor costs, and presumably help their profitability. That context has to be understood. 

Now, within that, there is the issue of cow packers, those who 

slaughter cows, which is the basis for most of the concern here 

today because the broader picture of what we are doing here economically has been lost. Cow packers kill about 5 million head year 

out of the 32 to 33 million head. That is an important sector of the 

meat packing business, but it is one-sixth of the meat packing business, but it is a very important sector. It is a sector that is in the 

spotlight here today because this rule does not allow cattle in over 

30 months, but allows the beef in over 30 months. Not allowing the 

beef in over 30 months versus allowing it in over 30 months, those 

two options were explicitly addressed in the regulatory impact 

analysis that accompanied the rule. 

The answer to your question is, yes, these issues were looked at. 

Were they looked at thoroughly enough? As I sit here today I can 

answer that and say no. What we have learned over the six to 9 

months since most of that analysis was done was that there will 

be a differential effect on cow packing plants. You look at Canada, 

cows sells for less than $20 a hundred weight. In the United States 

they sell for $50 a hundred weight. If you look at the price of lean 

beef in the United States, it is $140 a hundred weight. In Canada 

a packer can buy a cow for $20 a hundred weight and sell the beef 

for $140 a hundred weight in the United States. That is one heck 

of an incentive to pull cow beef across the border. 

There are estimates ranging from 250,000 head to 460,000 head 

additional cows will be killed in Canada, and that beef will come 

to the United States. Now, that comes here at a time when, as I 

said, there is a cyclical low in cattle slaughter in the United States 

which means that cow prices are higher than they would normally 

be because cow packers are bidding against one another to find a 

scarce number of cows. All of a sudden they are going to face lower 

beef prices at the same time they have high cow prices. Their marVerDate 0ct 09 2002 11:34 Jun 15, 2005 Jkt 098459 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 C:\DOCS\98459.TXT TOSHD PsN: TOSH
36

gins, already low, will be further stressed, and their capacity utilization, already low, is another factor that will hurt them as well. 

There is no question. I have communicated this to the Secretary. 

The Secretary is aware of the differential effects on the cow industry. That is why he took great pains in his opening statement to 

mention the fact that he did not want to see differential effects in 

the meat packing industry. That was not spelled out in his statement, but that is what that referred to. We are well aware of this 

issue. It is an economic issue, and it comes into collision with the 

science issues about whether you should import this beef or not. 

I just wanted to make sure, and you gave me the opportunity to 

do so, that our economic analysis is aware of what is going on, and 

the Secretary is informed on this issue. 

Senator COLEMAN. I appreciate it. 

I know my time is up, Mr. Chairman. As I said, I will submit 

some other questions. On the one hand we want to be judged by 

sound science. We want Japan to judge us by sound science so we 

have to be very clear. Mr. Secretary, I will repeat it again if it has 

not been said enough, you have been on it from day one. The opening of that market is critically important, but at the same time the 

economic impact issues are significant, and I appreciate the fact 

that you have looked at this. We will have to take a close look, and 

clearly, we want to minimize any kind of disparate treatment that 

we can. 

Secretary JOHANNS. Mr. Chairman, if I might offer a thought, I 

welcome the opportunity to visit with you. The question has come 

up as we have visited with your colleagues on a number of occasions. As I sat down and kept looking at this rule, I kept bringing 

these folks at the USDA back into meetings and say, ‘‘Now, why 

did we do that, and where are we coming from?’’ They are probably 

behind me nodding their heads because more than one meeting 

was devoted to this. That is an area that very, very clearly I am 

concerned about, I am taking a very close look at, that is a part 

of this rule, but a very important part because it does involve a lot 

of animals and it involves packers on this side of the line, small 

and probably some of the larger ones. I am taking a look at it. 

I will share with you that in terms of cattle over 30 months, as 

I understand the process that was developed some time ago, and 

Dr. DeHaven can address this, a risk analysis was not done on 

that, so we would have some work to do on this. That is exactly 

what I am trying to pull together here. 

Senator DAYTON. Mr. Secretary, I see your Minnesota education 

is holding you in good stead. 

Secretary JOHANNS. Thank you. 

The CHAIRMAN. Senator Lincoln. 

STATEMENT OF HON. BLANCHE LINCOLN, A U.S. SENATOR 

FROM ARKANSAS 

Senator LINCOLN. Thank you, Mr. Chairman, and thanks for 

holding such a timely hearing so that we all might offer the Secretary our concerns and thoughts, and we can share some wisdom 

and hopefully come about something that is going to really in the 

long term provide us what we need, both as a trading partner and 

for the safety of our consumers as well. It is a very important rule 

37

that has been proposed here in terms of what it means to a very 

important industry in the U.S., our cattle industry, and our consumers. 

Mr. Secretary, welcome back. I am glad to see that you still want 

the job. 

[Laughter.] 

Senator LINCOLN. I certainly appreciate the opportunity to talk 

with you about something that is of great concern to the cattlemen 

and women of Arkansas and to our cattle industry as a whole. The 

rule and the issues around it are very complex. You have seen that 

from the response of many of us, both complex, and they come at 

an unfortunate time when certainly we recognize that Canada has 

two more positive cases, or has had two more positive cases of BSE, 

and has been expressed by many, that the Japanese and the South 

Korean and some of our other U.S. export markets remain closed. 

I want to associate myself a little bit with the comments of Senator Roberts, where he talks about perception and reality. That is 

a critical thing for all of us up here. We continually have to remember it, and it is important for us as a nation that oftentimes when 

dealing with others globally that perception can be reality to them. 

We want to make sure that we are very, very clear about what the 

reality really is. 

In any case, during our last hearing when you were here we 

talked an awful lot about the Japanese and the South Korean markets and the negative impact that it is having on the entire U.S. 

cattle industry, and particularly my cattlemen in Arkansas which 

I hear about on a daily basis. I know this issue has been probably, 

we have discussed it a great deal here today, but I just feel compelled to have to emphasize that point one more time. The time has 

really come where the President of the United States needs to step 

up, and he has to step up to the plate and deal with this issue personally, and I hope that you will encourage that. This is certainly, 

with no offense intended to you or to USDA, with your authority 

or your power, but at the juncture we have come to, that we really 

need the President to weigh alongside you with his counterparts 

and with your counterparts in Japan. That is going to be essential. 

I do not know what you know about the horizon and the opening 

of those markets, and if you have anything further that you can divulge to us in terms of those perspectives. I have just personally 

come to the conclusion if the President does not personally engage 

himself in this, we are going to spend too much more time at a disadvantage here that is going to just exacerbate the problem that 

you have with the rule and Canada. 

We look at these markets that we seem to be losing, and we always talk about what it is going to take to fight to get them back. 

We lose these markets, sometimes we never get them back. That 

is something very important to put into this equation in terms of 

the timeliness of it, do I hope that you will consider that. 

In regard to the rule with Canada, looking at that, is it going to 

move the process with Japan and South Korea and others faster? 

Is it going to move us along faster in that initiative? I hope it will. 

Again, I reiterate I just cannot impress upon you enough how important that is. Is it going to set us back in terms of opening export 

markets in other places? We have talked about that, the impresVerDate 0ct 09 2002 11:34 Jun 15, 2005 Jkt 098459 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 C:\DOCS\98459.TXT TOSHD PsN: TOSH
38

sion that we leave globally and the science that we use, and its predictability and dependability in negotiating future markets is important. 

Dr. Collins, I just wanted to make sure I am clear. Is your economic evaluation complete, and do we have that up here? Have I 

just not seen it? 

[The prepared statement of Senator Lincoln can be found in the 

appendix on page 53.] 

Mr. COLLINS. There is what is called a Regulatory Impact Analysis that is available. It is required by both statute and Executive 

Order and regulation. It was complete for the promulgation of this 

rule. It is about 57 pages with another 30 pages of appendices. 

Senator LINCOLN. That is available to us? 

Mr. COLLINS. That is available to you. 

Senator LINCOLN. It is complete, or do you have further work? 

Mr. COLLINS. The analysis of this issue will never be complete. 

We will be revising our thinking as we continually get new information. That is a snapshot of how we saw this rule, a snapshot of 

what we saw as the effects of this rule or one that would go into 

place on March 7th. It is based on data available to the Department through the first half of 2004. It is complete as of that point 

in time. Every month we put out official forecasts of the price of 

fed beef, the beef production in the United States and so on, and 

so every month we will be reevaluating those variables based on 

new information. 

Senator LINCOLN. You will send us the updated information that 

you have which is consistent with the study that you have been 

doing ongoing, is that correct? 

Mr. COLLINS. I would be happy to do that. 

Senator LINCOLN. OK, great. 

Well, Mr. Chairman, as a member of the Senate Finance Committee, which has jurisdiction over international trade, we certainly 

spend a lot of time there talking about the needs to base decisions 

on scientifically sound ways, and we work to ensure that we are 

treated fairly in the international marketplace based on rules that 

we all agree to live by. 

I do not envy you, Mr. Secretary, you are in a perfect storm right 

now. You have two sides that are coming at you, and it is going 

to be critical, in my opinion, one, that the President weighs in, and 

two, that every ounce of consideration can be given in the timeframe of the rule, as Senator Salazar has mentioned, and what 

kind of impact it is going to have on our constituency. I look forward to working with you. 

Mr. Chairman, I am sorry. I will probably have to excuse myself 

too if you finish this up, and I am hoping that one of these three 

lunch meetings I am going to is going to serve me a steak after 

this. 

[Laughter.] 

Senator LINCOLN. I am looking forward to it. 

Thank you, Mr. Secretary. 

Secretary JOHANNS. Absolutely. 

The CHAIRMAN. If you get a steak, how about calling me? 

[Laughter.] 

39

The CHAIRMAN. Mr. Secretary, do you want to comment on anything that Senator Lincoln has said? 

Secretary JOHANNS. Just a quick comment. I do appreciate your 

thoughts in this area, and the economic analysis is available. I 

have taken the time to review it, and the regulations, and the Executive Order that are the basis upon which that is built. 

Dr. Collins’ observations are correct, this is a dynamic industry. 

What do I mean by that? It changes. Decisions are made at an individual basis that all of a sudden collectively can have a very profound impact. I would assert again that a very important issue for 

us to pay attention to is that raising cattle and processing go hand 

to hand, and without one or the other, the industry can really have, 

there can be very serious consequences. If we delay on this rule 

without basis we impact our trade negotiations. I just have no 

doubt about it. We get caught in a situation where the industry in 

Canada will, I believe, continue to build the capacity to slaughter. 

Once those decisions are made and those capital investments occur, 

it will not be in your lifetime or mine that the industry will retool 

itself in all likelihood, and all of a sudden you have a whole different dynamic. 

In the short term we may be thinking we are helping the producer. In the long term it may be a very devastating decision for 

him. You have a major presence in your State in this area, so you 

share my concern, I would be pretty confident. 

Senator LINCOLN. No doubt, but it is important to always remember that we have to have, in this dynamic industry, a customer. Again, as Senator Salazar mentioned, there are very few of 

us that come from rural America any more up here, and it is critical, that impact. I just really implore upon you and the President 

to recognize. Hopefully the President will seize this as an opportunity to show rural America that he is willing to step in and fight 

for them in those marketplaces like Japan, and I encourage that 

heavily. 

Secretary JOHANNS. He has and he will. In his conversations 

with the Prime Minister of Japan a few months ago, he aggressively worked this issue, and I could not be more appreciative of 

his efforts. 

The CHAIRMAN. Let me ask one final question. We, Mr. Secretary, have been talking here, obviously, about animal health 

versus food safety relative to this issue. FDA is not here today, but 

you mentioned FDA early on in your statement. I want to make 

sure that as this issue is publicized and this hearing is publicized, 

it is clear what role food safety plays in this issue. Would you or 

Dr. DeHaven quickly comment on that, please? 

Dr. DEHAVEN. I would simply say that food safety hospital always been the paramount issue that has been before us as we 

made the decisions on all of our programmatic changes and enhancements we have made to the program. Even to the extent that 

we increase surveillance to determine what the prevalence of the 

disease is or is not in the United States, that then has implications 

for what additional measures we may need to take with regard to 

a feed ban, additional food safety measures we may need to take 

with regard to SRM removal or some of the other actions. Clearly 

the starting point is ensuring food safety. The fact that Secretary 

40

Veneman very quickly initiated an SRM removal program shortly 

after the finding in the case is indicative of that, but again, the 

starting point has been food safety and all of the other actions we 

taken then stem from that. 

The CHAIRMAN. Thank you very much. Gentlemen, thank you for 

being here. Thanks for providing this testimony. 

We have received written statements and testimony from Senators Allard, Burns, Craig and Cantwell, that I would like to submit for the record, and without objection, it is so ordered. 

[The prepared statements of Senators Allard, Burns, Craig and 

Cantwell can be found in the appendix on page 72–79.] 

The CHAIRMAN. I would remind all Senators that the hearing 

record will remain open for 5 days to allow for Senators to submit 

statements for the record, as well as questions, to which, I would 

appreciate, Mr. Secretary, you all would respond to as quickly as 

possible so we can move ahead with this issue. 

[The prepared statement of Secretary Johanns can be found in 

the appendix on page 57.] 

The CHAIRMAN. With that, this hearing is concluded. 

[Whereupon, at 1:17 p.m., the committee was adjourned.] 

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Æ


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