S. HRG. 108–858

FISCAL YEAR 2005 FIELD HEARING

HEARINGS

BEFORE THE

COMMITTEE ON THE BUDGET 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

January 9, 2004—MAD COW DISEASE: INDUSTRY IMPACT AND U.S. 

GOVERNMENT RESPONSE

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Printed for the use of the Committee on the Budget 

FISCAL YEAR 2005 FIELD HEARING

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22–427cc 2004

S. HRG. 108–858

FISCAL YEAR 2005 FIELD HEARING

HEARINGS

BEFORE THE

COMMITTEE ON THE BUDGET 

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

January 9, 2004—MAD COW DISEASE: INDUSTRY IMPACT AND U.S. 

GOVERNMENT RESPONSE

(

Printed for the use of the Committee on the Budget 

2

COMMITTEE ON THE BUDGET 

DON NICKLES, Oklahoma, Chairman 

PETE V. DOMENICI, New Mexico 

CHARLES GRASSLEY, Iowa 

JUDD GREGG, New Hampshire 

WAYNE ALLARD, Colorado 

CONRAD BURNS, Montana 

MICHAEL ENZI, Wyoming 

JEFF SESSIONS, Alabama 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

JOHN ENSIGN, Neveda 

JOHN CORNYN, Texas 

KENT CONRAD, North Dakota 

ERNEST F. HOLLINGS, South Carolina 

PAUL S. SARBANES, Maryland 

PATTY MURRAY, Washington 

RON WYDEN, Oregon 

RUSSELL D. FEINGOLD, Wisconsin 

TIM JOHNSON, South Dakota 

ROBERT C. BYRD, West Virginia 

BILL NELSON, Florida 

DEBBIE STABENOW, Michigan 

JON S. CORZINE, New Jersey 

HAZEN MARSHALL, Majority Staff Director 

MARY ANN NAYLOR, Staff Director 

iii

C O N T E N T S 

HEARINGS 

Page 

January 9, 2004—MAD COW DISEASE: INDUSTRY IMPACT AND U.S. 

GOVERNMENT RESPONSE .............................................................................. 1

STATEMENTS BY COMMITTEE MEMBERS 

Senator Conrad ........................................................................................................ 1

WITNESSES 

Aasmundstad, Eric, President, North Dakota Farm Bureau ............................... 4

Carlson, Robert, President, North Dakota Farmers Union, Bismarck, North 

Dakota ................................................................................................................... 5

Dahl, Jeff, President, North Dakota Stockmen’s Association, Bismarck, North 

Dakota ................................................................................................................... 13

Duppong, Terry, Duppong’s Willow Creek Farms, Glen Ullin, North Dakota; 

On Behalf of the Ranchers-Cattlement Action Legal Fund, United 

Stockgrowers of America (R-CALF USA) ........................................................... 22

Galbreath, Craig, Dr., Oakes Feed, Oakes, North Dakota ................................... 28

Schuler, Larry, DVM, State Veterinarian, North Dakota Department of Agriculture, State Board of Animal Health, Bismarck, North Dakota ................... 15

(1)

MAD COW DISEASE: INDUSTRY IMPACT AND 

U.S. GOVERNMENT RESPONSE 

FRIDAY, JANUARY 9, 2004

U.S. SENATE, COMMITTEE ON THE BUDGET, Washington, DC. 

The committee met, pursuant to notice, at 10 a.m. in the Pioneer 

Room, North Dakota State Capitol, Bismarck, North Dakota, Hon. 

Kent Conrad presiding. 

Present: Senator Conrad. 

OPENING STATEMENT OF SENATOR KENT CONRAD 

Senator CONRAD. The hearing will come to order. I am asking 

people to take their seats so that we can begin the hearing. 

Let me indicate that this is an official hearing of the Senate 

Budget Committee, and so the rules of the U.S. Senate will be followed in this hearing. That means that we give the witnesses our 

full attention. We ask that there be no open expressions of agreement or disagreement with statements made by the witnesses, that 

they be allowed to make their full and complete statement without 

interruption. 

We will then have a time for questions of the first panel. We will 

then excuse the first panel and we will go to the second panel. We 

will allow each of them to testify, have a question and answer period, and then if there is time permitting, it is my hope that we 

would be able to open it up for people in the audience to make any 

additional statements or comments, or ask questions that they 

might have. 

The other point I should make is that if people have written testimony, if they would provide a copy of that to the court reporter. 

She advises me that that would be of assistance to her. So if any 

of the witnesses have prepared statements, if they would make a 

copy available to the court reporter, I am confident that that would 

help her. 

One other thing I would like to indicate to you today is that CSpan advised my office this morning that this is the first congressional hearing on this issue, and as a result, substantial national 

interest will be focused on what we learn here today, so this is an 

important hearing. It is an important hearing for North Dakota. It 

is an important hearing for the industry. It is an important hearing 

for the country. 

As you know, some 40 countries have now banned our exports of 

beef. That is a very serious matter, and something that we must 

move to correct as quickly as possible. That is one of the focuses 

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of this hearing, how we can proceed to recapture these lost markets. 

Let me indicate that the Committee on the Budget meets this 

morning to assess the impact of the recent case of mad cow disease, 

and the Federal Government’s response to that incident. 

It was just over 2 weeks ago that the United States cattle industry was rocked by the news that a single dairy cow in Washington 

state had been found with mad cow disease, otherwise known as 

bovine spongiform encephalopathy, or BSE. The revelation hit our 

ranchers and feeders like a gut punch, made worse by the fact that 

consumers were just settling in for the holidays, and cattle producers, themselves, were just starting to enjoy a long-overdue period of profitability. The ensuing drop in cattle prices and the subsequent loss of beef exports to nearly 40 countries were a shock to 

our cattlemen and to our nation. 

Fortunately, the situation has now somewhat stabilized. The immediate free-fall in cattle prices has eased, and by all accounts domestic consumer demand for beef remains at a very strong level. 

In this past week, USDA officials confirmed that the diseased cow 

had its origin in Canada, thus the United States can continue to 

assert and assert clearly and legitimately that we have not yet had 

a homegrown case of mad cow disease, and we can emphatically reassure our consumers, both at home and abroad, that U.S. beef remains healthy and safe. That should be the very clear message 

coming from this hearing—U.S. beef supplies are healthy and safe. 

They are healthy and safe for our consumers in this country, they 

are healthy and safe for our export customers. 

Also on the positive side, the crisis has served to educate the 

public on the great importance of the beef industry, not just to 

rural America, but to our entire economy. Beef is, indeed, critical 

to creating jobs and generating income across our entire nation. 

This bit of good news is welcome, but the reality remains that 

we have a lot to do to protect this industry and put it back on a 

solid footing. For example, our nearly $3.5 billion export market is 

still at considerable risk, and we are not likely to get cattle prices 

back up to their pre-crisis levels until we once again open those export markets. I do know that the market was limit up the last 2 

days—that is very encouraging. 

In addition, many questions remain as to the specifics of the mad 

cow measures that USDA has announced, including their impact on 

both producers and consumers. 

The mad cow case was a harsh reminder that consumer confidence is a very fragile asset—one that we can not take for granted and one that we must continually work to preserve. We can’t 

just react to events as Europe and Canada did after their mad cow 

outbreaks, or we will lose the consumer and see our industry devastated. Europe eventually destroyed nearly 4 million head. Let me 

repeat that, because that ought to be the warning to all of us as 

to the significance of the threat. In Europe they destroyed nearly 

4 million head in response to their outbreak, most of them in the 

United Kingdom. We have to be ever-vigilant, anticipate events, 

and make sure that we have the proper preventative measures in 

place to protect this industry and our consumers. 

3

As we know, on December 30th, the USDA announced several 

mad cow safeguard measures designed to maintain consumer confidence. Those steps are summarized in this chart. 

[The information referred to follows:] 

Senator CONRAD. Let me just direct your attention to those steps 

that have already been announced: 

National Livestock Identification System: Immediate implementation. 

Downer Animals: Immediate ban. 

Product Holding: Confirmation must be received before tested 

cattle are marked ‘‘Inspected and Passed,’’ and the confirmation, of 

course, is of the test results that have been done. 

Specified Risk Material: Immediate, more comprehensive ban. 

Advanced Meat Recovery: Additional restrictions, strengthen 

process control. 

Mechanically Separated Meat: An immediate ban. 

Air-Injected Stunning: An immediate ban. 

These are aggressive steps that were needed to protect consumer 

confidence. 

A case in point is the proposed immediate implementation of a 

national livestock identification system. Back on October 30th, well 

before the mad cow case surfaced, I wrote a letter, signed by four 

of my colleagues, to the Chairman of the Senate Agriculture Committee, Senator Cochran, asking for a hearing on USDA’s thenfledgling plans to develop a livestock identification system. I wanted to know then the expected costs and benefits of such a system, 

whether it would be made mandatory, whether it would be required of imports, how it would relate to the new country-of-origin 

labeling requirement, and so on. 

Now events have conspired to force the immediate implementation of a national identification system. Presumably, such a system 

will be made mandatory and applied to imported livestock and 

meat, as well. But these basic decisions remain unanswered. Neither do we know whether the new ID system will be fully funded. 

This is critical, and it’s a central focus of this hearing. 

The President is scheduled to release his new budget for the coming fiscal year on February 2nd, and I will be examining that budget very closely to see that it includes full funding for the new national identification system and related mad cow prevention measures. My concern is that if these measures are not funded by the 

Federal budget, that the full costs will be pushed onto producers. 

That would not been, in my judgment, a fair result. 

I would especially welcome any specific comments from our witnesses today on these points. 

Other fundamental questions remain, including the future terms 

of our livestock and meat trade with Canada. I have already called 

on USDA to postpone indefinitely any plans to reopen the border 

to Canadian live cattle, and I am calling on them today to reexamine the earlier decision to allow Canadian meat imports, especially 

in the wake of our new mad cow safeguard measures, which Canada has adopted only in part. These are critically important points: 

No. 1, the border should remain closed to Canadian live animals. 

No. 2, USDA ought to review their earlier decision to allow Canadian boxed beef into this country, because Canada has not yet 

4

adopted the full measures that we have to protect consumers in our 

industry. 

Our subject this morning is a serious one. We have a lot of work 

ahead over the next several months. We also have a lot at stake. 

Our ranchers are vital to North Dakota and to our country, and 

their future livelihood depends on our ability to continually reassure consumers that U.S. beef remains safe. 

I want to thank all of our witnesses for agreeing on very short 

notice to appear here today. I ask each witness to please try to 

summarize your remarks in 10 minutes, or approximately that, so 

we can maximize the time available for questions and discussion. 

A copy of your entire prepared statement will be made part of the 

record. 

In order to accommodate the schedule of our witnesses, we have 

grouped their presentations into two panels. We will now begin 

with the first panel, and I will turn to Eric Aasmundstad, who is 

the head of North Dakota Farm Bureau. I very much appreciate 

your being here today. Please proceed with your testimony. 

STATEMENT OF ERIC AASMUNDSTAD, PRESIDENT, NORTH 

DAKOTA FARM BUREAU 

Mr. AASMUNDSTAD. Chairman Conrad. I thank you for it opportunity to be here this morning to represent more 26,000 member 

families that are North Dakota Farm Bureau. 

North Dakota Farm Bureau is very concerned that the USDAAPHIS proposed rules to allow the importation of Canadian cattle 

in the United States are not stringent enough to prevent another 

BSE incident in our country. We believe that all importation of cattle from Canada should be suspended until the current investigation regarding the Washington state animal is completed, and then 

only if those findings say that—and the science says it is OK. 

The OIE recommends that the ban on the feeding of ruminant 

protein to ruminants should be in place for 7 years to classify a 

country or region as minimal-risk area for BSE. This recommendation is recognized by the WTO as an international recommendation 

for animal disease control. And Canada has not had a ban in place 

for that length of time. A case of BSE verified in Canada less than 

a year ago and the animal found now in the United States with 

BSE originated in Canada, and we submit Canada is not a minimal-risk country, and therefore, cattle imports should be banned 

from the United States from Canada. 

There are rumors circulating that a feed mill in Alberta has been 

including animal protein in ruminant feeds as recently as the past 

year. Now, we haven’t been able substantiate that, and we certainly hope that it is not true, but until this can be disproved or 

substantiated, we have to error on the side of caution so that our 

livestock, our cattle producers don’t have to suffer the same damages that the Canadian producers have. 

You know, Canada has made the efforts to minimize the risk of 

BSE. I think they have probably fallen short, but they have done, 

in part, quite an exemplary job of finding and isolating and preventing the spread of this disease in their country, but we have to 

ask ourselves, have they done enough so that we dare go there, so 

we dare import anything from Canada? We don’t think they have. 

5

And we think that the case of this cow showing up in Washington 

was an exclamation point behind that. 

The devastation the U.S. livestock market has experienced because of this discovery, cannot, must not be ignored. U.S. producers 

are not willing to risk further harm by allowing imports of Canadian cattle. 

We support the animal identification from the standpoint of food 

safety, being able to quickly trace where and when an animal may 

have contracted disease, and being able to identify suspect animals 

quickly will provide a safer, healthier food supply. 

Implementation of an animal identification program must have 

producer safeguards to be readily acceptable. The program cannot 

simply be a mechanism to pass all liability back to the producer. 

Once the original owner sells or relinquishes control of the animal, 

the owner’s liability must also be removed. The identification program must not force the costs of implementation, administration 

and/or regulation entire upon the producer. The expense of identification devices, whatever they may be, cannot be totally borne by 

the producer, either. Consumers, as well as producers, benefit from 

this program, and both should share in the cost. 

The authors of the proposed animal identification plan left a 

small window of opportunity for other types of identification. They 

mentioned tattoos, but provided no details. We believe tatoos, various types of brands, and etcetera, could be used by the original 

owner to identify the animal. Until more is known, we reserve further comments, however, we are generally supportive of the concept, if carried out properly. 

We support COOL. This may not be a food safety issue in and 

of itself, but if an infectious outbreak occurs, we will be able to 

more readily identify where that product originated. COOL is a 

consumer issue, and as such, will provide broader consumer confidence, especially in conjunction with measures being taken to assure food health and safety. Once again, I must reiterate that it 

cannot affect only producers, but the packers as well. 

We are very appreciative of the USDA-APHIS’s efforts in responding to this crisis. They have done an exceptional job of reassuring the public that control measures are in place and working. 

The agency and the media are to be commended for projecting a 

positive attitude and bolstering consumer confidence in the safety 

and wholesomeness of our meat supply. 

Once again, Senator, thank you. I will try to answer any questions after. 

Senator CONRAD. Thank you very much, Eric. Thank you very 

much for being here and testifying on what is really a very, very 

important subject to North Dakota and the nation. 

Welcome to Robert Carlson, President of the North Dakota Farmers Union. I am very pleased that you are here, as well. If you can 

proceed with your testimony. 

STATEMENT OF ROBERT CARLSON, PRESIDENT, NORTH 

DAKOTA FARMERS UNION, BISMARCK, NORTH DAKOTA 

Mr. CARLSON. Thank you very much, Senator Conrad, for holding 

this hearing on this important issue that in some ways is dividing 

the farmers and ranchers that produce beef in our state into two 

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camps—those that sold before the 23rd of September, and those 

that sold after. 

I could preface as my remarks—I guess two things: First of all, 

I have provided written testimony but I am not going to read it; 

and second, I am pleased to say that the position of the North Dakota Farmers Union is very much similar to what Mr. 

Aasmundstad has just stated is the Farm Bureau position, so that 

is always a happy occasion when that occurs. 

There is some talk in the country about how consumers and the 

media and government officials are overreacting to the single incident of BSE, and they say, you know, really, we haven’t scientifically proven the link between BSE, eating an animal with BSE, 

and the variant Creutzfeld Jakim disease and others have said, you 

know, your risk of contracting BCJD from eating beef is about 

equal to your risk of being buried in an avalanche. That may be 

so, but people can avoid an avalanche by staying away from the 

mountains, and we don’t want people to stay away from beef. They 

need to feel assured that beef is one hundred percent safe for them 

to eat, so we must take actions that really provide safe beef, and 

give assurance to consumers that it is safe. 

We support the actions that you outline, Senator, that the USDA 

has taken and FDA have taken so far. We proposed early on—in 

fact some cases they have exceeded what we proposed early on that 

no meat from downer cattle go into the retail system until the test 

results were in, and that all animals should be tested. The Secretary banned all downer cattle from the food supply, which, I 

think, looking back, was the appropriate decision to make to satisfy 

consumers that their food was safe. 

In addition to the measures recently initiated by USDA and 

FDA, let me enumerate a few steps, and if you have the written 

testimony, I am starting on page 4 here, and sort of not reading 

it, but hitting some of the points that are bulleted. 

We would like to see additional testing of cattle, particularly of 

imported beef. We believe that there is not enough testing. We 

need to do more testing, particularly of the beef that is imported 

into this country, the boxed beef and the live animals. I believe 

that this is already being done, but we also ask that the U.S. immediately ban the processing, blending and shipment of meat from 

any animal that has been tested for BSE until the test result are 

returned. 

Another point: USDA should suspend its current rulemaking 

process which was initiated to establish regulations governing the 

resumption of live cattle imports from Canada. Simple prudence 

dictates that the first Canadian BSE incident was not isolated, and 

that a much more concerted effort must be put in place to the prevent further expansion of the disease into the U.S. production and 

market system. 

USDA should rescind its prior rules and regulations governing 

the importation of beef products from Canada. And so I am agreeing with you, Senator, and with the Farm Bureau on this issue 

with the Canadian imports. 

We also believe that the Bush Administration should rapidly pursue the finalization of reasonable, cost efficient and workable rules 

for the implementation of mandatory country-of-origin labeling, 

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and seek congressional action supporting an expedited schedule for 

its implementation, rather than encouraging further delay, as has 

been the case. Mandatory country-of-origin labeling will help restore any loss of consumer confidence in our food safety protection 

system by providing additional information to our domestic and foreign customers while improving the traceability of products 

through the food chain. 

Frankly, Senator Conrad, Farmers Union members are frustrated with the U.S. House, which voted December 8th to delay the 

implementation of country-of-origin labeling for 2 years, and we are 

hopeful that the U.S. Senate will take a more thoughtful approach 

to COOL when it resumes work on the omnibus appropriations bill, 

perhaps later this month. 

Another point: If market prices do not recover, we would urge the 

Bush Administration and Congress to consider emergency economic 

assistance for producers who suffer economic and market losses as 

a result of the BSE incident. Without a commitment of Federal assistance, many beef producers in rural communities which rely 

upon them are likely to suffer irreparable damage as a result of a 

problem beyond their control. 

We urge speedy implementation of a mandatory animal identification system that spans the food chain from producer to consumer. This program is integral to homeland security. As such, we 

ought to use the resources of the Federal Government, resources 

meaning financial resource, to assist producers in implementing 

such an identification program. We must restrict access to this 

data base to ensure it serves the interests of the producers and 

consumers. 

Here are a few specific concerns about a mandatory animal identification program. 

No. 1, liability provisions: Producers should not be made scapegoats for every food-contaminated recall of products. For example, 

a cow processed with e-coli in its digestive system does not itself 

contaminate the meat. Meat becomes contaminated during processing. Packers and processors could try to escape liability by stating the owner of the cow is at fault. Unless there is willful negligence or fraud, producers should not bear liability. 

Program costs: Considering that the Secretary of Homeland Security has stated the U.S. needs mandatory animal identification 

to combat terrorism—along with concerns about animal health and 

food safety—it only makes sense that the Federal Government pay 

for creating and maintaining the data base, and compensate producers for costs of implementing animal identification. 

Country-of-origin labeling: We ought to require USDA to use this 

system and implement it immediately, along with the animal identification system. 

Use of proprietary information: This is important. Any animal 

identification program should be governed by clear limits as to how 

the information may be used and by whom. The information should 

not be used by packers to affect prices paid for livestock, nor should 

it be given out to telemarketers or made available to the public. 

One concept calls for restricting this information to public officials 

only for purposes of tracing animals or health or diseases, with the 

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exception that country-of-origin labeling follow through to consumers. 

Data base control: This information must be kept and controlled 

by the government or government agency, and not subcontracted 

out to new or established private entities. 

Farmers Union stands ready to provide any assistance to implement these initiatives which we believe will be useful in restoring 

our nation’s reputation as a supplier of high-quality products. 

We also recognize that this process and the information surrounding it is constantly evolving and changing, and the recommendations that we make today may be added to and probably 

will be added to in the near future. I look forward to any questions. 

Thank you. 

Senator CONRAD. Thank you very much for the excellent testimony from both of you. I appreciate that. 

I have talked about four specific measures, and I would like to 

review each of them with both of you and get your response. 

No. 1: I have said, immediately in the aftermath of this event, 

that we ought to continue the ban on all live cattle coming in from 

Canada to this country, as a prudent measure to protect our consumers and our industry. Do you agree with that position? 

Mr. AASMUNDSTAD. Absolutely. 

Mr. CARLSON. Absolutely. 

Senator CONRAD. The second point I had made is I have called 

on the Secretary to review her decision to allow boxed beef to come 

into this country from Canada. Again, it seems to me, as a prudent 

measure, that decision ought to be reviewed and overturned. 

Mr. Aasmundstad, what would your position be? 

Mr. AASMUNDSTAD. I would tend to agree with that, Senator, for 

the time being, until they can prove that the Canadian supply of 

boxed beef is safe. You know—and there, again, this will go back 

to the rumor of the feed mill in Alberta has not been following the 

ban on ruminant products and feed. 

Another thing that we should possibly do is demand that the Canadian government do a review of their inspection system regarding feeds and feedstuffs, to guarantee that they are following the 

international rules that apply to the feeding of ruminant by-products or ruminants. That, to me, would be another good step. 

Mr. CARLSON. Reviewing the imports of the boxed beef, yes, I 

think that is a prudent thing the do. There has been the assumption that in animals 30 months of age and younger, there is not a 

threat of BSE in that meat, and yet about the time I thought that 

that seemed to be the scientific case, we slaughtered, euthanized, 

lethally injected and then buried in a landfill, 440-some calves that 

were I think under a year old, so I think, as Eric said, the issue 

of science there does need to be reviewed. 

Senator CONRAD. I do think that is a reasonable and prudent 

step. I know Canada will mightily resist it, but, you know, our 

first, I think, obligation is to assure our consumers and our industry that every step has been taken to protect them. 

The third point I have made is that with respect to a national 

identification system, that that should be borne, the cost of that 

should be borne by the Federal Government. The Federal Government is imposing the requirement in the national interest, I agree 

9

with that, but that tells me it should be paid for by the Federal 

Government, not shifted to the industry. 

What would the position of Farm Bureau be on that? 

Mr. AASMUNDSTAD. I would certainly say that if it was a move 

by the Federal Government that benefited only the producers, then 

maybe there would be an argument for the producers to pay for it, 

but this doesn’t affect only the producers and benefit them. It benefits them, it benefits the packers, it benefits the entire chain 

through the consumers, to our foreign customers, what have you, 

so certainly, as we said in our testimony, we don’t think that this 

should be borne by the producers, but rather the Federal Government would be a place to do that. 

Also, when we talk about identification systems, I think that 

every safeguard that can be made has to be taken to assure that 

this is not used as a transfer of liability back to the grower. That 

is an absolute must. If we can look at a national mandatory animal 

identification system as a marketing tool, if you will, for the safeness of U.S. beef products, then we are going down the right road, 

but if we are going to use it as an industry means for transfer back 

to the producer, then we have missed the mark. 

Senator CONRAD. Very good point. 

Robert? 

Mr. CARLSON. I would just say ditto to all that. This is an issue 

of national security, homeland security, so it is appropriate that 

the Federal Government pay for implementation of the system. 

Senator CONRAD. The fourth point that I think is critically important is the connection to country-of-origin labeling. If we are 

going to have a national identification system, obviously that is 

connected to country-of-origin labeling. You can’t very well have a 

system without an ability to say what country it came from. In 

light of the Canadian experience, it seems to me even more clear 

that country-of-origin labeling is critically important to protecting 

our consumers and our industry. 

Eric, your reaction? 

Mr. AASMUNDSTAD. The most important thing we can do, Senator, as producers of foodstuffs, is to make sure that our consumers 

are given a safe product. Now, if we are going to guarantee to our 

customers worldwide and to our consumers here at home that our 

domestically grown beef is safe, then by all means, we need to identify that meat in all of our other products in the United States, so 

that we can differentiate our products from those products that 

come here from the rest of the world. If we are going to go out 

there and say, ‘‘Buy from the U.S. because we are the safest,’’ then 

we have to have a way of proving it, and country-of-origin labeling 

is probably the only way that we can do that. 

Senator CONRAD. Robert? 

Mr. CARLSON. We have been working for country-of-origin labeling since 1993, and I think that history is on our side, and that 

sooner or later we are going to overcome all the resistance and we 

are going to have it, and the sooner we have it the better. I am 

mystified by some groups that still find it objectionable. 

Senator CONRAD. If I can, just for the record, insert here a letter 

that I sent to the Secretary yesterday, I said, in part: ‘‘I ask that 

USDA reexamine its earlier cost benefit analysis of the feasibility 

10

of implementing country-of-origin labeling. The reason for my request is straightforward. According to USDA’s previous analysis, 

much of the assumed cost of country-of-origin labeling is associated 

with the record keeping involved in identifying livestock and meat 

as it moves through the food chain. However, implementation of a 

livestock ID system would put in place a foundation that can only 

facilitate country-of-origin labeling implementation. Thus, whether 

one supports country-of-origin labeling or not, having a livestock ID 

system in place would likely change the feasibility of implementing 

country-of-origin labeling in a fundamental way. Therefore, I ask 

USDA to reevaluate the costs and benefits of country-of-origin labeling, with the assumption that a livestock identification system 

will be made operational as announced by USDA.’’

I think that is just a very important point to make. 

The fifth point and final point that I would make is on the question of providing assistance to those producers affected. For example, we know herds are going to be destroyed, already have been, 

are in the process of being. Should that full cost be borne by the 

producers, or there should be some assistance to those who could 

potentially be wiped out through no fault of their own? 

Eric, what would be your judgment? 

Mr. AASMUNDSTAD. Inasmuch as the identification system would 

be a Federal mandate that you, yourself, Senator, feel should be 

paid for by the Federal Government because it is a Federal mandate. Also the destruction of livestock associated with this or any 

other catastrophic disease is controlled by the Federal Government, 

mandated by the Federal Government, we certainly think there 

should be assistance from Federal Government to ease those producers through the time that they have to struggle with while their 

herds are destroyed and transition into something else, certainly. 

Senator CONRAD. Robert? 

Mr. CARLSON. It isn’t the producer’s fault. The producer had no 

hand in wilfully injecting BSE into this herd, and I think there are 

precedents in other cases for compensating producers whose herds 

or animals have been destroyed because they are carrying disease. 

Senator CONRAD. One other issue I wanted to raise with you, and 

that is the question of downer cattle, because there is, I think, a 

legitimate question whether or not there has been somewhat of an 

overreaction. There is now a complete ban on downer cattle, and 

I think all of us would agree that downer cattle that are diseased 

should not go into the food chain. But I think its also the case, I 

think everybody here knows the reality is there are some cattle 

that are not diseased that are classified as downer cattle. They are 

cattle that have a leg broken in a pen, they are cattle that have 

been injured before they ever get to slaughter and that are perfectly healthy, and that could easily be subjected to testing that 

would then tell us whether or not it is appropriate for them to go 

to slaughter or not. I would just like your reactions on that question. It is the one thing that has troubled me a bit about USDA’s 

order, and it was very important that we take aggressive action, 

but I also think we don’t want to abandon facts and we don’t want 

to abandon science, and we should not be restricting animals that 

are fully healthy, other than they may have an injury. We certainly 

don’t want cattle that are ill, we don’t want cattle that present any 

11

kind of real threat to the food supply, but on the other hand, I 

don’t think it is wise to be preventing cattle from going into the 

food supply that have been fully tested and are healthy. 

Eric, your reaction? 

Mr. AASMUNDSTAD. Certainly, as in a lot of things, the details 

are in the definitions. Now, the steps that were taken to ban all 

downers needed to be done—at that moment in time it probably 

did. As we react to things so often, the pendulum goes so far one 

way, then it has to come back before we find any reason in it. But 

I would agree, Senator, that we have to define what a true downer 

is. We agree there shouldn’t be a wanton waste of perfectly good 

meat just because an animal is injured. So certainly there has to 

be some moderation, and science can’t be ignored. 

Senator CONRAD. Robert? 

Mr. CARLSON. To answer the question, it is a case of perception 

and reality. A steer that is injured in shipping, you know, is, if it 

was tested, that there would be nothing wrong with that meat and 

can be put on a retail counter. The perception, though, I noticed 

even the Bismarck Tribune kind of in the heart of cattle country, 

in a recent editorial talked about how great it was to ban all downer animals, and they even went on to say that they don’t want any 

meat from those animals fed to Fluffy and Fido, either. So I guess 

the reality is that testing would be the proper thing to do in terms 

of determining the safety. 

The word ‘‘downer’’ animal in itself is not a very marketable concept, so maybe this is a cost that has to be borne, you know, for 

awhile, at least to get consumer confidence back. 

Senator CONRAD. The thing that struck me is the use of language. Downer cattle, nobody wants to have any association with 

downer cattle. Maybe what we need is a better use of the language, 

and a more careful definition. What we need to be banning are 

unhealthy critters, whether they are downer or whether they are 

still ambulatory. That should not be the issue. It seems to me the 

issue is healthy or unhealthy. Those livestock that are unhealthy 

should not enter the food chain in any way. I think that would be 

our overwhelming agreement, the consensus. On the other hand, 

healthy animals should not be prevented from going into the food 

chain. I think all of us know, from growing up in this part of the 

country, that there are perfectly healthy animals that are designated as downers, and they have maybe broken a leg in shipping. 

Those animals should not be prevented from going into the food 

chain, and what we need is a more careful definition of what the 

real risk is. 

Any final thoughts or statements either of you would want to 

make? 

Mr. AASMUNDSTAD. I would just say, again, that the animal identification system, COOL, is of the utmost importance not only to 

the livestock industry but also our business of providing raw materials for food, the business of farming. We can’t wait until we have 

a wreck in another segment of our industry. We have had one here, 

and thankfully it is not as bad as it could have been, and like you 

said, getting better. But let’s not wait until we have a wreck in 

vegetables or table grapes or something along that line that come 

12

in from Chili or Argentina, or what have you. Let’s get done what 

we need to do, and do it now. 

Mr. CARLSON. There seems to be, at least kind of generally, a lot 

more interest in food safety. I noticed this morning on CNN talk 

about salmon, and talk about certain vegetables and so forth, and 

it seems to me that we are going to need to have USDA do more 

testing of a lot of food products in addition to beef. As I understand, today, administration officials, and so on, are meeting with 

a Japanese delegation about reopening beef sales. It will be very 

interesting to hear what comes out of that meeting, but I would be 

very surprised if it didn’t call for a large, large increase in our testing regime. 

Senator CONRAD. It is very interesting, if you look at country-oforigin labeling, there is no delay recommended for catfish, but 

there is a 2-year delay on beef. You know, I don’t think that difference can be justified, especially in light of USDA’s call for us to 

move ahead with respect to an identification system. 

If we are going to have an identification system, clearly, you are 

going to have to identify what country the cattle come from. I think 

that is just clear. So, hopefully, we will be able to move ahead in 

a way that makes sense for consumers and makes sense for the industry. 

I think it is very clear we send a clear, consistent message to 

USDA on these issues. I certainly think both of you have done that 

here this morning, and I appreciate it, and I thank you for the testimony. 

Mr. CARLSON. Thank you. 

Mr. AASMUNDSTAD. Thank you. 

Senator CONRAD. We will call now on the second panel, including 

Jeff Dahl, President of North Dakota’s Stockmen’s Association; 

Terry Duppong, representing R-CALF; Dr. Larry Schuler, State 

Veterinarian, North Dakota Department of Agriculture; and Dr. 

Craig Galbreath, Doctor of Veterinary Medicine from Oakes Feed, 

Oakes, North Dakota. 

As they are coming forward, I would like to just take a moment 

on a personal note, if I could, to congratulate Wade Moser, who has 

been named Agriculturalist of the Year, chosen by North Dakota 

State University Saddle and Sirloin Club for that honor. And, 

Wade, we would like to just publicly acknowledge that significant 

honor, and say it is well-deserved. It is in the record of the U.S. 

Senate, so congratulations to Wade. That is something you can be 

forever proud of. 

I am just delighted at the next set of witnesses that we have, because we are bringing to the witness table not only representatives 

of the industry, but also medical professionals, those who know this 

subject intimately and know it well, and I am just delighted that 

Dr. Schuler, the State Veterinarian, is with us; that Dr. Craig 

Galbreath, also a veterinarian from Oakes Feed, somebody that understands the feed side of this issue is with us; and, of course, Jeff 

Dahl, our outstanding President of the North Dakota Stockmen’s 

Association; and Terry Duppong, representing R-CALF. 

I thank you all for being here. I think this testimony is going to 

be very important to the record of the committee, and to help with 

an understanding of the public of precisely what has happened. 

13

With that, I would ask Jeff to begin with your testimony, if you 

would, Jeff, and then we will go to Dr. Schuler, and then we will 

go to Terry, and finally we will ask Dr. Galbreath at the back to 

clean up. OK? 

Jeff, welcome. 

STATEMENT OF JEFF DAHL, PRESIDENT, NORTH DAKOTA 

STOCKMEN’S ASSOCIATION, BISMARCK, NORTH DAKOTA 

Mr. DAHL. Thank you, Senator Conrad, for the opportunity to 

provide you with our comments today. Let me start by thanking 

you on behalf of the North Dakota Stockmen’s Association for the 

factual, positive statements you have made on behalf of the beef industry about the BSE situation over the last couple of weeks. 

It appears that the situation is beginning to stabilize, as is usually the case when calm thinking prevails. The BSE issue does 

present some problems that need to be addressed, and with your 

permission, I would like to touch on them before I discuss our 

budgetary concerns. We believe they would have required some 

government action. 

First, it is our belief that the expanded limits on cattle-futures 

contracts need to be removed. The expanded limits resulted in a 

knee-jerk reaction that cost cattle producers about 20 percent in 

equity in 5 days. If the original $1.50 limit had been maintained, 

it would have taken 10 days of limit-down to reach the same level. 

In this case, the amount of information gathered in those five extra 

days would have done a lot to alleviate concerns in the marketplace. We feel that government involvement may be needed to accomplish the removal of the expanded limits. 

Second, on the issue of trade, Stockmen’s Association would like 

to see that any proposed free (fair) trade agreements are delayed, 

and that the government and the livestock industry aggressively 

pursue resumption of trade with our international customers, 

which you already indicated is being done. Stockmen’s Association 

also seeks to delay any implementation of live-cattle imports from 

Canada. 

In regard to BSE, specifically, Stockmen’s feels USDA-APHIS 

should take a proactive stance by requiring any country that wants 

to trade with the United States to have in place a similar feed ban 

and BSE surveillance program. 

Third, on country-of-origin labeling, COOL appears to be the 

major sticking point in passage of the omnibus appropriations 

package. As we discussed earlier, our members support COOL. At 

the same time, they realize that COOL needs to be implemented 

in the least-cost manner for producers. When we visited last, we 

proposed that one of the ways to implement COOL at very low 

cost—or whatever the cost is to do a rule interpretation change—

is to remove cattle from the J-list and to change the interpretation 

of beef’s ‘‘final purchaser’’ as the retail customer, rather than the 

importer. 

We, as an organization, do have some concerns about how the existing law will be implemented, and we have attended several 

meetings to discuss alternative means of implementation. 

In regard to the budgetary issues, Stockmen’s Association would 

like to address three items that deal with food safety and agriculVerDate 0ct 09 2002 10:57 Nov 04, 2005 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\22427.TXT TISH PsN: LAF
14

tural programs. For decades, North Dakota has produced leaders, 

people in the forefront with ideas that have advanced our industry. 

As you will see, there are projects in the development stages here 

in North Dakota, that if properly funded, could accelerate the results that are needed not only in this country but worldwide. 

First of all, we urge that funding be provided to USDA for research to find a reliable tests for BSE that can be conducted without having to destroy the animal. We would also like funding to be 

provided to do genetic research to determine if there are cattle that 

are genetically resistant to BSE, much like there are sheep that 

are resistant to scrapie. Beef System Centers of Excellence is a 

project underway in the state that, if properly funded, would go a 

long way toward developing economic opportunities in North Dakota, and would also be able to do research to address the industry 

priorities, such as alternative rendering procedures, other food 

safety issues, such e-coli, and new product development. 

We recommend that you consult with Dr. Ken Odde, North Dakota State University Animal and Range Science Department 

chairman, about what level of funding Beef Centers of Excellence 

needs to get off the ground and to get working on these important 

issues. 

Second, the Stockmen’s Association feels that the National Animal Identification Program needs to be implemented as soon as 

possible and, since it is a government-mandated program, the government should provide the majority of funding. The proposed 

budget of the draft ID plan calls for $70 million in the second year 

of the program. However, if implementation of this program is accelerated, we feel $100 million will be needed for it to be implement properly. 

Stockmen’s Association had the foresight 3 years ago to see the 

benefits of this program, and supported legislation that was passed 

addressing animal identification here in North Dakota. Pilot 

projects need to be instituted for the National Animal Identification 

Program to work out problems with the program on a small scale 

before it is mandated on a national level, when fixing problems will 

be more difficult. 

North Dakota is in a position to run a pilot project. Because producers will bear some of the cost of the ID program and because 

the technology it employs is capable of managing multiple data 

bases, we recommend that duplicate government-mandated programs be eliminated. Examples of this might be the brucellosis and 

back-tag programs and health certificates for interstate movement. 

Cattlemen are willing to share information to keep the U.S. and 

world food supply the safest in the world, but are concerned about 

keeping their records confidential. We urge that safeguards be put 

in place to protect the integrity of the records. 

And finally, Stockmen’s Association is weary about the Senate 

reopening the omnibus appropriations bill for fear of losing drought 

provisions and funding for food safety and rural development programs. Most of North Dakota went into this winter in a very seriously dry condition, and if the drought conditions continue into this 

spring and summer, producers will need help to feed their livestock, and the necessary funding needs to be available in a timely 

manner to do the most good. 

15

With that, in closing, I thank you again for giving us this opportunity to provide comments today, and if Stockmen’s can be of any 

help in the future, please contact us. 

Senator CONRAD. Thank you very much, Jeff. Excellent testimony. 

Dr. Schuler, thank you for being here. Please provide your testimony. 

STATEMENT OF LARRY SCHULER, DVM, STATE VETERINARIAN, NORTH DAKOTA DEPARTMENT OF AGRICULTURE, 

STATE BOARD OF ANIMAL HEALTH, BISMARCK, NORTH DAKOTA 

Dr. SCHULER. Thank you, Senator. I appreciate your inviting us 

here today and allowing us to comment on the recent case of bovine 

spongiform encephalopathy in the United States and issues related 

to prevention of new cases and also to further protect the animal 

and human health of this country. 

We would like to begin our comments by saying that we believe 

that the U.S. beef supply is safe. There is very little risk to the 

beef-consuming public. The fire walls that the U.S. has erected in 

the past are effective fire walls, and based on the 2001 Harvard 

University Center for Risk Assessment report, which in laymen’s 

terms says that if BSE was imported into the United States, the 

existing control measures would eliminate the disease within 20 

years, and during that time human exposure would be extremely 

small. 

We can also use the United Kingdom as an example of how BSE 

behaves in a population. At the peak of the BSE epidemic in the 

UK, they were reporting approximately a thousand cases of BSE 

per week. 

Senator CONRAD. A thousand cases in the——

Dr. SCHULER. In the United Kingdom. 

Senator CONRAD. In the herds? 

Dr. SCHULER. In the cattle, yes. I am sorry. During that time, or 

at the beginning of that epidemic there were very few control measures in place to prevent human exposure, and yet in history, there 

have been only been an approximately 140 cases of human variant 

CJD, even based on what we would classify now as extreme exposure, so a single case in the U.S. would expose human health, the 

human population of this country at exponentially smaller levels. 

Senator CONRAD. It would be almost mathematically—it is almost impossible to state, isn’t it? I mean the risk is so infinitesimal. 

Dr. SCHULER. You are absolutely right. In regards to our reaction 

to the response of the USDA to date, we do support what USDA 

has done to date. The diagnosis was made quickly. The animal was 

slaughtered on December 9th, the announcement was made December 23rd. That is a very good turnaround on a routine surveillance 

animal. 

We support what USDA has done with the cooperation of the 

State of Washington to control the spread of the disease and prevent the movement of the animals out of the herd. And we support 

the safeguards Secretary Veneman announced, and you have already outlined on the board here. We do think that in some ways 

16

they have not gone far enough to address all of the concerns, and 

we will address those in a little bit. 

One other issue that has happened is that state officials have 

been meeting state veterinarians who, for the most part, felt a bit 

out of the loop on information on BSE because our first knowledge 

of the BSE case was when we heard it on CNN, and we subsequently—all of the information that we have received to date has 

been from the technical briefings that USDA has done for the 

media. This leaves us, as state officials, at a disadvantage because 

we are receiving information at the same time as the media, and 

don’t have a lot of time to react to it. USDA frequently refers to 

state officials as partners. In this particular situation, we felt a bit 

like spectators rather than partners. That is probably my issue, we 

would have felt more involved if we would have been notified. 

Some of the priority issues that we would like to bring forward: 

First and foremost, our primary concern has to be consumer safety. 

As I said earlier, we believe our beef supply is safe but we think 

USDA and its partners need to review the beef production system 

and take the necessary steps to close loopholes that could possibly 

result in human or animal exposure. 

Second, we believe the next highest priority for USDA should be 

to reestablish export markets. Exports of beef sales makes up 9 

percent of the beef industry sales. Loss of these markets has resulted in a substantial loss to livestock values. The industry can 

withstand short-term market drops, but longterm price drops 

would be devastating to the industry. This loss would make a difference in the survival of the cattle industry producers, who prior 

to this BSE case were anticipating and needed record prices for 

their animals. 

We believe USDA should respond to the BSE case in Washington 

much the same way that Canada responded to the BSE case in 

1997 that recalled the British imports. Basically, at that time the 

affected herd was depopulated and tested for BSE, all animals 

were traced out of that particular herd, and we believe this is what 

should occur in the U.S., and including the 81 animals that were 

imported with this animal. Congress should provide funding for the 

appropriation of testing, and indemnity of the owners. We estimate 

this would probably companies 7 to $10 million, which is a small 

price to pay for a lost export market in excess of $3 million. 

Additionally, we believe that we should trace back Canadian animals that have been imported into the U.S. There are an estimated 

300,000 or 400,000 breeding animals in the U.S. imported from 

Canada, and this would appear to be an insurmountable task, however, the traceback could be focused on cohorts of the Canadian 

animals that have been identified with BSE, and traceback of animals over 5 years of age that were imported from the province of 

Alberta and Saskatchewan. 

Senator CONRAD. Repeat that for me once again. I want to make 

sure I understand that point. When you are talking about 

traceback, you are talking about 5 years. Explain that to me. 

Dr. SCHULER. Actually, what I am saying is that we believe that 

USDA and state officials should attempt to trace Canadian breeding animals that are present in the U.S. in an effort to inform our 

trading partners that we have taken the steps necessary to make 

17

sure the BSE isn’t existing in the beef population. There are 3 to 

400,000 breeding animals in the U.S. from Canada, and that would 

be a major task, but what I am saying is we can focus the 

traceback on animals that would be cohorts of the animals that 

have been identified as BSE animals. They both originated in Alberta, virtually, so if we focused our traceback to older animals 

that were both 6 and 7–1/2 years of age, so if we build in a safety 

factor of tracing animals that are 5 years of age and older, and animals from Alberta and Saskatchewan. 

Senator CONRAD. That would dramatically narrow it, wouldn’t it? 

Instead of 3 to 400,000, you might be down to 30 or 40,000? 

Dr. SCHULER. That is correct. Actually, in our office we are starting that process. We have hired a temporary person to go through 

health certificates, and we are trying to develop a list and see what 

number of animals would be in North Dakota. 

Senator CONRAD. Why do you pick 5 years or older? Why 

wouldn’t you pick 3 years, or more than 30 months, for example? 

Dr. SCHULER. Actually, we were looking at animals that would 

have been born before the ban and——

Senator CONRAD. I see what you are saying. 

Dr. SCHULER. And built in a little bit of safety factor into that, 

so rather than saying 6 years, we are saying 5 years as a bit of 

a safety factor. 

Senator CONRAD. Because if Canada took steps going back that 

far, that would dramatically reduce the risk. 

Dr. SCHULER. Yeah, a Canadian feed ban, ruminant protein feeding ban went into effect in August 1997. 

Senator CONRAD. 1997? That is where you get the 6-years? 

Dr. SCHULER. Yes. 

Senator CONRAD. OK. 

Dr. SCHULER. We also believe the U.S. should set import standards that are at least equal to international standards. 

Senator CONRAD. Can I just stop you for another minute. Have 

you communicated with USDA on this traceback issue? 

Dr. SCHULER. We are just starting to communicate on it. There 

has been some discussion in the past. Most of USDA’s response 

was that it would be too hard of a task, tracing the 3 to 400,000 

animals would be more of a task than what could be accomplished. 

The idea of focusing, on the traceback, on the cohorts of the affected animals is something that is new and we haven’t had the opportunity to do that yet. 

Senator CONRAD. I would encourage you to do that, because I 

think that has merit, and that is really very focused. You are talking about a specific geographic area, you are talking about specific 

age. That would clearly dramatically reduce 3 to 400,000 to a much 

more manageable number, and something that could realistically I 

think be accomplished, if we are talking in the range of 30 to 

40,000 head. That may well be something that has real merit. Obviously, we want others to review the proposal and the specifics, 

but I think a traceback mechanism focusing on those that are the 

highest risk, that strikes me as having some merit. 

Dr. SCHULER. And as I said, I am not sure of the numbers we 

would be looking at. We are still trying to pull that information toVerDate 0ct 09 2002 10:57 Nov 04, 2005 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 C:\DOCS\22427.TXT TISH PsN: LAF
18

gether in our office, just to get an idea of what would be present 

in North Dakota. 

Senator CONRAD. I think we could probably guess it would be a 

very dramatic reduction from the 3 to 400,000, wouldn’t you agree? 

Dr. SCHULER. Absolutely. 

Senator CONRAD. We would be then focusing on really a fraction 

of that number, based on the screens that you have suggested here. 

OK? 

Dr. SCHULER. With regards to being at least equal to international standards, the proposed rule regarding BSE Minimal Risk 

Regions allowed a standard that was less than international standards. OIE, Office of International Epizootics has standards for regions, particular standards, and we believe that having standards 

lower than international standards will actually make our hope of 

reestablishing export markets slim. We have seen the response of 

our major trading partners to the Canadian case and to the U.S. 

case. We are concerned that unless we maintain a ban that is at 

least equal to international standards, we will have a difficult time 

justifying reestablishing——

Senator CONRAD. And what share of our total market, our exports—my understanding is it is roughly 10 percent. 

Jeff, would you agree with that? 

Mr. DAHL. 10 percent on a dollar value? It is probably closer to 

15. 

Senator CONRAD. On a dollar value it is a little more, because 

what we are exporting are the higher grade cuts, especially to 

Japan. OK. 

Dr. SCHULER. Another issue with regard to establishment of 

trade is the ruminant feed ban and the potential loopholes that are 

in it. The European Union has a Scientific Steering Committee that 

conducts an assessment of Geographic BSE Risk Assessment, or 

GBR. Nations or regions are classified according to the risk level 

that exists based on the factors that the Scientific Steering Committee has developed. Currently both the U.S. and Canada are 

classified as GBR Level II. That means, in the eyes of Steering 

Committee, BSE is unlikely to exist but they can not exclude it totally. When the Scientific Steering Committee reconvenes, Canada 

will, based on the criteria, move to GBR Level III. GBR Level III 

says it is likely to have BSE or it is present at a lower level. Based 

on the number of Canadian imports of live-cattle and feed in the 

U.S., the U.S. will probably also go to a GBR Level III. 

Senator CONRAD. When would that occur? 

Dr. SCHULER. Sometime after Christmas is the date I have 

heard. 

Senator CONRAD. This coming Christmas? 

Dr. SCHULER. No. 

Senator CONRAD. This last Christmas? So we are talking about 

something that might occur in the near future? That would have 

consequences for our regaining export markets, would it not? 

Dr. SCHULER. Yes, it will, because we will have slipped a step in 

status. The key to regaining our level of status, though, is to break 

the transmission cycle, and as we have heard, transmission of BSE 

from animal to animal only occurs through the feeding of ruminant 

19

protein. There is some debate about maternal transmission to calf, 

but that is still not known for sure. 

Senator CONRAD. That is speculative? 

Dr. SCHULER. Right. So the primary means of transmission is ruminant, ruminant feed. So therefore, eliminating loopholes in the 

ruminant feed ban is a must. As part of our ability to reestablish 

our export markets, some of the things we suggest, with Secretary 

Veneman’s announcement that Specified Risk Materials will be removed from cattle slaughtered for human consumption, SRMs will 

be removed. Currently, SRM will be allowed to be rendered. We believe that the material should not be allowed to be rendered, since 

very few rendering plants have dedicated lines for rendering of ruminant products. 

Senator CONRAD. So you could get cross-contamination? 

Dr. SCHULER. Yes, potential cross-contamination. 

We also believe a poultry litter ban should be installed. Poultry 

litter should not be allowed. Currently that is allowed. There is a 

certain amount of spillage of ruminant proteins from poultry feed, 

and therefore, it gets fed back to ruminants. 

We believe that standards for maximum protein levels in tallow 

should be set. The U.S. does not at this time have maximum standards for the level of protein in tallow, and that would be a source 

of ruminant protein that—tallow that is used for feed. 

We believe that USDA should expand their feed ban compliance 

inspections. 

We also believe that border inspections should be improved to 

prevent the importation of feeds or feed ingredients that contain 

ruminant protein. 

And we also believe that further scientific review of the other debatable items, such as blood meal, and plate waste in ruminant 

feed would be considered. 

Another issue is BSE surveillance. The U.S. has to increase their 

surveillance in order to meet the requirements of our trading partners and the requirements of our consumers. We need to consider 

stringent standards with regard to those countries that impose a 

higher standard on their own, so we can be at least equal to the 

countries that we are expecting to export to. 

The removal of downer animals from slaughter channels has actually eliminated a source of samples for BSE surveillance, so we 

need to develop other creative strategies to provide adequate surveillance to get adequately statistically significant numbers. 

Senator CONRAD. Maybe I could just pick up on that point, because some have said this ban on downer animals takes animals 

out of the system for testing that would help us identify whether 

we might have a problem or not, and so that we need to have some 

other method of testing those animals so that they are within the 

system, so we have a better data base. Is that what you are saying? 

Dr. SCHULER. That is correct. We need to develop new strategies 

for obtaining samples on the animals that are no longer available 

because of downer. 

Senator CONRAD. OK. 

Dr. SCHULER. The U.S. currently uses immunohistochemistry or 

IHC as a standard test for BSE in this country. It is a costly test, 

a time consuming test, and we urge the use of quicker tests. 

20

Senator CONRAD. Can you tell me, as a scientific matter, how 

long it takes to get test results using that method? I have been told 

9 to 10 days. Is that correct? 

Dr. SCHULER. I don’t believe it is quite that long. It is probably 

more like 5 days. The quicker tests are highly sensitive and specific. We don’t get a lot of false positives, not a lot of false negatives. They can be run in several hours. They can be set up to be 

done on a large scale. The cost is roughly $15 a test. 

Senator CONRAD. So there is no reason we couldn’t go to the 

quicker tests, in terms of kind of a broad screening, and then if we 

get a positive we could do an IHC. 

Dr. SCHULER. That’s right. That is what we would recommend is 

that the quick test be used and confirm with IHC when it is positive. 

There has been considerable talk about the U.S. animal identification plan. We are fully in support of that. It will provide the 

U.S. with a system to trace back animals. The goal is actually to 

be able to trace back animals within 48 hours of a situation where 

we need to trace them back. A lot of the plan is based on an electronic ID, and there is a U.S. animal ID plan that has been written, and there is a website available for reviewing that. I have included it in my comments. 

Senator CONRAD. All right. 

Dr. SCHULER. We do support it, and this document is still a document that is changing. It is open for public comment until the end 

of January. Actually, there is a budget attached in here that is on 

page 47 and 48 that I would ask you to review. 

Senator CONRAD. Does that have $25 million the first year——

Dr. SCHULER. The number I have been working with is $20 million the first year, but then again, if we do a rapid startup, it is 

going to cost more. 

Senator CONRAD. I think Jeff mentioned they anticipate it could 

be $70 million the second year, that if they have a speed-up we 

may be talking about $100 million the first year. It is obviously 

very important, though, how much money needs to be allotted in 

the President’s budget for this matter. As I heard Jeff say, he 

thinks it may be as much as $100 million if we have speeded up 

implementation. Would that be a conclusion close to your own. 

Dr. SCHULER. Based on the projections in this document years 4, 5, 6 are $125 to $130 million a year. That is once the system——

Senator CONRAD [continuing]. Gets up. 

Dr. SCHULER. Yes. I agree with Jeff that if we do a rapid startup 

of the system, it is going to cost more. 

We support solutions in keeping export information and keeping 

the information confidential. From an animal health perspective, 

really only thing we need is who has owned the animal, where it 

is moved to, and that is what our information should be restricted 

to. The United States Animal Health Association, which is the association of animal health officials of the country, passed a resolution which is attached to the testimony that encouraged—that accepted this plan as a work in progress, and encouraged its further 

development. 

Another issue that we don’t hear talked about much is maintenance of ID. Living in a border state, it is clear to us that animals 

21

leak out of trade channels from which they are imported. It is not 

uncommon to find slaughter animals outside of slaughter channels, 

or feeder animals outside of feeder channels. As a matter of fact, 

it is not uncommon for ID tags to be removed prior to resale to improve market value of the animals. There are currently no restrictions on removal of ID tags from animals after they are imported 

into the U.S. We believe it is imperative that regulations be developed that prohibit the removal of the official ID from animals. 

USDA must enact internal emergency regulations prohibiting removal of any official ID from animals imported from a foreign country. A meaningful penalty must also be associated with the removal 

of an official ID. Actually, with the Washington case, the fortunate 

part about that is that the official ID still existed on that animal 

and it was a Canadian ear-tag. 

With regards to country-of-origin labeling, we believe that it is 

important with regards to protecting consumer confidence in the 

U.S. food supply. COOL would give consumers at least the opportunity to select products which they perceive as safe. We recommend COOL be fully implemented, so that U.S. consumers 

would have more specific knowledge as to the origin of the beef. 

This would arguably lead to a smaller decrease in the expected demand for beef as a result of a disease situation. 

Increased laboratory capacity is another issue that, because we 

have to increase BSE surveillance, we need to increase laboratory 

capacity. We urge Congress to provide funding to build that laboratory structure that is necessary as a result of the demands for increased surveillance. 

Along those lines, we urge completion of the USDA-APHIS-ARS 

Master Plan for a new facility at Ames, Iowa, to meet BSE surveillance activity, but also to meet other national needs for research 

and diagnosis and product testing. 

Another issue I would like to bring forward is the disparity party 

in USDA’s approach to the prevention of the introduction of a disease into the country. With regards to BSE—or with regards to foreign animal disease, the USDA is proactive, meaning we allow importation only after the country has proved that they are free of 

the disease. In the case of BSE, we are reactive, in that we don’t 

discontinue imports until the country has a case. This is disconcerting to us because of the long incubation period of BSE and 

because of the public health issue related to it. We believe that this 

places the U.S. at risk of importing BSE, since we are continually 

reacting to BSE cases. We urge the USDA to clearly define 

proactive standards for trade with regards to BSE. 

We talked about advanced meat recovery. Advance meat recovery 

systems are notorious for containing nervous tissue derived from 

the dorsal root ganglia, which is a specified risk material. 

Senator CONRAD. I am not sure I even want to know what dorsal 

root ganglia is. 

Dr. SCHULER. Dorsal root ganglia are the nerves that come off 

the spinal cord, close to the vertebral column. Just large nerves, 

basically, is are what they are. 

Senator CONRAD. Now I know I didn’t want to know. 

Dr. SCHULER. In the worst case scenario of the Harvard Risk Assessment, approximately one-half of the infectious doses to which 

22

humans would be exposed would be derived from AMR products. 

We strongly urge the prohibition of AMR systems when slaughtering animals, or at least, extensive testing should be required for 

determining the presence of nerve tissue in the AMR meats. 

Yesterday, FSIS published rules which we haven’t had time to 

review yet, but it is related to advanced meat recovery. 

In July of this year the Midwestern Association of State Departments of Agriculture, or MASDA, approved a resolution concerning 

BSE. That is attached to the testimony. We helped draft and fully 

support that resolution. That MASDA resolution was also sent to 

the National Association of State Departments of Agriculture. 

Senator CONRAD. Is that included in your testimony? 

Dr. SCHULER. Yes, it is included in the testimony. And that was 

adopted with some minor changes. 

We thank you for the opportunity to provide this information. We 

urge aggressive activity by USDA to reestablish our beef export 

markets. We urge the FDA to reevaluate the ruminant feed ban, 

and ask them to set science-based standards for tallow in feeds. 

As I alluded to earlier, the Harvard Risk Assessment says that 

‘‘Measures taken by the U.S. Government and industry make the 

U.S. robust against the spread of BSE to animals or humans 

should it be introduced to this country.’’ However, with a finding 

of a case in the U.S., a reevaluation of the BSE prevention strategies is in order, and steps should be taken to further assure that 

all responsible measures have been taken to assure the protection 

of the animal and the public health of this country. 

Senator CONRAD. Thank you very much. 

Senator CONRAD. Terry, good to have you here. Please proceed 

with your testimony. 

STATEMENT OF TERRY DUPPONG, DUPPONG’S WILLOW 

CREEK FARMS, GLEN ULLIN, NORTH DAKOTA; ON BEHALF 

OF THE RANCHERS-CATTLEMEN ACTION LEGAL FUND, 

UNITED STOCKGROWERS OF AMERICA (R-CALF USA) 

Mr. DUPPONG. Thank you, Senator Conrad. Together with my 

wife Patty and two sons—Patty is at home doing chores—Ty and 

Casey, we own Duppong’s Willow Creek Farms in Glen Ullin, 

North Dakota. We raise registered Angus cattle and finish cattle on 

our full-time ranching operation. 

Our organization has worked tirelessly on behalf of the American 

cattle producer. Our focus has been on protecting and promoting 

the interests of independent cattle producers, and it is from that 

perspective that I come before you today. I appreciate the opportunity to provide comments on this issue as it is very important to 

the cow-calf operators, backgrounders and independent ranchers 

who constitute the heart of this country’s cattle and beef industry. 

The impact of the December 23, 2003 announcement by USDA 

of a presumptive positive case for BSE in a Washington state dairy 

cow was immediate and damaging to the United States live-cattle 

industry. We commend the USDA and its various departments, including APHIS, for doing an excellent job in calming consumer concerns and clearly explaining the BSE mitigation measures the U.S. 

began implementing in 1989. However, we are disappointed that 

the USDA has thus far ignored the economic interests of the 

23

United States cattle producers as its actions have of resulted in the 

subordination of U.S. cattle producers’ interests to other interests, 

some of whom are our foreign competitors. 

Despite the fact that the presumptive positive cow was tagged 

with a Canadian export ear-tag, USDA chose not to disclose this 

factual information until 4 days after its announcement of a presumptive positive case for BSE. R-CALF U.S.A. had received numerous reports, beginning on December 24th, from members familiar with the investigation, who indicated the cow was tagged with 

a Canadian ear-tag. On December 26, R-CALF contacted USDA 

urging the release of this factual information to prevent the market 

from overreacting. On December 27, USDA finally announced the 

fact that the cow was tagged with a permanent ear-tag indicating 

the cow was imported from Canada. However, this information was 

provided too late, as cattle markets already began to cement its application of a worst-case scenario for this situation. This worst-case 

scenario was that the United States likely had a native case of 

BSE, implying that it also had a significant break in its BSE prevention program, including the possible of a contaminated feed supply. 

This uncertainty in the market, caused largely because the market didn’t have the factual information necessary to mitigate the 

formulation of a worst-case scenario, was absorbed by United 

States live-cattle producers, who suffered an approximate $15.91 

per hundred to a drop of $190.92, on a 1200-pound steerling. 

Senator CONRAD. What is that as a percentage, Terry? Is that 

about 20 percent? 

Mr. DUPPONG. I would say in the neighborhood around 20 percent. 

Senator CONRAD. Around 20 percent? 

Mr. DUPPONG. Little less. 

Senator CONRAD. I was trying to calculate the size of this industry in term of cattle sales, and we say we have got $3.6 billion that 

we export, and that represents about 15 percent in dollar terms of 

our industry; isn’t that right, Jeff? 

Mr. DAHL. Yes. 

Senator CONRAD. So that would mean we have got about a $25 

billion industry, just in terms of cattle sales. The entire industry 

more broadly defined, I think, is calculated at $100 billion. That 

goes to the next step. That goes to——

Mr. DAHL. Dealerships——

Senator CONRAD. Hides. I just want to make sure that we get 

these numbers for the record, that we are talking about an industry, in terms of sales, it is about a $25 billion industry, $3.6 billion 

of that is export, in an industry that, overall, has approximately 

$100 billion impact on this nation. 

Would both Terry and Jeff agree with that basic outline of the 

diminishes of this industry? 

Mr. DAHL. Yes. 

Dr. SCHULER. Yes. 

Mr. DUPPONG. Not only did the United States domestic cattle 

market receive insufficient information to apply anything but a 

worst-case scenario to the disease situation, but our international 

markets were equally uninformed. 

24

On December 23, APHIS submitted the United States’ Emergency Report to the World Organization for Animal Health, the 

international organization that develops animal health standards 

for its 165 World Trade Organization members, including the 

United States. In its Emergency Report, APHIS stated that the 

source of the BSE agent and the origin of the infection was unknown, trace-back and trace-out investigations have been initiated. 

Thus, the United States’ export customers, which are also members 

of the OIE and respectful of its mission, were officially notified that 

the United States had a presumptive positive case for BSE, but 

they were not informed that the infected cow was tagged with a 

Canadian ear-tag. It was not until at least December 28 that 

APHIS submitted its followup Emergency Report to the OIE stating that ‘‘Preliminary tracing indicates that the animal may have 

entered the United States from Canada between the 28 August and 

25 October, 2001.’’ It is, therefore, the case that the United States’ 

nondisclosure of the Canadian ear-tag on the BSE-infected cow was 

assimilated by United States’ export customers for at least as long, 

if not longer, than it was assimilated by the domestic market. 

Meanwhile, the OIE did not include the United States on its 

international list of ‘‘Territories/Countries Having Reported Cases 

of BSE in Imported Animals Only.’’ Instead, the OIE classified the 

United States as having a confirmed case on December 23, without 

any explanatory footnotes. 

The information the USDA provided, as well as the information 

it did not provide in a timely manner to the OIE, is significant, because the BSE standard established by the OIE and contained in 

the OIE Code provides that a country’s disease ranking may not 

change if BSE is found in an imported animal. More specifically, 

if the United States discovers a BSE case in an animal that has 

been clearly demonstrated to originate directly from the importation of live cattle, and all of the offspring of the infected cattle are 

destroyed, then such a BSE case does not disqualify the United 

States from its ‘‘BSE provisionally free country or zone’’ ranking. 

It is important that Congress realize that if mandatory countryof-origin labeling were in place when the presumptive positive BSE 

case was announced, the financial harm experienced by United 

States cattle producers would not likely have occurred. 

With respect to the value of the United States beef export markets subject to risk as a result of the BSE case, R-CALF USA has 

reviewed the USDA-Foreign Agricultural Service’s HS 10-Digit exports and found that the value of beef and edible beef exports 

worldwide during the first 10 months of 2003 was $2.9 billion. In 

calendar 2002, the total volume of United States cattle and beef exports was $3 billion. 

A risk analysis was recently conducted by APHIS to assess the 

risks associated with reopening the Canadian border to live-cattle 

and beef. In its analysis APHIS included additional risks associated with BSE if trade restrictions were enforced against the 

United States. It estimated that indirect losses to the United 

States firms that support ruminant exports would equal an additional $2.5 billion annually. 

In addition, APHIS estimated that more than 33,000 full time 

jobs, accounting for almost $1 billion in wages annually could be 

25

jeopardized. Thus it appears that $6.5 billion in export value is at 

risk. 

It is important to note that the United States live-cattle industry 

is a supply sensitive industry. If our borders remain closed to exports, the 2.4 billion pounds of beef destined for export annually 

will continue to stockpile; and the continuing flow of beef imports 

into the United States, in the amount of 3.2 billion pounds annually, will certainly compound our already depressed cattle prices. 

This is precisely why, on the day of the BSE announcement, RCALF USA sent an emergency letter to President Bush and Secretary Veneman urging them to immediately close the United 

States border to all imports of live cattle, beef, and both raw and 

manufactured livestock feed until the circumstances surrounding 

this suspected case are fully disclosed and understood. R-CALF 

USA explained that this measure was needed to prevent a market 

collapse caused by a buildup of excess beef supplies. Neither the 

President nor the Secretary has responded. 

The United States does not have a native case of BSE. Our efforts should be directed toward preventing the introduction of BSE 

from imported sources. To this end, the immediate implementation 

of COOL is the quickest way to begin accurately differentiating domestic live-cattle from imported cattle; and should any of our livestock importers have any other disease outbreak, we can immediately segregate these animals from the United States herd. Removing livestock from the Department of Treasury’s list of exceptions from the general requirement to mark all imported products 

with a mark of origin, known as the J-list, would immediately enable us to accurately identify all animals that are not born and 

raised in the United States. 

Thank you. 

Senator CONRAD. Thank you. That is very important testimony. 

I am very hopeful some of the news media that have left get that 

testimony provided to them today, and I am going to ask my staff 

to make sure that that occurs, because what you are saying here 

is very important. You are saying that the delay in USDA revealing what they knew put all of us at a greater risk in terms of effect 

in the market? 

Mr. DUPPONG. Correct. 

Senator CONRAD. What you are saying, as I understand it, is that 

USDA knew that there was a Canadian tag on that cow that was 

identified as having BSE well in advance of when they released 

that to the public? 

Mr. DUPPONG. Correct. 

Senator CONRAD. How many days elapsed between the time your 

people were informed that cow had a Canadian tag and when it 

was released to the public? 

Mr. DUPPONG. We were on conference calls over Christmas, but 

I think they listed it officially as the 26th, in about a 24–48 hour 

period when USDA released its information. But the thing is, I 

think, if I can kind of go off the record here, I think that——

Senator CONRAD. Let me say, nothing is off the record here. This 

is all on the record. 

Mr. DUPPONG. And probably other people on this panel—or Wade 

can help me on this: I believe that that cow, December 9th, was 

26

the first time in Iowa that this cow was probably determined to 

have BSE, or the slaughterhouse. At that point in time, if this was 

the tag——

Senator CONRAD. Have you got that? 

Dr. SCHULER. If I could, this is a Canadian ear-tag (indicating), 

and what was portrayed to us on one of the early conference calls 

was that she had a small metal ear-tag in her ear, and as it turns 

out it was a Canadian tag. As I look at the back of that tag it says 

Province of Origin, so you would have known immediately it was 

a Canadian ear-tag. 

Senator CONRAD. Very clear. It is right on the back. ‘‘H of A, Saskatchewan,’’ what does that mean, Larry? 

Dr. SCHULER. Health of Animals, Saskatchewan. 

Senator CONRAD. So that is a Canadian tag, and that has a number on the front that would be a tracking number? 

Dr. SCHULER. That is correct. Individual number for each animal 

imported on that shipment. That would have been the number that 

would have been listed on the health certificate when she came 

across the border. 

Senator CONRAD. This is the first time I heard this. This is the 

first time I heard that they knew this before they released it to the 

public, and the fact is that that affects—all that information went 

out to all of those who are our buyers, right? All of those who are 

international buyers were not informed at the time they could have 

been, that this was not a U.S. animal at all, that this was an animal that had come in from Canada? 

Mr. DUPPONG. Or even the possibility that this animal was from 

outside our borders; that wasn’t even a consideration, either, at 

their opening press conference. 

Senator CONRAD. Well, I just say that is a very, very important 

fact that people should know, and I just alert those in the news 

media, I hope they pay very clear, special attention to your testimony here today. You are telling me something I did not know before this hearing. 

Mr. DUPPONG. I guess, just from a rancher’s point of view, if you 

knew something on December 9th, such as this, where is the information trail from the 9th to the 23rd to find out—or the 26th, 

where this cow came from? 

Senator CONRAD. Let’s go through this. The animal was slaughtered on the 9th, was it not? The animal was slaughtered on the 

9th. USDA made a public statement, not until the 26th that this 

animal had a Canadian tag? 

Mr. DUPPONG. Or the 27th. 

Senator CONRAD. That is 17 days. 

And, Dr. Schuler, you testified it takes 5 days to get the test results? 

Dr. SCHULER. Yeah, that is an estimation. 

Senator CONRAD. When was the test performed on that animal, 

do we know? Is it performed at the time of slaughter? 

Dr. SCHULER. Actually, the sample would have been sent to the 

National Veterinary Services Lab at Ames, Iowa, so there was time 

in shipment, since it was routine surveillance, it probably wasn’t 

a high priority situation where it was done immediately. 

27

Senator CONRAD. So there may have been some gap between the 

time the sample came in and the time the test was done? 

Dr. SCHULER. Right. 

Senator CONRAD. But what I hear Terry saying is that your organization heard before Christmas that this animal had a Canadian 

tag, and yet there was no release to the public, and more importantly, perhaps, no release to—well, what is critical is that there 

be a release to the public so that those who buy from us know that 

this was not a domestic animal. That is your point, correct? 

Mr. DUPPONG. Correct. They could have alleviated a lot of problems, saying that a case was found in the United States and that 

they are looking at it. 

Senator CONRAD. What I hear you saying is that we would have 

had less of a price drop if people had been informed in a more timely way that this animal bore a Canadian tag? 

Mr. DUPPONG. Correct. Because if I am not mistaken, under 

international rules we are still a BSE-free state as a nation. 

Senator CONRAD. Because it is not a domestic animal? 

Mr. DUPPONG. Yeah, if I am not mistaken. Canada had their first 

case in 1993, in which they revealed to the public that this cow was 

from Great Britain, and they released that information all at once. 

Senator CONRAD. They released it all at once. That they had the 

cow, and that the cow was from Great Britain, so they were not 

adversely affected in the sense of being judged a country with BSE? 

Mr. DUPPONG. Correct. They did not lose their BSE-free status. 

Senator CONRAD. That is big news. You are making big news at 

this hearing, to be able to tell us that that occurred here. That is 

a serious matter. 

Mr. DUPPONG. Yes, it is. 

Senator CONRAD. We didn’t get a presumptive finding until 

Morning Comments on December 29th. 28th, that would have come 

out, and it would have been in the morning news on the 29th. Well, 

that is very unfortunate. I thank you for bringing that to the attention of the committee. That is very important to understand. 

Why would they have delayed? I really don’t understand that. 

Why wouldn’t they have said very immediately that this animal 

carried a Canadian tag? 

Mr. DUPPONG. That is a really good question. Only speculation 

can answer that. 

Mr. DAHL. I asked that question, and the explanation I received 

was ramifications, if they were wrong, would have been, on trade, 

would have been great, so they were being cautious. I also was 

told——

Senator CONRAD. Well, gee, who are they worried about? Isn’t 

this the United States Department of Agriculture? I think sometimes this Secretary gets confused about which country she is looking out for. 

During the Farm Bill fight she invited the Canadian Agriculture 

Minister down to Washington to testify against the United States 

Farm Bill, and now I find out—and this is the first I heard of this 

is at this hearing right now, with, Terry, you telling us that your 

organization knew, days before it was released to the public, that 

this animal carried a Canadian tag. 

28

It would seem to me the very first thing we do, if you are our 

Secretary of USDA, of the United States Department of Agriculture, as soon as you knew that, you would state it. If they knew 

that that carried a Canadian tag, that she had an obligation to inform the public immediately. That is the most disturbing thing I 

have heard here today. Anything else you want to add? 

Mr. DUPPONG. Some day we will do that off the record. 

Senator CONRAD. I tell you——

Mr. DUPPONG. I converse with Scott and Tim quite often. 

Senator CONRAD. I tell you, Terry, honestly, this is the first I 

heard this was this morning at this hearing, and I find that very 

disturbing; that you knew about this, your organization knew 

about it before the public was informed, and by days. I mean that 

is not right. 

We will go on to our next witness. Are you finished? 

Mr. DUPPONG. Yes. 

Senator CONRAD. We go to our next witness, Dr. Craig 

Galbreath, who is also a veterinarian, who is with Oakes Feed. 

Dr. Galbreath, thank you so much for being here. 

STATEMENT OF DR. CRAIG GALBREATH, OAKES FEED, OAKES, 

NORTH DAKOTA 

Dr. GALBREATH. Thank you. Senator, ladies and gentlemen. As a 

veterinarian production consultant and producer, I have a vested 

interest in the reputation of our North Dakota agricultural products. In the years of my profession, I have had numerous interactions with the consumers of our livestock products in terms of 

beef, pork and lamb at all stages of development. The reputation 

of our North Dakota calves command respect from feed yards 

throughout the country. Our ability to diversify and capture added 

value from these products enables our farmers and ranchers to realize maximum profits from their respective enterprises. 

My position as a veterinarian in the Oakes community for the 

past 27 years has afforded me the opportunity to consult with my 

clients on many aspects of their production enterprise. Almost daily 

I visit with my clients in terms of marketing, genetic selection, 

health care and nutrition, whatever it takes to run a cow-calf operation. On these occasions I am often confronted with misinformation that causes me some concern for the safety and viability of our 

industry. 

About a year and a half ago I became acutely aware that some 

of our producers were either misinformed or uninformed about 

some of the rules in effect for ruminant feeding. I had two occasions where someone recommended using swine feed containing 

animal protein products for feeding cattle. Current evidence suggests that this is the single greatest risk for transmission of the 

prion, and breaches the safeguards that we have in effect to prevent BSE. 

Senator CONRAD. Can I ask you, not the name of the person, but 

where did you hear this? Was this somebody in the business, or 

was this is a rancher? 

Dr. GALBREATH. This is directly from the producers. They had received information from another party that they should be feeding 

29

the swine feed to their ruminant animals, and I can explain this 

in a little more depth here later. 

My experience in wearing two hats, both as a part-owner of a 

feed company, or a feed dealership, and also as a veterinarian, escalated my concerns over the improper nutritional consultations. 

About a year ago, I began a campaign to get feed dealers and nutritional consultants either licensed or certified by the state so that 

we had some idea who was out there giving information to our producers. If I was to ask Commissioner Johnson how many feed dealers we have in the state of North Dakota, he would not be able to 

give me an answer. However, if I went to the Department of Health 

and asked how many barbers are licensed in the State of North Dakota, I would get an answer. I think there is a disparity there that 

we need to address. 

I visited with our district representatives and senators at the 

state level. I have visited with the state veterinarians from both 

North and South Dakota, and also members of the Stockmen’s Association, and different opportunities, hoping to address this problem at the state level. However, in view of the recent events that 

have occurred, I imagine this is going to be more of a Federal mandate than that we are able to keep it at the state level. 

Our duty now with the current BSE case is to be sure and protect the industry by use of sound scientific evidence to prevent further exposure to our cattle population, and instill a level of confidence to the consumer that assures them of the safety of our 

products. 

The events of the past 2 weeks have put an urgency to the proposals being discussed in the livestock industry. Consumer confidence and food safety issues that we previously have been comfortable with have been brought into question. Our response to 

these concerns will determine the future of our industry, and ultimately, the future of agriculture. 

Fortunately we do have some precedence to use in the form of 

the successful eradication programs for diseases such as Brucellosis 

and TB. At the time, these programs were also met with resistance 

from certain sectors of the animal industry. Identification and testing were paramount to the success of these programs, however, 

producer compliance was at times compromised and hindering the 

process. Ultimately, the programs worked and the industry has enjoyed the benefits of the integrity of our products. 

The current program for eradication of scrapie in sheep and 

goats is another model we can use to plan for the challenges confronting us with BSE. At the start of the program there was some 

producer reluctance for the identification process. However, with 

time and education, our producers now can see results that, coupled with the technology of DNA, which it was alluded to earlier, 

and I strongly believe that we need to continue research along 

those lines to develop testing of live animals, gives us solid ground 

to move forward toward the goal of eradication of BSE in North 

America. 

Thank you. 

Senator CONRAD. Thank you very much. Just excellent testimony. I am going to come back to a point you made in a moment. 

30

I would like to recap a number of important statistics here for 

the benefit of the news media people who are here, and others that 

might be interested. 

What we have learned here today is we have got an overall in- dustry in terms of cattle sales value of $25 billion a year. $3.6 billion of that are exports. It is about 15 percent of the total. I believe 

we have, in overall terms, when more broadly defined, when you 

look at all the elements of the industry—you look at feed, you look 

at hides, you look, at more broadly defined, the industry, itself, it 

is a $100 billion industry in total. I think we have heard that there 

is consensus on those numbers. 

I am told that we have about a hundred-million head in this 

country. 

Jeff, is that your understanding? 

Mr. DAHL. Little more than that, but that is fine. 

Senator CONRAD. About a hundred-million head. We slaughter 

about 36 million head per year; is that approximately correct? How 

many head do we have in North Dakota? 

Mr. DAHL. 1.2 million. 

Senator CONRAD. About 1.2 million head in North Dakota. So 

that gives us kind of a rough understanding. 

I asked the previous panel members, and I would like to go to 

each of you and ask you, as well, I have recommended five separate 

items. 

First of all, that live-cattle imports, that the Secretary was considering allowing, be prevented. Let me just go down the line. 

Jeff, would you agree with that? 

Mr. DAHL. Absolutely. 

Senator CONRAD. Larry? 

Dr. SCHULER. Yes,. 

Senator CONRAD. Terry, would you agree with that? 

Mr. DUPPONG. Yes. 

Senator CONRAD. Doctor? 

Dr. GALBREATH. Yes. 

Senator CONRAD. Second, I have called on USDA, in a letter to 

the Secretary, to review the previous decision to allow boxed beef 

from Canada in, until we more clearly know what the source of 

those products are. 

Jeff, would you agree with that position? 

Mr. DAHL. If we say that we are basing everything on science, 

and we say that the causative agent for BSE has never been found 

in the muscle cuts, blood or milk, and we realize if—for our export 

markets out of this country, we use protection practices all the 

time, and Canadian is no exception, that they will do the same to 

us as we do to them, basically. It is tough to say let’s slam the border completely shut, but, however, let me followup on that with a 

couple points. Canada—and I think Larry has got some more information on this—is closing the border to all beef products from the 

U.S., including meat, and that is not based on science, that is a 

protectionist attitude. So if they are doing that, I think they are 

shooting themselves in the foot. Will closing the border to Canadian meat coming down here help stabilize the market? I think it 

would. So in the end, I am in favor of it. 

Senator CONRAD. Larry? 

31

Dr. SCHULER. Yeah, I would agree, and I agree with Jeff it has 

to be science-based. As it is now, we are in the middle of an investigation of a BSE case. As you said, we don’t know clearly what the 

results of that investigation are going to punch out, so at least continue the ban until the investigation is complete, so we know the 

source of feed and the source of animals. 

Senator CONRAD. I think that is clearly a prudent measure. 

Dr. SCHULER. As Jeff mentioned, I did download from the Canadian Inspection Agency website the restrictions on imports. It does 

include all live animals, all live ruminants and genetics, and ruminant-derived products, including ruminant animal beef. 

Senator CONRAD. That is pretty clear. 

Terry? 

Mr. DUPPONG. Yeah, I would agree. 

Senator CONRAD. Doctor? 

Dr. GALBREATH. I would provisionally agree, kind of the same information that Dr. Schuler and Jeff previewed with. 

Senator CONRAD. That is, it ought to be science-based? 

Dr. GALBREATH. You need to have it science-based. We need to 

know that there is a certain age restriction here, and also we need 

to know about the spinal cord ingredients that may or may not be 

in that boxed meat, under those provisions. And I think we have 

to the remember——

Senator CONRAD. It should be on a provisional basis? 

Dr. GALBREATH. Exactly. Because the BSE right now is a United 

States issue, but it is also a North America issue, and we need to 

remember that the border works both directions. 

Senator CONRAD. A national ID system that the Secretary has ordered implemented immediately ought to be federally funded. A 

Federal mandate ought to be federally funded. 

Do you agree with that, Jeff? 

Mr. DAHL. Yes. 

Dr. SCHULER. Yes. 

Mr. DUPPONG. I agree. I don’t know how to get it done, but I 

agree. 

Senator CONRAD. Dr. Galbreath? 

Dr. GALBREATH. Here, again, I think it should be federally funded, but I do think there should be some producer cooperation, because there is the opportunity for the producers to realize some additional benefit from having individual identification on their animals, whether it be traceback to them through breeding stock, or 

if it is the additional value of the hides because branding may not 

be needed any longer if this is implemented. The more important 

thing that comes to mind for our practice area is if these animals 

are individually identified, we do have the capability of getting additional carcass data back for our producers, as opposed to no identification at all. I do think——

Senator CONRAD. And that has a value? 

Dr. GALBREATH. That has a value. And I think producers will be 

aware of it, and I think they will be receptive if it is approached 

properly. 

Senator CONRAD. OK. Country-of-origin labeling, that there is a 

clear connection in terms of the previous position of USDA, that is, 

on the cost side. If you are going to have a system of livestock idenVerDate 0ct 09 2002 10:57 Nov 04, 2005 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 C:\DOCS\22427.TXT TISH PsN: LAF
32

tification, obviously, that leads you to be able to identify country 

of origin. 

Jeff? 

Mr. DAHL. I agree, it does, and if you can mesh the two together, 

it goes a long ways to solving any of the debate that is going on 

right now. 

Senator CONRAD. Larry? 

Dr. SCHULER. I agree with country-of-origin labeling. I think 

some of the rules that have been proposed have been a little cumbersome, and I think we need to develop some different rules. 

Mr. DUPPONG. R-CALF would be a supporter of COOL. We did 

a real good job of getting it into the legislation in the Farm Bill. 

It is not perfect, but we have to realize as time goes on we have 

to get going at this as things change every day. 

Dr. GALBREATH. This is a unique opportunity to implement 

COOL restrictions along with the national ID system, so by all 

means. 

Senator CONRAD. Let me go to a fifth point I have made, and it 

is relatively small in terms of cost, but I think there is a principle 

involved, and that is those ranchers, those producers who have 

herds that are affected ought to have a substantial part of their 

costs covered. That is, these people have a potentially catastrophic 

financial problem through no fault of their own. Certainly that is 

the case with respect to the herd in Washington, and that as a 

matter of principle there ought to be compensation. 

Jeff, your reaction? 

Mr. DAHL. I agree. There is precedence for both federally and in 

state on indemnity for cattle that are put down for disease reasons. 

So I think it is already, the mechanism is already there. 

Senator CONRAD. It is in place. It needs to be implemented. 

Larry? 

Dr. SCHULER. I agree with Jeff. Historically speaking when the 

other eradication programs, when animals were destroyed because 

of tuberculosis, for example, those producers were indemnified the 

value of the animal. 

Senator CONRAD. How did it work? Was it a full indemnification? 

Dr. SCHULER. Previously, it was a set amount regardless of the 

value of the animal. In today’s world we are dealing with appraised 

values, yes. 

Senator CONRAD. Appraised values? OK. 

Terry? 

Mr. DUPPONG. I think it would be good, and I think one standpoint is because the people that do have cattle from Canada, we 

don’t want to scrutinize them. We want to give them a tool that 

will bring it to the forefront to admit they have these cattle to identify them. It is estimated that between 15 and 20 percent of the 

cattle that have come in through Canada have lost importation 

tags. 

Senator CONRAD. Let me stop you on that, and make sure I understand what you are saying. You are testifying here that from 

what you have learned, that some significant portion of cattle coming in from Canada have lost their identification tags? 

Mr. DUPPONG. Correct. 

Senator CONRAD. And how does that occur? 

33

Mr. DUPPONG. It just gets ripped out of the ear, the long fence 

lines, so I think we need a tool to make these people want to come 

forward and identify these cattle. 

Senator CONRAD. OK. Let me just go back to the matter on Canadian boxed beef. What I have called for and what I wrote the 

Secretary is I asked her to review the decision to allow boxed beef 

into this country, in light of our new safeguard measures, and 

asked the fundamental question: Does Canada have equivalent 

measures? You know, none of this is going to work if we have got 

a system but there is all this leakage—you know what I am saying—across the border, and they have got a lesser standard than 

we do. In light of that, I would ask the question. 

Dr. Galbreath, do you know about the Canadian compliance on 

the feed ban? We have heard a lot of rumors, and there have been 

some discussed here today, with respect to there not being close 

evaluation and scrutiny on the ban they have in place. What have 

you heard? What is your understanding? 

Dr. GALBREATH. All I cite is some of the reference studies that 

were done back in 2002, when they actually did surveys in the 

United States and Canada for compliance, and basically, FDA—the 

United States gave a rather glowing report in favor of the compliance; however, if you look at the numbers, you find that certain 

feed mills and certain feed establishments were inspected, whereas 

some of the smaller family operations or smaller industry operations were not inspected. So there is a little problem with that 

right away. Then as you read the numbers, the initial numbers, 

you find, if my memory serves me correct, about an 8 percent noncompliance either in terms of labeling or actually having the product in their meat and bone meal, and then extrapolate that to the 

small mills and the small operations that aren’t even inspected. 

There is a potential for some risk. I can’t speak for the Canadian 

sector because I really don’t have any information on those. 

Senator CONRAD. Do you think that the same standards that 

apply here ought to apply there? 

Dr. GALBREATH. Yes. The ruminant ban that came in in 1997 is 

a North American ruling, and needs to be addressed both in terms 

of the Canadian influence and also the United States influence. 

Senator CONRAD. Just to repeat, Larry, your understanding is, 

from what you have drawn down from the Canadian website, is 

that they have imposed a ban not only on live animals going from 

our country to theirs, but also on boxed beef? 

Dr. SCHULER. That is correct. And there is no 30-month limit. 

They will accept boxed beef from Canada on less than 30 months 

of age. There is no mention of a 30 month restriction. 

Senator CONRAD. Well, I tell you, to me it is very clear we ought 

to impose that precise same requirement on them, and on both 

sides it ought to ultimately be science-based, and maybe we need 

to bring them to their senses. This cow came from Canada. This 

was not a U.S. cow, and they have put at risk our entire industry, 

$25 billion industry just in terms of cattle sales, in terms of the 

broader effect in this economy, a $100 billion industry. As we 

know, agriculture is the dominant part of North Dakota’s economy. 

It is the biggest part of our economy. We have about two-thirds of 

our agricultural income is crop income, about one-third is livestock. 

34

We are talking about a very substantial threat to the economic 

well-being of our state, and certainly of this industry. And we have 

got to take the steps to protect our consumers, without question, 

and to protect our industry, and I hope that message comes from 

this hearing loud and clear. 

I want to thank all of you. We have come to the end of our period 

for this hearing. I want to thank each of you for testifying, it is certainly valuable to the committee, and I believe the U.S. Senate will 

benefit from the knowledge that you have imparted through this 

hearing. 

With that, I will adjourn the hearing. 

[Whereupon, at 11:55 a.m., the committee was adjourned.]

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