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December 8, 2006


Table of Contents
Big Changes In The Bull, Female Replacement Markets
Big Brother Moves Into The Restaurant Business
NCBA Calls For Halt To South Korea Beef Trade
Magazine Study Finds 83% Of Broilers Contaminated
Roberts Sends Beef Letter to Korea
Seoul Is Three-For-Three In Rejecting U.S. Beef Shipments
U.S. Ag Exports to Reach $77 Billion
Spain Tries To Remove Burger King TV Ads
President Bush Signs Animal Terrorism Act
Bean-Sponsored Web Page Promotes Animal Ag
Congress Leaves Town With Lots Undone
Disaster Assistance Fails In Senate
December BEEF Content Now At www.beef-mag.com
Mark Your Calendars For "Eye On Energy" Conference
Trouble-Shooting Reproductive Failure
Eastern Nebraska Cattlemen's Expo Is Jan. 13
Four-State Beef Conference Is Jan. 10-11
Stocker Receiving Management Conference Is Jan. 25
"New" Plan For NAIS Just A New Tactic For Old NAIS
Ethanol Is Here To Stay. Deal With It.
USDA's Bruce Knight On Voluntary NAIS


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Our Perspective
Big Changes In The Bull, Female Replacement Markets
There's been a lot of talk about price-structure changes in the feeder, fed and even wholesale beef markets. So it's probably not surprising these differences are showing up in the bull and replacement female market this fall, at an unprecedented level.

A $2,500 average in a bull sale used to mean the bulk of the bulls sold in a range something like $1,800-$4,200, with the bulk selling between $2,200 and $2,500. Today, a $3,500 average, more often than not, means very few bulls sold between $3,000-$4,000, but rather they were either $5,000-$6,500 bulls or $1,500-$3,000 bulls.

This fall, we've seen $500 price differences between bred females in the same class on a daily business in sale barns across the country. While bred heifers might average $1,150, it likely means they sold for a $1,000 or $1,400, with not too many right at the average.

The message is quality matters like never before. As in other phases of the business, buyers are doing a much better job of assessing value. It has to be only a matter of time before the banking industry begins to adjust to these changes as well, with more sophisticated and complex means of assessing inventory values.

The days of assigning the same value to a producer's inventory that consistently sells 10¢ back of the market, as the producer who consistently sells 10¢ over the market, are numbered. Expect to have to provide much more historical and documented information on your marketing revenues rather than simple inventory numbers, or be relegated to accepting the least common denominator.
-- Troy Marshall


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Big Brother Moves Into The Restaurant Business
This week, the New York City Board of Health instituted a ban on trans fats in restaurant cooking. By July, all restaurants must switch to frying oils that virtually eliminate trans fats. By 2008, all restaurant items must contain less than 1/2 gm of trans fats.

OK, it's New York, but Chicago has been trying to pass similar measures, and the slippery slope is a valid analogy here. We certainly haven't reached the point when organized crime will be warehousing T-bone steaks, Twinkies and potato chips for sale on the black market. Nor are steakhouses with decadent desserts yet relegated to back-alley haunts you can enter only with a password.

But the reality is, there are those who actually would like such scenarios to exist. More importantly, these folks believe Americans, unable to make "common sense" choices, must have them foisted upon them.

Milton Friedman, one of the greatest free-market economists of our time, died last week. His message that the government doesn't belong where the market can respond is a timeless truism.

There are several types of liberty in the world -- political freedom being one, economic liberty being another. Unfortunately the war to preserve and advance them is never-ending.

For the most part, individual and economic freedom is alive and well in the cattle industry, but we need to advance these causes on the periphery of our industry, as well.

The Arizona referendum that will outlaw the commercial pig industry is one example to motivate us, lest we forget our opponents are working every day to legislate us out of business. They are committed to a long drawn-out battle of attrition, where it's not the power of the message, but its persistence, they bank on to carry the day.
-- Troy Marshall


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NCBA Calls For Halt To South Korea Beef Trade
The recent announcement that South Korea had blacklisted Creekstone Farms, after finding a bone fragment in the 9.3-ton shipment of boneless beef, came as a surprise to few people. But it did confirm, as everyone had been saying, that the agreement was not viable for a sustainable beef trade.

It also confirmed South Korea's intentions to appear to adhere to internationally recognized trade standards while doing everything possible to restrict access.

This week, National Cattlemen's Beef Association President Mike John, in a letter to USDA Secretary Mike Johanns, asked for trade to be stopped (technically) until a legitimate agreement can be reached. The industry has been perplexed ever since USDA signed the agreement, realizing early on that it wasn't feasible.

It may have been pragmatic to accept the 20-month provision to get trade started in Japan, realizing Japan needed time to prepare itself to come into line with international standards. South Korea, however, has never tried to deny the standards, just choosing to delay and confuse the issue on enforcement.

Some argue that, with November's Democratic victory in Congress, the chance for a trade agreement with South Korea may have slipped away. But the fact is South Korea needs the U.S. far more than the U.S. needs South Korea, not only economically but for national security reasons.

The U.S. simply is being out-negotiated and its importance minimized by the South Koreans. South Korea can't afford a trade war; nor can it afford to alienate the U.S. as the world community moves to defuse the North Korean crisis. It's time South Korea understands it's in its best interests to take steps to avoid an escalation of national tensions at such a crucial time.

"Fair trade or no trade" is a mantra the U.S. government has failed to enforce. The U.S. is merely asking for trading partners to live up to their agreements; she needs to make it clear that failure to do so will bring severe consequences.

Refusing to enforce a fair-trade policy because of a desire not to appear a bully is coming dangerously close to shifting the world back to protectionist and isolationist trade policies. The consequences of that are dire. The future of trade, and the corresponding positive impact it's had and continues to have on our industry, is in jeopardy if we fail to force our partners to live up to their agreements.
-- Troy Marshall


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Food Safety
Magazine Study Finds 83% Of Broilers Contaminated
An annual food-safety survey of chicken conducted by Consumer Reports found 83% of tested broiler chickens contaminated with either or both campylobacter and salmonella. The 525 chickens were purchased from retail outlets, including natural food stores, in 23 states.

The survey found 81% of the chickens tested were contaminated with campylobacter, 15% with salmonella, and 13% with both. Official USDA testing numbers found a 2005 salmonella infection rate of 16.3%.

USDA doesn't test for campylobacter. But a study last year by the agency and the National Chicken Council found only 26% of 4,200 broiler carcasses tested at 13 plants were infected with campylobacter, USAToday reports.

Richard Raymond, USDA under secretary for food safety, says the discrepancy might be due to the number of bacteria cells considered an infection. Consumer Reports considered more than 13 campylobacter cells in a cultured sample an infection, while the USDA study required 4,000.
-- Joe Roybal


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Foreign Trade
Roberts Sends Beef Letter to Korea
Sen. Pat Roberts (R-KS) sent a letter to the South Korean Ambassador asking for "immediate resumption of beef trade based on sound science in accordance with international standards." Roberts wrote, "This rejection seems to be based on nothing more than a continued effort by Korea to build false barriers to trade between our two countries. This is not how two allies, with many mutual interests should conduct business."

Roberts went on to write, "Continued barriers to resuming this trade, and unfair actions that are not based on science, will lead me to seriously question Korea's commitment to any other trade and foreign policy agreements with the U.S."
-- P. Scott Shearer, Washington, D.C., correspondent


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Seoul Is Three-For-Three In Rejecting U.S. Beef Shipments
South Korea rejected a third shipment of U.S. beef this week, citing the discovery of bone chips in a 10-ton shipment from Iowa. South Korea's National Veterinary Research and Quarantine Service turned away two other shipments citing similar reasons, on Nov. 24 and Dec. 1. All three shipments were from different U.S. suppliers. The earlier cases hailed from Kansas and Nebraska.

USDA Secretary Mike Johanns expressed his disappointment that the first three shipments of U.S. beef to South Korea since the market was announced as reopened in September all had been rejected.

Johanns says it "clearly illustrates South Korean officials are determined to find an excuse to reject all beef products from the U.S. There's absolutely no food-safety issue with any one of these shipments."

Johanns said he "finds it difficult to accept that bone fragments the size of one half of a grain of rice were found through visual inspection of 10 metric tons of beef, as is South Korea's claim regarding the third shipment, despite the fact it went through unusually rigorous inspection by the U.S. exporter before it was shipped. I can only conclude these actions are designed to restrict beef trade."

Calling the situation "unacceptable," Johanns says the U.S. will work with the U.S. Trade Representative to examine all options available to the U.S. to legitimately open the South Korean market to U.S. beef.

"Our objective is to implement a trade agreement for beef that reflects science-based international guidelines and facilitates real trade," Johanns said.
-- Joe Roybal


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U.S. Ag Exports to Reach $77 Billion
USDA says ag exports for FY 2007 are expected to reach a record $77 billion, $8.3 billion higher than FY 2006. Canada, Mexico and Japan continue to be the top-three export markets for U.S. ag, with China expected to become the fourth-largest due to increased soybean sales. Exports of livestock products are expected to reach $14.2 billion. Ag imports are expected to reach a record $69 billion.
-- P. Scott Shearer, Washington, D.C., correspondent


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Consumers
Spain Tries To Remove Burger King TV Ads
Spain's government tried to halt Burger King this week from pitching its biggest burgers on television, intimating it might take the chain to court.

The Guardian says the situation began last week when Elena Salgado, Spain's health minister, complained about an ad for Burger King's XXL burger, which the ministry claims has 971 calories. Burger King responded with ads for its Double Whopper with the punchline, "Eat like a man!"

The report says the minister characterized the ad as a breach of a voluntary agreement that chains would promote moderation. Felix Lobo, head of Spain's food regulatory body, said the case could end up in court for "illegally failing to comply with a contract."

Burger King said it just reacted to client taste, and always works "to reduce the risk of illness provoked by an inadequate diet and to promote a balanced ... diet," the report says.
-- Joe Roybal


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Activist News
President Bush Signs Animal Terrorism Act
President Bush has signed the "Animal Enterprise Terrorism Act." This legislation increases penalties for criminal acts against animal enterprises (commercial, academic, laboratories, animal shelter, pet store, breeder, or furrier). It also revises criminal prohibitions against damaging or interfering with the operations of an animal enterprise to include "intentional damage or loss to any real or personal property and intentional threats of death or serious bodily injury against individuals." The bill was sponsored by Sen. Jim Inhofe (R-OK) and Rep. Tom Petri (R-WI).
-- P. Scott Shearer, Washington, D.C., correspondent


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Industry News
Bean-Sponsored Web Page Promotes Animal Ag
The importance of animal ag is the focus of a new soybean checkoff-sponsored Web site, www.animalag.org. The site features factual info for soybean farmers to use in support of the animal ag-business climate. The site focuses on quantifying the importance of livestock and poultry to the soybean industry and contains info on the economic impact of animal ag at the state level, environmental regulation info, and contact info for experts in animal ag and animal welfare.
-- Joe Roybal


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Government
Congress Leaves Town With Lots Undone
The 109th Congress is expected to finish by the end of the week, leaving a number of unfinished items for the 110th Congress. Only two of 12 appropriations bills were completed. The remaining appropriation bills, including ag, were placed in a continuing resolution that will fund the government until mid February. The new Congress begins Jan. 4, 2007.
-- P. Scott Shearer, Washington, D.C., correspondent


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Disaster Assistance Fails In Senate
The Senate failed to pass a $4.9-billion, disaster-assistance package this week during consideration of the FY '07 ag appropriations bill. Tom Coburn (R-OK) and Judd Gregg (R-NH) objected and raised budget concerns.

The administration continues to oppose the proposal. The statement of administration policy said, "If the president is presented with a bill his senior advisors believe would result in total 2007 appropriations exceeding the $873 billion top line, the president's senior advisors would recommend he veto the bill."
-- P. Scott Shearer, Washington, D.C., correspondent


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Tips for Profit
December BEEF Content Now At www.beef-mag.com
Access all the December issue content of BEEF magazine at www.beef-mag.com. Included are: the annual BEEF magazine-Kansas State University survey of suppliers of radio-frequency ID hardware and software, and exclusive research on producer attitudes toward animal ID. You can also read economist Harlan Hughes' first installment regarding on-ranch accounting systems, and grazing guru Jim Gerrish's thoughts on the merits and appropriateness of fixed vs. flexible grazing cells.
-- Joe Roybal


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Mark Your Calendars For "Eye On Energy" Conference
Spiraling energy costs are forcing farmers to examine every agronomic practice on their operations, especially tillage. That's the focus of the 2007 Conservation Tillage Conference and Expo, Jan. 30-31, themed "Eye On Energy" and slated for the Ramkota Hotel and Conference Center in Sioux Falls, SD.

University experts and conservation-focused farmers will detail how conservation practices can help stretch energy dollars. The conference provides tillage info for beginners, as well as veteran no-till, strip till, ridge-till and mulch-till growers. Offered are four tracks:

Track I: Learn the basics: Tillage 101
Track II: Keep corn-on-corn profitable
Track III: Manage your energy costs
Track IV: Match new technology to tillage

To register, visit www.tillageconference.com or call 800-722-5334, ext. 14698. The conference is sponsored by The Corn & Soybean Digest and Farm Industry News, which are BEEF magazine sister publications.
-- Joe Roybal


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Trouble-Shooting Reproductive Failure
With fall preg-checking season well underway, some herd owners are surely pleased with their results. Meanwhile, others are looking for bred females to purchase.

The goal shouldn't be to have 100% of your cows bred each year. Herds at or near 100% pregnant year after year generally represent one of two situations -- a very extended calving season or overfeeding. Neither option is cost-effective for overall herd profitability.

Financial analysis indicates a pregnancy percentage of 90-95% in 65 days is both achievable and likely most profitable. If your herd is below this level, some investigation by you and your herd-health veterinarian is needed.

When I investigate a reproductive problem, I break it into the following categories: For bull problems, it's Breeding Soundness Exam (BSE), overuse, or lack of libido. For cow problems, I look at nutrition, environment, disease and genetics.

Bull problems. When a large percentage of cows are open, my first thought is generally a bull problem. With a national annual average of about 10% of bulls failing their BSE, an annual BSE on every bull before turnout is a must. Nearly every year I've been in practice, I've seen a group of cows all open due to a sterile bull. It's an easy situation to figure out.

Another bull problem is simply overuse. My rule of thumb for Midwest herds is you need a month of bull age for every cow in a 65-day breeding season. If you have 100 cows in a group, you need "100 months of bull" to breed them.

This means three bulls at three years of age, or two bulls at four years of age, would be adequate bull power. We know some bulls can service more than 50 cows in a breeding season, but 50 cows to a bull is our upper limit.

We also know using bulls of greatly differing ages doesn't work well. Having a yearling bull in the pasture with a three- and four-year-old adds up to 100 months, but the yearling will likely get no cows bred due to dominance issues by the older bulls.

The final bull problem is lack of libido. These bulls generally get some cows bred but not enough. To diagnose this problem, place a group of open cows with the bull(s) in question. If the bull lies down in the shade when a cow is in heat, he's asking to leave the herd.

Cow problems. Nutrition tends to be the most common reason for a less-than-desirable pregnancy percentage; the most common nutritional problem is lack of Body Condition Score (BCS) before calving. This is primarily an energy deficiency.

The period between weaning and the third trimester of pregnancy is the most cost-effective time to improve BCS. A good BCS prior to calving is key to breeding back in a timely fashion.

If thin cows are over-represented in the open pen, you may already have the answer. If your younger cows are over-represented, it can be the same problem.

Mature cows that calve too thin (below BCS 5) are at higher risk of being open, compared to cows in good BCS. Young cows are also at increased risk of being open as they need additional energy for skeletal growth. If you have a cow both young and thin, she's at a severe disadvantage.

Post-calving cows need 45% more energy and 40% more protein than a pre-partum cow. Be sure not to shortchange cows at this critical time.

Mineral and vitamin deficiencies also can reduce pregnancy percentage. While phosphorus deficiency historically was listed as a cause of reproductive failure, it's now very rare as most all cows are adequately supplemented with phosphorus.

Other elements that can cause reproductive failure include deficiencies of selenium, vitamin E, cobalt, copper, iodine and manganese. Check with your nutritionist, Extension beef specialist or herd-health veterinarian for requirements in your area.

Environment. A cow herd out of synch with what's going on in the environment can pose problems. The biggest concern is an overly productive cow in an average or poorer environment. We don't want high-maintenance cows weighing 1,700 lbs. trying to get rebred while grazing infected fescue.

Heat stress can also affect reproduction. It can cause reduced embryo viability early in pregnancy, as well as reduced sperm quality and breeding activity by the bull.

Disease. When disease causes reproductive failure, other manifestations of the same disease are generally seen. Abortions, early embryonic death, calves born weak or dead, and calves that die soon after birth are common manifestations. Most disease factors don't simply cause an increase in the percentage of open cows. This is another area where you need to get your herd-health veterinarian involved early in the course of the problem.

Genetics. There are differences in the inherent fertility of different beef breeds. Research also indicates an increase in pregnancy rate in crossbred vs. purebred cows. If you can't attain the pregnancy rate you desire, there may be an underlying genetic component.

If your herd's fall pregnancy results look good, then congratulations. If it's less than desirable, work with your beef team to get to the bottom of the problem. This time next year, you can be reflecting on a job well done.

For more on Breeding Soundness Exams of bulls, and body condition scoring of cows, visit www.beefcowcalf.com. Type either topic into the "Search for:" box on the opening page.
-- W. Mark Hilton, DVM, Purdue University, is a BEEF magazine columnist.


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Industry Meetings
Eastern Nebraska Cattlemen's Expo Is Jan. 13
The 2007 Eastern Nebraska Cattlemen's Expo is Jan. 13 at the Around The Bend Steakhouse in South Bend, NE. The free program runs 9:30 a.m. to 3 p.m., and is sponsored by the Cass-Otoe County Cattlemen, Nebraska Cattlemen and University of Nebraska-Lincoln Extension.

Topics of discussion include heifer-development programs utilizing distiller's grain, handling and storage of distiller's grain, and the benefits and challenges of using distiller's grains in feedlot diets. Presenters will also provide updates on Nebraska biodiesel and ethanol initiatives, as well as legislative issues.

No registration required. For more info, contact Rod Keil at 402-298-8574 or bigrodney@jagwireless.net.
-- Joe Roybal


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Four-State Beef Conference Is Jan. 10-11
The 23rd annual Four-State Beef conference is set for four locations over a two-day period, Jan. 10-11. Designed to give beef cattle producers in Iowa, Kansas, Missouri, and Nebraska an annual update on current cow-calf and stocker topics, the speakers and their topics include:
  • John Lawrence, Iowa State University (ISU) on the state of the beef industry;
  • Rick Rasby, University of Nebraska on utilizing co-product feeds;
  • Rob Kallenbach, University of Missouri on grazing management;
  • Larry Corah, Certified Angus Beef on why percent Choice is declining.
Jan. 10 meeting times are 10 a.m. in Holton, KS, at the Jackson County Fair Building; and 4 p.m. in Tecumseh, NE, at the Community Building. Jan. 11 session are at 10 a.m. in Lewis, IA, at the ISU Armstrong Research Farm, with a 4 p.m. session in Bethany, MO, at the community center.

Registration is $25, which includes a meal and proceedings; deadline is Jan. 5. Learn more at www.extension.iastate.edu/feci/4StBeef/.
-- Joe Roybal


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Stocker Receiving Management Conference Is Jan. 25
Jan. 25 is the date, and the Chisholm Trail Pavilion at the Garfield County Fairgrounds in Enid, OK, is the setting for the Stocker Receiving Management Conference. Sponsored by Oklahoma State University (OSU), USDA and state and local agencies, it includes sessions on stocker health, stocker research updates, low-stress cattle handling, and weaning calf management.

Among topics in the stocker health section are: treating respiratory disease, vaccination needs and priorities, cost-effective health dollars, sick calf identification and treatment, receiving management priorities, treatment of joint problems on wheat pasture stocker calves, bovine viral diarrhea virus testing, and trucking's impact on stockers. Presenters are Kansas State University DVMs Dan Thomson, Mike Apley and David Anderson.

OSU beef specialist David Lalman will present the stocker research update; Tom Noffsinger, Benkelman, NE, DVM will discuss low-stress handling techniques for stocker operators.

The weaning calf management session by OSU's D.L. Step, DVM, and nutritionist Clint Krehbiel will cover health implications, nutrition and management, and performance and treatment comparisons.

Registration is $25, which includes lunch. For more info, contact Greg Highfill at 580-237-7677 or Greg.Highfill@okstate.edu.
-- Joe Roybal


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Cow-Calf Weekly Mailbag
"New" Plan For NAIS Just A New Tactic For Old NAIS
Your Dec. 1 piece, "USDA Reaffirms Voluntary NAIS; Premiums Show ID Pays" is so far off the mark, it's shameful. "Though NAIS has apparently become road-kill on history's highway..." Give me a break. The new plan is a shell game of words.

The new plan says it's "voluntary at the federal level" while palming off the responsibility onto the states. The states already took the money, now it's time to pay up. USDA is making the state agencies implement the National Animal Identification System (NAIS) for them.

The goal of NAIS hasn't changed, just the tactics. NAIS is still going to eradicate small/private farms, homesteaders, hobbyists and horse-owning. Can rural America stand to take that kind of economic hit?
-- Sharon Zecchinelli
Enosburg Falls, VT


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Ethanol Is Here To Stay. Deal With It.
At least a few people are getting this corn/ethanol deal right. Mark Sip ("Rise In Corn Price Could Be To Beef's Advantage," Dec. 1 Beef Cow-Calf Weekly) put things in perspective until his phrase: "If $3+/bu. corn is here to stay as a result of a government policy encouraging ethanol production..."

$3+ corn is a result of many factors; ethanol is only a part of it. Exports, more need for corn oil/syrups, a short crop. Yes, this corn crop is shrinking every day. Thousands of products require corn. If we removed from grocery shelves all products utilizing some form of corn, we'd have a lot of bare shelves, and the meat case would be pretty empty.

Will we overbuild these ethanol plants? Of course. We overbuild everything in this country, but the bottom line is ethanol is here to stay.

Our biggest concern in ag isn't the price of feed grains, it's the activists who want to destroy our industry. We need to band together against these threats and not worry about feed-grain prices that the law of supply and demand will take care of -- as it should.

As for these cow-calf and feeder folks thinking we'll get back to under $2 corn any time soon, I bet these folks still put their "false teeth" under their pillow.
-- C. J Oakwood
Oakwood, IL


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USDA's Bruce Knight On Voluntary NAIS
I take exception to your recent characterization that USDA's commitment to keeping the National Animal ID program voluntary somehow constitutes a lack of resolve on our part to make this program a success ("USDA Reaffirms Voluntary NAIS; Premiums Show ID Pays," Dec. 1 BEEF Cow-Calf Weekly). I also disagree with the notion that USDA quietly announced this decision via release of our new draft User Guide for producers.

I've gone on the record numerous times to explain why it makes good sense to keep the Animal ID program voluntary at the federal level. Most importantly, around the country, producers -- the backbone of the system -- have told USDA their preference is a voluntary system. It's their livelihood, their business information and, quite simply, it should be their choice to participate.

We're actively promoting the system and encouraging producers all across the country to register their premises. The community outreach event you mention in your story was designed for just this purpose -- sitting down with our state and industry partners to discuss the system and new communications tools designed to help them increase premises registration totals across the country. The number of premises registered across the country stands today at more than 333,000 and continues to rise each week.

The recently released draft User Guide is another key component in this effort. Producers interested in animal ID now have a comprehensive guide that explains what the system is and how it can help protect their operations and communities from the potentially devastating effects of serious animal disease events. Releasing the guide for public comment provides a way for producers to send us their insights into the program, while also helping them make informed decisions regarding their participation.

Contrary to your report of the animal ID system's demise, the program is gaining traction across the country. The best way to enhance its momentum -- and ultimate success -- is to keep it voluntary at the federal level; inform producers of the system's many benefits; and, at the end of the day, let them make the right decision for their operations and their livelihoods.
-- Bruce I. Knight
USDA under secretary for
marketing and regulatory programs


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