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CAFTA Tour Update

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Task Force Finds Strong Opposition to CAFTA-DR
(Managua, Nicaragua) – R-CALF USA's task force assigned to visit Central American nations to research and analyze support for, and the impact of, the U.S.-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) announced today that strong political and popular opposition to CAFTA-DR exists in both Costa Rica and Nicaragua.

Members of the task force are: Dennis McDonald, R-CALF USA's International Trade Committee chairman, and president of Montana Cattlemen's Association; R-CALF USA Director and Missouri veterinarian Max Thornsberry, who also chairs R-CALF USA's animal health committee; Joel Gill, R-CALF USA's state membership chair for Mississippi, who also is vice-president of Mississippi Order Buyers and president of the Mississippi Livestock Marketing Association; and, Doug Zalesky, Ph.D., a Colorado State University bovine research scientist and cattle producer from Colorado, who recently was elected president of Colorado Independent Cattle Growers Association.

"In Costa Rica, President Abel Pacheco appointed a committee to study CAFTA. The leading Costa Rican opposition candidate, Otton Solis, is opposed to CAFTA, and because this is such a hot- button political issue here, the matter has been tabled until after the January presidential election," said McDonald. "Meanwhile in Costa Rica, 10,000 people protested CAFTA last week by marching through San Jose, the capital city."

On Wednesday, June 29, the task force met with a group of Nicaraguan agricultural leaders, including the presidents of two of the nation's largest cattle organizations. The leaders advised the task force they are opposed to CAFTA-DR because it fails to address their concerns over dairy products, grain and cattle issues.

"Certain groups of U.S. politicians are being disingenuous when they state that these nations favor the trade agreement," noted McDonald. "On the other hand, Honduras, San Salvador and Guatemala have already ratified CAFTA."

"One of the persistent and troubling pieces of information we continue to learn is that large numbers of live cattle are flowing to Mexican feedlots from Costa Rica and Nicaragua, and subsequently into the U.S. under the North American Free Trade Agreement (NAFTA)," commented Zalesky.

R-CALF USA's task force also has been told that large quantities of beef from Venezuela, Colombia and Uruguay are being shipped to Nicaragua and Costa Rica.

"Beef from these three South American countries is currently barred from entering the U.S. due to Foot-and-Mouth Disease (FMD)," said Thornsberry. "Under CAFTA, there is no prohibition of the transshipment of cattle."

Following a visit to the Seminole Ranch near Managua, Nicaragua, Zalesky indicated that task force members again witnessed firsthand that Central American cattle producers are excelling in the production of purebred breeding stock and commercial cattle.

"Semen and embryos imported from the U.S. have allowed producers here to develop purebred stock that rivals those produced in the U.S.," he said. "Additionally, commercial producers are utilizing effective crossbreeding programs to produce cattle with the genetics suitable for the environment and to provide carcass quality.

"The incorporation of carcass genetics from U.S. Red Angus bulls will go a long way towards producing cattle that can both survive in the Nicaraguan environment, but also produce carcasses that are of higher quality," Zalesky continued. "Combined with cheaper labor, a near ideal climate throughout the year, and abundant forage production, these producers have a significant production advantage over U.S. producers. I have learned during this trip that it would be a grave mistake to think that cattle produced in Central America can be discounted as poorer quality cattle and that they cannot compete in many markets."

Task force members reported that meetings with Nicaraguan producers and political leaders show they are extremely concerned about the negative effect of CAFTA-DR and worry that the trade agreement will put many agricultural producers out of business.

"Like ourselves, they believe that in its present form CAFTA-DR is good for only a few, but that many will suffer," Zalesky said. "They fear that U.S. corporate interests will disrupt their culture."

Nicaraguan officials have confirmed that Texas interests already have visited their country to negotiate development of cattle feeding operations.

Thornsberry said he was puzzled to learn that Nicaraguan cattlemen are concerned about the American Meat Association's (AMI's) demand that all cattle in Nicaragua be electronically identified with radio frequency identification (RFID) implants in the animal's ear.

"Not only is no infrastructure in place to accommodate this demand, the U.S. Food and Drug Administration (FDA) has refused to approve the implanting of RFID transmitters, fearing that metal and electronic materials could inadvertently affect the food supply," noted Thornsberry.

"Nicaraguan cattlemen have in place a very effective form of individual animal identification, which is their hot iron brand," he added. "Ownership cannot transfer without this identifying brand that traces the animal to the farm of origin."

Gill said the low costs of production among Central American nations are notable and significant.

"In Nicaragua, the cost of land is about $400 per acre, while labor costs average $2.50 per day, he said. "Producers here can raise a cow/calf pair on a little less than four acres of land, using no fertilizer, without any feed costs beyond their own pasture. The natural forage here averages 12 percent to 18 percent protein.

"The cost of taking an animal from weaning (around 350 pounds) to finished weight (1,100 pounds) costs $118, which makes the cost of gain about 13 cents per pound, plus the costs of vaccines and minerals," Gill pointed out. "With processed beef worth $1.12 per pound, this provides a handsome profit to the producer. Our guide here in Nicaragua related that the Nicaraguan cow herd is now over 3.4 million head and will most likely double in the next five years with better market access in the U.S."

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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) represents thousands of U.S. cattle producers on domestic and international trade and marketing issues. R-CALF USA, a national, non-profit organization, is dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALF USA's membership consists primarily of cow-calf operators, cattle backgrounders, and feedlot owners. Its members – over 18,000 strong – are located in 47 states, and the organization has over 60 local and state association affiliates, from both cattle and farm organizations. Various main street businesses are associate members of R-CALF USA. For more information, visit www.r-calfusa.com or, call 406-252-2516.

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