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Wonder if he still thinks the price of beef is too high

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HAY MAKER

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US Ag Chief talks to NCBA



Transcript of Secretary Mike Johanns remarks to The National Cattlemen's Beef Association Annual Meeting - Denver, Colorado

Release No. 0036.06

Contact:

USDA Press Office

February 3, 2006



SEC. JOHANNS: Thank you very much. Thank you. Thank you. Thank you very much. Thank you for that very warm welcome. Jim, thanks for that very kind introduction. I appreciate that immensely. That reference to my past political life kind of reminded me of a story. The story goes like this. There were three politicians, and they were at a forum and just taking questions from the audience. And this one gentleman got up and he said, 'you know, I want to get right down to brass tacks with my question.' He said, 'Imagine yourself, you've died and you're laid out in your casket, and people are walking by you. What do you want them to say about you when they're looking down at you in the casket?' And the first politician said, 'Boy that's quite a question.' He said, 'I guess what I'd want people to say is that I was an honest guy.' And the next politician said, 'Yeah, that's a great question.' He said, 'Thinking about it I guess what I'd like to have people say about me is that I worked hard.' And the third politician said, 'You know I've had a little more time to think about it than the others, and I guess if people were walking by me and I was laid out there in my casket, I hope that somebody says, I think he's still moving.'



[Laughter.]



I've been on the job a year, and I'm still moving. It's good to be back here.



Congratulations. I don't know if a lot has been made of this, but this is your tenth anniversary of the merger of the National Cattlemen's Association and the National Livestock and Meat Board. That was the birth of the NCBAA as we know it today. I want you to know how much we appreciate your good work on behalf of a great industry, America's cattle industry.



The demand for beef continues to be very strong. That's so encouraging.



To quote cattle facts, fourth quarter 2005 prices were higher than maybe what some anticipated. That's testament I believe to the unwavering consumer confidence in the safety of American beef.



I also want to take a moment as I start out here this morning and salute your tremendous staff. They do a great job for you; I want you to know that. They work tirelessly to represent and promote the strongest and the best beef industry in the world.



I have worked with Jim this year, and I want you to know how much I appreciate his leadership. He's a great guy, real straightforward guy, and I always appreciated the opportunity to talk to him about the industry and what we were doing at the USDA.



Of course it's a pleasure to welcome someone new to the post also, incoming president Mike John. I congratulate you. We look forward to working with Mike and the team as this year unfolds.



As you know, many of you know this event is something of an anniversary for me. When I joined you in Texas last year, this was the first speech outside of Washington after joining the President's team after becoming the Secretary of Agriculture. At that time it had been about a year since 64 percent of the meat and beef market had slammed shut, and I promised you then during that meeting that I would do everything I could to keep pushing to bring trade back to normal levels.



And together -- I might emphasize "together" we've been pushing hard to restore access to markets that closed a couple of years ago. And we have accomplished a great deal. Hong Kong, Singapore, South Korea, Taiwan have resumed trade in various beef products. And I was pleased to announce yesterday that Mexico took an additional step. They opened their market to bone-in beef, a testament to safety to U.S. beef and confidence in the safeguards against BSE.



The world is showing confidence in the safety and the quality of our beef products. And I promise you that USDA will work to keep that confidence in the safety of our product and our scrupulous attention to our agreements that we have with various customers around the world.



I'd be less than honest with you if I failed to acknowledge the temporary setback with Japan. The failure to meet the terms of an export verification program with Japan -- you know ladies and gentlemen, that's unacceptable. So we are investigating the situation to determine what happened. We want to be able to explain that, and we also want to set the course of action to make sure that that doesn't happen again.



Along with other measures I've announced 12 steps to strengthen our system and assure compliance. Your organization stepped up immediately and applauded that effort. I appreciate that. And I'll also share with you that it's very possible that after the investigation we may identify some additional things that we want to do, and of course we'll be very transparent in talking about that in releasing the results of our effort.



I've also spent a great deal of time on discussions with my counterpart in Japan, and we've had lengthy discussions with Japanese officials.



I will tell you that in terms of our effort here we don't intend to sacrifice thoroughness for speed in our investigation. We'll move as rapidly as we can, but when we're done we want to be able to say it was thorough.



I've assured Japan and all of our trading partners that this really is a no-holds-barred look at the situation. It's going to be deliberate in pace, and it's going to be comprehensive in scope. But I want to emphasize something that I've emphasized over and over again, both as a consumer and as your Secretary. And that is that American beef is absolutely safe.



[Applause.]



Thank you.



We worked very, very hard not only with you but with scientists and with others to put interlocking safeguards in place. Our interlocking safeguards protect consumers. Americans understand this. Consumption continues to be so strong. Many of our trading partners recognize this, and we're going to do everything we can with you in partnership working hard to show Japanese consumers what we mean.



Not only is American beef safe, I can also report to you with a tremendous body of information to back this up that, our herd is healthy. The largest BSE surveillance efforts ever undertaken in the United States is proving that fact, thanks in large part to an extraordinary government/industry partnership, and I might add an investment of about $1 million dollars to each and every week since the program began. This effort has been very informative.



On average we tested 1,000 high-risk cattle per day for BSE, 1,000. Only one in more than 600,000 animals tested came up with a positive. Yesterday USDA's Office of the Inspector General released its review of our BSE enhanced surveillance program. I want to be clear that this is not related to the situation in Japan. The report is a product of an investigation that began working with the USDA now nearly two years ago.



Given the magnitude of the report, we are very pleased to report to you today that it reflects what we describe as a clean audit. In other words, we reached agreement with the Inspector General's recommendations.



The fact is that the OIG report concludes that there's no evidence that specified risk materials entered the food supply ever. Our safeguards have worked. Our agencies with responsibilities in this area -- APHIS and FSIS -- have already acted on many of the recommendations in the report. And I will share with you that that work continues.



The Inspector General did recommend that we improve documentation and tracking of the work being done, and not only do we agree; we have already done so. The report also recommends that we proceed with due caution in drawing conclusions based upon the enhanced surveillance efforts, and ensure that our conclusions are not overstated. And of course we could not agree more.



We always want our conclusions to be accurate and based upon science.



Now let me if I might talk about some other issues that we face, and I failed to mention this at the beginning but when my comments are done I'll be happy to take questions from you.



While BSE has been a concern to our trading partners, it is not as the NCBA itself reports the only trade barrier that affects U.S. cattlemen. Ambassador Rob Portman and I have just returned from the World Economic Summit in Davo, Switzerland, where ministers continued to pushed for a successful conclusion to the Doha Round this year. I am pleased to tell you that there was progress; there's consensus. But there still is a lot of work to be done.



Now our goal in these negotiations, ladies and gentlemen, for America's farmers and ranchers, was well-put by Jim McAdams. I'm quoting Jim here. He said, "We believe in the WTO negotiations because we envision a future where high quality U.S. beef exports are not discouraged and punished by unreasonable trade barriers."



I can say to Jim that the President shares his vision.



Quoting from the President now in the State of the Union Message: "With open markets and a level playing field, no one can out-produce or out-compete the American worker. Americans should not fear our economic future because we intend to shape it."



Ladies and gentlemen, our ranchers and our farmers are indeed shaping the future. This year I will tell you that we are forecasting the third year in a row of record agricultural exports, $64.5 billion. That is up 25 percent from the year 2000. It's a remarkable track record.



Now we hear the debate about trade. But let me share some statistics with you. Producers know that 27 percent of our agricultural income comes from export markets -- 27 percent. I will also share with you that 5 percent of the world's population lives here in the United States. I'll state that the other way. That means that 95 percent, the rest of the world, are customers and our potential customers live outside of the United States. Our job is to make sure that we have fair access to those markets where they live.



As the President said, "This country can compete with anybody, anytime, anywhere." And if we can't, we ought to figure out what we need to do differently. Competition we all recognize is good. It challenges us to be better. But it has to be fair competition. In the spirit of the President's vision for the future of American competitiveness, everyone knows in this room that if U.S. agriculture is to thrive in this century we must develop foreign and domestic markets for our great productivity.



That is why this administration is committed to accomplishing free and open trade based upon scientifically sound and internationally recognized markets.



[Applause.]



Thank you.



But you know what? We're going to build on your strength. We're determined to build on the strength and the momentum of your industry, the cattle industry. This is an enormous show of strength that you display. Amid challenges in trade you continued to argue for a level playing field, for the opportunity to market your products world-wide. You truly are leaders in this area.



And it's not that the industry hasn't been challenged. From hurricanes in the south to drought in the northern Rockies, northern High Plains, massive grass fires in Oklahoma and Texas, one of the biggest fires in history I might add-- the industry has remained strong. Your assistance during the hurricanes was not only appreciated, it was unbelievable. It was great.



USDA continues to do all we can to help also. We continue to do all we can to deliver all possible assistance to farmers and ranchers to help them reclaim their businesses and their lives.



Last week in the hurricane areas we announced $2.8 billion in aid for hurricane victims. Of this, $1.2 billion will go to livestock and crop producers through programs like the new Livestock Indemnity Program and Feed Indemnity Program.



We want to get payments to producers for the loss of dead stock and protect livestock that did survive, to assist with buying feed in areas where feed was destroyed. We're giving producers $200 million in assistance through the Emergency Conservation Program and $300 million through the Emergency Watershed Protection Program.



We want to help producers get their fences back up, remove debris, repair conservation structures, and get their lives and their livelihoods back in order. Keep in mind that all of this is in addition to our ongoing efforts. Earlier this week we announced the Conservation Security Program sign-up for February 13 through March 31. We heard what you told us during our Farm Bill listening sessions last year. And improvements were made for rangeland requirements to reward the best stewards of working ranches.




We're also proud of our partnerships this year on work that advances the industry. By the way, if you do have any questions about our programs please stop by our NRCS and FSA booths. The FSA booth by the way is 20 feet long to celebrate the 20th anniversary of the Conservation Reserve Program. That program is something we can all be proud of.



Now let me offer if I might a few concluding thoughts, and then as I indicated I'd be very pleased to take your questions.



Let me conclude by talking about an issue that is important to all of you, an issue about which there are many questions. I suspect questions will continue -- the issue of the National identification system. I'd like to answer some of the questions that we have heard are being asked.



First though I would like to commend the NCBA members for showing tremendous leadership in the industry-led animal ID effort. The new U.S. animal identification organization has presented its database to us. That represents real progress. Now we feel as you do that the ID system must be grounded in partnership. Our longstanding goals remain, to move forward quickly without causing unnecessary burden on producers and without unduly increasing the size of government.



We believe that the system that we've been talking about, the meta-data system would get this job done-- which brings me to the questions that we have heard.



Now some have asked whether this system is a retreat from our position that private databases should contain the animal movement data. Let me assure you that I'm not changing course. Some time ago we proposed a system that would require raw data to be held in a private database. The widespread support for privately owned data was dampened by concerns among states and industry about sharing a single database. And we worried about gridlock. But APHIS did not throw in the towel; instead our staff went back and we started to work to determine how we could move forward in a way that addressed the concern.



APHIS came back with this proposal as a means to allow for multiple private databases that could own the data while providing USDA with a portal that we will need at times to access information.



Under this proposal you the industry would continue to own and have control over the animal movement data. But through agreements established between private entities and the USDA we would be able to access those pieces of information that are necessary in the event that we would need to do something like complete an investigation.



Organizations that wish to consolidate their tracking data can still do so and in fact are encouraged to do so. But this system provides the flexibility that so many have requested and I might add allows for a robust private sector.



But we've also been asked whether this system will slow the pace at which we enter into agreements with the private sector to access their information. The system will not slow that pace because it does not need to be operational before we enter into the agreements.



Now the first step is to develop criteria for the agreements. We're working on that. Our goal is to soon have the first draft of that criteria posted. And we're going to invite your comment. Once we finalize the criteria we will move forward with agreements at the same time that we are implementing the system.



Some have asked how much money we have dedicated to animal ID since this was kicked off, and today I can report to you that nearly $100 million in funding and resources have been dedicated to this effort. More than two-thirds of that has come from the USDA. I can also tell you that our commitment to the effort continues. I will not preview and really I can't preview the President's budget; it's his budget and he'll release it next week. But that funding information will be available on Monday.



Much of what has been spent has gone out to states under cooperative agreements to implement their own animal identification system. We believe that money has been well-spent. The industry and states have learned and provided USDA with information about what works, what doesn't work.



Finally, some simply want to know why we are putting so much effort in animal ID. It's a subject that brings debate. It would be a crucial tool in safeguarding the health of agricultural animals from disease. One only need look though to other parts of the world, to Australia or other countries to understand another reason why it's important -- and I think you understand this. My friends, they are aggressively marketing, aggressively marketing their animal traceability to gain whatever competitive advantage that they can gain.



Now I know this industry understands the importance of exports. A national animal identification system is needed to protect this crucial source of income and protect your future. I hope that helps to clear some of the questions that maybe have circulated through this conference. With NCBA's continued leadership on this issue and our partnership with other groups we believe that this has every opportunity to be a win/win situation for the industry and for the American consumer.



Final thoughts. The history of the cattle industry is the story of America. It's a proud heritage that threshed and harvested and ranched the land in this nation to agricultural greatness. The state of our beef industry is strong, like the state of our union. The President is as committed as ever and I am to ensuring that this industry remains vibrant, that agriculture remains a cornerstone of the U.S. economy.



It's been a pleasure to meet with you, and I look forward to a continuing partnership in the year ahead, a partnership to expand trade, a partnership to build global confidence in a product that we know is the safest in the world.



Thank you very much. God bless you.



[Applause.]



Thank you very much. Thank you. Thank you.



Now I do have to acknowledge ladies and gentlemen, now that the lights are up I see Nebraskans in the front row.



[Applause.]



Go Big Red? You know the line I always use? Tell the kids back home I found work in Washington, all right? So.



We've got cards out there I guess, so.



MODERATOR: Yes, sir. We thank you, Mr. Secretary. I just want to comment that one of our efforts is to find beef-boosters and beef-backers, and I think it's apparent to all of us that we certainly have a great beef-backer at the head of USDA. We appreciate that.



[Applause]



MODERATOR: Let me just explain how these questions will work. We're going to have staff in the aisles between the sections at every aisle. So if you want to ask a question, please come forward to the aisles and to the staff now. And they're going to give you a numbered card, and that will indicate what place in line you are. Then the Secretary's going to go from each section answering a question from each section until we run out of questions.



So at this time if the staff will kind of raise your hands, and if you'll start coming to the staff with the mikes in the aisles we'll start the questioning.



QUESTION: Andrew Murphy, a beef producer from Kansas. Mr. Secretary, Japanese media are reporting a delegation of elected officials and nontechnical people visited beef plants and are claiming there are problems with the proper removal of specified risk material. We as cattle producers and as you clearly stated earlier in your speech that have a good control over, or at least that's under our understanding -- can you please give us a clarification of what this delegation is claiming?



SEC. JOHANNS: Yes. I'd love to. Thank you for the question. Let me first if I might draw a comparison here because I think this comparison is very, very important to make.



The delegation that came to the United States was a delegation if you will from the opposition in terms of the current party that is in power in Japan. They spent a couple of days here and I think they spent two or three hours at this facility. Now the comparison I want to make is the process that we went through with Japan to get this market reopened.



To describe that process as painstaking would be to understate it. It went on for what, nearly two years with not just the government but the Food Safety Commission. Every piece of information that they requested over those two years was supplied. Technical discussions between scientists. Finally the Food Safety Commission approved a rule that says beef from animals under 20 months, which is below the international standard and I can go on and on, but I will spare you that. The comparison though I think is obvious. We go through a very, very extensive process for two years and they're in the plant for about three hours.



Now let me if I might shed on their behalf maybe a piece of information that I wish they would have asked us about before they made that statement because I think it would have been helpful to them.



In Japan the spinal cord is removed before the carcass is split. As you know in the United States we sometimes follow a different procedure. Because the spinal cord is still intact when we split the carcass in the midline it's possible that a perfectly safe and accepted procedure not only here but elsewhere might have been viewed by them in a very confused way. That's very possible.



I can tell you that our inspectors were present. They were there in the plant as they always are, and they witnessed no violation whatsoever. No violation whatsoever. There are different methods for the removal of the spinal cord, but I want to tell people not only in this room but around the world that all methods in the United States are safe. And our inspectors are at the plant to verify this.



So putting the best light maybe on their comment, I believe that they probably did not ask or inquire sufficiently to understand the perfectly safe system that we have in place here. And I'll give them that. But what I would suggest is that there's important issues at stake here.



What we need to do in our relationship with any trading partner is to make sure when we talk we talk based upon fact. They had access to our people, I even met with them; we were open to questions and comment and discussion. It would have been very, very helpful to them I believe before they made that statement to understand the very safe system that we have in place.



So thank you for the question.



MODERATOR: Sal, over here.



QUESTION: George (unclear), president of Mississippi Cattlemen's Association. Mr. Secretary, please allow me to make a brief comment. On behalf of the Mississippi Cattlemen's Group, we were affected by Hurricane Katrina. We really appreciate your visit to our state, and USDA's help in extending some help for us to repair fences, remove debris, and to date we've had something like 24,000 Mississippians who have applied for this help. We would love to have you continue to expedite this funding process.



Now for my question. Australia and Canada are ramping up rapidly to increase market share. How much are we willing to give up before we implement NAIS at this point?



SEC. JOHANNS: I don't want to give up any market share. I'll just be very direct with you about that. But I will tell you that Australia is a very, very fierce competitor in the beef area, and they're going to continue to be. But I will also share with you that because of a variety of reasons one of which probably the primary reason being the closure of the Canadian border for a lengthy period of time, Canada started ramping up their efforts in the export market, and so they've become a real competitor.



We run into them a lot as we get around the world to sell our beef products.



I have been to Australia and I have looked at a complete demonstration of their animal ID system. And they are absolutely convinced about it. I talked to them a lot about, well how is it accepted? And they said, well like anything else where there's change there was some grumbling and why do we have to do this?



But I talked to the minister just recently, and he said now that's really behind us and everybody is working very, very hard to get this up and running.



I just really believe that we have to not only move in this direction but we have to move as quickly as we can. Now we have a big industry here. At any given time we have over 90 million head in our herd. This is a big undertaking. It is not something that can be implemented overnight. It's a change for you; we acknowledge that. But I continue to believe that the private sector approach gives us the best opportunity, not only building an outstanding system, a great system, but doing it expeditiously, doing it in a way that gets the job done. But most importantly if it is a government system I believe we take the opportunity for price competition and innovation away from the system. So I just continue to be a proponent of this notion that the best thing I can do for you is allow that robust private sector out there.



But to get back to your original question, you pose. You're right-- we can't ignore what's happening out there in the marketplace in the world market. Our competitors are doing everything they can to promote this. And we have to move with all the diligence we can while getting it done right. Thank you.



MODERATOR: Go ahead and ask your question.



QUESTION: Thank you, Mr. Secretary, for coming to our convention. Randy Faber from Illinois. We've got a tremendous amount of producers who are right at the edge of the swamp with the national ID system waiting to wade in. But they know that there's supposed to be a United States prefix on the tags to basically get out of the swamp at the end of the tunnel.



Is there a timetable for when the tag companies will be able to issue the U.S. prefix on the tags?



SEC. JOHANNS: We have been working on that, and that's going to come very, very quickly. I can assure you that that's been one of the priority items, and I think that is just about wrapped up. I'd love to tell you within the next 30 days. I'll be a little bit bold and say that it could very well come that quickly, but yeah we're ready to turn that piece of this loose and get off and going with that.



MODERATOR: We're going to have time for just one last question.



QUESTION: Thank you very much for coming, Mr. Secretary. We appreciate your support of our industry. And I guess you know how frustrated we are with the Japanese situation. Last year during the convention we passed the resolution that called for sanctions if necessary. And my question is, is the Administration willing to call for sanctions to get this order with Japan situation remedied?



SEC. JOHANNS: Well I noticed this morning, I was reading through some newspaper clips, and Chairman Goodlatte on the House Ag Committee said, Look, we've got to resolve this quickly and he used that word "sanctions" and as you know there's pending resolutions.



I will say this. This is being described as a temporary suspension. I believe that when we have our report done, and we're going to do that thoroughly but we're also very, very mindful that we can't let grass grow under our feet. We're not going to waste an extra day to get it done. But we're going to be very thorough.



And then when we put our recommendations out there I'm really confident that we can ask Japan to come back and work with us and get through this quickly.



Now I use that word because I believe we can move quickly, but it's hard for me to set a timeline because so much of what we've done or what needs to be done is not just on our side, but it's also on Japan's side.



We always hesitate to do sanctions, and here's why. There are instances where it's warranted. But sanctions tend to breed a response, if you know what I'm saying. And that response tends to breed yet another reaction, and back and forth and back and forth. I want to be very straightforward about this. This should not have happened. This just should not have happened.



If I could turn back the clock, and I'm sure if this plant could turn back the clock, things would have been different. But it did happen. We have to identify what happened, and put in place whatever is necessary to make sure it doesn't happen again, and get back to normal trade.



It has been encouraging to me because so far the rest of the world has been willing to work with us and we've provided them information and we've kept them abreast. And so, so far so good. But we're going to do everything we can to get this solved, and I hope that debate doesn't become necessary.



I've got just one last thought here. I don't know if this is true or not but I was informed that Super Bowl Sunday is the second biggest eating day in the United States. And that's coming up here, so I'll wrap up with just two words. Eat beef.



Thank you.



[Applause.]





Last Modified: 02/03/2006

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mrj

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Re. your title for this thread.....would you post that quote?

I believe it was taken out of context, or maybe just not accurate.

When I heard something like that, I believe the Secretary said it more like (and this is a paraphrase, because I don't have the direct quote): "CONSUMERS think (or say) the price of beef is too high."

Big difference between that and what your headline says!

You made the accusation.....it seems reasonable that you provide confirmation via a direct and complete quote.

MRJ
 

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