BEEF bits

Sep 17, 2010
by WLJ
Senate fails to repeal 1099 requirement

The U.S. Senate last week failed twice to block the implementation of a 1099 filing requirement which will force small businesses to report any transactions with a single vendor totaling more than $600 in a single year. The reporting requirement was enacted as part of the massive health care overhaul and is set to go into effect starting Jan. 1, 2012. Democrats and Republicans are aligned in their belief that the reporting requirement should be repealed but differ in their approaches to removing the measure. The Senate turned down an amendment to a small-business bill, offered by Sen. Mike Johanns, R-NE, that would have repealed the requirement. The Senate also rejected a Democratic alternative that would have exempted business with fewer than 25 employees and would raise the reporting threshold for the remaining businesses to $5,000.

FDA preparing strict antibiotic rules

The New York Times reported last week that “after decades of debate, the Food and Drug Administration (FDA) appears poised to issue its strongest guidelines on animal antibiotics yet, intended to reduce what it calls a clear risk to human health.” FDA’s final rules are expected to be issued soon, perhaps before the end of the year, when they could be considered by a lameduck session of Congress. The guidelines “would end farm uses of the drugs simply to promote faster animal growth, and call for tighter oversight (of antibiotic use) by veterinarians,” according to the report. The law appears similar to language considered earlier this year.

COOL case heads to WTO

Last week, officials from Canada pled their case against U.S. mandatory Country of Origin Labeling (COOL) laws, which the country claims are a violation of the North American Free Trade Agreement to the World Trade Organization (WTO). Canadian producers have claimed that the law has cost producers north of the border more than $300 million as packers discriminate against Canadian livestock because of the labeling requirement, which makes them more expensive to process and less appealing to consumers. The Canadian federal government estimates the cattle producers, mainly in Alberta and Saskatchewan, stand to lose an average of $5,195 this year because of COOL and the effect of the strong Canadian dollar. John Masswohl, head of the Canadian Cattlemen’s Association, said a major element of Canada’s argument against COOL is that there has been “an economic disadvantage to marketing Canadian livestock” in the U.S. because of COOL.

No interest in expanded beef trade

Japanese trade negotiators met with U.S. trade officials last week to discuss the possibility of opening the market to U.S. beef derived from animals older than 20 months of age. However, according to Bloomberg News, the Japanese delegation has said there is little interest in opening the country’s borders to older imports, a product that they see as having a greater possibility of being contaminated with bovine spongiform encephalopathy, despite numerous studies and a World Animal Health Organization determination that proves otherwise. U.S. trade officials and beef industry officials have been pushing for expanded access to the Japanese market, citing concerns that their ban on beef from animals older than 20 months of age is an unscientific trade barrier which is limiting trade opportunities for U.S. producers.

JBS purchase cleared by Australians

Australian regulators announced late last week that JBS S.A. can complete its proposed acquisition of Rockdale Beef. The Australian Competition and Consumer Commission (ACCC) concluded after an investigation that the deal wouldn’t harm competition in the industry. In making its decision, ACCC considered that there will continue to be a number of competitors to Swift Australia Pty., Ltd. in both feedlots and abattoirs,” ACCC Chairman Graeme Samuel said in a news release. Rockdale Beef is owned by Mitsubishi Corp. and Itoham Foods Inc. of Japan. Rockdale operates a single co-located slaughterhouse and feedlot located in Yanco, New South Wales. Its facilities process approximately 200,000 head of cattle per year, exporting to a dozen countries.

USDA lowers production forecast

USDA slightly reduced from last month its total U.S. meat production forecasts for 2010 and 2011 as lower pork and broiler production more than offset an increase in beef production. Higher feed prices encourage cattle producers to keep cattle on forage longer and tempers pork, broiler, and turkey production gains, USDA said in its World Agricultural Supply and Demand Estimates report. USDA lowered its forecasts for beef imports for 2010 and 2011 as imports so far have been lower than expected. Export forecasts for beef were raised on continuing strong sales to a number of markets. Pork and poultry trade forecasts are unchanged from last month. USDA left its expectations for cattle prices unchanged.