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Ag Secretary Outlines Early Budget Increases, Talks about Trade

Speaking to National Cattlemen's Beef Association, Mike Johanns talks about Monday's budget announcement, and offers comments on more toward reopening trade with Japan, Canada. Willie Vogt

Monday's impending announcement of President George W. Bush's Fiscal Year 2006 budget will call on all departments to take part in the effort to reduce the deficit. But the extent of that effort by USDA remains to be seen. During his first event outside of Washington, D.C., since taking office as Secretary of Agriculture, Mike Johanns spoke to the National Cattlemen's Beef Association (NCBA) at the 2005 Cattle Industry Annual Convention and Trade Show Friday morning.

During his talk Johanns noted that all sectors of government are being asked to do their part in the effort to control that deficit, but wouldn't offer specifics. As he commented during a post-speech press conference: "When I was governor I told my cabinet that I got to announce the budget. The president will announce the budget on Monday."

Johanns did point to some increases in spending that will be announced next week including:

  • A $37 million increase to promote conservation assistance for nutrient management plans to meet environmental regulations.
  • A $10 million rise in spending to help control invasive species.
  • A $34 million boost for enhanced spending on the Healthy Forest Initiatives. "We've already treated 4.2 million acres under this program and this will sustain and grow the program," he says.
  • $144 million increase for the Food and Agriculture Defense Initiative - raising that program to $595 million.
  • And finally a $7.3 million boost to research on bovine spongiform encephalopathy (BSE), which is a 155% boost over 2005 spending.

Talk about trade
Johanns addressed the current rule under consideration that sets down regulations regarding nations with minimal risk status - Canada being the first candidate. He complimented NCBA on its report released this week that offers new information from the NCBA trade team. "I've read the report and we're going to put that information to use," Johanns says.

One issue that has been a highlight of discussions on the new rule is talk of just how many cattle will enter from Canada once that border opens. An early analysis from USDA talked of 2 million head, but Johanns says that information was based on data available several months ago when it was thought that Canada might have a stockpile of cattle to move.

"The NCBA team did a thorough job of looking at the current situation and there new numbers reflect new information," he says.

One part of the rules would allow meat from cattle over 30 months of age to enter the country, but not live cattle of that age. There's pressure from packers to bring those animals in, and Johanns is considering the entire measure.

"When I first read that rule I called staff in and asked them why the rule was crafted in that way," Johanns says. "Then I would think about it, and write it out to be sure I understood what the rule was telling me, and I would bring staff back in again." While he didn't offer specifics of just what bothered him about that rule, he did say that in advance of the March 7 date, he would have a decision on that matter.

During the press conference, Johanns was asked what he could do to the rule at this stage of the process: "You would have to get a good Washington attorney for that." He says whatever action he takes will be within the rules.

He notes there are risk management issues involved in the decision along with economic issues. The NCBA trade team noted the economic issues regarding the older cattle - in fact they note that prices for older cattle in Canada average 18 cents a pound versus about 50 cents a pound in the United States. The organization's Executive Committee, wants the over-30 month issue considered separately as part of this effort.

Japan, and the future
The U.S. has had a long, and healthy trade relationship with Japan; a fact that Johanns reiterated this week. But he has also asked the Japanese to set a "date certain" when the border would reopen to U.S. beef. So far, the Japanese have declined to do that.

Next week a Japanese team will discuss the A40 rule regarding how U.S. exporters would determine cattle ages, and at one point it was rumored USDA would send a team to discuss the rule at the meeting. Johanns says today that all the information that can be provided to the Japanese is in their hands. That meeting is slated for Tuesday Feb. 8.

This week NCBA is working on policy recommendations on trade issues concerning the minimal BSE risk rule and exports.

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