Agriculture Secretary Mike Johanns and Sen. Pat Roberts, R-Kan., visited the Lenexa, Kan., offices of Vance Publishing (parent company of Drovers) on Tuesday to meet with editors of the company’s 15 agricultural publications. Secretary Johanns was in the Kansas City area to address the International Symposium on Agroterrorism presented by the Federal Bureau of Investigation and the Heart of America Joint Terrorism Task Force Executive Board. Secretary Johanns and Senator Roberts fielded questions from Vance editors for more than an hour.
Both the Secretary and the Senator stressed the importance of international trade to U.S. agriculture and the overall economy, as 27 percent of what we produce needs to find a foreign market. Secretary Johanns said American farmers and ranchers need “trade for agriculture to be successful financially, and that’s not going to lessen any.” He also noted that America’s food and fiber system contributes $1.24 trillion dollars (more than 12 percent) to our gross domestic product, and that he expects agricultural trade exports should reach $59 billion this year, making 2005 the third highest export-sales year in history.
In regards to CAFTA-DR, the Secretary said this agreement is needed to level the playing field for U.S. agriculture. Right now there is a 30 percent import duty on U.S. beef going to those counties. With CAFTA, those duties for U.S. beef – Prime and Choice – would be removed immediately. All other tariffs would be phased out over 15 years. Currently, most agricultural exports from those counties enter the United States duty free. The majority of these are crops not competitive with domestically grown commodities such as tropical fruit and coffee.
In response to a question from Drovers editor Greg Henderson, Secretary Johanns said he is very concerned about the effects of litigation over the Canadian beef-trade issue. With current safeguards in place for cattle and beef under 30 months of age, science shows there is virtually no risk of BSE transmission, he said, adding that “the ruminant feed ban is working.” Keeping the border closed to Canadian cattle, he added, is causing a restructuring of the industry. The big processors will survive, but small packers in the northern states are at risk and the industry will become even more consolidated. Also, the inconsistent message complicates efforts to restore beef exports to Japan and other countries, the Secretary said. There is a “golden rule” of trade, meaning we need to treat trading partners the way we want them to treat us. Science, Secretary Johanns said, needs to be the common language.
The Secretary also expressed concern that the disruption in trade has severely distorted the market, and that $90 breakevens on feeder cattle bring a high level of risk. Any market impact that drives fed-cattle prices lower could cause severe financial losses among cattle feeders. Sen. Roberts noted that the concept of banning packer ownership has surfaced in the Senate several times. He called the proposed legislation a “very populist” idea but “not a reasonable answer.” The Senator also suggested that many proposed legislative efforts to aid small farmers often have the opposite effect.
In response to a question about USDA’s new dietary guidelines, Secretary Johanns said the new Food Guide Pyramid has attracted a surprising level of attention. The program’s Web site, www.mypyramid.gov, attracted 100 million visits during its first 48 hours. Some critics of the dietary guidelines, he added, would like USDA to recommend against eating certain foods. Instead, the new guidelines encourage variety, moderation and exercise