[Senate Hearing 110-78]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 110-78
 
THE IMPORTATION OF CANADIAN BEEF THAT COMES FROM ANIMALS OLDER THAN 30 
                             MONTHS OF AGE

=======================================================================

                             FIELD HEARING

                               before the

        SUBCOMMITTEE ON INTERSTATE COMMERCE, TRADE, AND TOURISM

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 21, 2007

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

                                 ______

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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska, Vice Chairman
    Virginia                         JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 GORDON H. SMITH, Oregon
MARIA CANTWELL, Washington           JOHN ENSIGN, Nevada
FRANK R. LAUTENBERG, New Jersey      JOHN E. SUNUNU, New Hampshire
MARK PRYOR, Arkansas                 JIM DeMINT, South Carolina
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri           JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
              Margaret Spring, Democratic General Counsel
             Lisa J. Sutherland, Republican Staff Director
          Christine D. Kurth, Republican Deputy Staff Director
             Kenneth R. Nahigian, Republican Chief Counsel
                                 ------                                

        SUBCOMMITTEE ON INTERSTATE COMMERCE, TRADE, AND TOURISM

BYRON L. DORGAN, North Dakota,       JIM DeMINT, South Carolina, 
    Chairman                             Ranking
JOHN D. ROCKEFELLER IV, West         JOHN McCAIN, Arizona
    Virginia                         OLYMPIA J. SNOWE, Maine
JOHN F. KERRY, Massachusetts         GORDON H. SMITH, Oregon
BARBARA BOXER, California            JOHN ENSIGN, Nevada
MARIA CANTWELL, Washington           JOHN E. SUNUNU, New Hampshire
MARK PRYOR, Arkansas
CLAIRE McCASKILL, Missouri


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 21, 2007................................     1
Statement of Senator Dorgan......................................     1

                               Witnesses

Barth, Elwood ``Woody'', State Secretary, North Dakota Farmers 
  Union..........................................................    28
    Prepared statement...........................................    29
Becker, Patrick, President, Independent Beef Association of North 
  Dakota (I-BAND); Cow/Calf Producer.............................    47
DeHaven, Dr. Ron, Administrator, Animal and Plant Health 
  Inspection Service (APHIS), Department of Agriculture..........     6
    Prepared statement...........................................     8
Froelich, Kelly, Director, Independent Beef Association of North 
  Dakota (I-BAND); Cow/Calf Producer.............................    48
Froelich, Hon. Rod, Representative (District 31), State of North 
  Dakota Legislature.............................................    41
Huseth, Mark, President, North Dakota Stockmen's Association.....    16
    Prepared statement...........................................    18
Johnson, Roger, Commissioner, North Dakota Department of 
  Agriculture; accompanied by Dr. Susan Keller, North Dakota 
  State Veterinarian.............................................    12
    Prepared statement...........................................    14
Keller, Dwight, Vice President, American Simmental Association; 
  Cow/Calf Producer..............................................    45
Kinev, Larry, Cow/Calf Producer..................................    45
Krueger, James E., Cow/Calf Producer.............................    44
Lund, Allen, Secretary, Independent Beef Association of North 
  Dakota (I-BAND); Cow/Calf Producer.............................    43
McDonnell, Jr., Leo R., Former President/Co-Founder, Ranchers-
  Cattlemen Action Legal Fund, United Stockgrowers of America (R-
  CALF USA)......................................................    20
    Prepared statement...........................................    22
Orts, Dorothy, President, Galloway Association of the North 
  Dakota Stockmen's Association; Cow/Calf Producer...............    48
Schmidt, James, Cow/Calf Producer................................    44
Schumacher, Herman, Co-Founder, Ranchers-Cattlemen Action Legal 
  Fund, United Stockgrowers of America (R-CALF USA); Co-Owner, 
  Herreid Livestock Market.......................................    44


THE IMPORTATION OF CANADIAN BEEF THAT COMES FROM ANIMALS OLDER THAN 30 
                             MONTHS OF AGE

                              ----------                              


                      WEDNESDAY, FEBRUARY 21, 2007

                               U.S. Senate,
   Subcommittee on Interstate Commerce, Trade, and 
                                           Tourism,
        Committee on Commerce, Science, and Transportation,
                                                      Bismarck, ND.
    The Subcommittee met, pursuant to notice, at 10:07 a.m. in 
the Missouri Room, Bismarck State College, Hon. Byron L. 
Dorgan, Chairman of the Subcommittee, presiding.

          OPENING STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. We'll call the hearing to order. I'm 
Senator Byron Dorgan from North Dakota. This is a hearing of 
the Subcommittee of the U.S. Senate Commerce Committee. The 
Subcommittee that I chair includes the interstate commerce 
issues as part of its jurisdiction. The Ranking Member of my 
Subcommittee is Senator DeMint from South Carolina. He's not 
able to be with me today, but I want to thank all of you for 
coming.
    This hearing will include a number of witnesses, following 
which we will have an open microphone, as you see in the middle 
of the room, to hear some of your comments. My hope would be to 
finish the hearing in 2 hours, but we'll see how that goes.
    Let me describe why I'm here and why I've called this 
hearing. There is a proposal by the Department of Agriculture 
to expand the imports of live cattle from Canada over 30 months 
of age and boxed beef from animals of any age coming from 
Canada, and that proposal is very controversial. I have spoken 
publicly in opposition to the proposal.
    There is now a public comment period on the proposal until 
March 12th, and I felt it appropriate to hold a hearing on the 
subject now. This is a very important issue to a very important 
industry in our country.
    We have the Department of Agriculture (USDA) with us today. 
The head of the USDA's Animal and Plant Health Inspection 
Service, Dr. DeHaven, is with us. We have other witnesses I 
have asked to make statements this morning. I will ask 
questions of the witnesses, and as I indicated, following that 
we will have an open microphone for the hearing.
    David Strickland is the principal staffer with me today 
from the Senate Commerce Committee. David, thank you for being 
here.
    Mr. Strickland. Thank you, sir.
    Senator Dorgan. I'm going to give a statement at the 
opening to describe why this is an important issue and share my 
perspectives and some of the perspectives of others on the 
subject.
    The beef industry is the largest segment of America's 
agricultural industry. About a million family farmers and 
ranchers in this country raise beef in all of our 50 states. 
North Dakota has 1.7-million head of cattle on 11,700 farms and 
ranches, and the beef industry contributes about $600,000,000 a 
year to this state's economy. It's a big deal, and any of us 
who have traveled much around North Dakota understand the 
consequences of this industry.
    In May of 2003 the U.S. closed the border to live cattle 
coming in from Canada when a cow from Alberta, Canada, was 
discovered to have BSE, better known as mad cow disease. The 
first animal with BSE was the first native cow to be found in 
North America. Unfortunately, it was not the last cow. There 
have been 12 native cases of BSE found in North America, and 10 
of them have been in Canadian animals.
    Here is a chart that shows the history of this from March 
20, 2003, through Thursday, February 8th, this month, in which 
Canada found the--I say tenth case of BSE because the cow in 
Washington State with BSE was actually a Canadian cow. So we're 
talking about ten head of cattle in a relatively short period 
of time.
    [The information referred to follows:]

Timeline of BSE Cases in North America
    May 20, 2003: Canada finds 1st native case in an animal born in 
March 1997.

    December 23, 2003: Canada's 2nd BSE case is found in Washington 
State.

    January 2, 2005: Canada finds 3rd BSE case.

    January 11, 2005: Canada finds 4th BSE case in an animal born after 
feed ban.

    June 24, 2005: U.S. finds 1st native-born BSE case in a 12-year-old 
cow.

    January 22, 2006: Canada finds 5th BSE case in an animal born after 
feed ban.

    March 13, 2006: U.S. finds 2nd BSE case in a 10-year-old cow.

    April 16, 2006: Canada finds 6th BSE case in an animal born after 
feed ban.

    July 4, 2006: Canada finds 7th BSE case.

    July 13, 2006: Canada finds 8th BSE case in an animal born after 
feed ban.

    August 23, 2006: Canada finds 9th BSE case.

    Thursday, February 8, 2007: Canada finds 10th BSE case.

    Now, I want to show you the consequences of all of this. As 
you know, USDA Prime is the best label you can have on a cut of 
beef. It means that cut of meat has been certified by USDA as 
among the most choice cuts of beef, and American beef has 
largely been recognized as the safest in the world because of 
our inspection system and because of what we have done to make 
sure that reputation exists. None of us want to do anything 
that would jeopardize that reputation.
    Now, let me talk about the imports of Canadian beef over 
the last decade, and this chart shows what has happened. You'll 
see we were up to 1.7-million head per year, in 2002. 
Immediately after the first Canadian cow was discovered, we 
shut off the import of Canadian cattle and beef to this 
country, and you can see the consequences of that were pretty 
dramatic. And then cattle under 30 months of age were allowed 
in and some boxed beef, and you see these numbers climbing back 
up.


    If this rule is, in fact, changed that Secretary Johanns 
and the Administration want to change, we'll see 1.3-million 
head of Canadian cattle that will await import in 2007 under 
the new rule. That number comes from the U.S. Department of 
Agriculture (USDA).
    Now this shows what happened to our beef exports as a 
result of these activities. As you can see in the 2003 period, 
shortly thereafter, it just dropped off the table. An 
unbelievable impact. In 2004 we exported 209,000 metric tons of 
beef. Our share of the world's beef export was 3 percent.
    Prior to that time it was very different, with 18 percent 
of the world's beef exports coming from this country. One in 
every five pounds of beef that was exported around the world 
was ours, and 1.1-million metric tons of beef were exported. 
That dropped precipitously, first almost to zero and then to 
just about 3 percent, just after the mad cow disease was 
discovered in December 2003.
    Ranchers lost about $100 million a month nationally, and it 
was a pretty devastating time.
    As the next chart shows, another consequence of the animal 
that was found in Washington State, again a Canadian animal, 
was that Japan closed its markets to American beef for two-and-
a-half years. Japan was our biggest customer, they'd been our 
number one export market, and we lost them for two-and-a-half 
years.


    We're now trading with them again, and there are 35 foreign 
countries that will accept U.S. beef now, and we've worked hard 
to make that happen, but they will not accept Canadian beef. * 
Some would like there to be a North American market that has no 
distinction. There ought to be a distinction, in my judgment.
---------------------------------------------------------------------------
    * ``Thirty-five foreign countries accept U.S. beef, but not 
Canadian beef.''--Canadian Beef Export Federation Newsletter (January 
2007).
---------------------------------------------------------------------------
    The next chart shows trade with South Korea, another 
example of the trouble we've had. We've been working hard to 
try to get back to that South Korean market after they stopped 
buying U.S. beef December 2003. It took a long while to get 
them to open their market, and it finally happened in October 
of last year. But we've run into trouble with them turning back 
boxes of beef coming into South Korea.
    This article from a South Korean news agency says this: 
``The procedure of butchering both U.S.-raised cattle and 
cattle from neighboring countries is commonplace in the United 
States. It has sparked concerns in South Korea because beef 
from Canada, which has reported numerous mad cow cases, could 
be included by mistake.'' **
---------------------------------------------------------------------------
    ** Yonhap News, Wednesday, July 26, 2006, article entitled, S. 
Korean Undecided on Timing for Lifting of U.S. Beef Ban: Official.
---------------------------------------------------------------------------
    I make that point only to say that we don't operate in a 
vacuum here, and if we don't have country-of-origin labeling, 
don't have segregation, don't have the kinds of things that 
will give our customers overseas confidence of what they're 
buying, then we bear the consequences of that financially.
    Next chart, please. USDA has proposed a rule, and Secretary 
Johanns has been active in pushing it, to open this market, and 
as I indicated, there is now a comment period.
    Let me tell you about the Harvard study that was done. 
``The expected number of infected cattle in the U.S. over 20 
years as a result of importing cattle from Canada would amount 
to 21 animals. Most of those infected animals (approximately 90 
percent) would be imported directly, while the remaining 10 
percent would represent secondary infections (i.e., native U.S. 
cases).''
    The point is that a reputable study of this situation shows 
that we are going to be importing a problem, a problem for our 
market. And while my heart breaks for the Canadian ranchers, 
you know, I understand how awful this must be for them, our 
first responsibility is for our domestic industry, for this 
country's interests. That must be our first responsibility.
    Dr. DeHaven, who is with us today--and he can respond to 
this--is quoted, as saying ``Considering Canada has roughly 5.5 
million [head of] cattle over 24 months of age, under OIE 
guidelines, they could detect up to 11 cases of BSE in this 
population and still be considered a minimal-risk country.''
    That minimal-risk issue might well be the case with respect 
to this assignment of words, but that is not the case with 
respect to those with whom we want to trade and those to whom 
we expect to be able to sell American beef. They will not view 
this as minimal-risk with respect to a marketplace in which we 
have 1.3-million head of Canadian cattle coming down across the 
border.
    Now, let me make a couple of final points. I understand 
this is a very controversial issue, and I have been very 
concerned about opening this border quickly and precipitously. 
I've been one of those who has fought for a good number of 
years for something called country-of-origin labeling, and I 
know there are some people who don't like that.
    Consumers can find out where their shoes come from, where 
their T-shirts come from. There are labels on everything, but 
you can't find out where your piece of meat comes from when you 
buy it at the grocery store, and that's wrong.
    So we enact country-of-origin labeling; it is the law. And 
then the USDA drags their feet for 2 years to implement it 
because they don't like it, and then at midnight a provision is 
stuck in a bill to delay it by another 2 years. But we're going 
to try very hard this year to get that done, to finally force 
country-of-origin labeling to be implemented. It makes no sense 
to me under any circumstance to allow the influx of 1.3-million 
Canadian cattle at a time when we have not been willing to do 
country-of-origin labeling; and even then if the acceptance of 
cattle from Canada is going to bring into this country 
additional cases of BSE or mad cow disease, it will have 
significant consequences on our beef market. And as I said 
before, our first responsibility is to our industry and our 
economic well-being. That is not being protectionist. That's 
just using some common sense. So I'm holding this hearing to 
solicit some testimony. I know that we're a big livestock 
state. We care a lot about these issues, all of us do, and I 
also know that Secretary Johanns is proceeding ahead and he 
intends to open this market if he can.
    The period is still open for comments, and we're going to 
continue to do a number of things, including holding this 
hearing, to try to get all of the facts on the table so that we 
understand the consequences of what's being proposed.
    Now that's the prelude. I'm sorry it took as long as it 
did, but I wanted to at least set the stage. You can see by the 
graphs that foreign demand has fallen off the table, and all of 
the consequences of these issues.
    We have a number of witnesses with us today, and I'm very 
appreciative of them being here. Dr. Ron DeHaven is the 
Administrator of the Animal and Plant Health Inspection 
Service, USDA, in Washington, D.C. Mark Huseth is President of 
the North Dakota Stockmen's Association. Roger Johnson is the 
North Dakota Agricultural Commissioner. He's accompanied by Dr. 
Keller, the State Veterinarian. Elwood Barth is Secretary and 
Board Member of the North Dakota Farmers Union. Mr. Leo 
McDonnell is former President and Co-Founder of R-CALF USA, who 
is also a North Dakota rancher.
    I want to thank all of you for being here. I am going to 
ask Dr. DeHaven to begin, and following the testimony of 
witnesses I intend to ask a series of questions. Following that 
we will have an open microphone period. I would ask that you 
summarize your testimony for us, in five to seven minutes.
    Dr. DeHaven, thank you again.

 STATEMENT OF DR. RON DeHAVEN, ADMINISTRATOR, ANIMAL AND PLANT 
              HEALTH INSPECTION SERVICE (APHIS), 
                   DEPARTMENT OF AGRICULTURE

    Dr. DeHaven. Chairman Dorgan, thank you for the opportunity 
to provide information on the U.S. Department of Agriculture's 
proposed rule to amend the minimal-risk region regulation for 
bovine spongiform encephalopathy, or BSE.
    In January 2005 the USDA published a final rule that 
established conditions for the importation of live cattle 
younger than 30 months of age and certain other commodities 
from minimal-risk regions for BSE. A minimal-risk region can 
include a region in which BSE-infected animals have been 
diagnosed, but where sufficient risk-mitigation measures have 
been put in place to make the introduction of BSE into the 
United States unlikely. This rule designated Canada as the 
first minimal-risk country recognized by the Department of 
Agriculture.
    Our current proposal published on January 9, 2007, would 
expand the scope of this 2005 rule to facilitate fair, science-
based trade consistent with international standards as defined 
by the World Organization for Animal Health, or the OIE.
    The rule proposes allowing the importation of bovine blood 
and blood products, bovine casings and part of the small 
intestine, and live bovines for any use born after March 1, 
1999. This is the date that we have determined to be the date 
of an effective enforcement of the ruminant-to-ruminant feed 
ban in Canada.
    The public comment period on these proposed actions, as you 
have indicated, will close on March 12th, and I want to 
encourage, along with you, that all stakeholders be part of our 
decisionmaking process by providing feedback through the 
submission of public comments.
    Science played a central role in the development of the 
regulation, particularly with regard to the rigorous evaluation 
of risk. Sound science continues to guide our proposed actions.
    The single most important thing that we can do to protect 
human health is the removal of specified risk materials, or 
SRMs, from the food supply. SRMs are those tissues that could 
be infected from a cow that is in fact infected with BSE. 
Likewise, the most significant step that we can take to prevent 
the spread of BSE in the animal population and bring about its 
eradication is the ruminant-to-ruminant feed ban.
    International standards as defined by the OIE served as our 
reference in developing this minimal-risk region regulation and 
they continue to guide our proposed actions.
    The OIE recommends the use of risk assessment to manage 
human and animal health risks of BSE. The OIE guidelines 
recognize that there are different levels of risk in countries 
or regions and suggest how trade may safely occur according to 
those levels of risk.
    As we've moved forward in issuing the proposed changes, our 
risk assessment continues to include careful consideration of 
the entire risk pathway--all of the steps in both Canada and 
the United States that must occur for BSE to spread to an 
animal in our country. I want to stress that one individual 
step cannot be considered to represent the entire risk pathway. 
In short, we found that the risk to the United States by 
allowing these additional animals and commodities from Canada 
is negligible.
    The risk assessment took into careful consideration the 
possibility that Canada could experience additional cases of 
BSE. Our risk assessment acknowledges that BSE is present in 
Canada at this time. We estimated the prevalence of BSE in the 
Canadian cattle herd using the exact same methods we used to 
determine the prevalence of BSE in the U.S. herd. We then used 
this estimate of prevalence to help assess the likelihood that 
BSE would be introduced into the United States from Canada over 
an extended period of time. We found that from a practical 
standpoint the risk to the United States via trade in animals 
and products with Canada is negligible.
    The OIE standards recognize that trade can safely be 
conducted with countries that have BSE present in their cattle 
populations. Our proposed rule is consistent with these 
international standards.
    The majority of imports from Canada are expected to be less 
than 2 years of age at the time of import. Our expectation is 
that BSE prevalence will continue to decrease given Canada's 
ruminant-to-ruminant feed ban, which has been in place since 
August 1997. Combined with the mitigative effects of both 
import requirements and the young age of most animals at the 
time of import, the likelihood of a BSE animal being imported 
is minimal.
    In addition, the series of strong risk mitigation measures 
in place in our country would make it highly unlikely that the 
disease would infect a U.S. animal.
    We also recognize that there have been cases in animals 
born after March 1, 1999. These cases are not unexpected, nor 
do we consider such diagnoses to undercut our conclusion that 
March 1, 1999, can be considered the date of effective 
enforcement of the feed ban in Canada.
    Experience worldwide has demonstrated that, even in 
countries with a feed ban in place, BSE has occurred in cattle 
born after a feed ban was implemented. But such isolated 
incidents do not contribute to further significant spread of 
BSE.
    As part of the original minimal-risk rule an evaluation was 
done that concluded Canada's feed ban is effectively enforced. 
Our proposed--in our proposed rule we considered when full 
implementation and effective enforcement of the Canadian feed 
ban was achieved. Full implementation occurred after completion 
of an initial implementation period and then after sufficient 
time had elapsed to allow most feed products to cycle through 
their system.
    So in following the OIE standards, we identified March 1, 
1999, as the date when Canada's feed ban became effective. We 
are not defining effective to mean 100 percent compliance or 
that there is no possibility for human error through that 
process, nor does it mean that no affected animals will be born 
after this date. Again, despite feed bans in many countries, 
affected animals continue to be found, but at a dramatically 
declining rate.
    Senator our proposed actions are an important move in our 
efforts to promote fair, science-based trade practices. I am 
confident in saying that we can take this next step while at 
the same time protecting American agriculture and maintaining 
confidence in the U.S. beef supply.
    I would be happy to answer your questions later in the 
program. Thank you.
    [The prepared statement of Dr. DeHaven follows:]

Prepared Statement of Dr. Ron DeHaven, Administrator, Animal and Plant 
      Health Inspection Service (APHIS), Department of Agriculture

    Chairman Dorgan, thank you for the opportunity to be here today to 
provide you information on my agency's proposed rule to amend the 
minimal-risk region regulation for bovine spongiform encephalopathy 
(BSE) to allow the importation of ruminants over 30 months of age from 
minimal-risk regions. Currently, only Canada has received that 
designation.
    In developing this proposal, we very carefully reviewed all the 
scientific information available to us and built upon the extensive 
analysis we conducted in writing the initial minimal-risk region 
regulation. Our regulatory actions are consistent with the guidance on 
BSE provided by the World Organization for Animal Health, or the OIE. 
The OIE guidelines, which I will describe further in a moment, promote 
safe trade in live animals and animal products based on how countries 
manage the known risk factors associated with the disease.
    Our proposal, which remains open for public comment until March 12, 
is appropriate from both a scientific and practical standpoint and I 
appreciate the opportunity to share information with you on both these 
fronts.
USDA's Minimal Risk Region Regulation
    As you know, in January 2005, USDA published a final rule that 
established conditions for the importation of live cattle younger than 
30 months of age and certain other commodities from minimal-risk 
regions for BSE. A minimal-risk region can include a region in which 
BSE-infected animals have been diagnosed, but where sufficient risk-
mitigation measures have been put in place so that the importation of 
ruminants and ruminant products will present a minimal-risk of 
introducing BSE into the United States. This rule designated Canada as 
the first minimal-risk country recognized by USDA.
    Before discussing our current proposal, let me go back and discuss 
the central role science played in the development of the regulation, 
particularly with regard to the rigorous evaluation of risk.
    Since the discovery of the first case of BSE in Great Britain in 
1986, we have learned a tremendous amount about this disease. That 
knowledge has greatly informed our regulatory systems and response 
efforts.
    We have learned that the single most important thing we can do to 
protect human health regarding BSE is the removal from the food supply 
of specified risk materials (SRMs)--those tissues that, according to 
the available scientific evidence, could be infective in a cow with 
BSE. USDA's Food Safety and Inspection Service (FSIS) enforces this ban 
domestically and ensures that all countries exporting beef to the 
United States comply with the SRM ban. Likewise, the most significant 
step we can take to prevent the spread of BSE and bring about its 
eradication in the animal population is the ruminant-to-ruminant feed 
ban. It is because of the strong systems the United States has put in 
place, especially these two essential firewalls, that we can be 
confident of the safety of our beef supply and that the spread of BSE 
has been prevented in this Nation.
    USDA has conducted a comprehensive risk analysis to support the 
January 2005 regulatory changes, and updated the analysis when the 
comment period was re-opened and again when the rule was made final. 
This analysis drew on findings from the Harvard-Tuskegee BSE risk 
assessment, findings from the epidemiological investigation of BSE in 
Canada, information on Canadian BSE surveillance and feed ban, and 
history of Canadian imports of cattle and meat and bone meal from 
countries known to have BSE.
    The results of that analysis confirmed that Canada has the 
necessary safeguards in place to protect U.S. consumers and livestock 
against BSE. These mitigation measures include the removal of SRMs from 
the food chain supply, a ruminant-to-ruminant feed ban, a national 
surveillance program, and appropriate, science-based import 
restrictions. Additionally, the extensive risk assessment conducted as 
part of USDA's rulemaking process took into careful consideration the 
BSE prevalence in Canada and that Canada could identify additional 
cases of BSE.
OIE Guidelines
    As I mentioned earlier, international standards as defined by the 
OIE served as a reference in developing the minimal-risk region 
regulations and they continue to guide our proposed actions.
    These international standards are used by national veterinary 
authorities to prevent the introduction of animal diseases, such as 
BSE, while avoiding unjustified trade barriers. The OIE recommends the 
use of risk assessment to manage human and animal health risks of BSE. 
OIE guidelines, based on current scientific understanding, recognize 
that there are different levels of risk in countries or regions, and 
suggest how trade may safely occur according to the levels of risk.
    As we've moved forward in issuing the proposed changes to the 
minimal-risk region regulation, our risk assessment continues to 
include careful consideration of the entire risk pathway--all of the 
steps, in both Canada and the United States, that must occur for BSE to 
be spread to an animal here in the United States. APHIS conducted a 
thorough risk assessment and found that the risk to the United States 
presented by allowing these additional animals and commodities from 
Canada is negligible.
Proposed Changes to the Minimal Risk Region Regulation
    Our current proposal, published in the Federal Register on January 
9, 2007, would expand the scope of the 2005 rule to facilitate fair, 
science-based trade, consistent with international standards as defined 
by the World Organization for Animal Health, or the OIE.
    Specifically, the rule proposes allowing the importation of live 
bovines for any use born on or after, March 1, 1999; blood and blood 
products derived from bovines, collected under certain conditions; and 
casings and part of the small intestine derived from bovines. As I will 
discuss further in a few moments, March 1, 1999, is the date we have 
determined to be the date of effective enforcement of the ruminant-to-
ruminant feed ban in Canada.
    I'll note here that meat and meat products from animals of any age, 
with specified risk materials removed, were addressed in the January 
2005 final rule that established the minimal-risk region 
classification. In March 2005, APHIS published a notice of a delay of 
applicability of certain provisions of that rule. This delay affected 
only meat and meat products from animals 30 months of age or older. If 
the proposed rule published on January 9 is made final, it would be 
consistent to lift the delay and also allow the importation of products 
derived from animals over 30 months of age into the United States.
    Again, the public comment period on these proposed actions opened 
January 9, and will close on March 12, 2007. I encourage all 
stakeholders to be a part of our decisionmaking process by providing 
feedback through submission of public comments.
Analysis of Risk to U.S. Animal Health
    APHIS completed a comprehensive risk assessment to evaluate the 
risk presented by allowing the additional commodities outlined in the 
January 2007 proposal to be imported from minimal-risk regions. The 
risk assessment breaks down the possible pathways for the establishment 
of BSE in the U.S. cattle population into a series of steps and 
analyzes the likelihood of these steps in the process. It is important 
to note that the impact of any specific step depends on its 
relationship to the other steps in the pathway. In other words, one 
individual step can not be considered to represent the entire risk 
pathway.
    As part of the risk assessment, we estimated the prevalence of BSE 
in the standing adult cattle population of Canada with the same methods 
that we recently used to estimate the prevalence of BSE in the United 
States. We then used this current estimate of prevalence to help assess 
the likelihood that BSE would be introduced into the United States over 
an extended period of time. We chose to evaluate what could happen over 
the next 20 years, assuming that the proposed rule would apply into the 
foreseeable future.
    First we looked at the most likely scenario. Given that Canada has 
had a feed ban in place since 1997 and evidence indicates that the 
implementation of a feed ban results in decreasing BSE prevalence, the 
most likely scenario is that BSE prevalence in Canada will continue to 
decrease over the next 20 years.
    This decrease, combined with the mitigative effects of our import 
requirements and the fact that the majority of imports from Canada are 
young animals that pose little risk of harboring BSE due to the 
disease's lengthy incubation period, would continuously decrease the 
possibility that infected animals would be imported over the 20-year 
period. Under this scenario, then, the likelihood of BSE exposure and 
establishment in the U.S. cattle population as a consequence of 
importing infected Canadian cattle is negligible.
    We then considered other less likely scenarios that may over-
estimate the overall risk. In these less likely scenarios, we assumed 
that BSE prevalence in Canada would remain constant during the next 20 
years.
    This would mean the continued detection of infected animals--born 
after the implementation of the feed ban--during the entire 20-year 
time frame. Even with these less likely scenarios, our assessment 
indicates that BSE will not be spread or become established in the 
United States as a result of the proposal.
    The majority of imports from Canada are expected to be less than 2 
years of age at the time of import. With the expectation that BSE 
prevalence will continue to decrease, and the mitigative effects of 
both the import requirements and the young age of animals at the time 
of import, the likelihood of a BSE positive animal being imported is 
minimal. In addition, the series of strong risk mitigation measures in 
place in our country would make it highly unlikely that the disease 
would infect a U.S. animal.
Analysis of Risk to U.S. Public Health
    Although our risk assessment was conducted to evaluate animal 
health risks, we did use one model in our assessment to also consider 
possible impacts on public health. The results of this model also 
indicated that these potential impacts are extremely low.
    As you know, public health in the United States is protected 
through slaughter practices, including the removal of specified-risk 
materials, and the ruminant-to-ruminant feed ban.
    In conclusion, for all commodities considered under the current 
proposal, the risk of BSE infectivity is negligible and the disease 
will not become established in the United States. This is true even if 
Canada identifies additional cases of BSE and even if infected animals 
were to be imported to the United States.
BSE Cases in Canada
    From the time of detection of the first native case of BSE in 
Canada in May 2003, 10 cases of Canadian-born BSE-infected cattle have 
been identified. Nine of these cases have been detected in Canada, and 
the other case was in a native-born animal exported to the United 
States, which tested positive for BSE in December 2003. The most recent 
case was detected in a mature bull from Alberta on February 8, 2007.
    Right from the start, we've had an excellent working relationship 
with Canada that has enabled us to participate directly in several of 
their epidemiological investigations and receive all of the information 
we have needed to conduct the various risk analysis and regulatory work 
I'm discussing with you today.
    All of the cases of BSE in Canada, save for the most recent, are 
considered in our prevalence estimate. However, let me stress that the 
model used for that estimate is much broader than simply evaluating the 
number of cases detected. As mentioned previously, we used that same 
model in our estimate of the prevalence of BSE in the United States. 
That analysis documented the fact that identifying additional cases of 
BSE over time does not significantly impact the overall estimate of 
prevalence, because the model incorporates a wide range of 
epidemiological information and assumptions. The same principle would 
apply to our use of the model in estimating the prevalence in Canada--
i.e., the identification of additional cases would not significantly 
change the prevalence estimate.
    We also recognize that there have been cases in animals born after 
the date proposed in our regulation as when the feed ban was 
effectively enforced. Let me say that these cases are not unexpected, 
nor do we consider such diagnoses in any way to undercut our conclusion 
that March 1, 1999 can be considered the date of effective enforcement 
of the feed ban in Canada. Let me also say that this is an area in 
which I invite all interested stakeholders to contribute to our 
decisionmaking process and provide us with their comments before March 
12.
    Experience worldwide has demonstrated that, even in countries with 
a feed ban in place, BSE has occurred in cattle born after a feed ban 
was implemented. No regulatory effort can ensure 100 percent compliance 
or avoid human error. But such isolated incidents do not contribute to 
further significant spread of BSE, especially when considered along 
with the series of other strong risk mitigations in place.
    Our risk assessment acknowledges that BSE is present in Canada at 
this time. From a practical standpoint, however, the risk to the United 
States via trade in animals and products is negligible.
    OIE guidelines recognize that trade can be conducted safely with 
countries that have BSE present in their cattle population. Our 
proposed rule is consistent with these guidelines. I want to emphasize 
again that our risk assessment considered the entire risk pathway--all 
of the series of risk mitigations in place. The proposed requirement--
only allowing imports of live bovines born on or after March 1, 1999--
is one step in the process that effectively decreases the risk.
Canadian Feed Ban
    I'd like to say a few more words about the ruminant-to-ruminant 
feed ban in Canada and our evaluation regarding its effectiveness.
    Similar to the United States, Canada has had feed ban regulations 
in place since August 1997.
    The Canadian Food Inspection Agency (CFIA) has conducted a 
comprehensive epidemiological investigation into each of the BSE cases 
found in the country. In each instance, appropriate measures have been 
taken to identify and remove any birth cohorts (animals born within a 
year of the affected animal and that could possibly been exposed to the 
same feed at the same time) that were still alive. Each investigation 
also included a detailed examination to determine the possible feed 
exposure source. In those instances where noncompliance events 
occurred, CFIA has instituted enforcement investigations for regulatory 
violations.
    Finally, as part of the original minimal-risk rule, an evaluation 
was done that concluded Canada's feed ban is effectively enforced. This 
conclusion was based on consideration of the regulations in place and 
the statutory authority for those regulations, adequate infrastructure 
to implement the regulations, and evidence of implementation and 
monitoring. In our January 9 proposed rule, we gave additional 
consideration to defining when full implementation and effective 
enforcement of the Canadian feed ban was achieved. Full implementation 
occurred after completion of an initial (or practical) implementation 
period and after sufficient time elapsed to allow most feed products to 
cycle through the system. For Canada, this practical implementation 
took approximately 6 months, and then 12 months was considered 
sufficient time to allow products to cycle through the system, given 
cattle management practices in that country.
    In following the OIE guidelines for trade in live animals, we 
therefore identified March 1, 1999, as the date when Canada's feed ban 
was effectively enforced. We are not defining effectively enforced to 
mean 100 percent compliance, however, or that there is no possibility 
for isolated incidents/human error throughout the process. Nor does it 
mean that no affected animals will be born after this date--again, 
despite feed bans in many countries, affected animals continue to be 
found, but at a declining rate.
International Trade
    USDA's efforts to reopen export markets to U.S. beef remain a top 
priority. We believe that the most effective way of promoting 
harmonized international beef trade is to base our own policies in 
sound science, and to encourage our trading partners to also base their 
import requirements on science. Our proposed changes to the minimal-
risk region regulation are another positive step forward in this 
regard.
    In regard to trade, Secretary Johanns has said on numerous 
occasions that our actions must be undertaken with the utmost 
deliberation, using science as the basis. In the absence of that 
science, sanitary and phytosanitary (SPS) restrictions will be used 
arbitrarily by some nations, without any basis of protecting human or 
animal health.
    I want to be very clear that while protecting human and animal 
health must remain our top priority, I know that we can seek to return 
to normal patterns of international commerce by continuing to use 
science as the basis for decisionmaking by U.S. regulatory authorities 
and our trading partners.
Conclusion
    Senator, these proposed actions are an important move in our 
efforts to promote fair, science-based trade practices. I am confident 
in saying that we can take this next step while at the same time 
protecting American agriculture and maintaining confidence in the U.S. 
beef supply.
    I am happy to answer any questions you have regarding the issues 
I've raised in my testimony.
    Thank you again for the opportunity to be here today.

    Senator Dorgan. Dr. DeHaven, thank you very much. Obviously 
you have stimulated my interest to ask a lot of questions, but 
I will defer until all our witnesses have testified. I will now 
call on North Dakota Agricultural Commissioner Roger Johnson.

    STATEMENT OF ROGER JOHNSON, COMMISSIONER, NORTH DAKOTA 
                   DEPARTMENT OF AGRICULTURE

    Mr. Johnson. Thank you very much, Senator Dorgan, for 
holding this hearing. It's certainly a timely subject, and 
thank you, also, for granting me permission to be accompanied 
by our State Veterinarian, Dr. Keller.
    Whenever I make statements relative to BSE, I've been 
careful to consult with her and to use the science that she 
understands as the basis of my statements and of my positions, 
and so I very much appreciate the fact that you've allowed her 
to be with me. It is--and I would also anticipate that if there 
are very technical questions, I would hope that I could defer 
to her scientific training to respond to some of those.
    It has been frustrating for me to witness USDA's continuing 
efforts to open the border to Canadian cattle and products 
despite the known risk and the unknown prevalence of BSE in the 
Canadian cattle herd.
    USDA acknowledges that cattle over 30 months of age are at 
even greater risk of having the disease than are the younger 
cattle currently allowed in under only stringent movement 
restrictions that require the transport of animals in a sealed 
truck directly to approved feedlots and/or slaughter.
    Canada has now recorded, as you indicated, ten cases of 
BSE, six since the beginning of last year, and the most recent 
case just this month. I think there are a number of issues that 
we need to talk about.
    First of all, Canada, itself, is taking additional 
precautions over and above what we are doing internally, and so 
it really begs the question, if we are allowing the Canadian 
cattle to come into our herd, should we be doing additional 
things to protect our herd as a result of that intermixing 
that's likely to be occurring?
    USDA, I think, has unilaterally ignored the fact that other 
countries do not approve of USDA's new BSE minimal-risk status. 
This is something that was created just for Canada.
    Canada will implement more stringent restrictions on the 
use of SRMs, specified risk materials, in both ruminant and 
non-ruminant feed. The success of this prohibition will be 
inconclusive for several years. During the meantime, we will be 
importing these additional Canadian cattle.
    This minimal-risk rule number two acknowledges the risk of 
SRMs from older Canadian cattle by declaring that the distal 
ileums of these older-aged animals cannot enter the U.S. The 
same rule, however, allows older cattle to be trucked across 
the border with their distal ileums intact. It makes no effort 
to completely remove the distal ileums from all U.S. beef 
shipped.
    USDA's overall lack of responsible actions with respect to 
BSE in Canada has already decreased the status of the U.S. 
cattle herd in the eyes of our trading partners. And the 
information that you put up, Senator Dorgan, coming right out 
of the Korean press I think absolutely makes that point. When 
we intermingle these herds, other countries are going to take 
notice of that.
    The second issue deals with feed cohorts and the types of 
BSE. Canada acknowledges that contaminated feed was the likely 
source of the infection up there and that additional feed 
cohorts are likely to be infected, as well. Yet higher risk, 
older feed cohorts will now be allowed to come across the 
border if this rule is adopted.
    In addition, five Canadian BSE cases reportedly were born 
after the implementation of the 1997 feed ban, indicating that 
the feed ban has not been effective in preventing BSE or there 
is an even greater prevalence of BSE in their country than what 
was originally thought. Either scenario increases the 
probability that infected cows will be imported into the USA.
    Canada is clearly admitting that it has a BSE problem. 
Through regulatory actions USDA appears to want to bring 
Canada's problem into the U.S. and make it ours.
    The identification issue. If Canadian cattle over 30 months 
of age are allowed to come into the U.S., those animals must be 
permanently identified with an official tag and a CAN brand and 
must be strictly segregated by USDA through the entire 
slaughtering process. Should positive cases of BSE be found in 
any Canadian animals that are processed in the U.S., it must 
not be to the detriment of the U.S. cattle industry or our 
consumers.
    USDA should not implement this rule until it can assure 
domestic and foreign markets of the origin of our beef 
products. Finding another BSE-infected cow from Canada in the 
U.S. could be just as devastating to our domestic market as it 
has been to our export markets.
    As you indicated, I believe that we must have mandatory 
country-of-origin labeling fully implemented before we even 
consider additional imports of Canadian animals.
    The question of age. Allowing the importation of Canadian-
born cattle after March 1, 1999, does not make scientific sense 
in light of the BSE cases diagnosed in Canada after USDA 
declared that Canada's feed ban was, ``effective.'' It's also 
unenforceable since it is nearly impossible to verify the true 
age of older cattle. In many cases veterinarians will have to 
accept producers' statements as the only source of verification 
on the age of the cattle.
    BSE minimal-risk status. BSE is not only an animal health 
concern, it's also a public safety concern. Congress should 
demand that USDA adhere to the most conservative policies with 
respect to BSE that the OIE guidelines allow. USDA appears to 
be establishing a much more lenient approach to animal health 
standards for the U.S. How can producers and consumers be 
assured that USDA's minimal-risk status would not be assigned 
to other countries subsequently who may have 19 or 109 or 229, 
or whatever number, greater number of BSE cases?
    Foreign markets is the last issue I want to address. I 
believe this proposed rule will make it more difficult for the 
U.S. to regain its lost export markets. The United States must 
first restore and maintain the confidence of our foreign 
trading partners before we allow additional suspect animals 
into the U.S. marketplace from a country that has not met 
international standards of minimal-risk.
    Japan and Korea have reduced U.S. beef imports and continue 
to put up additional restrictions and roadblocks. I believe 
that this issue of access to our foreign market needs to be 
resolved before we go down this road.
    In summary, I believe that opening the border to these 
older than 30 months of age cattle in the manner proposed in 
this Minimal Risk Rule 2 cannot be justified at this time and 
will only serve to increase the risk of BSE being introduced 
into the U.S. cattle herd.
    Thank you.
    [The prepared statement of Mr. Johnson follows:]

    Prepared Statement of Roger Johnson, Commissioner, North Dakota 
                       Department of Agriculture

    Senator Dorgan and Members of the U.S. Senate Subcommittee on 
Interstate Commerce, Trade, and Tourism, I am North Dakota Agriculture 
Commissioner Roger Johnson. I appreciate the opportunity to testify on 
behalf of North Dakota State Veterinarian Dr. Susan Keller and myself 
in opposition to the United States Department of Agriculture (USDA) 
proposal allowing importation of Canadian cattle over 30 months of age.
    It is frustrating to witness USDA's continuing efforts to open the 
border to Canadian cattle and products, despite the known risks and the 
unknown prevalence of bovine spongiform encephalopathy (BSE) in the 
Canadian cow herd. USDA acknowledges that cattle over 30 months of age 
are at even greater risk of having the disease than are the younger 
cattle currently allowed in only under stringent movement restrictions 
that require transport of animals in a sealed truck directly to 
approved feedlots and/or slaughter. Canada has now recorded 10 cases of 
BSE, six within the last year and the most recent case just this month. 
Before we further lift of our import restrictions and requirements on 
Canadian cattle, we must consider a number of issues.
Canada Taking Additional Precautions
    While Canada is taking additional measures to decrease the 
potential amplification and spread of typical BSE, USDA has 
unilaterally ignored the fact that other countries do not approve of 
USDA's new BSE minimal-risk status. This summer, Canada will implement 
more stringent restrictions on the use of specified risk materials 
(SRMs) in both ruminant and non-ruminant feed. The success of this 
prohibition will be inconclusive for several years, because of BSE's 
long incubation period. Further, the United States does not have these 
measures in place, nor are they even being initiated.
    Minimal Risk Rule 2 (MRR2)--the proposed rule allowing Canadian 
cattle over thirty months of age into the U.S.--acknowledges the risk 
of the SRMs from older Canadian cattle by declaring that the distal 
ileums of these older age animals cannot enter the U.S. The same rule, 
however, allows older cattle to be trucked across the border with their 
distal ileums intact and makes no effort to completely remove the 
distal ileums from all U.S. feed supplements, including those to non-
ruminants, as is the case now in Canada. How can this be explained 
logically to producers and consumers, both here and abroad?
    While USDA buries its head in the sand, Canada is taking at least 
some additional actions to improve their ability to export and decrease 
the incidence of BSE in their national herd over time. USDA's overall 
lack of responsible actions with respect to BSE in Canada has already 
decreased the status of the U.S. cattle herd in the eyes of our trading 
partners.
Feed Cohorts and Types of BSE
    Canada acknowledges that contaminated feed was the likely source of 
the infection and that additional feed cohorts are likely to be 
infected as well. Yet higher risk, older feed cohorts, will be allowed 
to come across the border, if this rule is adopted. In addition, five 
Canadian BSE cases reportedly were born after the implementation of its 
1997 feed ban, indicating that either the ban has not been effective in 
preventing BSE or there is a greater prevalence of BSE in their country 
than originally thought. Either scenario increases the probability that 
infected cows will be imported into the U.S.
    Canada is clearly admitting it has a BSE problem. Through 
regulatory actions, USDA appears to want to bring Canada's problem into 
the U.S. and make it ours. We must remember that Canada's BSE cases 
have all been identified as ``typical'' BSE and the U.S. cases have all 
been identified as an ``atypical'' form of BSE. The pathogenic 
differences between those two prion forms are still unknown.
Identification
    I believe that if Canadian cattle over thirty months of age (OTM) 
are allowed to come into the U.S., those animals must be permanently 
identified with an official tag and a CAN brand and must be strictly 
segregated by USDA through the entire slaughtering process. Should 
positive cases of BSE be found in any Canadian animals that are 
processed in the U.S., it must not be to the detriment of the U.S. 
cattle industry or our consumers.
    The recent investigation of seven head of Canadian animals 
slaughtered in a Nebraska plant dramatically points out the critical 
need to improve animal identification and tracking capabilities in the 
U.S., starting first at our ports and borders. USDA needs to start 
leading by example in all matters associated with animal health. Its 
primary concern should be its own current inability to quickly and 
accurately trace all animals that enter the U.S. and ultimately our 
food supply.
    USDA should not implement this rule until it can assure domestic 
and foreign markets of the origin of our beef products. Finding another 
BSE-infected cow from Canada in the U.S. could be just as devastating 
to our domestic market as it has been to our export markets. We must 
have mandatory, country-of-origin labeling fully implemented before 
USDA further weakens our standards on Canadian beef imports.
Age
    Allowing importation of Canadian cattle born after March 1, 1999 
does not make scientific sense in light of the BSE cases diagnosed in 
Canada after USDA declared that Canada's feed ban was ``effective.'' It 
is also unenforceable, since it is nearly impossible to verify the true 
age of older (Canadian) cattle. In many cases, veterinarians will have 
to accept producers' statements as the only source of verification on 
the age of their cattle. When dealing with a disease such as BSE, with 
its serious health and economic implications, this is not an effective 
import requirement. Animals born prior to March 1, 1999, will 
unknowingly (even to the veterinarians signing certificates of 
veterinary inspection) be able to move into the U.S. under this 
proposed rule.
BSE Minimal Risk Status
    BSE is not only an animal health concern, but it is also a public 
safety concern. Congress should demand that USDA adhere to the most 
conservative policies with respect to BSE that the OIE guidelines 
allow. USDA appears to be establishing a much more lenient approach to 
animal health standards for the U.S. How can producers and consumers be 
assured that USDA's ``Minimal Risk Status'' will not be assigned to 
other countries that have 19, 109 or even a greater number of BSE 
cases?
Foreign Markets
    I believe this proposed rule will make it more difficult for the 
U.S. to regain its lost export markets. The United States must first 
restore and maintain the confidence of our foreign trading partners 
before we allow any additional suspect animals into the U.S. 
marketplace from a country that has not met international standards of 
minimal-risk. Japan and Korea have reduced U.S. beef imports and 
continue to put up additional restrictions and roadblocks. I believe 
this rule would make it even harder to regain their confidence and may 
result in the permanent loss of these markets. USDA's inability to 
fully regain these lost exports makes the case that more stringent 
standards are needed rather than proposing to allow additional risks 
for our domestic and foreign markets. If we are to maintain current 
export markets and regain lost export markets, USDA should make its 
existing and future BSE import policies compliant with OIE 
international standards.
Summary
    The science of prion diseases (especially BSE) is still unfolding, 
and the sensitivity of tests and detection limits are continually 
improving. There must be more certainty and fewer assumptions before 
rules are promulgated to allow more high risk cattle from Canada to 
enter the U.S., or the results could be devastating. Opening the border 
to OTM age cattle in the manner proposed in the MRR2 cannot be 
justified at this time and will only serve to increase the risk of BSE 
being introduced into the U.S. cattle herd.
    Senator Dorgan and Committee Members, thank you for the opportunity 
to testify on this important issue. I would be happy to answer any 
questions.

    Senator Dorgan. Mr. Johnson, thank you very much. Next, we 
will hear from Mark Huseth, who is the President of the North 
Dakota Stockmen's Association. Mr. Huseth, thank you for being 
here.

 STATEMENT OF MARK HUSETH, PRESIDENT, NORTH DAKOTA STOCKMEN'S 
                          ASSOCIATION

    Mr. Huseth. Thank you, Senator. Good morning. My name is 
Mark Huseth. My wife and I, Eileen, ranch in partnership with 
our adult sons on our third-generation family operation near 
McLeod, North Dakota, in the Sheyenne River Valley.
    I have the privilege of representing cattlemen like myself 
from across this great state this year as President of the 
North Dakota Stockmen's Association. It is on their behalf that 
I appear before you today.
    Our forward-thinking cattlemen and cattlewomen formulated a 
policy back at our 2005 annual convention in anticipation of 
this very proposed rule which would expand allowable Canadian 
imports to include live animals 30 months and older. The 
Stockmen's Association member resolution opposes any further 
expansion of Canadian beef trade until the United States 
receives assurances from Canada and its other trading partners 
that if trade is expanded and a problem is detected in a 
foreign-born import, that the animal's country-of-origin, not 
the U.S., will suffer from any resulting trade sanctions.
    The resolution also calls for an orderly market transition 
plan to be put in place before the border is opened further so 
a sudden supply shock does not cripple the domestic market.
    Nearly 2 years later these stipulations have not been 
satisfied, and so our opposition to the proposed rule holds 
true today.
    Before I go any further, I want to emphasize that we are 
not opposed to the U.S. Department of Agriculture's proposed 
rule because of food safety concerns. That's because BSE, as 
you know, is not a contagious disease and the mode of infection 
is through the consumption of feed contaminated with abnormal 
prion protein.
    The United States ruminant feed ban and other harvest 
measures, like the removal of all specified risk materials, 
have proven effective in identifying sick animals and keeping 
them out of the food supply. We're confident in this industry 
and the government-implemented firewalls to maintain the level 
of food safety and consumer confidence that we worked so hard 
for and are so proud of.
    At the same time, the North Dakota Stockmen's Association 
views the realization of Canadian trade as premature. That's 
because we're still suffering from the consequences of the 
Canadian-born cow diagnosed with BSE in our country in December 
of 2003. The lone animal, commonly referred to as the ``cow 
that stole Christmas,'' changed the U.S. beef industry. More 
than 3 years later we are still working to recover import 
global beef markets and the consumer confidence that were 
snatched away that December 23rd.
    Before we open the border wider and possibly exaggerate the 
problems we already have, we have to make sure that we protect 
our domestic cattle producers from unintended harm to ensure 
that they have the opportunity to make an honest living without 
the threat of another country's cattle collapsing their market 
and driving them out of business.
    Our members ask that USDA's proposed rule not be adopted 
until the following conditions have been met. Number one, the 
United States receives in writing guarantees from Canada and 
all of its other beef-trading partners that any disease problem 
identified in a foreign-born imported animal in the United 
States be considered the problem of its country-of-origin.
    In addition, any trade sanctions those countries impose 
because of the disease situation be on that country-of-origin. 
The United States, on the other hand, would not suffer the kind 
of trade backlash it still is recovering from since the first 
case of BSE in 2003. Likewise, the World Organization for 
Animal Health, or OIE, recognizes the United States with the 
same low-risk health status if the disease occurs in an 
imported animal.
    Number two, USDA develops and implements an orderly market 
transition plan before expanding the scope of cattle and beef 
imports from Canada. This would involve gradually accepting in 
such imports so as not to overload our country's supply and 
crash those markets. We think this is especially critical to 
preserve our already-overloaded slaughter cow and slaughter 
bull processing facilities, particularly in the northern tier 
where many Canadian cattle would likely be sent.
    You can imagine the impact when you add the estimated 
545,000 cows and 66,000 cull bulls and stags that would enter 
this country each year over a 5-year period if the proposed 
rule is adopted. That would lead to an annual decrease in beef 
prices of approximately $4 per hundredweight or $50 for a 
1,250-pound cow. Multiply that by an average of 140,000 cull 
cows sold by North Dakota producers each year, and you arrive 
at approximately a $7 million impact per year to cattlemen and 
women from our state alone. We can't afford to do that.
    Number three, before entering the United States all 
Canadian cattle are permanently identified with a universal 
hot-iron brand that designates them as Canadian cattle. The 
brand would preserve the cattle's identity through slaughter 
and make it crystal clear where they originated. Tattoos, on 
the other hand, cannot be read at a glance and can fade over 
time. Consequently, we do not support tattoos as identification 
means for these imported animals.
    Number four, a further evaluation of the Canadian feed ban 
be conducted in light of the most recent BSE cases detected 
there. While USDA has determined that Canada has a robust 
inspection program, that overall compliance with the feed ban 
is good and that the feed ban is reducing the risk of 
transmission of BSE in the Canadian cattle population, they did 
identify a possible exemption in the ban with mineral mixes 
produced with ruminal meat and bone meal before the feed ban 
took effect. Maybe a mandatory recall of such mixes would help 
curtail the number of cases there.
    We empathize with our Canadian neighbors and the situation 
they are in. The North Dakota Stockmen's Association has always 
supported fair trade and maintained that our producers can 
compete and win in the global market of beef because of the 
superior cattle and beef we raise in this country.
    We look forward to expanding our trade with Canada in the 
future. However, now is not yet the time, and in order for our 
beef trade with Canada to be fair, the steps we outline today 
must be taken before the USDA's rule is implemented.
    We appreciate the chance to share our perspective with you 
today and the fact that you have recognized this issue as an 
important one to us. I thank you very much, and I will also 
address questions later, and if there are any technical ones, I 
would also defer to Dr. Keller.
    [The prepared statement of Mr. Huseth follows:]

 Prepared Statement of Mark Huseth, President, North Dakota Stockmen's 
                              Association

    Good morning, Senator Byron Dorgan, and Members of the Senate 
Interstate Commerce, Trade, and Tourism Subcommittee.
    My name is Mark Huseth. My wife, Eileen, and I ranch in partnership 
with our adult sons on our third-generation family operation near 
McLeod, N.D., in the Sheyenne River Valley. I have the privilege of 
representing cattle producers like myself from across this great state 
this year as the President of the North Dakota Stockmen's Association. 
It is on their behalf that I appear before you today.
    Those forward-thinking cattlemen and cattlewomen formulated policy 
back at our 2005 Annual Convention in anticipation of this very 
proposed rule, which would expand allowable Canadian imports to include 
live animals 30 months and older. The Stockmen's Association's member 
resolution opposes any further expansion of Canadian beef trade until 
the United States receives assurances from Canada and its other trading 
partners that, if trade is expanded and a problem is detected in a 
foreign-born import, that the animal's country-of-origin, not the U.S., 
will suffer any resulting trade sanctions.
    The resolution also calls for an orderly market transition plan to 
be put in place before the border is opened further, so a sudden supply 
shock doesn't cripple the domestic market.
    Nearly 2 years later, those stipulations have not been satisfied, 
and so our opposition to the proposed rule still holds true today.
    Before I go further, I want to emphasize that we are not opposed to 
the U.S. Department of Agriculture's (USDA) proposed rule because of 
food safety concerns. That's because bovine spongiform encephalopathy, 
as you know, is not a contagious disease, and the mode of infection is 
through the consumption of feed contaminated with abnormal prion 
protein. The United States' ruminant feed ban and other harvest 
measures, like the removal of all specified risk materials (the only 
things capable of carrying the disease), have proven effective in 
identifying sick animals and keeping them out of the food supply. We're 
confident in these industry- and government-implemented firewalls to 
maintain the level of food safety and consumer confidence that we work 
so hard for and are so proud of.
    At the same time, the North Dakota Stockmen's Association views the 
liberalization of Canadian trade as premature. That's because we are 
still suffering the consequences of the Canadian-born cow diagnosed 
with BSE in our country in December 2003. That lone animal, commonly 
referred to as ``the cow that stole Christmas,'' changed the U.S. beef 
industry. More than 3 years later, we are still working to recover 
important global beef markets and customer confidence that were 
snatched away that December 23.
    Before we open the border wider and possibly exaggerate the 
problems we already have, we have to make sure that we protect our 
domestic cattle producers from unintended harm--to ensure that they 
have the opportunity to make an honest living without the threat of 
another country's cattle collapsing their market and driving them out 
of business.
    Our members ask that USDA's proposed rule not be adopted until the 
following conditions have been met:

        1. The United States receives, in writing, guarantees from 
        Canada and all its other beef trading partners that any disease 
        problem identified in a foreign-born, imported animal in the 
        United States be considered the problem of its country-of-
        origin. In addition, any trade sanctions those countries impose 
        because of the disease situation be on that country-of-origin. 
        The United States, on the other hand, would not suffer the kind 
        of trade backlash it still is recovering from since the first 
        case of BSE in 2003. Likewise, the World Organization for 
        Animal Health, or OIE, recognizes the United States with its 
        same low-risk health status if the disease occurs in an 
        imported animal.

        2. USDA develops and implements an orderly market transition 
        plan before expanding the scope of cattle and beef imports from 
        Canada. This would involve gradually accepting in such imports 
        so as not to overload our country's supply and crash those 
        markets. We think this is especially critical to preserve our 
        already-overloaded slaughter cow and slaughter bull processing 
        facilities, particularly in the northern tier, where many 
        Canadian cattle would likely be sent. You can imagine the 
        impact when you add the estimated 545,000 cull cows and 66,000 
        cull bulls and stags that would enter this country each year 
        over a five-year period if the proposed rule is adopted. That 
        would lead to an annual decrease in beef prices of $4 per 
        hundredweight, or $50 per 1,250-pound cow. Multiply that by an 
        average of 140,000 cull cows sold by North Dakota producers 
        each year and you arrive at a $7 million impact per year to 
        cattlemen and women from our state alone. We can't afford to do 
        that.

        3. Before entering the United States, all Canadian cattle are 
        permanently identified with a universal hot-iron brand that 
        designates them as Canadian cattle. The brand would preserve 
        the cattle's identify through slaughter and make it crystal 
        clear where they originated. Tattoos, on the other hand, cannot 
        be read at a glance and can fade over time. Consequently, we do 
        not support tattoos as an identification means for these 
        imported animals.

        4. A further evaluation of the Canadian feed ban be conducted 
        in light of the most recent BSE cases detected there. While 
        USDA has determined that Canada has a robust inspection 
        program, that overall compliance with the feed ban is good and 
        that the feed ban is reducing the risk of transmission of BSE 
        in the Canadian cattle population, they did identify a 
        ``possible exception'' in the ban with mineral mixes produced 
        with ruminal meat and bone meal before the feed ban took 
        effect. Maybe a mandatory recall of such mixes could help 
        curtail the number of cases there.

    We empathize with our Canadian neighbors and the situation they are 
in. We know what they are going through, because we're in a similar 
situation ourselves.
    The North Dakota Stockmen's Association has always supported fair 
trade and maintained that our producers can compete and win in the 
global beef market, because of the superior cattle and beef we raise in 
this country. We look forward to expanding our trade with Canada in the 
future. However, now is not yet the time, and, in order for our beef 
trade with Canada to be fair, the steps we outlined today must be taken 
before USDA's rule is implemented.
    We appreciate the chance to share our perspective with you today 
and the fact that you have recognized this issue as the important one 
it is. Thank you.
    I would be happy to address any questions that you may have.

    Senator Dorgan. Mr. Huseth, thank you very much. Next, we 
will hear from Mr. Leo McDonnell, on behalf of R-CALF USA. I 
understand you're from Columbus, Montana and ranch in Rhame, 
North Dakota; is that correct?

          STATEMENT OF LEO R. McDONNELL, JR., FORMER 
  PRESIDENT/CO-FOUNDER, RANCHERS-CATTLEMEN ACTION LEGAL FUND, 
                UNITED STOCKGROWERS OF AMERICA 
                          (R-CALF USA)

    Mr. McDonnell. Yes, sir. Thank you, Chairman Dorgan, for 
holding this hearing. It's very important to U.S. cattle 
producers.
    Today USDA is considering allowing in over-30-month beef 
and cattle from Canada, a product that is banned for health 
concerns from nearly every international market, products that 
the United States cannot even export to our primary market. 
That is, USDA's actions will make the United States a dumping 
ground for beef and cattle banned from major international 
markets, and at the same time U.S. producers are being lobbied 
against by major importers here in the United States from being 
able to differentiate their product with country-of-origin 
labeling. Makes no sense. I think we have to ask ourselves who 
benefits from these actions? Not U.S. producers, not U.S. 
consumers.
    It's been said that this is a North American problem. This 
is not a North American problem. Canada has tested around 
140,000 head since 2004 and has found eight cases with typical 
prions. The United States has tested 800,000 head and found 
only two cases in our native herd with atypical prions. 
Completely different prions. The Canadian and the European 
prions with BSE are very aggressive, and really there's very 
little known about the atypical prions.
    Make no doubt if USDA is allowed to proceed in allowing 
over-30-month beef and cattle, then the full weight of the 
Canadian problem is going to be put squarely on U.S. ranchers' 
shoulders, and Canada would be relieved of those problems, the 
economic problems.
    You don't manage risk by increasing exposure. Sound science 
tells you you do not eradicate a disease by increasing 
exposure. United States should be pursuing sound science that 
is practiced by major importing countries, and we should strive 
to upward harmonize those import practices surrounding health 
and safety issues, not pursuing some of the lowest standards in 
the world.
    U.S. beef exports remain at less than half of the 2003 
levels, and yet we've had no assurances from USDA if they find 
additional cases in Canada or even the United States that we're 
going to be able to maintain what new export markets we've 
opened. I believe you pointed that out.
    Last year we opened up to under-30-month cattle, and in 6 
months our losses on cattle went from $49 to $150 per head as 
reported by USDA. The OTM rule on the relaxation of the delayed 
rule on beef will worsen its present situation.
    Just last October three major packing plants said that they 
were going to cut their kill because of weakening demand and 
oversupplies of cattle. Why are we letting more in? And by the 
way, over three-quarters of the increase in the supply of those 
cattle were coming from Canada in the under-30-months.
    The proposed OTM rule did not require Canada to implement 
the applied practices of other BSE-infected countries that have 
successfully reduced the incidence of BSE. Canada has a weaker 
feed ban. It only bans ruminant feed to ruminant animals, not 
ruminant feed to all animals.
    Canada has an inferior BSE testing program. It does not 
test all high-risk cattle like other countries in the European 
Union and Japan does. Canada practices the least restrictive 
SRM removal policy. Other countries remove the vertebrae and 
all other high-risk tissues in much younger cattle. Given if 
the U.S. commingles Canadian cattle and beef with U.S. cattle 
and beef, it's not logical to expect that Canada's weaker feed 
ban, inferior testing program, and least restrictive SRM 
policies would help the U.S. to restore lost beef markets and 
gain new ones. You don't gain consumer confidence by lowering 
your standards.
    The proposed OTM rule, like the existing BSE import policy, 
does not comply with international scientific standards. And I 
won't go through that. Roger Johnson went through it very well. 
I believe Dr. Keller will.
    But I do want to point out that the OIE recommends that 
cattle not be exported from a BSE-affected country unless the 
cattle were born 2 years after the feed ban was effectively 
enforced, and that's the key word, ``effectively.'' We've seen 
an increase in young cattle in Canada born after the feed ban 
and a decrease in the number of cattle that were born prior to 
the feed ban. That tells you they have not had an effective 
feed ban.
    The OTM rule is inconsistent with OIE testing requirements, 
I believe. Based on OIE testing recommendations, Canada needs 
to test 187,000 consecutively targeted cattle with a BSE risk 
equal to that in the casualty slaughter age between four and 
seven years. They haven't done that.
    As reflected by the OTM rule, the U.S. does not have a 
coherent comprehensive strategy for resuming beef exports, 
building new export markets, fully protecting animal health, 
and supporting consumer confidence in the safety of U.S. beef.
    I think some of the things we need to look at before we 
even consider allowing in over-30-month beef or cattle is the 
U.S. should not give additional access to the U.S. market until 
the U.S. fully regains the share of the global market that we 
lost since 2003. Don't make a dumping ground out of the U.S. 
market for product other countries don't want.
    The U.S. should not further relax its already lenient 
import standards until it can be scientifically documented that 
BSE is no longer in Canadian feed. I don't know if you all know 
this, but this summer Canada already has plans to tighten their 
feed ban. They recognize they're having problems, so they're 
going to make it more stringent. So why are we letting these 
cattle in here? We need to wait a while and let their feed ban 
work.
    The U.S. should not allow the importation of over-30-month 
cattle or beef, which are known to be of higher risk for 
transmitting BSE, particularly now that the disease is known to 
have been circulating in animals born years after the Canadian 
feed ban.
    The U.S. should not allow over-30-month cattle or beef from 
Canada in until both the U.S. and Canada has significantly 
strengthened their respective feed bans. The U.S. should not 
allow over-30-month Canadian cattle or beef into the United 
States until it additionally obtains firm assurances from all 
our U.S. beef export partners that if Canada or the U.S. has 
another case, they're not going to shut us down.
    I believe I've probably gone over my time so I'll stop 
there, and thank you for holding this hearing.
    [The prepared statement of Mr. McDonnell follows:]

   Prepared Statement of Leo R. McDonnell, Jr., Former President/Co-
 Founder, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of 
                          America (R-CALF USA)

    Chairman Inouye, Vice Chairman Stevens, Members of the Committee, I 
am Leo McDonnell. My wife and I own and operate Midland Bull Test, 
which is a bull genetic evaluation center in Columbus, Montana, and we 
ranch in both Montana and North Dakota. Bulls from our test center have 
been sold in both the domestic and international market and we are cow/
calf producers as well as seed stock producers. I am also proud to be a 
member of the Ranchers-Cattlemen Action Legal Fund--United Stockgrowers 
of America (R-CALF USA), an organization that I co-founded in the late 
1990s. Our organization has worked tirelessly on behalf of the American 
cattle producer. Our focus has been on protecting and promoting the 
interests of independent cattle producers, and it is from that 
perspective that I speak to you today. I appreciate the opportunity to 
provide comments on this issue as it is very important to the cow/calf 
operators, backgrounders, stockers and feeders that constitute the 
heart of this country's cattle and beef industry.
Background
    After the December 2003 detection in Washington State of a 
Canadian-born cow infected with bovine spongiform encephalopathy (BSE), 
over 50 export markets closed their borders to U.S. beef and in 2004, 
U.S. beef exports fell to a 19-year low. \1\ While the U.S. has since 
struggled to negotiate even limited access for U.S. cattle and beef 
exports to foreign markets, the domestic market has been thrown open to 
a much broader range of imports from abroad, including imports from 
Canada where 10 native cases of BSE have so far been detected. As a 
result, the U.S. cattle industry experienced its third consecutive year 
of substantially reduced exports in 2006, with the U.S. running a 
significant trade deficit in cattle and beef estimated at $2.7 billion. 
At the conclusion of 2006, U.S. beef exports remained at less than half 
their 2003 volume. \2\
    Since late 2003, the U.S. border was closed to all but boneless 
Canadian beef derived from cattle less than 30 months of age--a product 
the World Organization for Animal Health (OIE) considers suitable for 
trade regardless of a country's disease status. \3\ However, in mid-
2005, the USDA further opened the Canadian border to both imports of 
live cattle less than 30 months of age and an expanded scope of beef 
products from cattle less than 30 months of age. \4\
    Within 6 months of the border's reopening to live cattle, domestic 
live cattle prices began to plummet. Fed cattle prices in the U.S. fell 
from $96.50 per cwt. in December 2005 to $79.10 per cwt. in May 2006, a 
decline of $17.40 per cwt. \5\ Cattle producers who sold their fed 
cattle during this period suffered losses conservatively estimated by 
USDA within the range from $4.08 per cwt. to $12.93 per cwt., or $49 to 
$155 per head. \6\
    R-CALF USA believes that USDA's existing BSE policies are 
contributing greatly to the ongoing losses experienced by U.S. cattle 
producers, and we seek the assistance of Congress to correct these 
existing policies. Notwithstanding the dire need to reverse existing 
BSE policies, the USDA's recently proposed OTM rule assures that 
current problems will be made far worse for U.S. cattle producers. \7\ 
The OTM rule would allow the importation of live Canadian cattle born 
after March 1, 1999, certain Canadian beef products immediately, and 
the full scope of Canadian beef products from cattle over 30 months of 
age at some point thereafter.
    USDA's inability to fully restore lost export markets during the 
past 3 years, which has caused substantial harm to the U.S. cattle 
industry, is directly attributable to inappropriate BSE policies now in 
effect, and the proposed OTM Rule will only worsen the current 
situation for the following reasons:
A. The Proposed OTM Rule Does Not Require Canada To Implement the 
        Practices That Other BSE-Affected Countries Are Using to 
        Successfully Reduce the Incidence of BSE and Protect Consumers
Canada Has a Weaker Feed Ban
    Canada has a weaker feed ban than other BSE-affected countries, 
and, because the U.S. imports Canadian beef and cattle nonetheless, the 
United States continues to experience difficulty in both restoring lost 
markets and gaining new ones. Under current U.S. policies, Canada is 
required to maintain only the most basic of feed bans--a feed ban 
determined by other BSE-affected countries to be insufficient to 
control the disease. The feed bans of the European Union (EU) and 
Japan, for example, are much more restrictive as they ban all ruminant 
material, including blood, from all animal feed. Canada bans only 
ruminant material, with the exception of blood, from only ruminant 
animal feed. While Canada has announced intentions to begin 
strengthening its feed ban in July 2007, the long incubation period of 
BSE (approximately 5 years) \8\ necessitates a lengthy period of 
disease surveillance following implementation just to determine if the 
improvement is successful.
Canada Has an Inferior BSE Testing Program
    In addition, Canada has an inferior BSE surveillance program when 
compared to other BSE-affected countries, and, because the U.S. imports 
Canadian beef and cattle nonetheless, the United States continues to 
experience difficulty in both restoring lost markets and gaining new 
ones. Under current USDA policies, Canada is not required to test all 
high-risk cattle for purposes of determining the prevalence of the 
disease and to ensure that all symptomatic cattle are removed from both 
the human food chain and animal feed chain. In contrast, Japan tests 
all high-risk cattle and all cattle entering the human food chain. The 
EU tests all high-risk cattle over 24 months of age and all OTM cattle 
entering the human food chain. \9\
    Canada, however, has only a voluntary BSE testing program and is 
testing fewer cattle than many BSE-affected countries with much smaller 
herd sizes. \10\ Despite Canada's detection of BSE in younger cattle, 
including a 50-month old cow, Canada does not recognize the value of 
testing healthy cattle at slaughter. This stands in sharp contrast to 
the EU's experience, which caused the EU to begin testing all healthy 
slaughtered OTM cattle since 2001. \11\ The EU detected 113 positive 
BSE cases in healthy slaughtered cattle in 2005. \12\
Canada Practices the Least Restrictive SRM Removal Policies
    Canada practices the least restrictive specified risk material 
(SRM) removal policies when compared to other BSE-affected countries, 
and, because the U.S. imports Canadian cattle and beef nonetheless, the 
U.S. is experiencing difficulty in both restoring lost markets and 
gaining new ones. The proposed OTM Rule would subject Canadian cattle 
less than 8 years of age (cattle born after March 1, 1999) only to the 
same SRM removal policies adopted in the United States--a country 
unlike Canada that has detected only two atypical cases of BSE in 
cattle over 10 years of age. Thus, Canadian cattle less than 30 months 
of age will have only their tonsils and distal ileum removed, while 
only OTM cattle will be subject to the broader SRM removal 
requirements. However, the EU removes the broader list of SRMs from all 
cattle over 12 months of age and Japan removes the broader list of SRMs 
from cattle of all ages.
    It is counterintuitive to expect that Canada's weaker feed ban, its 
inferior testing regime, and its less restrictive SRM removal policy 
are helping to restore consumer confidence in Canadian beef sold 
directly from Canada or Canadian beef sold from the United States. 
Current trade challenges clearly demonstrate this concern: South Korea, 
for example, which was the third largest U.S. beef importer in 2003, 
\13\ continues to demand that U.S. slaughter plants segregate U.S. 
cattle from Canadian cattle in their production lines to ensure that no 
Canadian beef is included in their U.S. beef imports; \14\ and, recent 
headlines from the ChinaDaily/Xinhua News Service stating ``Beijing 
Confiscates Canadian Beef on Fear of Mad Cow Disease,'' further 
exemplifies the trade challenges associated with Canadian beef. \15\ 
Because Canada's feed ban is weaker, its BSE testing regime inferior, 
and its SRM removal policy less restrictive than those of other BSE-
affected countries, which includes countries that import U.S. beef, the 
proposed OTM Rule will only worsen the unfavorable situation that 
already exists and should be withdrawn.
B. The Proposed OTM Rule, Like the USDA's Existing BSE Import Policy, 
        Does Not Comply With International BSE Import Standards 
        Established by the OIE
The OTM Rule Does Not Comply With the OIE's SRM Standards
    The OIE has in the past and continues today to recommend that SRMs 
from cattle originating in a BSE-affected country not be imported for 
the preparation of animal feed or for the preparation of fertilizer. 
\16\ Current U.S. BSE policies ignore this recommendation and SRMs 
removed from live Canadian cattle currently entering the U.S. are free 
to enter the U.S. non-ruminant animal feed system as well as fertilizer 
production. \17\ While this failure to follow OIE recommendations is 
most likely already contributing to the ongoing difficulty in restoring 
lost beef markets and gaining new ones, the proposed OTM Rule would 
significantly aggravate this failure.
    The proposed OTM Rule, because it would allow the importation of 
animals from a BSE-affected country with an unknown prevalence of BSE, 
would necessarily allow the importation of the entire list of SRM's 
contained in each animal. Until and unless the U.S. begins to follow 
international standards by expressly banning SRMs originating in 
Canadian cattle from the preparation of all animal feed and fertilizer, 
the USDA is not in compliance with OIE standards, and its demands to 
the international community to follow international standards will not 
be taken seriously.
The OTM Rule Does Not Comply With the OIE's Feed Ban Standards
    Canada has so far confirmed four BSE cases born after the 
implementation of its 1997 feed ban, with three cases born years after 
(one in 1998, two in 2000, and one in 2002). \18\ A recent Dow Jones 
Newswires report regarding Canada's 10th case of BSE in a native 
animal, which was confirmed on February 7, 2007, suggests that this 
latest case was also born after the feed ban (in the year 2000). \19\ 
This would make a total of five positive BSE cases, or half of all 
native Canadian cases, born after the implementation of the Canadian 
feed ban. Whether there are 4 or 5 positive cases among Canada's 10 
native cases that were born after the implementation of the Canadian 
feed ban, it is clear that the empirical evidence available to this 
Committee shows several truths:

        1. Canada's known BSE prevalence has increased since 2003.

        2. Canada's 1997 feed ban was not effective in preventing the 
        spread of BSE.

        3. Canada's system of BSE control measures and ``interlocking 
        safeguards'' have not succeeded in preventing or eliminating 
        its BSE problem. This shows that USDA's reliance on such 
        systems to protect the United States against imported BSE is 
        unwise: they simply do not work well enough to accomplish this 
        goal.

        4. Canada's BSE problem is ongoing. It is not confined to a few 
        old cattle infected before the control measures were 
        implemented (one of USDA's optimistic assumptions in re-opening 
        the border in 2005). The data show that Canada's BSE problem 
        persists and shows no immediate signs of diminishing.

        5. Canada's prevalence rate of BSE is large enough so that 
        there is close to 100 percent probability that continuing to 
        import cattle from Canada will result in some BSE-infected 
        cattle being imported into the United States.

    These facts show that the USDA's proposal to allow OTM cattle, 
replete with the entire list of SRMs and the entire scope of bovine 
products from animals up to 8 years of age, into the United States is 
inconsistent with the OIE's international BSE import standards. The OIE 
makes clear that beef from cattle originating in a BSE-affected country 
that does not have an effectively enforced feed ban, i.e., a feed ban 
that does not reduce the prevalence of the disease, is to be derived 
only from cattle that have the entire, expanded list of SRMs removed if 
the cattle are over 12 months of age. Because the proposed OTM Rule 
would require the removal of the entire, expanded list of SRMs only in 
animals over twice this 12-month age limit, i.e., at 30 months of age, 
the OTM Rule does not comply with OIE standards. \20\
    Moreover, the OIE specifically states that cattle selected for 
export from a BSE-affected country should be born at least 2 years 
after the country's feed ban was effectively enforced (for a country 
like Canada with an undetermined BSE risk), \21\ or at least born after 
the date that the feed ban was effectively enforced (for a country 
unlike Canada with a controlled BSE risk). \22\ The USDA's proposed OTM 
Rule that would allow the importation of Canadian cattle born after 
March 1, 1999, despite multiple cases of BSE detected in cattle born 
long after that date, clearly violates this OIE standard, regardless of 
whether Canada is considered a controlled or undetermined risk.
The OTM Rule Is Inconsistent With OIE Testing Requirements
    The USDA proposed OTM Rule is further inconsistent with OIE testing 
standards. Canada does not perform, and the OTM Rule would not require, 
sufficient testing of Canadian cattle to meet even minimal OIE testing 
standards. As a minimum, the OIE testing standards require a country 
like Canada to test 187,000 consecutive targeted cattle (with a BSE 
risk equal to that in the ``Casualty slaughter, age between 4 and 7 
years'' subpopulation in Table 2), and be found BSE-free to be 
confident that the BSE prevalence is not more than 1 in 100,000. \23\ 
However, Canada has tested only 143,528 total cattle during the 
combined years of 2004, 2005, 2006, and including up through February 
12, 2007, with 8 positive BSE cases detected during this period. \24\ 
While this empirical evidence shows that Canada's BSE prevalence is 
much greater than 1 in 100,000, Canada must increase its BSE testing 
significantly before any accurate estimation of the true magnitude of 
Canada's BSE problem can be made either by the U.S. or by international 
beef importers. Until this is done, the U.S. should not consider any 
relaxation of current BSE import restrictions, and the proposed OTM 
Rule should be withdrawn.
    Standing in stark contrast to Canada, the U.S. has tested 
approximately 800,000 cattle since June 1, 2004, and has detected only 
two atypical cases of BSE, both in cattle over 10 years of age. \25\ 
Given the distinct difference between the BSE risk profile of Canada, 
when compared to the United States, the effect of existing BSE 
policies, which would be further aggravated by the OTM Rule, is to 
unjustly burden the U.S. cattle industry with the stigma of Canada's 
more serious BSE problem.
    It is counterintuitive to expect that the OTM Rule that violates 
the OIE's SRM standards, that does not comply with the OIE's feed ban 
standards, and that is inconsistent with the OIE's BSE testing 
standards would help to restore consumer confidence in Canadian beef 
sold directly from Canada or Canadian beef sold from the United States. 
Because the proposed OTM Rule would be inconsistent with the OIE's SRM 
standards, feed ban standards, and testing standards, the proposed OTM 
Rule would only worsen the unfavorable situation that already exists 
and should be immediately withdrawn.
C. As Reflected by the OTM Rule, the U.S. Does Not Have a Coherent, 
        Comprehensive Strategy for Resuming Beef Exports, Building New 
        Markets, Fully Protecting Animal Health, and Supporting 
        Consumer Confidence in the Safety of U.S. Beef
    R-CALF USA recommends that Congress issue a formal directive to the 
USDA to ensure that the U.S. develops an aggressive, coherent, and 
comprehensive BSE strategy for resuming beef exports, building new 
markets, fully protecting animal health, and supporting consumer 
confidence in the safety of U.S. beef. The Animal Health Protection Act 
empowers the Secretary of Agriculture to take action to prevent ``the 
introduction into or dissemination within the United States'' of animal 
diseases from other countries. Until recently, USDA policy had 
recognized that: ``Preventing the introduction of BSE into the United 
States is critical.'' \26\ But USDA has now abandoned the Congressional 
mandate to prevent the introduction of a devastating disease, BSE, and 
proposes to rely only on measures to mitigate the dissemination of the 
disease once it has entered the United States. R-CALF USA believes that 
Congress must now intervene to ensure this important Congressional 
mandate is followed and offers the following 7 principles for Congress' 
consideration:

         1. The U.S. should not give additional access to the U.S. 
        market to imports from countries known to have BSE until the 
        U.S. fully regains the share of the global export market it has 
        lost since 2003. Before opening the border further to Canada or 
        other BSE-affected countries, the U.S. must get assurances from 
        other countries that export markets will not be lost if 
        additional BSE cases are found in Canada or if the U.S. finds a 
        Canadian case here.

    Allowing OTM Canadian cattle and beef into the U.S. will further 
harm the United States' ability to fully restore lost export markets. 
After 3 years of allowing Canada--a country where BSE is known to have 
circulated years after implementation of a feed ban--to have access to 
the U.S. market, the U.S. share of the global beef market has fallen 
from 18 percent in 2003 to an estimated 7 percent in 2006. \27\ The 
export markets that have reopened have imposed stricter conditions on 
U.S. beef exports than what the U.S. requires on Canadian imports, and 
several export markets continue to ban U.S. exports that contain beef 
from Canadian cattle.

         2. The U.S. should not further relax its already lenient 
        import standards until it can be scientifically documented that 
        BSE is no longer circulating in Canadian feed or in OTM 
        Canadian cattle and there is international acceptance for such 
        a conclusion.

    The full magnitude of Canada's BSE epidemic is still unfolding, but 
it is already much greater than what USDA has asserted and assumed. BSE 
has now been detected in 10 Canadian-born cattle. If media reports that 
indicate the latest case was born in 2000 are correct, then half of 
Canada's known cases were born after Canada implemented its feed ban. 
This evidence demonstrates that Canada's feed ban was not effective in 
preventing the spread of BSE in either its feed system or cattle herd.

         3. The U.S. should not allow the importation of OTM cattle or 
        beef, which are known to be of higher risk for transmitting 
        BSE, particularly now that the disease is known to have been 
        circulating in animals born years after the Canadian feed ban.

    Cattle over 30 months of age that originate in a BSE-affected 
country have an inherently higher risk for transmitting BSE. As 
recently as January 2005, the USDA stated that the two most important 
factors in determining risk were the age of the cattle and the effect 
of the feed ban. Now that the feed ban is known to be ineffective, the 
30-month age limit remains as the most important factor in minimizing 
the risk of introducing BSE into the U.S. from Canada.

         4. The U.S. should not allow imports of OTM cattle or beef 
        from Canada until both the U.S. and Canada have significantly 
        strengthened their respective feed bans and sufficient time has 
        lapsed to ascertain the effectiveness of any feed ban 
        improvements. Given the known breeches in Canada's feed ban, 
        Canada must significantly ramp-up its BSE testing so that the 
        effectiveness of its feed ban can be more accurately monitored.

    As previously recognized by the Food and Drug Administration, and 
as recognized by international BSE experts, current BSE mitigation 
measures are inadequate to address the increased risk associated with 
OTM cattle and beef from Canada. The Food and Drug Administration, the 
Canadian Food Inspection Service, and international BSE experts all 
have acknowledged the need to strengthen the feed bans implemented in 
both the U.S. and Canada to prevent the spread of BSE. However, neither 
country has yet implemented improvements to their respective feed bans.

         5. The U.S. should not allow OTM Canadian cattle or beef into 
        the U.S. until it additionally obtains firm assurances from all 
        U.S. beef export markets and the OIE that the United States' 
        BSE risk profile would not be downgraded to Canada's level if 
        Canadian OTM cattle and beef are allowed into the U.S. market 
        and available for export.

    Allowing OTM Canadian cattle and beef into the United States will 
immediately harm the United States' international disease risk profile. 
The United States has a more favorable BSE risk profile than Canada. 
Canada cannot possibly meet the OIE standard for a country with a 
negligible BSE risk, which requires that the youngest BSE case must be 
born more than 11 years ago. \28\ However, because the U.S. has only 
detected BSE in two native animals, both born well before the feed ban 
and the youngest of which was estimated to be 10 years of age on 
February 28, 2006, the U.S. will likely meet the international standard 
to be considered a negligible BSE risk country if it does not mix 
Canadian cattle and beef with U.S. cattle and beef.

         6. The U.S. should not allow OTM Canadian cattle or beef into 
        the U.S. until the U.S. additionally implements country-of-
        origin labeling to mitigate the financial harm that will 
        inevitably befall U.S. cattle producers and that will likely be 
        more severe than what USDA will predict.

    The financial losses to U.S. cattle producers will likely be severe 
if the United States allows OTM Canadian cattle and beef into the U.S. 
market while most export markets remain closed. The USDA grossly 
underestimated the negative financial impact that actually occurred to 
U.S. cattle producers following the 2005 resumption of Canadian cattle 
imports. The USDA underestimated the price decline that U.S. producers 
experienced in the domestic fed cattle market by a factor of nearly 
three. Domestic fed cattle prices, which USDA predicted would fall by 
as much as $6.05 per cwt., \29\ actually fell by $17.40 per cwt. during 
the 5-month period from December 2005 through May 2006. Mandatory 
country-of-origin labeling must be implemented in the United States so 
both domestic and international consumers can differentiate beef 
produced exclusively from U.S. cattle from beef produced from Canadian 
cattle, before any further relaxation of current U.S. import standards 
is even considered.

         7. The U.S. should not relax its standards on imports from 
        Canada without an evaluation of the health and safety risks and 
        economic impact of OTM beef and without evaluations that 
        combine OTM cattle and beef imports.

    The risks from OTM beef imports were not properly evaluated in 
either the 2003 or 2004 risk analyses, and the 2005 delay on OTM beef 
imports posted in the Federal Register does not include a risk analysis 
based on the new findings of multiple cattle with BSE born after 
Canada's ban on meat and bone meal. Also, there is concern that the 
risk analysis of OTM beef and OTM cattle, when combined, will be much 
higher than separate analyses. That would also be the case if OTM beef 
and cattle are combined in an economic impact analysis.
Conclusion
    For the reasons described above, the USDA's proposed OTM Rule is 
premature and should be immediately withdrawn. It is inconsistent with 
the applied practices in other BSE-affected countries; it is 
inconsistent with OIE standards; and it does not contribute to any 
cohesive, comprehensive U.S. strategy to restore lost markets, build 
new markets, fully protect animal health, and support consumer 
confidence in the safety of U.S. beef.
     R-CALF USA respectfully requests that Congress take steps to cause 
the immediate withdrawal of the OTM Rule as well as steps to ensure the 
immediate development of a comprehensive BSE protection strategy and 
enforcement of the Congressional mandate to prevent the introduction of 
BSE into the United States.
    I sincerely appreciate this opportunity to share R-CALF USA's views 
with you on this important issue and I would be happy to answer any 
questions that you may have.
ENDNOTES
    \1\ Table 5, Total U.S. Beef and Veal Exports, Red Meat Yearbook 
(94006), U.S. Department of Agriculture, Economic Research Service, 
available at http://usda.mannlib.cornell.edu/MannUsda/
viewDocumentInfo.do?documentID=1354.
    \2\ See Cumulative U.S. Meat and Livestock Trade, Livestock and 
Meat Trade Data, Livestock, Dairy, and Poultry Outlook Tables, U.S. 
Department of Agriculture, Economic Research Service, available at 
http://www.ers.usda.gov/Data/MeatTrade/Data/AnnualLivestockTable.xls; 
see also Table 5, Total U.S. Beef and Veal Exports, Red Meat Yearbook 
(94006), U.S. Department of Agriculture, Economic Research Service, 
available at http://usda.mannlib.cornell.edu/MannUsda/
viewDocumentInfo.do?documentID=1354.
    \3\ Terrestrial Animal Health Code--2006, World Organization for 
Animal Health (OIE), at Article 2.3.13.1. (1)(g).
    \4\ See Bovine Spongiform Encephalopathy, Minimal-Risk Regions and 
Importation of Commodities; Final Rule and Notice, Federal Register, 
Vol. 70, January 4, 2005, at 460-553.
    \5\ Choice Beef Values and Spreads and the All-Fresh Retail Value, 
USDA, Economic Research Service, available at http://www.ers.usda.gov/
Data/meatpricespreads/Data/beef.xls, downloaded on December 19, 2006.
    \6\ High Plains Cattle Feeding Simulator, United States Department 
of Agriculture, Economic Research Service, available at http://
www.ers.usda.gov/Publications/LDP/xlstables/High %20Plains %20Cattle 
%20Feeding %20simulator %20Nov06 %20R.xls.
    \7\ See Bovine Spongiform Encephalopathy; Minimal-Risk Regions; 
Importation of Live Bovines and Products Derived from Bovines; Proposed 
Rule, Federal Register, Vol. 72, No. 5, at 1102-1129, hereafter OTM 
Rule.
    \8\ Federal Register, Vol. 70, No. 2, Final Rule, January 4, 2005, 
at 475.
    \9\ See Report on the Monitoring and Testing of Ruminants for the 
Presence of Transmissible Spongiform Encephalopathy (TSE) in the EU in 
2005, European Commission, ISSN-583X, at 5.
    \10\ Table B5, Total Positive Cases Per Number of Cattle Tested or 
Present in the Adult Cattle Population (>24 months of age), Report on 
the Monitoring and Testing of Ruminants for the Presence of 
Transmissible Spongiform Encephalopathy (TSE) in the EU in 2005, 
European Commission, ISSN: 1725-583X, June 20, 2006, at 17. (France, 
with an adult cattle population of over 10 million cattle tested over 
2.5 million head and detected 31 positive BSE cases in 2005; the 
Netherlands, with an adult cattle population of only 1.7 million cattle 
tested over 517,000 cattle and detected 3 positive BSE cases in 2005. 
In contrast, Canada with an adult cattle population of approximately 6 
million cattle tested fewer than 60,000 cattle and detected 2 positive 
BSE cases in 2005; in 2006, after again testing fewer than 60,000 
cattle, Canada detected 5 positive BSE cases.)
    \11\ The TSE Roadmap, European Commission, Brussels, COM(2005 322 
Final, July 15, 2005, at 7, 8: ``The detection of BSE in healthy 
slaughtered cattle in 2000 indicated the need for active monitoring 
which was introduced in the whole community in the beginning of 2001. 
The active monitoring programme became fully operation in July 2001 and 
still includes: The testing of all risk animals over 24 months of age 
(fallen stock, emergency slaughtered animals and animals with clinical 
signs at ante-mortem inspection); The testing of all healthy 
slaughtered bovine animals above 30 months of age (a total of 10 
million cattle per year).''
    \12\ Table B12, Testing on Healthy Slaughtered Bovine Animals, 
Report on the Monitoring and Testing of Ruminants for the Presence of 
Transmissible Spongiform Encephalopathy (TSE) in the EU in 2005, 
European Commission, ISSN: 1725-583X, June 20, 2006, at 26.
    \13\ See Cumulative U.S. Livestock and Meat Trade, Livestock, 
Dairy, and Poultry Outlook Report, U.S. Department of Agriculture, 
Economic Research Service, March 23, 2004, available at http://
usda.mannlib.cornell.edu/usda/ers/LDP-M//2000s/2004/LDP-M-03-23-
2004.pdf.
    \14\ Use of Cattle Legally Imported from Canada Within the EV 
Program for the Republic of Korea, U.S. Department of Agriculture, 
Agricultural Marketing Service, August 29, 2006, available at http://
www.ams.usda.gov/lsg/arc/KoreaCanadianCattle.pdf.
    \15\ Beijing Confiscates Canadian Beef on Fear of Mad Cow Disease, 
ChinaDaily/Xinhua News Service, Sunday--February 18, 2007.
    \16\ Terrestrial Animal Health Code--2006, Article 2.3.13.13 (1), 
(2), (3).
    \17\ See Importation of Certain Commodities from BSE Minimal-Risk 
Regions (Canada), Environmental Assessment, October 27, 2006, U.S. 
Department of Agriculture, Animal and Plant Health Inspection Service, 
at 7. (Both FSIS and FDA have implemented regulations that prohibit the 
use of SRMs in human food and other products, including dietary 
supplements and cosmetics.)
    \18\ See Completed Investigations, Canadian Food Inspection Agency, 
available at http://www.inspection.gc.ca/english/anima/heasan/disemala/
bseesb/comenqe.shtml.
    \19\ CFIA: Latest Canadian BSE Case Likely Born in 2000, Dow Jones 
Newswires, CattleNetwork Today, February 8, 2007.
    \20\ Terrestrial Animal Health Code--2006, OIE, Article 2.3.13.11. 
(2)(a).
    \21\ See Terrestrial Animal Health Code--2006, OIE, at Article 
2.3.13.8.
    \22\ See Id. at Article 2.3.13.7.
    \23\ See Surveillance for Bovine Spongiform Encephalopathy, 
Terrestrial Animal Health Code--OIE--2006, Appendix 3.8.4.1, Tables 1 
and 2.
    \24\ See BSE Enhanced Surveillance Program, Canadian Food 
Inspection Agency, available at http://www.inspection.gc.ca/english/
anima/heasan/disemala/bseesb/surv/surve.shtml#num.
    \25\ BSE Testing Results, U.S. Department of Agriculture, Animal 
and Plant Health Inspection Service, September 1, 2006, available at 
http://www.aphis.usda.gov/lpa/issues/bse_testing/test_results.html; See 
also BSE Ongoing Surveillance Program, U.S. Department of Agriculture, 
Animal and Plant Health Inspection Service, available at http://
www.aphis.usda.gov/newsroom/hot_issues/bse/surveillance/
ongoing_surv_results.shtml.
    \26\ See, e.g., Federal Register, Vol. 62, December 16, 1997, at 
65747, 65748.
    \27\ Livestock and Poultry: World Markets and Trade, U.S. 
Department of Agriculture, Foreign Agricultural Service, Circular 
Series, DL&P 2-06, October 2006, available at http://www.fas.usda.gov/
dlp/circular/2006/2006 %20Annual/Livestock&Poultry.pdf.
    \28\ Terrestrial Animal Health Code--2006, OIE, Article 2.3.13.3. 
(3)(b).
    \29\ Economic Analysis Final Rule, Bovine Spongiform 
Encephalopathy: Minimal-Risk Regions and Importation of Commodities, 
U.S. Department of Agriculture, Animal and Plant Health Inspection 
Services, December 20, 2004, at 24.

    Senator Dorgan. Mr. McDonnell, thank you very much. And, 
finally, we will hear from Mr. Elwood ``Woody'' Barth, who is 
here representing the North Dakota Farmers Union, and we 
appreciate you being here. You may proceed.

  STATEMENT OF ELWOOD ``WOODY'' BARTH, STATE SECRETARY, NORTH 
                      DAKOTA FARMERS UNION

    Mr. Barth. Thank you, Senator Dorgan. It is good to be 
here. For the record, my name is Woody Barth. I am a livestock 
producer from Solen, North Dakota, and also serve as State 
Secretary of the North Dakota Farmers Union, the state's 
largest general farm organization.
    Today I am here representing the members of the North 
Dakota Farmers Union, and I thank you for the opportunity to 
appear before you and focusing on the United States Department 
of Agriculture's proposed rules.
    USDA proposed rules that allow for liberalized importation 
of Canadian beef and cattle do not address the issues of safety 
of our Nation's producers. The United States cattle producers 
continue to have no assurances that Canada has its BSE problem 
under control.
    The rules will call for allowed importation of beef and 
cattle of all ages, including animals born after March 1, 1999. 
Live animals must have an ID plus a permanent tattoo that will 
allow Canadian officials to certify the age of animals. These 
rules have no clarification as to what will happen if another 
BSE case is found as relates to our trading partners, and no 
explanation of how USDA plans to separate Canadian beef from 
U.S. beef for export.
    Just 2 weeks ago, Canada confirmed its ninth case, possibly 
the tenth case if you count the animal in Washington State, for 
BSE positive. The recent animal was six-and-a-half years old, 
which falls within USDA's proposed age limit to expand beef and 
cattle trade with Canada.
    Just recently, Canadian cattle entered the United States 
without government-required health papers or identification 
tags in Washington State. Because of these events, we believe 
American producers and consumers deserve better than what USDA 
is proposing.
    North Dakota Farmers Union believes livestock health is 
critical to production agriculture and our Nation's ability to 
provide a safe food supply. We believe the following items need 
to be addressed prior to expanding beef and cattle trade with 
Canada:
    First of all, Canadian cattle need to be proved and 
verified that their cattle herd and beef products are BSE-free.
    Canada must prove and verify 100 percent compliance with 
the ruminant feed ban.
    The U.S. international beef export markets are firmly 
reestablished first, and we also call for mandatory country-of-
origin labeling to be fully implemented before this rule takes 
effect.
    We call for increased level of surveillance, quarantine, 
and inspection and testing at all U.S.-Canadian border 
locations.
    Impose similar guarantees concerning livestock feed 
production from all trading partners and require Canada to 
allow the U.S. to perform random investigations and testing of 
their production facilities as a condition of market access.
    Rapid-test technology is provided to all domestic 
slaughtering facilities to provide stability to the cattle 
market and another layer of confidence to the American 
consuming public.
    We also call for a guaranteed economic safety net for 
American producers if this importation of cattle and beef 
products from BSE-positive countries negatively impacts 
domestic profitability here in America.
    In the interest of U.S. producers and consumers, USDA 
should withdraw the proposed rule to expand Canadian beef and 
cattle imports. The Department should also move to immediately 
implement mandatory country-of-origin labeling, which would 
allow consumers to make an informed choice of where their food 
comes from.
    With that, Senator, I would thank you for being here, and I 
would answer any questions.
    [The prepared statement of Mr. Barth follows:]

 Prepared Statement of Elwood ``Woody'' Barth, State Secretary, North 
                          Dakota Farmers Union

    My name is Elwood ``Woody'' Barth. I am a livestock producer from 
Solen, North Dakota, and also serve as the State Secretary of the North 
Dakota Farmers Union, the state's largest general farm organization. 
Today I am here representing the members of North Dakota Farmers Union. 
Thank you for the opportunity to appear before you and for focusing on 
the United States Department of Agriculture (USDA) proposed rules.
    The USDA's proposed rules that allow for liberalized importation of 
Canadian beef/cattle do not address the issues of safety for our 
Nation's producers. United States cattle producers continue to have no 
assurance that Canada has its BSE problem under control.
    The rules will call for allowed importation of beef/cattle of all 
ages, including animals born after March 1, 1999. Live animals must 
have an ID plus a permanent tattoo that will allow Canadian officials 
to certify age of animals. These rules have no clarification as to what 
will happen if another BSE case is found as it relates to our trading 
partners, and no explanation of how USDA plans to separate Canadian 
beef from U.S. beef for export.
    Just 2 weeks ago, Canada confirmed its ninth BSE-positive case. The 
recent animal was 6.5 years old, which falls within USDA's proposed age 
limit to expand beef/cattle trade with Canada. Just recently, Canadian 
cattle entered the United States without government-required health 
papers or identification tags in Washington State. Because of these 
events, we believe American producers and consumers deserve better than 
what USDA is proposing.
    North Dakota Farmers Union believes livestock health is critical to 
production agriculture and our Nation's ability to provide a safe food 
supply. We believe the following should be addressed prior to expanding 
beef/cattle trade with Canada:

   Canada can prove/verify their cattle herd and beef products 
        are BSE-free;

   Canada can prove/verify 100 percent compliance with the 
        ruminant feed ban;

   U.S. international beef export markets are firmly 
        reestablished;

   Mandatory country-of-origin labeling is fully implemented;

   Increased level of surveillance, quarantine, inspection and 
        testing at all U.S.-Canadian border locations;

   Impose similar guarantees concerning livestock feed 
        production from all trading partners and require Canada to 
        allow the U.S. to perform random investigations and testing of 
        their production facilities as a condition of market access;

   Rapid-test technology is provided to all domestic 
        slaughtering facilities to provide stability to the cattle 
        market, and another layer of confidence for the American 
        consuming public; and

   A guaranteed economic safety net for American producers if 
        the importation of cattle and beef products from BSE-positive 
        countries negatively impacts domestic profitability.

    In the interest of U.S. producers and consumers, USDA should 
withdraw the proposed rule to expand Canadian beef and cattle imports. 
The department should also move to immediately implement mandatory 
country-of-origin labeling which would allow consumers to make an 
informed choice of where their food comes from.

    Senator Dorgan. Mr. Barth, thank you very much. Let me ask 
questions first of Dr. DeHaven and then perhaps others, as 
well. Dr. DeHaven, it has seemed to me that the Secretary of 
Agriculture has been more than anxious to open this market up, 
almost like a cattle drive from Canada. You know, ``I'm ready 
to go and, Katie, bar the door.'' And I don't understand that. 
I would expect an approach that has the USDA saying, ``look, 
we're going to be cautious, careful. First and foremost we're 
going to protect our domestic industry to make certain that 
we're not inheriting risks that we don't now have.''
    Mr. McDonnell said you don't minimize risks by increasing 
exposure, which I agree with. So I'm trying to understand this, 
and let me ask a number of questions. Under the proposed rule, 
USDA will allow in Canadian cattle as long as they were born 
after March 1, 1999. They implemented their feed ban in August 
1997, so you allow 6 months after the feed ban and give it a 
chance to work through the system. Then you add an additional 
year for good measure, and so that becomes the date.
    However, looking at the timeline of the BSE cases, four of 
Canada's cases have been found in animals born after the feed 
ban. Three of them were in animals born after March 1, 1999. So 
why does the USDA think it's appropriate and safe to import 
cattle born after March 1, 1999, given that one-third of the 
BSE cases were born after that date? Does that not give USDA 
some pause?
    Dr. DeHaven. Thank you, Senator. Let me first reflect on 
your initial comment about Secretary Johanns and his interest. 
The Secretary has been very clear from the beginning that our 
trade policies need to be based on sound science and 
consistency with the international standards. So we believe 
that, in fact, our initial minimum-risk rule and this proposal, 
in fact, are in keeping with the science as we know it today, 
and it is evolving rapidly, and, second, will get much more 
consistency with the international standards than what we 
currently have.
    With regard to the March 1, 1999, feed ban, let me just 
clarify slightly from what you indicated in terms of how we 
came to that date. The United States and Canada both 
implemented almost identical feed bans at the same time, August 
1997.
    In the risk assessment that we did to support this rule, we 
estimated that it would take approximately 6 months for the 
Canadians to really implement that rule and then an additional 
year for feed that might be in their system to clear the 
system, and so came up with a date some 18 months after their 
initial feed ban was implemented.
    It's important when discussing the potential risk pathway, 
the way that BSE might find its way into the United States--
excuse me, into the United States from Canada, that we not take 
any single-risk mitigation factor and consider it by itself, 
but rather consider the entire risk pathway and all of the 
mitigations along that pathway that would mitigate any risk 
that would be posed to the United States from Canada from their 
cattle or from cattle products.
    Senator Dorgan. I'll let you continue, but let me ask a 
question about this issue of risk. The Department provided the 
minimal-risk status to Canada based on what you say were 
international guidelines; is that correct?
    Dr. DeHaven. Consistent with the international standards, 
yes.
    Senator Dorgan. Let me ask you a question. What if before 
May of this year we find an 11th case of BSE in Canadian herds? 
Is the Department at that point going to withdraw the minimum-
risk assessment?
    Dr. DeHaven. Senator Dorgan, I assume that you're referring 
to the quote on the chart that you referred me to, and I would 
just go back in history. That quote is from January 3, 2005, 
and it was consistent with what was at the time----
    Senator Dorgan. Let's put that quote up, if we can.
    Dr. DeHaven. That quote was--at the time it was stated was 
consistent with the OIE standards as they existed. The OIE at 
the time categorized countries in one of five categories. Free, 
provisionally free, minimum risk--minimal-risk, as would 
indicate on that chart, moderate risk, or high risk. A five-
category scheme, if you will.
    In May of 2005, some 5 months after that quote, the OIE 
changed their country categorization system, got away from 
comparing cattle populations and the number of positive cases 
based on that population, and went to a three-categorization 
scheme where the country is designated as either negligible 
risk, controlled risk, or undetermined risk, and instead of 
looking at just prevalence, looking again at that entire risk 
pathway. What are all of the measures that a country has in 
place to mitigate the animal health and public health risk of 
BSE?
    Senator Dorgan. I want to know whether the USDA has 
evaluated the difference between your evaluation of sound 
science and our trading partners' determination of what sound 
science means to them. It seems to me that our continued trade 
gap somehow represents a difference in judgment of our trading 
partners' evaluation of sound science and health risk versus 
USDA's evaluation.
    I'm wondering whether this plays any role in your 
consideration, or is it irrelevant? Because this gets at the 
root of what this issue means to our industry and our domestic 
producers, and it has everything to do with what our trading 
partners are interested in purchasing. You can only sell what 
people are willing to buy. You might say that's an irrational 
gap, but you can't say it doesn't exist.
    My question is: What role does USDA play in evaluating 
whether that gap means anything to the USDA or to this country?
    Dr. DeHaven. Senator, I don't mean to suggest that the 
Department is ignoring the economics and the chart as you've 
presented, but looking at a longer-term picture, if you'll 
recall, if we go back to May of 2003, there were really two 
standards: Countries that were affected by BSE and the rest of 
the world cut off all beef and beef products and animals from 
those countries, and then countries that were not affected and 
there were no restrictions. And we were part of that problem, 
not consistent with the international standards.
    Since May of 2003 we have worked to make our trade 
policies, our regulations consistent with the science and 
consistent with international standards. If, in fact, we are 
successful in doing so both domestically, then we are in a 
better position of convincing trading partners to likewise use 
the science and use the OIE standards as a basis for 
determining their trade policies.
    I have not been directly involved in the trade discussions, 
but I have had discussions with a number of countries on BSE 
and their ongoing restrictions of beef and beef products, and 
as we hammer those countries to accept our beef and beef 
products based on international standards, their first response 
is yes, but you need to get your policies in the United States 
consistent with the science and then come talk to us, because, 
in fact, our regulations have not been. This rule will go a 
long way toward making our standards consistent with----
    Senator Dorgan. I don't think we need any lectures from any 
of our trading partners about our standards. The fact is we 
have the best supply of beef in the world, the safest supply of 
beef in the world, and we don't need anybody lecturing us about 
that.
    But my question here is about a gap. It seems to me the 
market has made a judgment.
    You say this is sound science and this gap seems to play no 
role. I'm just saying, Dr. DeHaven, if this plays no role, then 
we're in big trouble because this has to play a significant 
role in the decisions we're making.
    Perception is everything. Others around the world perceive 
that there is a problem. Let me refer you to the Chicago 
Tribune the day before yesterday, which you're probably 
familiar with. The Chicago Tribune headline, ``Canadian cattle 
slip past USDA safeguards. Critics fear problems could lead to 
mad cow,'' and it's a story about cattle coming in without 
identification, without papers, and so on, slipping through the 
system, or as one of my friends called it, holes in the dike.
    So, you know, my concern here is we're ignoring the 
obvious, and I'm trying to understand the urgency the Secretary 
sees in rushing to make this decision.
    We have a comment period that is still open, but when you 
look at the statements of the Secretary of Agriculture, I'm 
hard pressed to see that any comments are going to do anything 
to change a mind that's already closed on this issue. Disabuse 
me of that, if you can.
    Dr. DeHaven. Thank you, Senator. And let me first make it 
very evident and clear that the Secretary is acutely aware of 
the economic impact of the current situation indeed. We have 
sent countless trade teams around the world to reopen the 
markets, to push the science, and, in fact, we have been 
largely successful in terms of reopening those markets with----
    Senator Dorgan. That's not true. Look at that chart.
    Dr. DeHaven. Indeed.
    Senator Dorgan. I'm sorry to interrupt you, but this is not 
true.
    Dr. DeHaven. I'm not suggesting that we don't have a ways 
to go. In fact, it's work in progress. My point being the 
economics of this situation are certainly not lost on the 
Secretary or anyone in the Administration.
    Senator Dorgan. But they don't play a role in this judgment 
of whether to open the market; is that correct?
    Dr. DeHaven. In fact they do, and an economic impact 
analysis was part of the rule as it was published as a 
proposal. You know, I suspect that economists are much like 
lawyers. If you have six of them in the room, you'll have six 
different opinions. We value and respect the opinion of Dr. 
Keith Collins, our Chief Economist, and his staff, who have 
done a thorough economic analysis of this rule. Here again, 
that's part of this process where we would welcome comments on 
the economic impact analysis.
    Dr. Collins and his staff would suggest that this rule 
taken by itself, not ignoring the situation, but in fact 
putting into context what this rule would do, the overall 
economic impact on the United States would be favorable. 
Clearly there would be a reduction----
    Senator Dorgan. You said what? Tell me again.
    Dr. DeHaven. Would be a favorable outcome in the long term, 
recognizing that, in fact, there would be lower prices in cull 
cattle in the United States, but in terms of the impact on fed 
cattle, feeder cattle and products from those animals, this 
rule would be--would result in no change or even a slight 
increase to producers in this country.
    Senator Dorgan. You know, I know Keith Collins, and I wish 
he had about a thousand head of cattle that he owned and then 
give his judgment. I used to teach a little economics myself, 
but I was able to overcome that. You know, I understand. You 
can get whatever you pay for from the economists, but I do 
think that there are several issues here that are important.
    One is the fact that Canada has decided that it's going to 
revise its feed ban in order to make it more effective. That's 
my understanding; right? So Canada's taking steps to make it 
more effective. What's the implication of that? They've 
determined that the feed ban needs to be made more effective 
because it is not effective at this point, or at least it is 
not completely effective. If that's the case, again, I don't 
understand the urgency and the rush by the Secretary to do 
this.
    I'm going to ask some other questions and then I'll come 
back to you, Dr. DeHaven, if I might.
    Commissioner Johnson, let me ask your assessment of USDA's 
evaluation of both the public health side of this and the State 
Veterinarian's evaluation of the prospect of additional cases 
coming in and its impact on the U.S. herd.
    Mr. Johnson. Well, I don't know that I can answer the 
public health side of this. I mean, the statement has been made 
and I believe it to be accurate that we should not be fearful 
that this is going to increase the problem that we have, that 
it's going to make our beef less safe in this country. I think 
this is largely--as you indicate, it's about that economic gap 
and it's about how folks are perceiving this to be, and the 
result of that is that economic gap. If I can----
    Senator Dorgan. But the perception--I'm asking about the 
perception of public health, and I think this is a very fine 
line. None of us want any American consumers to believe that 
we've got a problem here because we don't, but we could import 
a problem, and we don't want to be importing someone else's 
problem.
    Mr. Johnson. Let me answer the question this way, Senator: 
I think USDA made a critical mistake a number of years ago when 
there was a small company by the name of Creekstone that was 
asking for the right to test every animal, and the reason they 
were asking for that right was because in Japan that is exactly 
what they were doing. They have a problem with BSE in Japan and 
so they tested every animal. That was what the consumers 
wanted, and so they wanted the same thing from us. If they were 
going to import beef from the U.S., they said, well, of course, 
but you need to test every animal. We refused to allow them 
that right.
    And so certainly in the minds of the Japanese consumers 
there is a higher risk associated with importing beef that has 
not been tested where there's known to have been at least a 
case or several cases of BSE. Now that gets to the question of, 
you know, is there a--does the consumer believe there to be a 
risk? In America I don't think that's the case, but certainly 
in Japan it is.
    Senator Dorgan. Dr. Keller, do you have anything to add to 
Dr. DeHaven's testimony today with respect to the standpoint of 
number of cases of BSE we might see and its impact?
    Dr. Keller. The only comment I'd like to add is that if we 
look at the science, we really have to look at where we're at 
with OIE guidelines, and we still have not been assigned a 
status by OIE as a country nor has Canada. If we would be 
what--I've seen Dr. DeHaven quoted recently saying that we 
might be a controlled-risk status country. In the Minimal Risk 
Rule 2 automatically we would not be in compliance or we would 
not be meeting those guidelines. Animals over 30 months of age, 
the SRMs--there's a list of them, I could read them to you--we 
should not be allowing those into this country. Minimal Risk 
Rule 2 does not address what would be required as a controlled-
risk status country.
    Senator Dorgan. So if we have additional cases of BSE that 
are imported into this country, which USDA says will happen--
the question isn't whether, the question is how many--then that 
puts us in a more significant risk category?
    Dr. Keller. Absolutely. We cannot have it both ways. We've 
either got to do what Canada's doing or we don't let those 
older-age cattle in.
    Senator Dorgan. And the consequences of that then are on 
this chart in terms of our trading partners' perception of our 
product; is that correct?
    Dr. Keller. Yes. Some of it's perception, some is reality, 
though. We cannot be at an unequal status.
    Senator Dorgan. I understand that if you import risk, 
that's real. I understand that. And that has an impact on our 
trading partners' assessment of our product.
    Dr. Keller. Correct.
    Senator Dorgan. And that gap is real, and gets back to Mr. 
McDonnell's statement that he put, I thought, in a very concise 
way. You don't minimize risk by increasing exposure. Mr. 
Huseth, you know, some economists, would take a look at you and 
say, you know what you are, you're just a protectionist. You 
want to keep everything out of here and the world has changed, 
get with it, free trade, open the borders, and do a little 
testing, but you know what, you're just protectionists. That's 
what some would argue. Not me, but some will argue that. So 
respond to that.
    Mr. Huseth. Senator, we probably are protectionists because 
we're protecting our own producers, protecting the product that 
we think is safe and that we do produce. So in a way we are 
protectionists, but we still are open minded enough to know 
about the free trade and what goes on in that arena.
    Senator Dorgan. How important is country-of-origin labeling 
to you as a rancher?
    Mr. Huseth. Country-of-origin labeling to me, is very 
important. I think we need to look at that, and for our 
situation we can do that right now, if we want, start tagging 
and not wait for the government to go through their 
bureaucracy, but I think some of that has to be done. Seems to 
be a real holdup at your end of the participation in the 
government. They always come up with ideas but never have the 
solutions or the ways to get there, and I think that's a 
problem, and country-of-origin labeling is an important thing 
in our industry.
    Senator Dorgan. Mr. McDonnell, you've missed the whole--
they would say you've missed the whole world movement of free 
trade and you're just coming here saying I want to protect my 
own economic interests. Anything wrong with that?
    Mr. McDonnell. Well, thank you, first of all, for calling 
me a protectionist. That's what I would tell them. I'm not an 
isolationist, though. In fact, we have extended members of our 
family--one cousin's boy is over in Afghanistan today 
protecting this country. So I don't know if I deserve to be 
quite in that crowd, but thank you.
    We participate in our own business very much in the 
international market with semen sales across the world. We're 
one of the largest, if not the largest, sellers of breeding 
bulls. We have more bulls and semen studs than anybody else in 
the market, so we're very active in it.
    Establishing trade guidelines that are smart, that are 
fair, in this case that are responsible to consumers and 
producers is--could hardly be called protectionist. I call them 
responsible and fair practices, and, you know, it's so funny, 
Senator, every time we get into this debate, these folks don't 
seem to be able to debate us on the issues. It's like a bunch 
of little kids on a school ground, the first thing they do is 
go to name calling.
    I'm very proud of what we've done. I'm very proud of what 
you've done.
    Senator Dorgan. Thank you very much. Mr. Barth, the North 
Dakota Farmers Union has an official position on this issue. 
Does the National Farmers Union have a similar position?
    Mr. Barth. Thank you, Senator Dorgan. Yes, they do. They 
believe that there needs to be protection for the U.S. beef 
market; that the U.S. beef market needs to be protected; that 
we have a safe supply of food here and that needs to be 
protected. As you stated, we can't import a problem.
    And also we call for mandatory country-of-origin labeling 
both on the North Dakota level and national level. We want that 
implemented immediately. As you said, there have been many 
delays in that process of implementing country-of-origin 
labeling.
    Our history in North Dakota and the National goes back to 
the early Nineties in supporting country-of-origin labeling. We 
have a long history there, and we believed that would be a part 
of the solution before we do open up the border to Canadian 
trade of animals over 30 months of age.
    Senator Dorgan. Dr. DeHaven, we just talked a bit about 
importing risk. Is it USDA's contention that opening this 
market will not import risk, or is it your understanding that 
there will be some risk imported as a result of this?
    Dr. DeHaven. Senator, we're characterizing the risk as 
negligible, again, looking at having done a thorough science-
based risk analysis consistent with the OIE standards, looking 
at the entire pathway and looking at the mitigations that are 
in place along that entire pathway. If you'll permit me, I'll 
go through some of those steps that we have considered and 
those risk mitigation measures that are in place.
    Senator Dorgan. I certainly will permit that. I'd also like 
you to comment, as well, on Canada's tightening of their feed 
standards and whether you saw that as evidence that the current 
feed standards were inadequate, and if so, did that play a role 
in your judgment?
    Dr. DeHaven. Certainly. Our risk assessment of the Canadian 
situation and the risk that it would present to the United 
States begins with a prevalence estimate. The Canadians have 
implemented an enhanced BSE testing program much like what we 
carried out for 2 years beginning in June of 2004.
    They have tested a comparable--in fact, based on percentage 
of--relative percentage of adult cattle populations, I think 
they've actually exceeded the number of high-risk animals that 
they tested. We used the exact same methodology to determine 
the prevalence of BSE in the Canadian cattle herd that we used 
domestically based on our testing program to determine our 
prevalence.
    Senator Dorgan. Dr. DeHaven, I'm going to apologize for 
interrupting you, but I want to try to understand this as you 
go through it, and I think those who have come here would like 
to understand it, as well. You're talking about prevalence. I 
want to ask the question: Is BSE more prevalent in Canada than 
in the U.S.? If prevalence is a standard, based on what we know 
and based on existing cases, is it more prevalent in Canada 
than the U.S.?
    Dr. DeHaven. We estimate the prevalence in Canada in their 
adult cattle population to be 6.8 positive animals per ten 
million adult cattle. That's somewhere less than one in a 
million. Looking at the assessment that we did and prevalence 
estimate that we did for the United States, we estimated it to 
be somewhat less than one in a million. So they are certainly 
in the same ballpark based on extensive surveillance programs 
in both countries.
    Senator Dorgan. But the answer is if you start with the 
first point being prevalence, currently what we understand is 
there's a greater prevalence of BSE cases in Canada than in the 
U.S.?
    Dr. DeHaven. I can't say that, Senator.
    Senator Dorgan. I thought you just said that.
    Dr. DeHaven. No, no. I said that based on the estimate that 
we've done, which uses the enhanced testing surveillance 
programs in both countries----
    Senator Dorgan. How about based on what we know in terms of 
confirmed cases?
    Dr. DeHaven. Based on confirmed cases, as well as the 
population of negative tests that we have, we're estimating the 
prevalence in Canada to be 6.8 positive animals, less than 
seven animals per ten million adult cattle. That's somewhat 
less than one positive animal in a million. When we did the 
assessment for the U.S. national herd, we estimated the 
prevalence at somewhat less than one in a million.
    Senator Dorgan. OK. We're just discussing different 
subjects because I'm trying to ask the question of the 
documented cases of BSE in the two markets. There's a greater 
prevalence of documented cases in Canada than in the U.S. 
You're describing a testing regime. That's not what I was 
asking, but why don't you proceed to the second point.
    Dr. DeHaven. Well, I will concede, Senator, that we have 
found two indigenous cases in the United States with all the 
testing we have done. The Canadians have found ten indigenous 
or ten native-born cases there. I'm talking about what you can 
infer from a statistical basis from that testing or from the 
testing programs in both countries.
    Senator Dorgan. But if I'm a customer, I look at the United 
States and Canada and what I see is more cases of BSE being 
disclosed in Canada than the United States; is that correct?
    Dr. DeHaven. There has been, yes, sir. But I think for the 
entire picture you need to look at the statistical analysis of 
all of the data rather than drawing conclusions simply on the 
raw numbers of animals that have tested positive.
    Senator Dorgan. I appreciate USDA's advice to the Japanese 
and the Koreans and others, but I'm not sure that's the way 
they will evaluate that. I think they will look at what they 
know to be the case in the United States and Canada based on 
what we have discovered in both countries. But proceed to the 
second point.
    Dr. DeHaven. OK. Again, Senator, I'm discussing the various 
measures and issues that we considered in developing that risk 
analysis and upon which this rule was based. First was the 
prevalence, and while we can argue about the finite number of 
cases that might be in either country, needless to say 6.8 
positive animals out of 10 million adult animals is a very low 
prevalence of the disease.
    Second, we did look at their feed ban, and just to clarify 
one point, our risk assessment was based on the feed ban that 
currently is in place in Canada, not the enhanced feed ban that 
they plan on imposing. So our determination that there is 
negligible risk is based on their current feed ban, and their 
enhancement of that feed ban can only improve the overall 
situation, continue to reduce whatever risk there might be.
    Senator Dorgan. Let me ask a question about that, because 
if the Canadians have judged their feed ban needs to be 
tightened, they obviously think something is deficient with 
respect to what they were doing. Or at least that it should and 
could be improved. Did you make that same judgment when you 
looked at the Canadian feed ban?
    Dr. DeHaven. We haven't looked at the enhanced feed ban. We 
conducted our risk assessment in the context of their existing 
feed ban. I think this goes without saying, though, that the 
enhancements that they're talking about will accelerate the 
time that any infectivity in the Canadian feed will be 
eliminated from the national feed supply.
    Senator Dorgan. But you gave them minimum-risk status at a 
time when they had a feed ban which they now believe needs to 
be strengthened. Did you reach that same judgment as you were 
giving them a minimum status?
    Dr. DeHaven. Again, we have based that minimum region 
categorization on the existing feed ban, not the enhancement.
    Senator Dorgan. And you felt the existing feed ban was fine 
and adequate?
    Dr. DeHaven. Correct.
    Senator Dorgan. And the Canadians apparently think it was 
inadequate because they now are making changes to strengthen 
it.
    Dr. DeHaven. I think the Canadians are looking at a number 
of factors, not the least of which is a cost benefit analysis. 
What is the cost of enhancing their feed ban compared to the 
potential return that they might realize in increased export 
markets by enhancing that feed ban? So I'm not sure that it's 
necessarily based totally on risk. It's also looking at the 
cost benefit and long-term--what that enhanced feed ban might 
do in terms of increasing their export markets.
    Senator Dorgan. So, therefore, the Canadians might be doing 
this based on the perception of risk rather than risk itself, 
which gets back to the entire point that I've been making this 
morning. This is all about perception, isn't it, in terms of 
people who are interested in purchasing a product from us who 
have a perception based on the prevalence of cases that have 
been documented in Canada versus the U.S.?
    Dr. DeHaven. Senator, I don't think we could have this 
discussion without considering the biological sciences, the 
political science, and the economic science of the whole 
situation. We are doing so and I'm sure the Canadians are doing 
likewise.
    It really comes down to a cost benefit analysis on their 
enhanced feed ban. If there is infectivity in the Canadian feed 
supply, and there's evidence that there is, increasing the 
removal of SRMs, enhancing that feed ban will accelerate the 
time period that it takes for them to totally eliminate that 
infectivity from their feed.
    We would estimate that just having the ruminant-to-ruminant 
feed ban in place that they have, like we have in the U.S., 
will eliminate infectivity from either country's feed supply. 
Their enhancements will accelerate that process.
    Senator Dorgan. But the point is they didn't have to 
improve their feed ban or make changes with respect to the feed 
standard. They didn't have to do that because you would already 
allow under the current system 1.3-million head of Canadian 
cattle to come into the country in 2007.
    Dr. DeHaven. Well, I would just remind you, Senator, this 
is a proposed rule. I think these are all relevant comments, 
but your premise is accurate. We based the proposed rule on 
their existing feed ban, not the enhancements that they plan 
putting in place in July of this year.
    Senator Dorgan. So the Canadians weren't worried about our 
perception because USDA's perception was that their feed ban 
was fine.
    Dr. DeHaven. Well, in fact, we are not the only market for 
Canadian exports.
    Senator Dorgan. But 1.3-million head is a pretty 
substantial market.
    Dr. DeHaven. It is indeed. It is indeed. Continuing then 
with looking at the entire risk pathway, we first did a 
prevalence. We considered the feed ban that they had in place, 
which again is consistent with ours and has been in place for a 
similar period of time. Recognize that even if an animal is 
infected early in life, it does not represent a risk to either 
animal health or public health until just a few weeks before it 
develops clinical signs and then would be excluded from the 
feed supply, which gets to the Creekstone testing issue that is 
an entirely different discussion, but, in fact, an animal that 
is infected will not test positive, will show no clinical 
signs, and represents no animal health or public health risk 
until just a matter of a few weeks before it develops clinical 
signs and then will die.
    So part of the analysis is recognizing that there may be 
infected animals in Canada. Most likely they would be imported 
into the United States well before the age that they would 
develop clinical signs, well before they would represent any 
infectivity to our cattle herd or to public health in the 
United States.
    So, again, you're taking that prevalence of infected 
animals and further reducing the risk and that there's a narrow 
window of time when even an infected animal represents risk to 
animal health or public health.
    Second, when the animal comes across the border, we are 
going to remove those specified risk materials, tonsils and 
that distal ileum from animals of all ages, and the other SRMs 
for animals that are over 30 months of age. So we have, in 
addition to the SRM removal, various slaughtering practices in 
place that will minimize that risk, ensuring that practices to 
recover some of the meat don't include, for example, nervous 
tissue, ensuring that stunning isn't used or a pneumatic 
device, which could put nervous tissue into the meat, as well. 
So those practices are in place to protect public health.
    On the animal health side it would require--here again, an 
animal that's infected that's in that narrow infected window to 
get into a rendering plant. That rendering plant in the U.S. is 
going to apply procedures, such as heat and pressure, that will 
reduce any infectivity, and then on top of that we have a 
ruminant-to-ruminant feed ban. So even if there is infectivity 
in that feed, it shouldn't be fed to susceptible animals in the 
United States.
    All of those breaches would have to occur in the United 
States to represent a risk for a positive animal. If all of 
those safeguards were breached and you did end up with an 
infected animal in the United States, I would just remind you 
that that animal, when it goes to slaughter, is going to be 
subjected to the same SRM removal and slaughtering practices. 
Its tissues are going to be subjected to the feed ban and 
shouldn't end up in animal feed.
    So, again, we are not looking at a single issue, such as 
the effectiveness of the feed ban, to mitigate risk. We're 
looking at the entire risk pathway and in doing so have 
determined that the risk to the United States from this rule 
would be negligible.
    Senator Dorgan. But, again, that ignores that risk, which 
is perception. And the other thing I don't understand is we're 
talking about all these dates and your scientific analysis. 
One-third of the BSE cases that have now been discovered are 
cases in cattle that were born after March 1, 1999, long after 
the feed ban went into effect.
    Dr. DeHaven. Mr. Chairman, excuse me for interrupting. No 
one is ignoring that trade gap. It is real. The Secretary 
understands it acutely. Everyone in the Department understands 
that trade gap, and we are working mightily to overcome that. 
What we are saying--and this is subject to your comments and we 
would welcome them--is that the impact of this rule will be 
negligible on that gap. It's not going to make that gap worse.
    Senator Dorgan. Dr. DeHaven, the Secretary is ignoring that 
gap. That's not speculation. He is ignoring that gap by 
trotting out this rule. He's ignored that gap, and the fact is 
there is no economist in the world that will convince me that 
this rule and what you intend to do with respect to the import 
of these cattle is inconsequential to that gap. I mean, that 
represents a very substantial economic injury, and I understand 
what's happening there. That has to be a part of the 
evaluation, and again I come back to the point, I don't 
understand the Secretary's urgency here. He has seemed so 
anxious to get this done. Well, for whom? Why? I don't 
understand it.
    And I do think with due respect you've come here to make 
the case of why you have done what you've done leading up to 
the end of the comment period, but frankly, I don't think the 
explanation holds water. I just do not.
    I described the size of this industry to our country. I 
described what we have done over a long period of time to try 
to make certain the world knows that we have the safest beef 
supply in the world, and I do not understand why we would 
increase our exposure, and I think the evidence is quite clear. 
We'll increase our exposure by rushing in this circumstance.
    The country-of-origin labeling is very important, and I'm 
going to find a way to introduce something here very soon in 
the Senate that will try to prevent USDA from implementing this 
new rule prior to implementation of country-of-origin labeling 
in this country. At the very minimum--that ought to be the 
first step. There ought to be country-of-origin labeling before 
we even whisper about this sort of move, and yet the Secretary 
has been so anxious to move so quickly.
    So, Dr. DeHaven, you are someone with a scientific 
background, you're a public servant. I appreciate your being 
here. We have very strong disagreements, and I think you and 
the Secretary know there's great anxiety out here in the 
country where people are trying to make a living about what has 
happened, and this chart shows it in a very dramatic way. What 
has happened is very consequential.
    Let me thank our witnesses for being here and for your 
entire statements. I know you've summarized. Your entire 
statements will be a part of the permanent records of the 
Commerce Subcommittee hearing. Let me ask you to go ahead and 
depart from the table, and I'm going to ask others who may wish 
to make a comment to come to the open mike so that they can 
contribute, as well, and I thank all six of you for being here.
    State Rep. Rod Froelich had asked to speak, and I believe 
he has introduced some legislation in the--is that right, in 
the state legislature, Rod?

 STATEMENT OF HON. ROD FROELICH, REPRESENTATIVE (DISTRICT 31), 
               STATE OF NORTH DAKOTA LEGISLATURE

    Representative Froelich. Yes, Senator.
    Senator Dorgan, I'd like to conclude this by just giving a 
little history. Senator Dorgan and guests, for the record, my 
name is Rod Froelich. My family has been ranching in Sioux 
County for over 80 years. I have a 15-year-old grandson who 
will be the fifth-generation rancher.
    Senator, as you well know, I represent District 31, which 
includes all of Sioux County, all of Grant County, one-half of 
Hettinger County, and a large portion of Morton County, which 
is comprised of 3,710,000 acres and approximately 130,000 beef 
cows.
    My constituents have been through blizzards, floods, 
tornadoes, droughts, and fire. To say that they have been 
tested would be a huge understatement--not tested. Senator, as 
you know, we raise some of the finest crops, hardiest cattle, 
and some of the toughest people in the world. Of course, 
Senator, you are living testament to my words.
    Senator, all it takes is a little common sense to 
understand that opening the border to Canadian cattle over 30 
months of age at this time is not a very wise option. Canada is 
still experiencing cases of BSE. It is not in the best interest 
of the consumers or the producers of livestock to contemplate 
such actions until Canada has installed preventive measures to 
stop the prevalence of BSE in their country.
    Our Far East trading partners have seriously restricted the 
importation of our livestock products, when, in fact, that 
cause of their concern is created by our Canadian trading 
partners.
    Senator, until we have assurances by our trading partners 
that our commerce will not be hindered, the United States is 
obligated to protect its consumers and its producers.
    Senator, there's been a resolution introduced in the House 
of Representatives, State of North Dakota, that has passed the 
House Agriculture Committee, it has passed the full House in a 
unanimous vote, and if I may, can I read it?
    Senator Dorgan. How long is it?
    Mr. Froelich. Very short, sir.
    Senator Dorgan. Proceed.
    Mr. Froelich. A Concurrent Resolution urging Congress not 
to allow the importation of Canadian cattle over 30 months of 
age.
    Whereas, in 2003 the United States border was closed to 
Canadian cattle in response to findings of bovine spongiform 
encephalopathy, BSE, in cattle; and
    Whereas, after the implementation of corrective measures, 
the border was reopened in 2005 to Canadian cattle less than 30 
months of age; and
    Whereas, many fear that consideration is now being given to 
the removal of the age restriction on Canadian cattle; and
    Whereas, cattle over 30 months of age which originate in a 
BSE-affected country have an inherently higher risk of being 
infected with BSE; and
    Whereas, there has been insufficient time since Canada's 
last case of BSE to determine whether the corrective measures 
implemented by Canada have been successful in preventing the 
spread of BSE; and
    Whereas, the United States cannot afford any further 
reduction in its share of the global beef market stemming from 
the American products that contain beef from Canadian cattle; 
and
    Whereas, the United States should not further relax its 
already lenient import standards until it is scientifically 
documented that BSE is no longer a risk in Canadian cattle and 
there is international acceptance of that conclusion, as 
demonstrated by a restoration of international markets--like 
you said, Senator--for American beef and beef products;
    Now, therefore, be it resolved by the House of 
Representatives of North Dakota, the Senate Concurring Therein:
    That the Sixtieth Legislative Assembly urges the Congress 
of the United States not to allow the importation of Canadian 
cattle over 30 months of age until there is scientific 
evidence, coupled with a sufficient time lapse, to ensure that 
any corrective measures implemented to counter the incidences 
of BSE in Canada have been successful; and
    Be it further resolved, that the Secretary of State forward 
copies of this resolution to the United States Secretary of 
Agriculture and to each member of the North Dakota 
Congressional Delegation.
    Thank you, Senator.
    Senator Dorgan. Rod, thank you very much. We appreciate 
your being here.

     STATEMENT OF ALLEN LUND, SECRETARY, INDEPENDENT BEEF 
    ASSOCIATION OF NORTH DAKOTA (I-BAND); COW/CALF PRODUCER

    Mr. Lund. Senator Dorgan, thanks for coming up. Thanks for 
giving us this opportunity. My name is Allen Lund. I'm a cow/
calf producer from south central North Dakota. I'm also 
Secretary of the Independent Beef Association of North Dakota, 
and I'm speaking on behalf of our member policy.
    I stand before you to voice my opposition of opening the 
Canadian border to live cattle and beef over the age of 30 
months. If this is allowed to happen at this time, we are 
further lowering the United States livestock standards in an 
attempt to allow more foreign beef into this country.
    Most of the countries that we exported beef to now have 
their borders closed to us because of a cow from the State of 
Washington that tested positive for BSE. It didn't seem to 
matter to our trading partners that this cow originated from 
Canada. Some of these countries would accept our beef again if 
we could guarantee sending them U.S. product.
    The following safeguards need to be put in place before 
allowing over-30-month-age Canadian cattle and beef to enter 
this country.
    Number one, we need the assurance that Canada is taking 
every possible precaution in eradicating BSE from their 
country. Some of the Canadian cattle that contracted BSE were 
born after Canada's feed ban was to have gone into effect. We 
have recently heard of more contaminated feed entering Canada's 
feed supply.
    Number two, we need to regain the foreign markets that 
closed their doors to us before allowing further imports of 
cattle to enter this country. Failure to do so will result in a 
glut of beef causing price devastation to our domestic 
livestock industry.
    Number three, mandatory country-of-origin labeling must be 
implemented. We will need this law to maintain and build 
confidence in U.S. beef for the domestic consumer, as well as 
the foreign consumer. It will also act as a marketing tool for 
the U.S. cattle producer.
    To put it in a nutshell, it is too early to swing the doors 
wide open to the Canadian border. We need to put common sense 
ahead of politics and just say no at this time to Canadian 
cattle and beef over 30 months old.
    Thank you.
    Senator Dorgan. Thank you very much.

STATEMENT OF HERMAN SCHUMACHER, CO-FOUNDER, RANCHERS-CATTLEMEN 
ACTION LEGAL FUND, UNITED STOCKGROWERS OF AMERICA (R-CALF USA); 
               CO-OWNER, HERREID LIVESTOCK MARKET

    Mr. Schumacher. Senator Dorgan, Herman Schumacher from 
Herreid, South Dakota, but I grew up in Zeeland, North Dakota, 
so I'm a local.
    Just a few short comments and maybe a question, but Dr. 
DeHaven mentioned that--in his statement that it would only 
affect the markets when opening the border to older-than-30-
months, that it would only kind of affect the markets of the 
cull cows. Well, right now today I think cull cows in Canada, 
using U.S. dollars, are somewhere around 25 cents, and here 
they're in the low 40s. So that devastation--but, you know, 
there might be another chart you could use, Senator Dorgan, and 
that would be one that would take you back 20 years, the dairy 
buyout.
    And at that time a million cows were slaughtered in the 
United States, and in the first week in running an auction we 
saw a decline in the feeder market of up to $15 to $20 a 
hundred. It took almost 2 years to get out of that deal. So 
that would be another economic model.
    And going back to Keith Collins, who I know pretty well, I 
think he was appointed by the Reagan Administration, and he 
could surely come up with an economic model there that could 
probably serve you both.
    Thank you.
    Senator Dorgan. All right. Thank you very much.

         STATEMENT OF JAMES SCHMIDT, COW/CALF PRODUCER

    Mr. Schmidt. Yes, Senator. James Schmidt. I'm a cow/calf 
producer from southeast of Bismarck. In the last week since the 
last cow that was tested--or last bull that was found with BSE 
in Canada, Mexico has dropped their rules now for opening their 
border to Canadian cattle. Beijing, China, is another one that 
has absolutely dropped their rules now for opening China.
    My question is: USDA people, when they're there writing 
these rules for us, this affects us. If this market drops, 
there are a lot of them with the drought this year that are 
actually going to be out of business. But are they going to be 
out of a job if it backfires? No. They'll still have a job. And 
yet we're the ones that are going to suffer for their 
decisions. So that's all I have to say.
    Senator Dorgan. Thank you very much.

        STATEMENT OF JAMES E. KRUEGER, COW/CALF PRODUCER

    Mr. Krueger. May I speak, Senator? I'm a little wobbly 
nowadays. You asked why. I can tell you why Secretary Johanns 
is so anxious to pass this. I was connected with Creekstone. We 
promised them several thousand cattle a year, a month. Ryan 
Meier called Johanns, wanted to do the BSE deal. He said, No. 
You guys are just a drop in the bucket. We've got to leave this 
to Tyson and Swift and the big boys. So right away I said that 
guy's no good.
    And this whole American deal, since the Democrats woke up 
when we got some power back there, they're so determined to get 
this NAFTA, CAFTA and SHAFTA, I mean, they're going to do their 
best. So you fellows down there, the Democrats, got to be on 
their toes, because they're going to be pushing midnight 
legislation through. Thank you.
    Senator Dorgan. Thank you.

STATEMENT OF DWIGHT KELLER, VICE PRESIDENT, AMERICAN SIMMENTAL 
                 ASSOCIATION; COW/CALF PRODUCER

    Mr. Keller. Senator Dorgan, thank you for holding this 
hearing and giving us an opportunity to speak here. I'm Dwight 
Keller from south central North Dakota, cow/calf producer.
    There's one issue, I guess, that I'd like to bring up to 
Dr. DeHaven that he did not address, and it's the 
pharmaceutical use of blood, and I know there's a big concern 
with the safety of the blood that is put in the medicine that 
is not--if we commingle the Canadian cattle with ours, the only 
really safe place left to get blood for the pharmaceutical 
industry is the United States and Australia, and so we are--and 
that issue has been totally avoided by USDA, and, you know, 
prions are--have been isolated in the blood.
    And I'd also challenge you to look at some of the latest 
research that's been out in Europe that is being done on BSE, 
and that has not been considered in this rule, some of the 
latest stuff that's been done.
    And the other point I would like to make is with the animal 
ID, they want to identify our animals so we can export them 
overseas, so we can maybe be able to access that market, but 
we're going to open our border and expect our people to eat all 
the Canadian beef and we're going to keep that here and expect 
our people to eat it, but Canada and Korea do not want it. So, 
I mean, what are we telling? That it's OK for our people to eat 
it, but they don't want it?
    So I think there are a lot of concerns and we are way, way 
rushing into this, and I agree with Senator Dorgan that we need 
to step back and take a long look at this and we're way 
premature in making some of these decisions. Once it's done, 
it's too late to back up. We need to take some time and maybe 
it's 2 years, maybe it's 5 years before we make these decisions 
instead of rushing into them, and the economics is self-
explanatory.
    Thank you, Senator Dorgan.
    Senator Dorgan. Dwight, thank you very much.

          STATEMENT OF LARRY KINEV, COW/CALF PRODUCER

    Mr. Kinev. I'm compelled to ask a question of Dr. DeHaven. 
He--he made comments back to history, and in 1997 when we 
started our feed ban, USDA said that we're going to do 
everything to prevent BSE in the United States that we possibly 
can, and our number one issue is going to be not to import beef 
from countries that have known cases of BSE, and somewhere 
along the line that changed. Didn't they say that? I read 
everything, and I must have read it in 14 different 
publications. Now we're opening it up.
    And then you brought it up that somewhere along the line a 
cow is not horribly diseased until she shows signs of clinical 
symptoms. If we take the blood sample in the slaughter plant 
and the cow shows the BSE agent in the blood, is she not a BSE 
cow that we have to report? Isn't that like saying your 
girlfriend's a little bit pregnant? A BSE cow is a BSE cow, and 
we're going to have to report them to the world.
    Senator Dorgan. Dr. DeHaven, would you want to answer that 
point? Your name, sir?
    Mr. Kinev. Larry Kinev, cow/calf operator from Dawson, 
North Dakota. And if we want to get any history before you 
start on this, I'd like to go back to December of 2003. When 
our Secretary of Agriculture announced that we had our first 
case of BSE in the United States, it was a Canadian cow and the 
Canadians were bragging about their tagging program that they 
have traced back. Did she have that Canadian tag in her hand 
when she reported the case of BSE in the United States? It 
never came out that it was a Canadian cow until it was leaked 
to the press. There was a gag order out in Washington. They 
didn't talk to anybody. Comment on that, too.
    Senator Dorgan. Dr. DeHaven.
    Dr. DeHaven. Could you clarify that last point? I'm not 
sure I understand it.
    Mr. Kinev. Well, my point was that it seems like our USDA--
and I have a little bit of mistrust in them--seemed like they 
were at that time protecting the Canadian industry more so than 
the United States industry.
    Senator Dorgan. All right. Dr. DeHaven.
    Dr. DeHaven. Thank you, Senator Dorgan. I believe there are 
about four issues to address in all of that. First going back 
to the historical perspective. First case of BSE was identified 
in the United Kingdom in 1986. We knew very little about the 
disease back at that point in time. So in 1989 we, in fact, 
started imposing import restrictions on any country that 
diagnosed a case of BSE. That was appropriate at the time 
because we knew very little about the disease, how it was 
transmitted, what tissues and what parts of an animal's carcass 
represents risk.
    Someone indicated that we should be looking at the latest 
U.K. research. In fact, most of the research--because it's been 
such a big issue in U.K. and other parts of Europe, that's 
where most of the research is coming from, although we're 
adding now considerably to that research body of knowledge.
    So, in fact, we have made a change and we've made changes 
to our import policy consistent with what we now know about the 
disease, what tissues represent a risk. We now know that it's 
primarily a disease of animals over 5 years of age, even though 
they may be infected in the first few months of life. So, in 
fact, we have made some changes because we know much more about 
the disease today than we did back in 1986 when it was first 
diagnosed.
    In terms of clinical symptoms, in fact what is happening 
from a disease standpoint is the prion that is believed to 
cause the disease only starts accumulating in the nervous 
system tissues just a few weeks or few months before the animal 
develops clinical signs and dies.
    So if you have an animal that, in fact, was infected in its 
first few months of life, up until that point when it develops 
clinical signs, for the most part that animal represents no 
public health or animal health risk. The prion isn't in that 
carcass in any quantity to represent any risk. It's only in 
that latter part just before the animal develops clinical signs 
and then dies. That's when it represents a risk.
    Senator Dorgan. Doctor, on that point, though, can I ask a 
question that was asked previously? That, nonetheless, if 
tested and discovered, is it an infected animal?
    Dr. DeHaven. Indeed. That's the third point. I want to 
clarify, though, we are not testing blood tissue. We are 
testing brain tissue, and that infected animal that, in fact, 
was infected early in life will not test positive until just a 
few months before it develops clinical signs and dies. We think 
in most cases about 3 months before.
    So that animal--there's about a 3-month window when that 
animal may, in fact, test positive but be clinically normal.
    If we do get one of those that tests positive, indeed it is 
a case, it's reportable just like the animal that's exhibiting 
severe clinical nervous system disorder, and we would report 
that. It's not a blood test. It's a test on the brain tissue. I 
wish we had a blood test, and there's a lot of research being 
done to develop that so that we wouldn't have to wait for an 
animal to die before we test it.
    You know, my job is to protect and promote American 
agriculture. I take that very seriously, and it's both on the 
animal side and the plant side. We deal with wildlife issues, 
as well, but I also recognize that we have to import to export, 
and both our import policies and our export policies need to be 
based in science. We can't expect those that we are trying to 
get to accept our products to accept them on any basis other 
than science, but in doing so we also need to be willing to 
accept their products based on science.
    No one's ignoring the economic gap there. We are working 
mightily to overcome that. We can argue probably all day long 
until we're blue in the face, and even then we get another 
economist in the room and we'll probably have a different 
opinion in terms of what will be the impact, if any, on that 
trade gap from this room. No one's denying that that trade gap 
exists. I think what is at issue here is--how will it impact 
that trade gap?
    Senator Dorgan. I have to be at the Capitol in about 5 
minutes, so if there are a couple of last comments, I'd be 
happy to take them.

            STATEMENT OF PATRICK BECKER, PRESIDENT, 
         INDEPENDENT BEEF ASSOCIATION OF NORTH DAKOTA 
                  (I-BAND); COW/CALF PRODUCER

    Mr. Becker. Senator Dorgan, I'm Patrick Becker. I'm a 
rancher in Sioux County, and I guess I just want to make a 
comment.
    When I think of the United States of America, the term gold 
standard was used, and to me I interpret that as the rest of 
the world--they view the United States as the best. They buy 
the best. This is lowering our standard. You know, I don't know 
how you--what kind of standard you want to name it, but I think 
I stepped in some this morning when I was checking heifers.

        STATEMENT OF DOROTHY ORTS, PRESIDENT, GALLOWAY 
          ASSOCIATION OF THE NORTH DAKOTA STOCKMEN'S 
                 ASSOCIATION; COW/CALF PRODUCER

    Ms. Orts. I want to make just one quick comment. Dorothy 
Orts, Oriska, and I think I figured out that trade gap. When 
Dr. DeHaven said we are--we are hammering our trade partners, 
I'm a salesman and I have never sold anything by hammering my 
prospects.
    Senator Dorgan. Thank you.

    STATEMENT OF KELLY FROELICH, DIRECTOR, INDEPENDENT BEEF 
    ASSOCIATION OF NORTH DAKOTA (I-BAND); COW/CALF PRODUCER

    Mr. Froelich. Senator Dorgan, for the record, my name is 
Kelly Froelich, and I'm a rancher in Selfridge, North Dakota, 
in Sioux County, and also I'd like to clarify for the record 
that North Dakota Stockmen's Association does not represent me 
and thousands of other cattle producers in this state, but I'd 
like to--back in the late Eighties I was attending college down 
at NDSU, and my instructor said to us, imagine sitting in the 
confines of your own house and a red light goes off on your 
computer telling you that, oh, your old number favorite seven 
cow is calving, and we thought this guy is crazy. What is he 
talking about? And it's just around the corner. That technology 
is just around the corner, and now the red light is blinking on 
them cows up in Canada, and it's time that we implement COOL.
    Senator Dorgan. Thank you very much. I want to thank all of 
you who come here today. I'll recognize Mr. Gaebe in the back 
of the room here from Governor Hoeven's office. We welcome you.
    We will keep the record of this Subcommittee hearing open 
for 2 weeks. Anyone wishing to submit testimony to become a 
part of the permanent record may do so, and we would invite you 
to send it to my office or the Senate Commerce Committee within 
2 weeks from today.
    I thank all of you very much for being here. This hearing 
is adjourned.
    [Whereupon, at 11:55 a.m., the hearing was adjourned.]

                                  
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