Testimony

on behalf of the

NATIONAL CATTLEMEN'S BEEF ASSOCIATION

with regard to

Interstate Shipment of State Inspected Meat

submitted to

Senate Agriculture, Nutrition and Forestry Committee

The Honorable Richard Lugar, Chairman

submitted by

Richard Nielson

President,

Utah Cattlemen's Association

April 6, 2000

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Initiated in 1898, the National Cattlemen's Beef Association is the marketing organization and trade association for America's one million cattle farmers and ranchers. With offices in Denver, Chicago and Washington D.C., NCBA is a consumer-focused, producer-directed organization representing the largest segment of the nation's food and fiber industry.

Statement of Richard Nielson

President of Utah Cattlemen's Association

Hearing on Interstate Shipment of State Inspected Meat

April 6, 2000

Mr. Chairman, thank you for the invitation and the opportunity to present this testimony today. I am Richard Nielson and I am the President of the Utah Cattlemen's Association. Interstate shipment of state inspected meat is one of the top priorities of the Utah Cattlemen's Association, the National Cattlemen's Beef Association and the producer groups represented here today.

Under current law, state-inspected plants cannot ship beef, pork, lamb or poultry across state lines. This restriction limits the ability of these plants to expand marketing opportunities and limits competition for slaughter animals. Current law also applies unequally to different species in regards to state inspection programs. For example, based on information provided by the committee, there is no restriction on the interstate-shipment of state-inspected bison, venison, pheasant, and ostrich. This bill would expand interstate shipment of state inspected meat to include beef, pork and poultry. Meat inspection programs would enforce the same inspection laws and regulations enforced under the federal program to create a seamless national inspection system with states retaining the right to impose additional inspection requirements. Products inspected under this authority would be eligible for interstate shipment, export and use in products destined for export.

I would like to share several reasons and anecdotes as to why this legislation is justified and why the ban on interstate shipment of state inspected meat should be eliminated.

Elimination of the ban is good for small businesses. State-inspected plants are typically family-owned and operated small businesses whose growth is limited to markets in their own state. Because their markets are limited, so to is their ability to compete with the large corporate processors who have a worldwide market. Removing the ban would give these businesses a substantial boost in market opportunities for their products and create additional competition in the live cattle market, which is just one facet in dealing with the issue of packer concentration.

The current ban actually favors imported meat over U.S. produced state-inspected beef. While state inspected products are restricted from interstate commerce, meat from over 30 countries that is not directly inspected by USDA can be sold anywhere in the United States. This legislation will recognize state inspection systems that are the same as federal requirements and allow state inspected products to compete on an equal footing with imported products.

The elimination of the ban is good for the economy. A 1997 Ohio State University study found that ending the ban would create $36.86 million in increased economic output and increase employment by 588 people in Ohio alone. Imagine the total if you added in the remainder of the states by removing the ban and opening up another engine of economic growth.

I would like to share with you a couple of examples of how this ban has gone awry. Tyler Meat Company of Toledo, Ohio sold meat for ten years to the River Café located on the Michigan-Ohio border. USDA ordered Tyler to stop sales to the café even though its Kitchen was in Ohio. The café dining area was located in Michigan, thus the sale of Tyler meat was considered interstate commerce.

Another example is the Jackson Brothers Food Locker in Post, Texas. Jackson Brothers supplied beef jerky to support U.S. troops during Operation Desert Storm. They could ship their product half-way around the world to support U.S. troops, but they can't send their product 80 miles west into New Mexico. Not only are they limited from growing their business, they are prohibited from selling product to former Desert Storm servicemen and women who came to like their product.

It is important to note that Jackson Brothers met the standard set by the State of Texas Department of Health Meat Inspection Service, one of the best state programs in the country. The HACCP plan for their plant was in place in November of 1999, 3 months before it was required for plants of their size.

To summarize, this legislation will remove a barrier that impedes competition, impedes growth and limits the marketing opportunities for U.S. beef. Passage of this legislation will create tremendous opportunity for state inspected plants and subsequently for cattle producers who market their livestock to state inspected plants. Our goal is a dynamic and profitable beef industry. With the growth in technology and the Internet, the world is truly our market. We urge you mark up this legislation in your Committee as soon as possible, and report it to the Senate floor. I want the beef industry to have the opportunity to grow by meeting the needs of our customer and not be stifled by laws which have outgrown their use.