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Agriculture Today

Groups contend Ag Department underestimates numbers

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Wilson County News
June 27, 2012 | 3,924 views | Post a comment

Economic studies are important to determine if a project is feasible. What happens when a government study underestimates the economic impact of a proposed program yet to be implemented? Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) and 15 other organizations, including the Farm and Ranch Freedom Alliance, raised such concerns in a June 7 press release regarding the proposed U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service animal disease traceability program.

According to the press release, “USDA ‘arbitrarily assumed that only 30 million cattle’ would be subject to new regulatory requirements.”

In a June 6 letter to an Office of Information and Regulatory Affairs Office of Management and Budget provided by Judith McGeary, executive director of the Farm and Ranch Freedom Alliance, the group cites data that only the number of cattle in six states was used, including Oklahoma and Texas. According to the report, these states account for the concentration of the cattle industry’s capacity for feedlots and slaughterhouses. But, the groups asked, what about the other 60 percent of cattle “located outside of those six states”? In the letter, the groups estimate that the agency should have “estimated that 50 million cattle cross state lines each year, if not more.”

While considering the cost of compliance, the groups cited a study by Kris Ringwall, Ph.D., director of Dickinson Research Center Extension and livestock specialist at North Dakota State University, who conducted a three-year study involving the tagging of 14,432 calves. He added the cost of shrinkage, defined as “weight loss while handling calves.” The total cost ranges from $17 to $27 per head, without the cost of the tag, for identification.

The USDA cost is estimated at $4.68 per head, including a shrinkage and injury cost of $2; chute operation at $2.50; and labor to attach the eartag at 18 cents.

Using Ringwall’s data and the number of animals (USDA’s 32.25 million head) involved, the costs range from $582 million to $924 million annually -- just for identification. And this does not include the cost of the Interstate Certificate of Veterinary Inspection.

The price quoted by the USDA in the Aug. 12 Federal Register ranged from $3.5 million (if the rancher is currently using tags) to $30.5 million annually. Add to this equation the additional $3.8 million for the Certificate of Veterinary Inspection, and the costs rise to $34.3 million.

A third concern addressed by the groups is costs associated with auction barns.

“The agency dismissed the cost to sale barns by stating that they are already required to keep records on the cattle sold,” the letter states. “The agency ignored, however, that the current record-keeping requirements do not require separate documents for each animal or even group of animals, while the proposed rule would do so. ... Even more disingenuously, the agency anticipated that veterinarians will charge producers for the costs of keeping such records and then failed to address what those costs are likely to be.”

The 16 groups concluded in the R-CALF USA press release, “By underestimating both the number of animals affected and the cost per animal, the USDA estimated the fiscal impacts at under $100 million, claiming that the rule is not ‘economically significant’ and placing it on the fast track to be finalized after review by the OMB [Congressional Office of Management and Budget].”

While the cattle industry at least has some assessment of the costs to analyze, the poultry industry -- also included in the program -- did not have the costs in its Regulatory Impact Analysis.

According to the press release, “This deficiency on the part of the USDA could have significant repercussions not only for farmers, but the growing number of citizens ‘both rural and urban settings who own a few birds for food, show, or as pets.’”

The groups ask the Office of Management and Budget “to return the rule to USDA for a thorough and complete analysis, which must acknowledge that the rule is economically significant.”

McGeary, who served on the Secretary of Agriculture’s Advisory Committee on Animal Health, gave more insight into the program. See related article, above.

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