Cattlemen's Capitol Concerns: Estate Tax Reform, Secure The Border

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NCBA, PLC Continue the Push for Estate Tax Reform

The National Cattlemen's Beef Association (NCBA), the Public Lands Council (PLC) and a coalition of national organizations representing family farmers, ranchers and growers are joining together in the fight for meaningful and permanent estate tax reform. On Jan. 1, the estate tax temporarily zeroed out for the year 2010, but unless Congress takes action, the tax will come back next year at its staggering pre-2001 levels.

The following is an excerpt from a recent letter sent by the coalition to Senate Leadership:

"If estate taxes are allowed to be reinstated at the beginning of 2011 with only a $1 million exemption and top rate of 55 percent, the negative impact on our industry will be significant. We support permanently raising the exemption to no less than $5 million per person and reducing the top rate to no more than 35 percent. It is also imperative that the exemption be indexed to inflation, provide for spousal transfers and include the stepped-up basis.

"Family farmers and ranchers are not only the caretakers of our nation's rural lands but they are small businesses too. The 2011 change to the estate tax law does a disservice to agriculture because we are a land-based capital intensive industry with few options for paying estate taxes when they come due. The current state of our economy, coupled with the uncertain nature of estate tax liabilities make it difficult for family-owned farm and ranches to make sound business decisions. We urge Congress to pass permanent estate tax reform now.

"We strongly support estate tax relief as outlined above, which provides the greatest relief and certainty for agriculture. We respectfully request your leadership in reforming current estate tax laws to strengthen the business climate for family farmers, ranchers and growers while ensuring agricultural businesses are passed to future generations."

NCBA and PLC also continue to support an agriculture exemption from the estate tax. Specific agricultural relief would benefit the American public through greater food security, maintenance of open space and environmental resources, as well as the preservation of valued traditions and lifestyle. Farm estates are 5-20 times more likely to incur estate taxes than other estates, and it is estimated that one in ten farm estates (farms with sales of $250,000 or more annually) are likely to owe estate taxes in 2009, according to the USDA Economic Research Service. For more information, visit: http://www.beefusa.org/uDocs/deathtaxleavebehind.pdf

NCBA, PLC Support Legislation to Secure the Border on Federal Lands

The National Cattlemen's Beef Association (NCBA) and Public Lands Council (PLC) are supporting legislation to increase border security on federal lands. H.R. 5016--introduced earlier this week by House National Parks, Forests and Public Lands Subcommittee Ranking Member Rob Bishop (R-UT), House Natural Resources Committee Ranking Member Doc Hastings (R-WA), Homeland Security Committee Ranking Member Peter King (R-NY) and Judiciary Committee Ranking Member Lamar Smith (R-TX)--would prohibit the Department of the Interior (DOI) from using environmental regulations to hinder U.S. Border Patrol from securing our border on federal lands.

According to the bill's cosponsors, DOI is hindering border security efforts on federal lands by preventing the use of motorized vehicles, requiring the Department of Homeland Security (DHS) to complete lengthy and expensive environmental analysis, and at times literally locking out Border Patrol agents to prevent their access to some areas. H.R. 5016 would free DHS and Border Patrol from these bureaucratic interferences which currently impede their ability to effectively secure the border on public lands. For more information, visit: http://republicans.resourcescommittee.house.gov/News/DocumentSingle.aspx?DocumentID=180913

NCBA and PLC have long supported the need for a sustainable plan to increase border security. For more than 100 years, live cattle trade across the U.S.-Mexico border has been an integral part of the beef industry; yet the historical lack security at our borders continues to pose a threat to livestock producers and their families. Land conservation and national security should not be mutually exclusive goals. Allowing Border Patrol to do their job will not only protect American lives, it will also protect the health of our public lands, which have become breeding grounds for drug trafficking, smuggling and other illegal activities.

A Closer Look at February Beef Trade Statistics
by Gregg Doud, NCBA chief economist

The U.S. Department of Agriculture's (USDA) February trade statistics came out this week and indicated that February beef exports were up 15 percent in value and nine percent in volume compared to February 2009. Through the first two months of 2010, beef and beef variety meat exports were up nine percent in volume and 11 percent in value ($481 million or $501 million if processed beef products are included). However, when looking at these percentages, we have to keep in mind that during this period last year the world economy was still in shock from the meltdown of late 2008 and the U.S. dollar was very strong when compared to most currencies around the world.

Through the first two months of 2010, the top ten markets for U.S. beef are Mexico (down 30 percent in value versus the same period in 2009), Canada (+31 percent), Japan (+34%), South Korea (unchanged), Vietnam (+2%), Taiwan (more than double 2009), Hong Kong (more than triple 2009), EU (double 2009), the Caribbean (+44%), and Egypt (+36%). Number 11 on this list would be Russia at $11 million compared to just under $3 million in trade during January and February 2009. These eleven markets accounted for 98 percent of the total value of U.S. beef and beef variety meat exports through February.

As you can see from these percentage changes, there are two distinct trends emerging thus far in 2010. The first is the continuation of the decline in demand for U.S. beef in our top export market. It's quite shocking to see that Jan.-Feb. U.S. beef and beef variety meat exports to Mexico are 43 percent lower than the first two months of 2008 and these comparisons to 2008 (versus 2009) are probably a better way to measure the trend. A closer look indicates that Jan.-Feb. 2008 variety meat exports to Mexico were $93 million compared to only $25 million in 2010. This continuing free-fall in variety meat exports accounts for three-quarters of the difference in sales to our top market versus 2009.

On the flip-side, it's extremely encouraging to see that with the exception of Canada where sales are flat compared to 2008, sales to every other market are up dramatically from 2008. In fact, despite the $93 million decline in sales to Mexico compared to 2008, total global beef and beef variety meat exports during Jan.-Feb. 2010 were still $38 million better than in 2008. Certainly the highlights include these huge increases in sales to Taiwan and Hong Kong. U.S. beef exports to the Caribbean are off to a red-hot start. The reduction in the EU's tariff from 20 percent to zero, as a result of last year's agreement on compensation pertaining to the hormone dispute, is also having a significant impact on our ability to export beef into that market. The fact that we've already exported $11 million in beef to Russia this year suggests that Russia's economy is recovering and that developments in this market should be watched closely in the coming months. Sales to Canadian should remain strong as long as the U.S. and Canadian dollars are at or near par.

On the import side, the drought ending rains and efforts to restock herds in Australia are certainly impacting U.S. cull cow and bull (lean beef trim) prices. A look at the unofficial data through mid-April indicates that U.S. imports of Australian (lean trim) beef are down 44 percent and the primary reason why total U.S. beef imports are down 34 percent. Imports of Canadian beef are up three percent during this period and over half of these imports (50.7 percent) are actually 50 percent lean trimmings. (About 35 percent of Canadian beef exports to the U.S. so far this year are whole muscle cuts, which is up about a percent from this time last year.)

In live cattle trade, imports of live Canadian steers and heifers directly for processing through April 3 were up 16 percent at 198,674 head. There were also 71,868 head of imported cull cows and bulls (direct for processing), which is up 28 percent on the year (unofficial data). A clear trend in the other direction, however, is the sharp decline in imports of Canadian feeder cattle so far this year at just under 51,000 head--a 60 percent decrease compared to just over 125,000 head during this same period last year. Imports of Mexican feeder cattle are running at their normal pace so far in 2010, at just under 300,000 head through April 10-up 13 percent from a year ago.

Legislative Watch

Vote YES!

H.R. 4717 / S. 3122, Open EAJA Act of 2010
Summary: Currently, there is virtually no oversight of the Equal Access to Justice Act (EAJA). And while the Act was originally intended by Congress to help private citizens seek judicial redress from unreasonable government actions, it has been manipulated by environmental activist groups as a means to use taxpayer dollars to target federal-lands agencies, and ultimately the family-farmers and ranchers who use the lands. The Open EAJA Act would restore much-needed accountability in the use of these funds.
Primary Cosponsors: Reps. Cynthia Lummis (R-Wyo.), Stephanie Herseth Sandlin (D-S.D.) and Rob Bishop (R-Utah) / Sen. John Ensign (R-Nev.)

S.J.RES. 26 / H.J.RES.76 / H.J.RES.77 - Resolution in disapproval of EPA's endangerment finding
Summary:A joint resolution disapproving EPA's endangerment finding and the regulation of greenhouse gases under the Clean Air Act.
Primary Cosponsors: Sen. Murkowski(R-AK) / Rep. Ike Skelton (D-Mo.) / Rep. Joe Barton (R-Texas)

S.RES.452 / H.RES.1196 - Resolution supporting increased market access for U.S. beef exports to Japan
Summary: The resolution urges the Obama Administration to insist on increased market access for U.S. beef to Japan. Japan's unscientific restrictions on U.S. beef imports results in approximately $1 billion in lost exports annually for the American beef industry.
Primary Cosponsors:Senators Mike Johanns (R-Neb.) and Blanche Lincoln (D-Ark.) / Rep Jerry Moran (R-Kan.)

H.R. 5016, to prohibit DOI from impeding border security on public lands
Summary: H.R. 5016 would increase U.S. border security by prohibiting the Department of the Interior from using environmental regulations to hinder U.S. Border Patrol from securing our border on federal lands.
Primary Cosponsors: Reps. Bob Bishop (R-Utah), Doc Hastings (R-Wash.), Peter King (R-N.Y.), and Lamar Smith (R-Texas)

Vote NO!

H.R. 1549, Preservation of Antibiotics for Medical Treatment Act (PAMTA)
Summary: HR 1549 would stop veterinarians and producers from preventing disease in livestock, which would ultimately harm animal welfare, animal health, food safety, and food security. Prevention of disease is a cornerstone in both human and animal medicine. Taking away this tool undermines preventative medicine, and healthy animals are the foundation of a safe food supply.
Primary Cosponsor: Rep. Slaughter (D-N.Y.)

S. 787, Clean Water Restoration Act
Summary:Currently, waters under the jurisdiction of the federal Clean Water Act (CWA) are defined as "navigable waters of the United States." Other waters are subject to regulation by individual states, which are better equipped to manage their own unique geographical concerns. S. 787 would remove the word "navigable" from the definition, drastically expanding federal regulatory control over all wet areas and any "activities" affecting those waters. Farmers and ranchers could be required to obtain permits for everyday activities, like driving a tractor near an irrigation ditch or grazing cattle near a mud hole.
Primary Cosponsor:Sen. Feingold (D-Wis.)

H.R. 3012, TRADE Act
Summary:The TRADE Act essentially puts the U.S. on the sidelines by requiring the President to set in place a plan for renegotiating all of the current U.S. trade agreements (including the WTO agreements with over 150 member states) 90 days before initiating any new trade agreement negotiations or submitting a revised trade agreement to Congress. The U.S. would effectively be in a "time out" while our competitors continue to move forward on negotiating and implementing new preferential agreements to grow their economies and strengthen their job base.
Primary Cosponsor: Rep. Michaud (D-Maine)

H.R.503 / S.727, Prevention of Equine Cruelty Act of 2009
Summary: Banning the processing of horses will result in more, not less, horse welfare issues, including abuse, neglect, and abandonment. Abusing, starving, or turning a horse loose to fend for itself is not humane, and there are not enough adequate horse adoption and rescue facilities to protect these animals. In addition to creating unintended consequences for horses, this bill would set a dangerous precedent by jeopardizing citizens' private-property management rights.
Primary Cosponsor: Rep. John Conyers (D-Mich.) /Sen. Mary Landrieu (D-La.)

Don't miss NCBA's Cattlemen to Cattlemen!

Don't miss NCBA's Cattlemen to Cattlemen, April 20-24! We'll visit with our friends at Intervet Schering-Plough Animal Health for some tips on how to manage BRD on your stocker operation. Plus, we'll see how nearly 20 longhorns are educating kids on the history of Texas cattle drives.

NCBA's Cattlemen to Cattlemen debuts on Tuesday at 8:30 p.m. The show also airs Wednesday at 10:30 a.m. and on Saturday at 9 a.m. (All Times are Eastern). Don't forget, you can watch NCBA's Cattlemen to Cattlemen online anytime by visiting
CattlemenToCattlemen.org. Follow us on Twitter at NCBA C2C and become a fan of the show on Facebook by searching NCBA's Cattlemen to Cattlemen.



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