Beef Is Back

Almost exactly 10 months to the day that Japan banned U.S. beef from its markets, Japan has agreed to allow – under certain conditions -- U.S. processors to again export beef to Japan. On October 23, U.S. and Japanese officials in Tokyo reached a framework agreement that will permit the resumption of beef trade. The agreement was reached after three days of prolonged negotiations.

In late December 2003, Japan along with approximately three dozen other countries closed their markets to beef produced in the United States after one dairy cow was found to be infected with bovine spongiform encephalopathy. To date, no other U.S. cattle have been found to be infected with the deadly brain-destroying disease. Japan has insisted that the United States test every cow presented for slaughter for BSE before Japan would resume imports of U.S. beef. The United States countered that scientific evidence does not support the need for 100-percent testing. Some experts say that current testingprocedures cannot detect the causative agent of BSE in young cattle.

Prior to the import ban, Japan imported more than $1.7 billion in U.S. beef. Imports ofU.S. beef are not expected to resume soon, following completion of regulatory processes. Japan will revise its domestic regulations to alter its BSE cattle testing requirements and other procedures. The United States is initiating rulemaking procedures relating to importation of Japanese specialty beef.

American Meat Institute president and CEO J. Patrick Boyle welcomed the news. “We are encouraged by the interim breakthrough on U.S. Japan beef trade, announced today by the governments of the U.S. and Japan. U.S. negotiators are to be commended for their perseverance in seeking a restoration of trade.” Boyle said in a prepared statement.

He added: “The multiple firewalls that we have established to prevent and contain BSE if it did occur here have served us well. Despite enhanced BSE surveillance, which began in June 2004, none of the thousands of tests that have been done have detected a single, additional case of BSE in the U.S. We welcome the full review of our cattle and beef production practices by the Office of International Epizootics that was announced today. We are confident that upon the completion of that review in July 2005, the U.S. and Japan can reestablish full beef trade.”

U.S. Meat Export Federation president and CEO Philip Seng also hailed the agreement as an important first step in achieving full beef trade with Japan adding “there remains significant work to be done.”

He added: “We are confident in the safety of U.S. beef and USMEF stands ready to continue our work with USDA to provide Japanese authorities with the additional proof they need that our system can provide the products they demand.”

Seng applauded the efforts of USDA Under Secretary J.B. Penn, his USDA team and other industry players that have worked so diligently to reach this accord. Seng said: “We understand there is still hard work to do and we stand ready to do our part in the United States and in Japan, where our staff is already working with our embassy and our valued industry partners to re-launch U.S. beef.” Seng said USMEF must study the agreement with Japan further and consult with U.S. officials before it can accurately estimate how much U.S. beef can begin to be shipped and how soon, but said USMEF remains fully committed to re- establishing full trade as soon as possible.

A special marketing program will be developed for Japan under which USDA's Agricultural Marketing Service will certify that exported products meet the terms of the agreement, according to USDA. “The United States now will be permitted to sell beef and variety meats to Japanese importers from animals below 21 months of age,” USDA said in a release. “Animal age will be determined by a combination of production records and physiological means (grading system). This marketing program will be evaluated by the countries in July 2005 and modified as appropriate. This evaluation will be based in part on an independent review of the marketing program and the BSE situation conducted by experts from the World Organization for Animal Health and other organizations.”

USDA Secretary Ann Veneman stated: "The agreement reached in Tokyo will enable our beef trade to resume under a special marketing program. We then will review that program after six months of operation, with a view toward returning trade to more normal patterns. This is a very important milestone in our returning to normal after finding the case of BSE in the United States. We have put significant measures in place to further strengthen our already strong food safety system. And, we have new measures to protect our cattle herd.”

She added: "We also are well underway with an enhanced surveillance system to detect any BSE in our cattle herd. As of last Friday, we had tested over 92,000 animals, all being negative. "Our trade team, already in Asia, now is moving on to Korea, the number our three beef market for the United states, and other important markets in the region to discuss market openings.”

A summary of the agreement appears below. USDA said, “Further details of some conditions and modalities remain to be worked out by experts and working-level officials of both countries by the time of the actual resumption of trade.”

A. JAPANESE EXPORT TO THE UNITED STATES

The United States will permit Japanese export of beef and beef products following relevant domestic rule-making procedures.

B. U.S. EXPORT TO JAPAN: MARKETING PROGRAM

The United States will establish a marketing program that enables a resumption of some trade for an interim time period (interim trade program). The operational details of the Beef Export Verification program managed by USDA's Agricultural Marketing Service will be further worked out by U.S. experts and Japanese, major points of which are as follows:

Specified risk materials must be removed from animals of all ages.

a) The range of SRMs is defined as bovine heads (except for tongues and cheek meat, but including tonsils), spinal cords, distal ileum (two meters from connection to cecum), vertebral column (excluding the transverse processes of the thoracic and lumbar vertebrae, the wings of the sacrum and the vertebrae of the tail) of all ages.

b) In regard to treatment of SRMs, USDA will verify the control program of each facility managed by Hazard Analysis Critical Control Point or Sanitation Standard Operating Procedures.

2. Beef items including offals and variety meats must be derived from bovine animals verified to be 20 months of age or younger.

3. Bovine animals included in the BEV program for Japan must be traceable to live animal production records which indicate that they are 20 months of age or younger at the time of slaughter. Records that will be used to verify this requirement by the U.S. government must meet at least one of the following criteria:

• Individual Animal Age Verification
• Group Age Verification
• Insemination Age Verification
• USDA Process Verified Animal Identification and Data Collection Services

4. Experts of both countries will continue to consult on carcass grading and quality attributes with a view to verifying physiological age to evaluate carcasses to be 20 months of age or younger. Additional information will be developed by USDA for consideration by the experts, including a special physiological maturity study. This study will involve examination of maturity grades of samples of representative cattle. When the carcass grading system objectively demonstrates that it can verify physiological age to evaluate carcasses to be 20 months of age or younger, it will be used as a method to satisfy the BEV program requirement.

C. DOMESTIC PROCEDURES AND TIMING OF RESUMING TRADE

The necessary modifications to U.S. and Japanese regulations would be completed expeditiously so the United States and Japan will resume two-way beef trade immediately after completing their respective domestic procedures. In Japan's case, such domestic approval process includes deliberation by the Food Safety Commission. Both countries will undertake these domestic procedures and endeavor to resume the beef trade as soon as possible.

D. CONTINUED JOINT SCIENTIFIC CONSULTATIONS

1. Joint consultations by the U.S. and Japanese experts will be continued to help both sides gain a fuller understanding of the pathogenesis and patterns of the BSE disease. Specific topics to be addressed would include (but not limited to): BSE definition and testing methods; transmissibility; and current and ongoing research including the Japanese transgenic mouse assay. 2. Other international experts including from the World Organization for Animal Health (OIE) and the World Health Organization (WHO) would be invited to participate in the consultations. 3. The consultations would begin immediately and be conducted to provide information to be available for the BEV Program Review (as described in E below).

E. BEV PROGRAM REVIEW

The BEV Program (as described in B above) will be reviewed for modification as may be appropriate in July 2005. The joint review by officials of the Governments of the United States and Japan will take into account a scientific review to be conducted by OIE and WHO experts. The conclusion of the review, including the action to be taken, will be made by the consensus judgment of both governments. In Japan's case, it will be subject to deliberation by the Food Safety Commission.

Scientific Review: Experts from the OIE and the WHO will be asked to review existing and new information to be compiled during operation of the BEV Program and to provide guidance as to modifications that might be appropriately made and assure consumer safety in U.S.- Japan beef trade. The information to be reviewed will include:

• Information made available by the joint scientific consultation as described in D above;
• The United States BSE status according to OIE criteria to be reviewed; results of the U.S. enhanced surveillance program; U.S. feed regulations; and the range of BSE amelioration measures in place in the United States;
• Cut-off age for BSE testing; and
• Other relevant scientific information.

F. PREVENTION OF TRADE DISRUPTION

Both the United States and Japan have food safety systems in place that are sufficiently robust such that identification of a few additional BSE cases will not result in market closures and disruption of beef trade patterns without scientific foundations.

G. AUDIT SYSTEM

Following equivalency audits of each country's relevant food safety system and resumption of trade, both countries will cooperate to audit each side's facilities on a regular basis. ANNEX

Terms of Reference: Physiological Maturity of Beef Cattle Carcasses USDA's Agricultural Marketing Service will conduct a special study in which steers and heifers of known ages (births identified within a one-month period) are slaughtered and evaluated for physiological maturity. The purpose of the study is to determine an expected end-point maturity that will assure the exclusion of steers or heifers with a chronological age greater than 20 months from a certification program for export to Japan. This evaluation of physiological maturity on a representative sample of the U.S. fed-beef slaughter population will provide a reliable assessment of the age of cattle. The study -- in consultations with Japanese experts -- will be designed and the data analyzed utilizing internationally recognized sampling and statistical methods. The study will be completed and a report presented within 45 days.