News Update

News Update
Jan. 12, 2006

Philippines Opens Market to Live Cattle

The Philippines Department of Agriculture has agreed to allow live U.S. breeding cattle imports into the country, said John Clifford, deputy administrator for the Animal and Plant Inspection Service (APHIS).

U.S. cattle imports will be subject to the Philippines Import Health Protocol for Live Cattle. As with meat and meat products, a veterinary quarantine clearance (VQC) from the country’s Bureau of Animal Industry (BAI) will be required before animals are allowed entry, Clifford explained in a statement released yesterday.

“This agreement is another example of our trading partner’s confidence in the effectiveness of the United States’ interlocking measures to safeguard U.S. beef from bovine spongiform encephalopathy (BSE),” he stated.

USDA Considers New ID Approach

The U.S. Department of Agriculture (USDA) is considering a new approach toward the National Animal Identification System (NAIS), John Clifford, USDA chief veterinarian, told attendees of the American Farm Bureau Federation (AFBF) annual meeting.

According to an AFBF release, the system would allow the USDA to access a number of both government-operated and private animal ID tracking systems.

“The concept will allow us to enter into agreements with the different entities responsible for the different databases,” Clifford stated. Such agreements will define the legal responsibility of all parties involved regarding system specifications, which will include reliability, uninterrupted access for state health officials, and no user fees for states or federal entities accessing the system.

Clifford emphasized that USDA is now only considering the feasibility of the approach.

Meanwhile, the United States Animal Identification Organization (USAIO) announced yesterday its formation as a nonprofit, independent organization created to manage the animal ID database as prescribed by the NAIS. (Click here for e-List coverage.)

A memorandum of understanding (MOU) has been submitted by the USAIO to USDA to form a strategic partnership.

History Indicates Fuel Prices to Drop, Say Economists

Gasoline and diesel prices are high and probably will remain so for several years, but give them time and pump prices will come down, said Ray Massey, a University of Missouri (MU) Extension ag economist, during a workshop at the MU Crops Management Conference in Columbia.

Fuel prices will go down because natural resources, like timber and common metals, historically have always trended down, not up, Massey said. He emphasized that his opinion is not held by all economists.

The recent increases in fuel prices are mostly related to supply, not demand problems, Massey said. When those domestic supply issues are resolved — that is, gasoline and diesel refining capacities are increased and consumer use drops — then prices will drop, Massey said.

World demand for crude oil will remain high with growing energy consumers like China. That affects the price of oil but only accounts for a portion of the price at the pump. Massey said that the recent spike is an anomaly caused more by events like Hurricane Katrina.

“Most of the problem we’ve had with high prices has not been with obtaining crude [oil]; it’s been with refining it,” Massey said. “The demand side is a permanent problem. The supply side is temporary. As soon as we bring supply up, the prices will go down.”

Massey said there is a general principle taught in economics that the cure for high prices is high prices. In this case, Massey said, as the price of gasoline and diesel increase, there will be more incentive for companies to build refineries, which will increase supply and lower prices.

Ron Plain, also an MU Extension ag economist, agreed with Massey’s prediction. He said commodities tend to increase in price slower than inflation, meaning the real cost to consumers goes down.

Plain said he predicts that 2006 fuel prices will be lower than 2005, and 2007 prices lower than 2006.

— Release written by Chuck Adamson of MU Extension, which provided this article, available in its entirety at http://agebb.missouri.edu/news/queries/showcur.idc?story_num=3590&iln=27.

— e-List compiled by Crystal Albers, Angus Productions Inc.