The Federal government administers policy and publishes regulations for livestock and livestock-related issues through USDA and other Federal agencies. Federal farm policy covers programs ranging from livestock insurance for eligible counties to environmental conservation programs. Federal regulations on manure storage and disposal, animal health and safety, mandatory price reporting, and country of origin labeling have implications for how livestock and meat are produced and marketed.

• Policy
• Regulatory Issues

Policy

Federal commodity programs for livestock are generally not comparable to those for crops. The two exceptions are Dairy and Wool.

Livestock producers who have suffered losses due to weather-related disasters or other emergency conditions may receive Natural Disaster Assistance through USDA's Farm Service Agency. Examples and description of these programs include:

• The Noninsured Crop Disaster Assistance Program provides financial assistance to producers of noninsurable crops, including forage crops for livestock producers, when low yields, loss of inventory, or prevented planting occur because of natural disasters;
• The Livestock Indemnity Program provided benefits to livestock producers for livestock deaths caused by natural disasters occurring between January 2005 and December 2007, including losses due to blizzards that started in 2006 and continued into January 2007;
• The Livestock Compensation Program provided benefits to livestock and catfish producers who suffered feed losses or incurred additional feed costs directly resulting from natural disasters occurring between January 2005 and December 2007, including losses because of blizzards that started in 2006 and continued into January 2007;
• Livestock Assistance Grants provided $50 million in State block grants to help livestock producers partially recover forage production losses due to certain drought conditions during 2006; and
• The Feed Indemnity Program provided payments to eligible livestock owners and cash lessees who suffered feed losses or increased feed costs due to 2005 Hurricanes Dennis, Katrina, Ophelia, Rita, and Wilma.

The Food, Conservation, and Energy Act of 2008 (2008 Farm Act) provides indemnity payments to eligible producers for livestock death losses in excess of normal mortality due to adverse weather.

When producers are experiencing financial stress, USDA's Agricultural Marketing Service (AMS) may purchase meats, poultry, fish, and egg products for domestic feeding programs to stabilize prices through its Food Purchases program.

USDA's Risk Management Agency offers Insurance for Cattle and Swine that provides protection against declining livestock prices or gross margins (livestock price minus feed costs).

USDA's Animal and Plant Health Inspection Service (APHIS) oversees USDA's Disease Eradication, Animal Health Surveillance System, and Emergency Management Response System. It is Federal policy to pay an indemnity based on fair market value for any animals seized and destroyed for public or animal health reasons. Seizures of animals in response to exotic Newcastle disease, avian influenza, pseudorabies in swine, and some other livestock diseases are included in this category.

The discovery in December 2003 of bovine spongiform encephalopathy (BSE, or mad cow disease) in a dairy cow in Washington State led USDA to announce additional safeguards to bolster U.S. protection systems against BSE and further protect public health. APHIS provides the latest USDA information on BSE.

There are also Federal programs that pay participating livestock producers for adopting conservation and environmental measures aimed at protecting natural resources. The programs primarily aim to enhance or conserve soil and water resources. USDA's Natural Resources Conservation Service administers multiple programs for livestock operations. These include the Environmental Quality Incentives Program, which provides technical, educational, and financial assistance to eligible farmers and ranchers to address soil, water, and related natural resource concerns on their lands in an environmentally beneficial and cost-effective manner. The Conservation of Private Grazing Lands initiative provides technical, educational, and related assistance to conserve and enhance private grazing lands. Among the stated purposes of the initiative are the conservation and improvement of wildlife habitat, fish habitat, and aquatic systems.

Regulatory Issues

Animal waste. A primary regulatory issue associated with livestock production is manure storage and disposal. During livestock production, animals are often kept in confined lots. The density of animals on these lots determines the volume of manure that will be produced per unit of area, and hence the concentration of manure nutrients (nitrogen and phosphorous, both of which can be pollutants in high enough concentrations). Research is ongoing into various aspects of manure management, such as animal feeding, manure handling and storage, land-spreading techniques, and cropping systems to properly recycle manure nutrients. Manure can be used as a fertilizer, but improper use can lead to groundwater contamination. The Environmental Protection Agency promulgates and enforces livestock waste regulations. Feedlot operations are specifically addressed under the Concentrated Animal Feeding Operation regulations.

Poultry and hogs are generally kept in confined areas for their entire life cycles. Beef cattle and sheep are generally raised on rangeland and pastures and then finished on feedlots, where the animal densities are high. Dairy production is intermediate in nature, with the dairy cattle being fed and milked in confined units, but allowed out to pasture for a given period.

The portion of livestock production that occurs on forage (or pasture and rangeland) also affects the environment through herding and feeding activities. Livestock can contribute to erosion and water pollution. To the extent that livestock consume naturally occurring forage, they also compete with native and wild species for the same food sources. This consideration is important when private livestock are grazing on public range land. Federal agencies administering public lands (the Forest Service and Bureau of Land Management, for example) have set rules about where, and in what density, livestock may graze on public lands, so that livestock production does not diminish the land's capacity to produce multiple-use benefits for the American public.

Animal health and food safety. In addition to affecting livestock production impacts on the environment, regulations also govern livestock imports from other countries, livestock feeding practices, and food safety for meat products. Administered by different Federal agencies, these regulations are designed to protect the food-consuming public and livestock-producing enterprises.

USDA's APHIS is responsible for inspecting imported live animals. Careful monitoring of imported livestock is necessary so that transmissible diseases - such as foot-and-mouth disease, swine flu, and avian flu - do not spread to U.S. food-producing animals. Diseases specific to certain types of livestock can cause catastrophic economic losses to U.S. producers, as well as affect the availability and prices of meats and other animal products. APHIS is the first line of defense in preventing animal diseases that can also infect humans from entering the U.S. food supply.

U.S. Food and Drug Administration (FDA) oversight of livestock feeding similarly safeguards the Nation's food supply and public health. FDA regulations aim to keep contaminants and diseases out of the food supply at the farm and feedlot levels. (Information is available from FDA's Center for Food Safety and Applied Nutrition.) The regulations state that mammalian proteins (feed supplements derived from mammal tissues, such as meat and bone meal) cannot be fed to ruminants (cows, sheep, goats, etc.) because these are possible sources of BSE, which preliminary evidence has linked with a variant of Creutzfeldt-Jakob disease in humans. FDA has also promulgated regulations stating that all animal feed ingredients must be properly labeled to prevent animal byproducts, such as meat and bone meal, from entering the ruminant food supply chain.

Federal regulations further govern the inspection of livestock before slaughter and inspection of meat products after slaughter. USDA's Food Safety and Inspection Service (FSIS) inspects slaughter facilities, animals, and meat products. For food safety, FSIS generally focuses on food-borne illnesses caused by microbes such as E. coli, salmonella, and listeria. FSIS also provides a line of defense against diseases such as BSE by inspecting slaughtering plants, animal health prior to slaughter, as well as conducting post mortem examinations of animals displaying symptoms of illness or disease, and random routine examinations of slaughtered animals to ensure product quality and safety.

The Farm Security and Rural Investment Act of 2002 (2002 Farm Act) included provisions for enhancing animal health protection and animal welfare. To ensure domestic livestock health, APHIS may prohibit or restrict import of any animal or related material, if necessary, to prevent the spread of any livestock pest or disease. The agency may also prohibit or restrict exports, if necessary, to prevent the spread of livestock pests or diseases from or within the United States. APHIS has express authority to hold, seize, treat, or destroy any animal, as well as to limit interstate livestock movements. Owners are to be compensated based on fair market value of destroyed animals and related material. APHIS may also take measures to detect, control, or eradicate any livestock pest or disease.

The 2008 Farm Act directed establishment of a voluntary trichinae certification program and compensation for industry participants and cooperating State agencies for 100 percent of eligible costs in conducting livestock pest or disease detection, control, or eradication measures relating to control of low-pathogenic diseases.

Livestock Mandatory Price Reporting. The Livestock Mandatory Reporting Act of 1999 represented a Government response to demands by livestock producers for more price information, regarding the marketing of cattle, swine, lambs, and their products, at various stages in the marketing chain. The resulting easy-to-understand information 1) tells producers, packers, and other market participants what they need to know about pricing, contracting for purchase, and supply and demand conditions for livestock, livestock production, and livestock products; 2) improves USDA price and supply reporting services; and 3) encourages competition in the marketplace for livestock and livestock products.

USDA implemented its Mandatory Price Reporting (MPR) program in April 2001. Under this program, certain livestock packers and livestock product processors who annually slaughter an average of 125,000 cattle or 100,000 swine, or slaughter or process an average of 75,000 lambs, were required to report to USDA the details of all transactions involving livestock purchases, domestic and export sales of boxed beef cuts, and sales of boxed lamb cuts and lamb carcasses. Importers who annually import an average of 2,500 metric tons of lamb meat must report information concerning the sales of imported boxed lamb cuts.

The statutory authority for the program expired in September 2005; however, most packers continued to provide information voluntarily, anticipating that the mandatory system would be reauthorized. All reports continue to be published except those for slaughter cows and imported boxed lamb. In October 2006, MPR was reauthorized through September 30, 2010, with some modifications to swine reporting. Because USDA's legal authority to run this program lapsed, its authority must be reestablished through the normal rulemaking process. Work on this process is underway.

MPR has differed in several ways from the AMS voluntary reporting system. Under the voluntary reporting system, buyers and sellers voluntarily provide information to AMS, while MPR participation has been mandatory for packers. The voluntarily reported information, while accurate, is predominately negotiated cash transactions, which continue to become a smaller percentage of total livestock and meat transactions. Information collected is generally limited to the volume, weight, grade, and price.

Mandatory reporting encompasses all transaction types and, more importantly, requires packers to report all transactions, rather than just those that they prefer to provide, as under the voluntary system. Information is collected electronically from packers through the mandatory reporting system. Data accuracy is confirmed through auditing of packer records. As a result of mandatory reporting, formula and contract market information is now available. Livestock marketing has evolved from pricing live animals to a system of quality incentives based on carcass characteristics. MPR has taken into account this evolution and has required packers to report information about premiums and discounts for quality characteristics.

Country of origin labeling. The 2002 Farm Act required retailers to inform consumers of the country of origin at the final point of sale for covered commodities, which include muscle cuts of beef, pork, and lamb; ground beef, lamb, and pork; farm-raised fish and shellfish; and wild fish and shellfish.

AMS issued guidelines for voluntary country-of-origin labeling in 2002 and was originally required to promulgate mandatory regulations by September 30, 2004. However, on January 27, 2004, President Bush signed Public Law (P.L.) 108-199, which delayed, until September 30, 2006, implementation of mandatory country-of-origin labeling for all covered commodities except for wild and farm-raised fish and shellfish. On November 10, 2005, President Bush signed P.L. 109-97, which delayed, until September 30, 2008, implementation for all covered commodities except wild and farm-raised and shellfish. Since April 2005, country of origin labeling and the method of production have been required for fish and shellfish sold at retail.

The 2008 Farm Act amended the country of origin labeling provisions, adding goat meat and poultry to the list of covered commodities. On January 15, 2009, AMS published a final rule for all covered commodities (74 FR 2658) that became effective on March 16, 2009. The final rule outlines requirements for labeling and the recordkeeping for retailers and suppliers. The rule prescribes specific criteria that must be met for a commodity to bear a "United States Country of Origin" declaration. The rule also contains provisions for labeling covered commodities of foreign origin.

The Secretary of Agriculture has asked the industry not only to adhere to the final rule, but also to voluntarily adopt practices that would ensure that consumers are adequately informed about the source of their food products. These practices include:

• Informing consumers about what production steps occurred in each country when multiple countries appear on the label;
• Providing voluntary labeling for processed products subject to curing, smoking, broiling, grilling, or steaming; and
• Reducing the time allowance from 60 days to 10 days for a ground meat product label to bear the name of a country, even if that country was not present in the processor's inventory.

Last updated: Monday, May 28, 2012

For more information contact: Kenneth Mathews