The Palestine Herald, Palestine, Texas

November 26, 2008

Cow Tax? EPA looking into regulating greenhouse gases

By WAYNE STEWART

PALESTINE — An effort to possibly regulate greenhouse gases by the Environmental Protection Agency could have far-reaching effects on the bottom line for local cattle producers.

The EPA has issued an “Advance Notice of Proposed Rulemaking” and in so doing is seeking public comment on a plan to regulate greenhouse gas emissions from automobiles under the Clean Air Act, though an EPA spokeswoman said the agency is still in the data collection stage.

If the plan goes through, the American Farm Bureau said it would trigger other provisions of the Clean Air Act which would have a direct impact on agriculture through a cow and pig tax on individual animals.

“Anytime the government wants to do something like this everybody should worry,” said Texas Farm Bureau Director of Commodity and Regulatory Activities Ned Meister.

As Meister explained it, if the EPA determines it should regulate greenhouse gases by automobiles, then other activities are going to fall under the agency’s regulatory umbrella.

“If they are going to regulate automobiles, then they are going to regulate all sources (of greenhouse gases,)” Meister explained. “That includes livestock.”

Cattle and other ruminants produce methane as a natural byproduct of the animal’s digestive process. Methane is considered one of the principal culprits of greenhouse gas emissions.

An activity that produces 100 tons or more of greenhouse gases per year would be subject to regulation under the Clean Air Act, Meister explained.

For operations that size, “there is a permit fee, which is in effect a tax,” Meister explained.

Under the guidelines a dairy with 25 or more head of cattle or a beef-catle operation with 50 or more head of cattle would be subject to a “presumptive minimum rate” permit fee.

The fee for dairy cattle would be $175 per dairy cow and $87.50 for every head of beef cattle.

Such an eventuality would make turning a profit from a cow-calf operation nearly impossible, according to Meister.

“The markets are down right now,” Meister continued. “This would have a direct economic impact (on producers) that is not recoverable.”

Cattle prices have dropped considerably over the past year. In November of 2007, a 500-pound top-grade steer calf would bring from 85 cents to $1.27 per pound, this year the best to expect is from 79 cents to $1.10 per pound. A drop of more than 10 percent on the high side.

In other words, a year ago a 500-pound calf could bring in excess of $600 with the same calf this year bringing in $500 or less. Now, take off $87.50 per animal and the profit margin drops even further when factoring in the higher input costs of diesel, feed and fertilizer.

The EPA proposal also would affect swine production with producers having to pay $20 per animal for operations with 200 or more hogs.

“The economic costs to producers from the cow and pig tax would be great and could cause the cost of beef, pork and dairy prices to rise,” said American Farm Bureau Federation Director of Regulatory Relations Rick Krause. “The cow and pig tax would impose severe penalties on livestock producers in the United States without effectively reducing greenhouse gas levels in the atmosphere.”

The deadline for sending comments to the EPA is Friday. Meister said public input is critical.

“You need to tell the EPA why regulating greenhouse gases is not a thing we should do from a farm and ranch standpoint,” Meister said. “You need to explain to them (the economic burden.)”

To send written comments to the EPA, they should be mailed to Air and Radiation Docket and Information Center, Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Washington, DC 20460, RE: Docket ID No. EPA-HQ-OAR-0318; or comments can be sent online by going to www.stopepa.com.