We're now moving into our afternoon program with panel number 3, and please come up as I call your name. Jim Carroll, Steve Erdman, Roel Andriessen, Bill Menner, and Gretta Irwin.

And, Roel, it looks like you're here already, so you start talking while they're sitting down.

MR. ANDRIESSEN: Thank you and good afternoon. Thank you for this opportunity to share my views about the importance of international trade and some of the challenges we face in the rural market.

As you know, export sales are critical to the supply, both American agriculture, especially in light of our massive supply of food subsidies. The current prices have no chance to make substantial recovery without more exports. Grain farmers, beef and pork producers are depending on the offices of the USDA and USDR to open doors for more world trade. IBP is a willing partner in adding value to farm commodities for sale on the international marketplace. This process adds jobs to the U.S. and helps all aspects of production in agriculture.

We have worked hard to determine the needs of its customers throughout the world. We know what they want, are anxious to produce for them, and will continue to invest substantial funds in this effort, especially if we can be assured of greater market access.

According to the U.S. Meat Export Federation, beef exports added $9.57 a hundredweight to the value of cattle, and $5.91 a 100 weight to the value of slaughter hogs in 1996. Meanwhile, U.S. feed grains and soybeans exporters accounted for almost $1 billion. This points out the potential for what could be, if more markets had reasonable access.

Our company has been involved in opening international markets since we opened our first beef plant in western Iowa in 1961. We started by exporting just a few items to Europe. The export business grew rapidly, and in the mid '70s we opened a sales office in Europe. Today we have international offices in England, Japan, Korea, Taiwan, China, Mexico, Canada and Russia, while exporting products to more than 50 countries.

IBP exports boxed beef and boxed pork, as well as allied products such as cattle hinds, pig skins, tallow, bonemeal, gelatin bone, edible meats such as kidneys, livers and tongues, and all four meats destined for the pet food industry.

Beef, which generates 80 percent of our sales, remains the largest segment of our export business. Since 1990 our export sales have doubled. Last year they totaled $1.6 billion, or 30 percent of IBP net sales. The export sales reached one million metric tons, or 16.5 percent of the total IBP sales.

The Far East is by far our biggest forum of Iowa boxed beef and boxed pork. Our focus and commitment to this part of the world will continue to increase and expand in the years ahead. IBP's and the industry's largest export market in the Far East is Japan. Our commitment to the export markets can be seen in our efforts to custom-fabricate beef for the Asian markets.

For example, our plant out of Dakota City, Nebraska, beef complex has been designated as IBP's export plant. It produces a variety of export-style beef cuts in accordance with the requirements of our Japanese, Korean, and Chinese customers. Another example is a joint venture with Nipo meat packers, Japan's largest meat company.

Since March 1995, our pork plant in Perry, Iowa, has been producing pork cuts according to Nipo specifications. Similar developments are being implemented for export markets closer to home, mainly Canada and Mexico.

As you know, the changing world marketplace has created tremendous opportunities, as well as challenges, for our industry. In order for exports to increase, some things will have to change. The European community, for example, continues to be a market of limited access. The EU's ban on beef produced with growth promotants is costing beef producers in the U.S. 100s of millions of dollars a year. During the past decade, the EU has not been able to provide scientifically valid reasons for the ban. While the U.S. beef industry has won all rounds and efforts to require the European Union to comply with international trading rules on the ban, the issue remains resolved.

We encourage the USDA and USDR to continue efforts to preempt European strategies and gain access to the European market. In this area of global markets, sound science must be upheld as the basis for trade agreements, if these agreements are to be fair. We also encourage you to be proactive as it relates to eastern European countries and Russia since these countries seem to be in the process of duplicating EU standards.

Once again, we thank your office for your efforts on the matter in the past and encourage you to maintain them in the future.

Business to Japan remains strong, while exports to sales to Korea and Taiwan increasingly grow bigger and bigger. We encourage you to continue efforts to remove any trade barriers and/or reduce tariffs that prohibit our ability to do business in these countries. Greater access means increased profit potential for the U.S. meat industry, packers, and livestock producers alike. The U.S. is one of the world's most efficient producers of high-quality meat products, and in a free market environment, can be extremely competitive.

As you know, China wants to become a World Trade Organization member. Negotiations with the Chinese have already resulted in a signed agricultural agreement (inaudible) that could lower tariffs and expand access to the Chinese market. We encourage the USDA and the USDR to see that meat industry interests are considered during negotiations with China.

IBP and all the members of our industry continue to see great potential for business in China, given the country's population of more than one billion people.

MR. BLOUIN: I'll ask you to wrap it up. You're about a minute over already.

MR. ANDRIESSEN: One of the goals for the next WTO rounds of negotiations should be an acceptance by all WTO members that strict, science-based (inaudible) should not be weakened or diluted. Restrictions on access for sanitary or phytosanitary rules must be based on science, and those that are not must be removed in accordance with the WTO dispute settlement. It will also be important for Russia to be brought under the rules of the WTO as soon as possible to ensure that market potential is being met.

In closing, let me emphasize that beef and pork exports are key components of total red meat demands. They play an increasingly important role in the meat industry's well-being. In order for this industry to continue to thrive, especially here in the Heartland, we believe it's crucial our nation continue to aggressively work to gain access in the merging markets and to expand access in existing markets.

Thank you for your consideration.