MS. RAINES: I'm Dr. Amy Raines with the American Ostrich Association. I'm also a veterinarian in Oklahoma. The purpose of my presentation today is simply to educate the community about the U.S. ostrich industry and its reliance on foreign trade.

The ostrich industry in America began in the late 1980s, and the American Ostrich Association was founded in 1988 by ostrich producers in Texas and Oklahoma. The association currently represents producers, processors, and supporting industries across the United States and nine foreign countries. While there are other ostrich organizations in the world, including the International Ostrich Association and the South African Ostrich Association, the world looks to the American Ostrich Association for information and guidance.

Ostriches in this country have been processed under USDA voluntary inspection since 1995. Each bird produces an average of 65 to 70 pounds of boneless red meat and a 12 to 14 square foot hide. Estimated numbers, including USDA inspection and state-inspected birds and those not processed for resale, in 1995 were about 15,000 birds; in '96, 30,000; in '97, 100,000; and in 1998, 160,000. We are a young and growing industry.

In 1998 there was an estimated 450 to 500 thousand birds in the United States owned by 3,500 to 4,000 producers across the country. Most of our ostrich producers are small family farms with an average of about 10 hens. While producer numbers have declined in the last year, the overall production potential has not declined. We are the most efficient country in raising ostrich, including South Africa.

Also in 1998, an estimated 85 percent of all of our U.S.-produced ostrich products (meat and leather) were exported to countries in Europe, South and Central America, and the Pacific Rim. Recently there has been correspondence with Pacific Rim countries specifically requesting American ostrich meat. Breeding stock in the form of adult birds, chicks, and hatching eggs also continue to be exported as these countries try and develop their market.

Issues that have affected the U.S. ostrich industry in the past include importation of large volumes of foreign hides, primarily from South Africa, causing a decline in prices of our domestic hides. I've seen several ostrich boots here in the room at lunchtime, and I venture to guess that none of those boots were made with domestic hides. In 1996, American ostrich producers were getting between 300 and 400 dollars for their green hides, and in May of 1999 we were getting 80 dollars for that same green hide. Our feed costs have maintained to be about 125 to 150 dollars per bird. Traditionally, U.S. hides have been considered inferior to South African hides, yet today South African tanners are currently soliciting green hides from American producers.

The American ostrich industry is uniquely positioned in the world market, in that U.S. farms are free from some of the diseases affecting ostrich production in other countries such as New Castle's Disease, salmonella, and Caribbean and Congo fever. The U.S. ostrich industry offers a red meat that is free from the use of hormones, antibiotics, and other growth promoters in its production. With today's growing concern, whether valid or not, about chemical manipulations of livestock as a food source, American ostrich producers offer a clean, healthy, chemical-free red meat.

As a young and growing industry, foreign market access is important to us. Speaking as an ostrich producer, a veterinarian, and a mother of a future ostrich producer, I encourage this committee to consider American ostrich products in their negotiations. Thank you. Are there any questions?

MR. ACETO: I'm just curious as to what your major export markets are, what kind of trade regimes you're facing there. Is this something that's generally subject to tariffs or quota, low tariffs, high tariffs?

MS. RAINES: The export -- U.S. exporters pay a fee to the Fish and Wildlife Department, because our birds are considered an exotic species. And we're trying to make those changes. Most of our meat goes to Europe and the Pacific Rim; a lot of our hides have gone to Mexico and the Pacific Rim and Italy. We've been affected by the Mexican regulations concerning their influenza control measures, where they have stopped the importation of hides, which have -- there's no way that an ostrich hide that's been chemically treated can transmit influenza, and yet, because we're considered poultry, we were affected by that regulation.

Some countries are unable to import ostrich products from the U.S. because their policymakers consider us to be an exotic species, and yet all ostrich in the United States are domestically raised on farms. And so we need some assistance to educate the foreign governments that we're farm-raised.

MR. GALVIN: I'm sorry, Dr. Raines. You said that you have to pay a fee to --

MS. RAINES: Yes. We have to pay -- because we have to record the birds and eggs and meat, anything that's ostrich related products, we have to report what we're exporting. And there's a fee associated with that. I'm not sure what that fee is.

MR. GALVIN: Okay. I would be curious in learning more about that, like how prohibitive, or if it is prohibitive. If you've got any information on --

MS. RAINES: I can get that to you.

MR. GALVIN: Thank you. And I'm unclear just where the imported ostrich skin is produced.

MS. RAINES: This is not an imported skin.

MR. GALVIN: No. But the import that you were talking about.

MS. RAINES: They're coming from South Africa and Israel.

MR. GALVIN: But yet South Africa is buying the –

MS. RAINES: Currently. Right. In the past, in 1996, '97, they imported a large volume of hides that basically dumped a large volume of hides onto the U.S. market, causing a decrease in the domestic hide value. They were also claiming that American hides were of less value and less quality, therefore they weren't worth as much. And yet today, in today's market, they are calling us requesting hides.

MR. GALVIN: Are they currently sending us hides too or no?

MS. RAINES: There are some -- there are some hides that are being imported from South Africa. The bootmakers traditionally have relied on South African hides. And it's hard to -- for us to re-educate them as to getting U.S. hides. We'd like to see them buying U.S. hides.

MR. GALVIN: Are they tanned hides?

MS. RAINES: Tanned -- some are green and some are tanned.

MS. COMBS: I've got a question. Do you know where most of the hides are being tanned and processed?

MS. RAINES: Until the regulations in Mexico, most of the hides were going to Mexico to be tanned, and they were coming back into the U.S. or being exported to other countries. We have a good tanner in New York, there was a good tanner in Louisiana that was doing ostrich and alligator. And that's one of the problems our industry has is that there's just not enough U.S. tanneries to support the industry here in the U.S.

MS. COMBS: So basically most are being tanned offshore?

MS. RAINES: Yes. In Mexico. Or had been, until recently.

MR. GALVIN: And now what's happening? You just ship them all green to South Africa?

MS. RAINES: Now they get shipped green or they go to the tanner in New York, or people are trying to find other tanners around the country. There's a tannery that's up and coming in Iowa that's doing a really good job with ostrich hides. They seem to be a little bit more difficult to do than your traditional cow hide or smooth hide.

MR. GALVIN: Thank you very much.