It Is Time to Reopen the Canadian Border

If necessity is the mother of invention, American cattlemen may want to pay heed to a Canadian beef industry that is reinventing itself.  The growing frustration in Canada is giving birth to initiatives that threaten to shake up the industry here.             

The Canadian cattle industry, which used to export two-thirds of its product, has been battered for 15 months.  Fed cattle are selling for about U.S. $49/cwt.  A large reason for this decline rests on the U.S. border, which remains closed to live cattle trade even though science tells us there is no reason for continuing this ban.  However, elements within the U.S. cattle industry sued to close that pipeline, an action that will have repercussions beyond their protectionist goal.

The United States is struggling to reopen its own export markets following the December BSE incident in Washington state.  Now the world is watching to see whether the U.S., when dealing with Canada, will make its own decisions based upon sound science.   Simply put, if we don’t agree that beef from Canadian cattle under 30 months of age is safe — then what assurances can we offer the world that our beef is safe, other than blanket BSE testing at an estimated annual cost to producers of $900 million? 

Our No. 2 export market and the only country that has significantly reopened to U.S. beef trade has been very clear on this point.  Mexico will not import from the United States what the United States won’t take from Canada.

Reopening the Canadian border to some form of live cattle trade is an issue filled with passion and protectionism, often masquerading as “public and animal health concerns.”  If we’re basing our decisions on sound science as we say we are, there is no justification for this trade restriction other than a protectionist lawsuit.  Saying that importing Canadian cattle that would be slaughtered by 30 months of age jeopardizes the herd health of U.S. cattle is ludicrous as BSE is not a contagious disease.  Canada’s regulations for removing specified risk materials are identical to ours, so public health is protected.

This trade barrier is in no way justified under the guidance spelled out by the Organization of International Epizootics (OIE).  Any suggestion otherwise is a distortion of internationally recognized facts. 

A continued lack of action in resuming trade north of the border could impact the livelihoods of cattlemen in the Pacific Northwest and across America.

First, Canadian packing plant capacity is increasing.  The current weekly 70,000 head capacity will be 92,000 by this time next year.  This poses the biggest threat to the U.S. Pacific Northwest, where four plants slaughter 40,000 head per week.    

U.S. imports of Canadian fed cattle in 2002 averaged 14,535 head per week.  With 95 percent of Canadian cattle feeding operations in Alberta, it is reasonable to assume that most of the fed-cattle imported into the United States ended up at one of the four major plants in the region. Keeping this pipeline closed could result in the closure of one of the plants on the U.S. side of the border.

The result would be a drop in competitive bidding for fed cattle in the Pacific Northwest — making feedlots in the region less competitive. A significant quantity of cattle would also need to be hauled an additional 500-1,000 miles to market at the expense of the feedlot owner, thus further lowering bids for feeder cattle in the region.

This could lead to a smaller feedlot capacity in the region, which would force an equal number of feeder cattle to be sold outside the region.  This means ranchers would pay the increased transportation costs.  A rancher forced to truck his feeder cattle to Greeley, Colo., rather than Twin Falls, Idaho, would pay an estimated $23 per head more for doing so.

Canadian cattlemen are calling to create an industry that can’t be held hostage by forces inside the United States.  With patience nearly exhausted, the Canadian industry is considering departing from the “harmonized North American response to BSE” and is increasingly willing to take on additional costs, such as 100 percent BSE testing that will force the United States to follow suit.  Canada already expanded its feed ban to one that is more stringent than that of the U.S., and now the Food and Drug Administration is considering following suit.  If that happens, there will be a further financial impact on U.S. cattle producers.

The United States and Canada first put up the same BSE safeguards in 1989, and began looking among the millions of animals for the two “mad cows” that were discovered in the last 15 months.  The United States reacted to the first case by abandoning science and closing the Canadian border.  If the United States wants to see foreign markets open, then it must lead by following the science — and reopen the Canadian border.