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Reopening Canadian Borders to Beef Hurts Some Minnesota Ranchers

Posted on: Saturday, 16 July 2005, 00:00 CDT

Jul. 16--Thursday's court decision reopening the Canadian border to cattle imports is good news for U.S. meat processors and their packing-house employees, but it will come at a price for ranchers who have been supplying American feedlots with live calves, some Minnesota ranchers said Friday.

Calves raised on Minnesota farms and ranches have brought from $1.10 to $1.30 a pound the past two years when the Canadian border was closed to cattle, said Debbie Blowers of DD Ranch at Motley, Minn.

But now, she said, cattle producers anticipate that prices for live calves could fall to around 90 cents per pound by October, when this spring's new crop of calves are placed in feedlots. That could reduce the value of this year's calves by as much at $48,000, when they're sold this fall, she said.

She and her husband Denny -- the other "D" in the ranch handle -- had been expecting the court's decision. "We knew it was coming, but the timing is never good," she said.

The U.S. Ninth Circuit Court of Appeals in San Francisco Thursday overturned a Montana federal judge's March 7 injunction against the U.S. Department of Agriculture re-opening the cattle trade with Canada. A suit had claimed that reopening the border to Canadian cattle would endanger U.S. beef supplies and cattle. Canadian cattle imports have been banned since May 2003 when Canada's first case of bovine spongiform encephalopathy, commonly called mad cow disease, was diagnosed.

In the interim, two cases of mad cow disease have been identified in the United States as well, prompting many U.S. trading partners to ban cattle and beef imports from both the United States and Canada.

Canada has had four diagnosed cases of the cattle disease, which is suspected of causing a brain-wasting variant disease in human called Creutzfeldt-Jakob disease. About 150 people have died from that disease in the United Kingdom since it was first diagnosed in the 1980s.

Groups such as Montana-based Ranchers-Cattlemen Action Legal Fund, which represents 18,000 U.S. ranches, brought suit against USDA, claiming that neither the U.S. nor Canadian governments have done enough to insure the safety of imported cattle.

Shae Dodson, a spokeswoman, said her R-CALF group will explore other legal options.

But meat industry groups welcomed the court's reversal, claiming that the U.S. and Canada have coordinated animal health and food safety measures to prevent the disease from getting into the food supply.

Since traders were anticipating the court's decision, futures prices for live cattle fell for August delivery fell only 42 cents at the Chicago Mercantile Exchange on Friday, closing at $78.52 for 100 pounds. December futures contracts had the biggest drop, falling by $1.05 to close at $83.20 for 100 pounds.

The American Meat Institute, the large trade association for the $92 billion a year U.S. beef industry, called the court's decision "a victory for the beef industry and for consumers." The trade ban on Canada has caused the highest retail beef prices since 1979, said AMI president J. Patrick Boyle in a statement. And, he added, it has cost American about 8,000 jobs.

That's because large meatpackers such as industry leader Tyson Foods have closed some meat plants. Minnetonka-based Cargill, the No. 2 beef processor, has laid off some employees and reduced production to four days at some of its plants.

Mark Klein, spokesman for Cargill Meat Solutions, the company's meat-packing unit, said the disrupted trade bore out that North America is one cattle market, not two. The trade ban caused a shortage of animals in the states and built up animal supplies in Canada, and is prompting American firms to invest in Canadian meat plants.

Cargill has seven beef packing plants in the U.S. with 15,000 employees. It also has a large plant in Alberta, a smaller plant in Toronto, and is buying another beef plant and company elsewhere in Ontario.

In a statement issued Friday, U.S. Agriculture Secretary Mike Johanns said his department will work with other U.S. and Canadian agencies to restore trade, making sure that health and safety standards are met.

"The court decision will not change the fact that neither Canada nor the USA have taken the steps necessary to stop the spread of mad cow disease," said John Stauber, executive director of the Madison, Wis.-based Center for Media and Democracy. His group is advocating more rigid controls on animal feed products to ward off the disease, and more rigorous government testing of meats and animals.

Any intervention in markets produces winners and losers. Tom Stattleman, a rancher at Pine River, Minn., said prices for calves have been higher in the past two years with the border closed. But all production expenses have gone up in that time as well, starting with energy related costs for fuel and fertilizer.

If there is a stampede of cattle coming over from Canada, he said, "you're going to see a lot of broken ranches."

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Source: Saint Paul Pioneer Press (St. Paul, Minn.)

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