Alberta's cattle ranchers are in a holding pen once again as they await more legal wrangling in the United States that could eventually help pry open - or slam shut - the border to live Canadian cattle.

The beleaguered beef industry took more blows last week when an American livestock group won a temporary court injunction to delay the long-anticipated border opening, circumventing a rule passed by the United States Department of Agriculture (USDA) that would have resumed trade in young Canadian cattle.

The USDA says it will not appeal the ruling in favour of the Montana-based Ranchers-Cattlemen Action Legal Fund (R-CALF), but will wait until later this month when it will go to court to fight a lawsuit filed by R-CALF to block all cattle and beef imports from Canada.

In addition, the U.S. Senate last week took the first steps to void the USDA regulation that would have restarted the flow of live beef south, although the White House said President George W. Bush will veto the resolution if it also is passed by the House of Representatives.

Dave Olecko, Business Edge
Brian Sutter, Chicago Blackhawks coach and Sylvan Lake-area rancher, shows one of his Angus calves at the Calgary Bull Sale.

"This is not a positive thing. There was so much optimism. This just isn't good at all," said glum Hereford breeder Richard Schrader, who was grooming his bulls at the annual Calgary Bull Sale held at the Calgary Exhibition grounds last week.

"We were hoping the market would open up for young animals, creating more of a market for bulls," said Schrader who ranches near Bowden, south of Red Deer.

After being closed for 22 months after bovine spongiform encephalopathy (BSE) was discovered in an Alberta cow, the border was to have opened last week to cattle 30 months and younger.

But R-CALF, citing fears of mad-cow disease, successfully persuaded U.S. District Judge Richard Cebull that imports of Canadian cattle would harm U.S. international markets.

Cebull said dropping the ban on Canadian cattle will attach a "stigma" to all U.S. meat unless products from the two countries can be distinguished.

His decision gave both sides 10 days to set a trial date.

The federal government now says it will consider emergency funding for Canadian beef producers.

Finance Minister Ralph Goodale said that Ottawa will "reassess" its aid to farmers if the border remains closed much longer.

The Calgary Bull Sale - North America's oldest beef bull sale - attracted 426 Charolais, Hereford and Angus bulls, with their owners hoping to fetch good prices as optimism grew last week over the border opening.

But news of the postponement came within hours after the show opened, chilling the highs spirits of consignors.

Frustrated by the injunction, Alberta Agriculture Minister Doug Horner said he could not believe that a lower court could dictate to the government what its trade policies should be.

"R-CALF is not looking at the picture of its own industry," he told a QR77 radio show in an interview. Without cattle from Canada, Horner said, the U.S. packing plants are suffering and being forced to lay people off.

The Alberta beef industry needs to aggressively pursue other markets as a "balanced industry," where all beef leaves the country in a box instead of on the hoof, Horner added.

He noted that Sunterra Farms' expansion of its Innisfail plant to accommodate slaughter of older cattle, and the Alberta government's recent announcement to spend $38 million on prion research - the rogue proteins that attack the nervous system and cause the brain-wasting disease - are steps in the right direction.

Even if the border had opened, breeding cattle were still banned from the U.S. But breeders were hopeful that movement in the market would result in domestic sales of their animals.

"It would have given buyers some cashflow to get that replacement bull. And it would have helped improve prices," said Schrader.

Katelin Wildeman, communications co-ordinator for the Calgary-based Canadian Hereford Association, said the industry has turned into a "marketing game," forcing ranchers to aggressively seek buyers outside the U.S.

"A lot of ranchers used to sit back and wait for buyers to come to them," she said. "Well, you can't do that anymore. You've got to get out and find those buyers yourself."

Ranchers, many of whom doubted the border would open, are selling beef off their farm and approaching repeat customers, said Wildeman, whose family owns Wild Bear Herefords near Okotoks.

"It's all about diversity and those who aren't getting out there are being left behind."

Hereford rancher Grant Hirsche, who brought 17 bulls to the sale, predicted last month that the border would remain shut. A member of the Beef Initiative Group, which is hoping to build a producer-owned packing plant, Hirsche reiterated his belief that beef producers must develop an industry built around testing for BSE.

"The only leverage we have on the Americans is to develop new markets around testing. If we developed our industry around that, we'd have a leg-up on them, because they don't want to test all animals," Hirsche said.

The annual bull sale, celebrating its 105th year, has also suffered since the first case of BSE was diagnosed in an Alberta cow in May of 2003.

"About 30 per cent of bulls from the sale used to go to the U.S.," said Calgary Stampede agriculture manager Don Stewart.

Just five years ago, the sale boasted more than 700 entries. Now down to little more than 400 animals, this year's numbers were down another 30 bulls compared to last year, Stewart said.

Last year, the average price for bulls was $2,500 - down from the year prior to BSE when sales averaged $3,400.

"No one's going to buy now," said a disappointed Brian Sutter, coach of the NHL's Chicago Blackhawks and a rancher who raises Angus cattle near Sylvan Lake.

Like all ranchers, Sutter has suffered severe losses due to BSE.

Bulls that normally fetch an average of $3,500 dropped to about $1,000, while unbred cows worth between $700 to $900 dropped to between $200 to $300.

The American Meat Institute, which represents the packing industry, is also suing the USDA, saying there is no scientific reason not to reopen the border to all Canadian beef and cattle.

Without live exports from Canada, the U.S. packing industry fears it will be forced to close plants as a result of short cattle supplies and high cow prices.

This latest news may accelerate plans to build additional slaughter plants in Canada, said Larry Toner, president of the Canadian Angus Association. "We need to set our own standards and have niche markets. Hopefully we've learned from this. We need more than one customer," said Toner, who attended the bull sale.

Rick Paskal, a feedlot owner in Picture Butte in southern Alberta, said he's frustrated with the influence that R-CALF is having on Canada's multibillion-dollar industry.

"We've got 12,000 protectionist-minded people that are now the watchdog of the scientific community in regards to animal health," he said. "It's real crap."

Others suspect that this continued delay is the result of Canada's decision not to support the U.S. in missile defence.

"You better believe it," said Toner. "We're paying for that one."

Prior to 2003, Canada annually shipped about 900,000 cattle to the U.S. The BSE crisis has cost the cattle industry about $5 billion.

- With files from CP (Wendy Dudley can be reached at wendy@businessedge.ca)