As shock waves continue to stampede through Alberta’s $15-billion beef business, cattle producers and consumers are predicting major changes to the Canadian livestock industry in the wake of the mad cow scare.
Nations including Russia, Japan, Taiwan, New Zealand, Australia and South Korea scrambled to join the United States in closing their borders to Canadian beef last week after the discovery of a Northern Alberta cow infected with bovine spongiform encephalopathy (BSE), commonly known as mad cow disease.
BSE in cattle is linked to the human form of the fatal brain-wasting ailment known as variant Creutzfeldt-Jakob (vCJD) disease. At least 100 people in Europe have died of vCJD after eating infected meat.
“We’ve got about 20 to 30 days before we’re in a full-scale disaster,” said Alberta farmer and feedlot owner John Kolk. “There are very few risk-management tools that work when the border is shut.”
The BSE scare has tainted consumer confidence and highlighted the importance of proving the livestock industry’s practices are safe and efficient, said Kolk, who runs between 6,000-8,000 cattle in his feedlot near Picture Butte.
|File photo by Larry MacDougal, Business Edge|
|Nations raced to shut their borders to Canadian beef last week after the discovery of mad cow disease in Alberta.|
“This could have an impact on the entire animal byproducts industry,” said Kolk, who suggested manufacturers of pet, poultry and hog feed may have to replace animal protein with plant protein.
Changes may be necessary to convince consumers beef is a safe product, added Kolk. “It’s no longer good enough to say you have a safe system. You have to prove it.”
Ron Glaser of the Alberta Beef Producers agreed, noting: “We’ll all have to take a step back, study what happened, and make appropriate improvements.”
Officials were struggling to trace the origins of the sick cow, a Black Angus-cross from Marwyn Peaster’s farm near Wanham,.about 550 kilometres northwest of Edmonton. Peaster bought the cow, along with 69 other cows and calves, from a breeder in Lloydminster, Sask., last year.
On Friday, Dr. George Luterbach, the Canadian Food Inspection Agency (CFIA) chief veterinarian in Western Canada, revealed the sick cow was ground up and used in chicken feed. Three farms were quarantined in B.C. late last week after getting that batch of poultry feed, and investigators were checking to see if it was eaten by any of the cattle on the ranch.
As of last Friday, 13 cattle ranches were under quarantine in the three western provinces. As well, CFIA inspectors descended on a huge feedlot near Barrhead that bought 211 animals from Peaster. The feed lot operator said 600 cattle out of 10,000 at his operation will be slaughtered and tested.
Since 1997, Canada has banned the feeding of ruminant products to other ruminants, such as cattle and sheep.
It is widely thought that the single cow diagnosed with BSE may have contracted the disease through contaminated ruminant feed. It was born two years before the feed ban came into effect. Mad cow cannot be passed from one animal to another, but it can be spread among ruminants by feeding supplements contaminated with the prions that cause BSE.
Kolk said rendering practices, as well as producers’ record-keeping, will likely undergo changes as a result of the country losing its BSE-free status.
In the rendering process, about half of each slaughtered cow is cooked at high temperatures to reduce it to grease and powder. The gelatinous liquid is used in a number of products, from lubricants and soaps to lipstick and gum candies. The powder is used in pet food and livestock feed.
The BSE scare may also force producers to sharpen their record-keeping skills when it comes to documenting feed and other practices, said Kolk. In recent years, industry leaders have urged producers to keep accurate and detailed records as part of on-farm quality assurance programs.
Lax record keeping is being blamed for the difficulty in tracing back the origin of the infected cow and the whereabouts of its calves. “There is no law compelling farmers to keep records, and that is why it complicates our investigation,” said Dr. Claude Lavigne of the CFIA.
“I would not be surprised if there’s a review of practices because of what has happened,” said Lavigne.
“There’s nothing like a good scare to bring about a review and encourage changes to be made faster.”
Alberta Agriculture Minister Shirley McClellan said the government is considering making livestock records mandatory.
Canada shipped 373,432 tonnes of beef and veal products – about $1.67 billion worth – to the U.S. in 2002, accounting for about 72 per cent of Canada’s worldwide beef exports, according to the Canada Beef Export Federation.
The ripple effect of the scare sent fast-food stocks, such as McDonald’s Corp. and Wendy’s International Inc., plummeting, while shares in soy – a protein-rich bean consumed as a meat substitute – held their own.
With Alberta’s $15-billion beef industry accounting for 60 per cent of Canada’s beef production, the economic impact is nationwide. Cattle haulers, restaurants, slaughter and packing plants, agricultural equipment suppliers, grain growers, meat shops and even tourism could be devastated by a long-term ban.
“Our challenge will be to reassure people this is not a human health issue,” said Travel Alberta spokesman Don Boynton, who was prepared to field questions about BSE at a recently held international travel show in Vancouver. “We have to tell people that Alberta and Canada is a safe destination.”
Cattle hauler Rick Silbernagel of Continental Cattle Carriers in Crossfield has gone from earning as much as $18,000 a month to zero. “Most of my transport is U.S. bound, so I’m pretty much shut down,” he said.
Meat-shop owners expect to lose money if they have to drop prices to sell their inventory of beef. “Fifty per cent of our sales are beef, and right away, people began switching to pork and chicken,” said Corey Schnell of Calgary Meats and Deli.
But some consumers are questioning those alternative meats, said Ed Schultz, general manager of Alberta Pork. “People are asking us if pigs and turkeys can get BSE, so this is not a good thing for anybody.” Many experts say pork, poultry and other non-ruminants are not susceptible to BSE.
Most equipment dealers and farm-supply stores are taking a wait-and-see attitude before considering layoffs or reduced hours. “If this ban is long-term, there will be a severe impact, but you have to maintain a positive attitude,” said Rene Van Geerenstein of Rimbey Implements.
“This affects a lot of our customers and has the potential to be devastating,” said Jim Holland, director of brand management for Alberta’s 34 UFA supply stores. “But we’re not pressing the panic button. We always have plans and things we could look at, like our product offering, labour and promotions.”
Throughout the province, auction markets are cancelling sales, not wanting to subject sellers to prices that have dropped by as much as 50 per cent. However, some producers are taking advantage of the low prices. “If you’re gutsy enough to take a gamble, then the more power to you,” said Bill Perlich of the Highwood Livestock Auction in High River.
While most auctionmarts say it is too early to consider layoffs, the province’s two major packing companies have cut back on the number of animals slaughtered each day.
Lakeside Packers in Brooks, which employs 2,400 workers, shut down for a day and will monitor the situation on a day-to-day basis, said spokesman Gary Mickelson. “We don’t anticipate layoffs at this time,” he said. Both Lakeside and Cargill Foods in High River, which employs 2,000, are killing only the number of animals needed to satisfy domestic demand.
“About 50 per cent of Canadian beef is exported, and we can’t consume all that at home,” said Will Irvine, general manager of Calgary Stock Yards. Feedlots could soon have a backlog of finished animals, and are in a quandary about what to do with them. If they grow too fat, consumers don’t want the oversized cuts. One option is to kill them and freeze the meat.
The real crunch could come in the fall, when most producers market their calves, said Highwood Livestock Auction’s Perlich. For now, the animals are on pasture, but come fall, the cost of feeding would be prohibitive.
Producers raising grass-fed and organic beef sell most of their product locally, so are not vulnerable to the U.S. ban. Consumers may switch to these meats, since organic operations undergo mandatory annual inspections to maintain their organic certification, said Larry Frith, a Pincher Creek rancher and member of the Diamond Willow Range Ltd., a group of ranchers who raise organic beef free of antibiotics and artificial hormones. “They inspect everything. There has to be an audit trail on cattle and feed and you name it,” Frith said.
“But this ban isn’t doing anybody any good. It hurts the whole beef sector, so the sooner it’s over, the better,” he added.
The annual Calgary Stampede livestock show is crossing its fingers that this was an isolated case of BSE and that the panic will have subsided by July. The show attracts about 900 head of cattle from Western Canada. Most are breeding animals but if producers are financially strapped, they won’t be looking to expand their herds.
“We’ve already had some calls from Wyoming, wondering where the bulls that were bought at the (Stampede’s) bull sale came from,” said Don Stewart, the Stampede’s agriculture manager. The sale was held in March.
The last incidence of mad cow disease in Canada was in 1993 on a ranch near Red Deer. The herd was destroyed.
“We got over that with very few repercussions, so hopefully the same thing will happen this time,” said Frank McInenly of Foothills Livestock Auction.
* Black Angus-cross calf may have been born on Mel McCrea’s Anchor R ranch in Baldwinton, Sask., about 100 km south of Lloydminster. Another possible birthplace was still being investigated Friday.
* The cow was sold to another Saskatchewan ranch in 1998, and then resold to yet another ranch in the province.
* It was purchased by Alberta farmer Marwyn Peaster in August 2002.
* Peaster says the cow was sent to slaughter when she couldn’t stand up. The animal was condemned on Jan. 31, 2003 – suspected of having pneumonia – and its head set aside for testing, but BSE wasn’t confirmed until last week.
* Prime Minister Jean Chretien says the Alberta government took too long to diagnose the disease, but Alberta’s chief veterinarian Dr. Gerald Ollis tells reporters: “We don’t see the timeframe is a major impact here,” as the animal exhibited no symptoms of BSE at the time of slaughter.
* Several nations quickly ban Canadian cattle and byproduct imports. The U.S. closes its borders to beef, causing immediate lineups and sending a shudder through Alberta’s $15-billion beef industry. Several farms are quarantined and their livestock sent to slaughter for post-mortem tests. Slaughter and packing plants across the country gear down operations.
* On Friday, officials announce the sick animal was ground up into chicken feed – it is legal to process diseased animals for feed in Canada, as their remains are heavily diluted with grain and other ingredients.
* Three farms in B.C. that received the feed are immediately quarantined to see if the feed was fed to livestock.