Despite the recent easing of a three-month ban on Canadian beef products, Alberta’s cattle industry isn’t holding its breath for a quick recovery.
Elation over the partial lifting of the American and Mexican bans is tempered by the fact that live cattle are still not allowed across the border – costing Canada more than a billion dollars in lost sales revenue.
“Now that there’s been a crack, we have to push it open the rest of the way,” said Alberta Beef Producers spokesman Ron Glaser. “We have to re-establish the market for live cattle. That’s the only way we can even start to get back to normal.”
The United States and Mexico – Canada’s two largest beef export markets – are now accepting applications for the shipment of certain Canadian beef products, for the first time since a single Alberta cow was diagnosed with bovine spongiform encephalopathy (BSE) in May. The beef products represent 40 per cent of Canada’s beef trade with the U.S., and up to 85 per cent of beef trade with Mexico.
However, those shipments are not expected to start moving until September. And details on how strict the American rules will be to grant import permits are not yet known.
The more than 30 other countries that also shut their borders to Canadian beef are expected to follow with similar partial openings. Japan, however, remains adamant about not opening its borders unless Canada tests every slaughtered cow for BSE – an effort officials say would be too costly.
“The border opening is the first solid good news we’ve had in three months,” said Glaser. Last year, Canada exported $2.2 billion worth of beef and beef products around the world, of which the U.S. imported $1.67 billion. Mexico’s imports were worth $282 million and Japan was third at $81 million.
Starting Sept. 1, the U.S. and Mexico will begin accepting shipment of boneless muscle cuts from younger animals, including cattle under 30 months old, veal from calves no older than 36 weeks, and fresh or frozen beef liver.
However, there is no word on when the ban may be lifted for live cattle. Industry officials speculate it could be another three to six months, and it’s possible the borders may never open again to live animals over 30 months of age, Glaser said.
“We normally cull our cows and bulls to the U.S. All our live exports were to the U.S. A big chunk of the business is live cattle,” he said. Last year, 1.6 million head of live cattle were shipped to the U.S., representing $1.8 billion.
It’s unpopular to speak of a massive slaughter, but there is no way Canada can consume all of its cattle older than 30 months, Glaser said. “There’s a limited market for cow beef in Canada.”
Young animals provide tender and high-quality cuts, while older animals are processed as ground meats, such as hamburger.
Discussions on new guidelines allowing the import of live cattle under 30 months old are now under way.
“The U.S. is committed to expediting the process, so at least we’re headed in the right direction,” Glaser said.
Canada, the U.S. and Mexico are also reviewing the strict trade protocols that shut the borders to all beef products, despite the fact only one cow was diagnosed with the disease – a review welcomed by Premier Ralph Klein.
Changes are necessary, Klein said, because a single case of BSE should not lead to the extreme measures that cost Canada’s beef industry $11 million a day. It is estimated that the mad cow crisis has so far cost Alberta’s economy as much as $600 million, and approximately 800 jobs.
So far, the partial border opening hasn’t increased cattle prices, and until those prices rise from the current 38 cents to above 80 cents or so, the industry will not bounce back. Some producers are having to sell their calves at the lower price just to make bank payments, while others plan to hold onto their stock and feed them through the winter.
It’s uncertain how much impact the border opening will have until beef products begin moving in September, said Glaser. Until then, Cargill Foods meat packers in High River will maintain its current 80-per-cent capacity production level, and hold off on rehiring its 400 laid-off employees.
With no live animals to move, the crack in the border ban also did little for cattle trucking companies. Many of those employees have sought jobs elsewhere.
The beef industry will forever be changed because of Alberta and Canada’s summer mad-cow crisis, said Canadian Cattlemen Association vice-president Dennis Laycraft.
The cattle-identification plan will be fast-tracked from plastic ear tags to electronic identification, herds will be culled of older animals that are more susceptible to BSE, and feed programs are expected to change as the North American trading block discusses removing all animal parts from livestock feed.
The Canadian Food Inspection Agency is also set to announce higher rates of testing for BSE – from the 3,200 animals tested in 2002 to as many as 25,000 to 70,000 animals per year.
To convince other countries that Canadian beef is safe, Klein is launching a $5-million beef barbecue road campaign to promote Alberta beef in countries that reopen their borders. The U.S. and Mexico are first on the list to be visited. The campaign will include food safety seminars and information on how Canada responded to the BSE crisis.
In Canada, however, consumer confidence remains high, with beef consumption up 10 per cent over last year.
Businesses have also jumped on board to support the industry. Burger King Canada is now serving only Canadian beef in its 365 restaurants across the country. Pfizer Animal Health also announced last week its Pfizer BSE Canadian Cattle Health Credit program, which will help eligible producers and feedlot owners ensure cattle health.
By offering credits towards Pfizer animal-health products, Pfizer will commit $1 million to the Canadian cattle industry.