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HAY MAKER

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Relationship between U.S., Canadian cattlemen may bear permanent scars
Monday, March 14, 2005, 4:52 PM

by Josh St. Peters

A few bad cows may have eternally spoiled the lot in North American beef trade.

The relationship shared between American and Canadian cattlemen has been lost on the backs of a handful of diseased animals and played out through a slough of lawsuits in United States courtrooms. What started out as a routine investigation nearly two years ago has left the two former trade partners standing firmly on opposite sides of a divisive issue that blocks livestock traffic across their common border.

Some American groups argue that the Canadian cattle are not safe to consume, while livestock organizations in Canada say U.S. interests are too wrapped up in politics and economics to do the right thing. In the mix of confusion over what is right and what is wrong, the only certainty is that it has been nearly two years since a live cow crossed the border from one side to the other.

The once dependent system of raising and slaughtering beef in conjunction with one another has been annihilated in the fight, leaving two separate entities that now appear to be competing for the same prized export markets. Cattle organizations in each nation are trying to trump the other with accusations and criticisms that leave no room for friendship.

“It’s a pretty sorry state of affairs. We’re mad up here and we’re pissed off. We’re pissed off at the American government and the way that they’ve handled this thing,” says Alberta cattleman Rick Paskal.

The feedlot operator says he and his fellow beef producers have gone through the motions, but now they are just plain fed up. Paskal says they knew it would be a tough haul when bovine spongiform encephalopathy was found in a Canadian cow on May 21, 2003. But nearly two years later, with the border still closed, the livestock producer says the trade relationship is a complete mess.

“It’s been an absolute disaster; we have an integrated marketplace on the North American continent,” he says. “May 20, 2003, the United States feedlot operators imported into their country 575,000 head of feeder cattle. If the BSE concern was so great in the U.S., then why didn’t those American producers send those cattle back out of this country?”

Paskal isn’t alone is questioning why some cattle groups in the U.S. continue to argue for a sealed border. Others, including Canadian government leaders and livestock organizations have criticized the excuse that beef across the border may not be safe to consume.

“Yes, we had BSE, but the mitigations that we have in place here are more than sufficient to make sure the consumers in the North American marketplace can feel very comfortable. If an American tourist comes up to Canada, into Toronto, and eats beef there, he knows darn well that it’s safe,” says Paskal.

It still doesn’t convince one group of U.S. beef producers, though. In recent weeks, the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) succeeded in securing an injunction in a Montana court that will keep the border closed, at least in the short term. R-CALF USA argues that there is not sufficient evidence that it is safe to bring Canadian beef back into the U.S. food system.

“What we are doing is protecting the long-term integrity of this industry. We are doing that by preventing the introduction of disease and we are doing that by preventing the USDA from arbitrarily relaxing this border just to achieve the desires of the economic, self-interested packers in this issue,” says R-CALF USA executive Bill Bullard.

Bullard’s group fought the government in court to prevent a USDA-planned border opening that would have occurred on March 7, 2004. But the CEO’s statement falls on deaf ears as far as the Canadians are concerned.

Paskal says several Montana beef producers, and R-CALF USA members, have bought and sold cattle in the Canadian marketplace. He says they have taken advantage of a program created to ease financial burdens on ranchers that were going broke without a market to sell cattle to.

“The [Canadian government] came up with the Competitive Bid Program where the cattle would be set aside for 8 weeks, 12 weeks, and investors could come up and buy these cattle,” he says. “So the investors, that we found out came up and bought our cattle, were the same guys that were members of R-CALF. These are the same people that have advocated to U.S. agriculture interests and American consumers that Canadian beef is unsafe.”

Bullard confirms that some members bought and sold cattle in Canada, but says they too lost money due to the border crisis.

“We are aware that some of our members had in fact purchased cattle up in Canada, but as this issue has evolved and multiple cases of BSE have been discovered, some of these producers took a pretty big hit. We’re not aware of any producers who have purchased cattle up there recently, in other words, in an attempt to make windfall profits,” says Bullard.

But that answer doesn’t satisfy Paskal, who claims at least one well-respected Montana rancher and R-CALF member has bought cattle from him.

“People from south of the border who had benefited greatly, because their livestock prices went through the roof down there, they had excess dollars in their pocket, came up to Canada and seen how cheap our inventory was and they took a position in the Canadian market to own not just a few cattle, but substantial amounts of inventory,” says Paskal. “[They] are people that are good R-CALF members in the state of Montana that had bought substantial numbers of cattle in Canada.”

The Canadian says U.S. cattlemen have directly benefited from his misfortunes, since the border between the two countries was closed in 2003. “I don’t know if [they] own cattle in Canada right now, but they owned large numbers of cattle over the period of time since the border has been closed,” he says

However, the days of pointing fingers appear to be coming to a close. The governments of both countries have failed to strike a deal that allows live cattle to cross the border. The Alberta producer says the clock has run out on Canadian cattlemen sitting around being patient.

“We just, in Canada here, strongly believe this is not a food safety issue. This is strictly an economic deal; this is strictly a political deal right now,” he says. “Myself and my feedlot buddies in Canada, as well as all the cow-calf operators in this country are the sacrificial lamb here. It has cost us millions, it has just literally broke the back of our industry here and it has pushed us into the corner where we’re really going to lash out and do whatever we have to do to survive.”

And the plan the he says cattle groups have come up with seems to be flush with vengeance.

“Alberta and western Canada is home to large amounts of gas and oil. In this last week we have seen a reluctance of land owners to let these oil companies onto their land anymore, to sign more agreements in regards to gas and oil right-of-ways. That is going to happen. I have personally turned away people and I know some of my friends and fellow ranchers are doing the same thing,” he says.

“We’re suggesting to Canadian tourists stay the hell away from some of these areas that are close to Canada. You know there are areas in the United States that welcome Canadian tourists, that need those tourist dollars to come down there and be spent on their economies. Our cattle industry associations are telling them to stay home.”

Paskal says he speaks for many Canadian cattlemen when he affirms that it’s not based on science at all. He says it’s not based on food safety anymore, and he’s of the opinion that the producers are sworn to do whatever they’ve got to do to keep afloat in the industry.

“Some of these measures are going to cost not just the Canadian industry, but it is going to cost the American industry dearly. The minute we tell Japan, Korea, Taiwan and China that we are going to provide them a product that is BSE-free, that is going to set the standard in the world,” he says. “The minute that we tell the consumers on the North American continent that we aren’t going to feed anymore animal protein in the diets of any livestock, that is going to cost the U.S. industry billions of dollars.”
 

Kato

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According to the news, industry leaders have been meeting all week to come up with a contingency plan in the event that the border stays shut. It'll be interesting to see what those plans involve. We're backed into a corner so we've nothing to lose.

Maybe the time has finally come when those who have been preaching the 'sound science will save the day' mantra will finally open their eyes to the true state of affairs. To see things for what they really are, and to actually make some moves that are not influenced by what the powers south of the 49th want Canada to do.

I think what makes it all the more bitter up here is that for years we felt of all the commodities that traded across the border, beef was the one example of how trade can really work to the benefit of both partners. With the exception of a few elements in your country who will never want to trade with anyone any way, I think most will agree that it was working for you too.

There were people in your country who complained that our cattle were hurting your market, but there will always be someone who says that, just on the philosophical level.

There were people here too, who complained that we were giving away the value added benefits of our beef by shipping live cattle. Not a perfect world, but when you have people and money involved, it never is. It did work though.

We used to be a single market. Now we are separating into two entities.

What happens in the next few weeks with this border thing will be the deciding factor in whether or not the separation becomes a divorce. :?

Big question is who will be better off in the long run?
 

SASH

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What happens in the next few weeks with this border thing will be the deciding factor in whether or not the separation becomes a divorce.

Big question is who will be better off in the long run?

Good analogy. I don't really think there is any question who will be better off in the long run.
 

don

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it looks like relations are getting better. gov. schweitzer said he knows with the severe fire risk conditions down there he can count on his friends north of the border to help out with firefighting if necessary. rotflmao. didn't he write a friend of the court letter advising keeping the border closed???
 

SMS

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HAY MAKER said:
“Alberta and western Canada is home to large amounts of gas and oil. In this last week we have seen a reluctance of land owners to let these oil companies onto their land anymore, to sign more agreements in regards to gas and oil right-of-ways. That is going to happen. I have personally turned away people and I know some of my friends and fellow ranchers are doing the same thing,” he says.”

I am glad that I someone else is starting to think like us in North Alberta.

I seen a oil industry report released a couple months ago. In a nutshell, 1/2 of the worlds old supply left is currently sitting in the Alberta tarsands. There is more oil there than all OPEC countries combined. Suncor just annouced another $10 billion plant to be built in the next few years. That is 5 plants in that $5 - 10 billion size that is currently being built and waiting to be built.

But to get this oil to markets they have to cross our land. We may not be able to stop it, but can make it ugly with appeals, enviromental reviews and arbitration settlements. All takes time.
 

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