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border closure seen bringing permanent split in NA mkt

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waterloo_boy

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cp agriculture news
Thursday, Jul 14, 2005

U.S. border closure seen bringing permanent split in North American beef market

OTTAWA (CP) - One unexpected outcome of the U.S. ban on imports of Canadian cattle could be a permanent split in the once firmly integrated North American meat packing industry, industry officials say.
Meat processors have seen a major silver lining in the mad cow crisis in that cattle prices fell and demand for slaughter capacity soared.

But the beef industry wants to see a return of the integrated market, industry spokesmen told a news briefing Thursday.

John Newman, chairman of the Beef Information Centre, said Canadian ranchers are anxious for the border to reopen. The return of U.S. buyers is expected to raise cattle prices.

cp agriculture news
Thursday, Jul 14, 2005 Email this to a friend
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U.S. border closure seen bringing permanent split in North American beef market

OTTAWA (CP) - One unexpected outcome of the U.S. ban on imports of Canadian cattle could be a permanent split in the once firmly integrated North American meat packing industry, industry officials say.
Meat processors have seen a major silver lining in the mad cow crisis in that cattle prices fell and demand for slaughter capacity soared.

But the beef industry wants to see a return of the integrated market, industry spokesmen told a news briefing Thursday.

John Newman, chairman of the Beef Information Centre, said Canadian ranchers are anxious for the border to reopen. The return of U.S. buyers is expected to raise cattle prices.

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"We've done what we had to do to expand slaughter capacity and process these animals," he said. "But we'd rather continue our strategic relationship with the U.S. industry, so that together, we can be a stronger North American beef industry."

Jim Laws, executive director of the Canadian Meat Council, said meat packers have added 1,500 jobs since the border was closed in May, 2003, following the discovery of a case of mad cow disease in Alberta.

Canadian packing plants are working overtime six days a week and aggressively expanding capacity, while new players are popping up across the country, Laws told the briefing.


Canada's red meat processing industry has annual sales of $11.4-billion, employs 34,000 people, and is the fourth-largest manufacturing sector after cars, petroleum and lumber.

That increased capacity won't go away when the U.S. border is reopened to live cattle from Canada, he said.

"The bricks and mortar investments that we've been making to process the cattle that we used to export to the U.S. are quite literally 'concrete.' They will not be dismantled if the border opens later this month.


"At the end of the day the Canadian beef industry will be stronger than it was before and better able to compete on the international stage."

Even if the border is reopened, the meat packers are confident that Canadian ranchers will make sure they stay in business, Laws said.

"This is a growing industry in Canada," he said. "We know Canadian farmers will not soon forget that border closed and that they need to keep supplying this extra capacity that was built in Canada."

In contrast, U.S. meat packing plants have been closing or operating far below capacity, said Patrick Boyle, president of the American Meat Institute.

He said 7,800 jobs are gone in the U.S. industry, although he blames that on a combination of factors, not just the lost access to Canadian cattle.

The price of ground beef in the United States has risen so sharply that low-income consumers are shifting to other types of protein such as pork and chicken, he said.

"The changes that are occurring in the U.S. beef industry will become permanent and so too will the corresponding changes that are occurring here in Canada," he said.

"Former partners in trade, in an integrated market, will now become fierce competitors in international markets going forward, unless we can restore trade to our two countries."

Boyle is visiting Canada as part of his industry's campaign to get the border re-opened.

He said he hopes U.S. judges pondering an application by the ranchers' group R-CALF-USA to keep the border closed, understand the long-term implications of a fractured North American market.



© The Canadian Press, 2005

http://www.mytelus.com/news/article.do?pageID=cp_agriculture_home&articleID=1980082
 
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