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Published Monday
February 28, 2005
Canadian Stampede Unlikely
BY CHRIS CLAYTON
WORLD-HERALD STAFF WRITER
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Cattle shipment battle festers
BROKEN BOW, Neb. - Cattle feeders such as Bill and Jerry Adams, whose feedlot here is the state's largest, wonder whether it will be worth the hassle to import Canadian cattle once the border opens.
An employee checks one of the many pens at Adams Land & Cattle Co. near Broken Bow, Neb., last week. Bill and Jerry Adams, the feedlot owners, say plans to reopen the U.S. border won't necessarily lead to a big influx of Canadian cattle.
While Canadian cattle buyers already are lining up slaughter cattle for U.S. meatpackers, brokers say there is little movement by U.S. feedlots to import cattle when the border reopens, potentially as soon as March 7.
"Everybody is still trying to digest what it's going to take to get the cattle down there," said Andy Drake, a Manitoba, Canada, cattle buyer for feedlots. "It depends a lot on whether feedlots down there want to go through the hoops of having Canadian cattle in their lots."
Despite Canadian feeder cattle being cheaper than U.S. cattle, Bill Adams, president of Adams Land & Cattle Co., said he doesn't think he will buy Canadian feeders just yet. That's not because he thinks there is anything wrong with Canadian animals.
"They've got some good cattle up there," Adams said.
At least 20 Nebraska feedlots purchased feeder cattle from Canada in the eight months before the border closed in May 2003 because of a case of mad cow disease in Alberta. Adams Land & Cattle was the state's largest feedlot buyer of Canadian cattle during that time, importing 19,000 animals in the eight months before the closing.
"That time was probably the one time we bought a lot of Canadian cattle," Bill Adams said.
A number of factors converged to make Canadian animals a good buy: Producers culled herds because of a drought; feed prices were high; and the exchange rate increased the U.S. dollar's buying power.
"It did work out so we could get a few cattle out of that area," Bill Adams said.
Jerry Adams, vice president of Adams Land & Cattle, said they've recently looked at buying Canadian animals but don't think it is as financially attractive as in 2002. The exchange rate with the Canadian dollar is higher than two years ago and feed is cheaper in Alberta, which is Canada's largest province for cattle feeding.
"For the feedlot industry, there won't be a lot of feeders coming south in the very near future," Jerry Adams said. "The dynamics have really changed economically, and that will really discourage a lot of cattle coming across."
Drake agreed that it is now cheaper to feed cattle in Alberta than in the States. It's even possible that next year U.S. calves and yearlings will head north to Alberta.
"It's not out of the question we could have cattle going to Canada in the next two years," Jerry Adams said. "It will put a whole new twist on how the cow-calf man looks at this issue."
From 1999 to 2001, Canada actually imported 183,000 more feeder cattle from the United States than the U.S. imported. That all turned around in 2002, when drought pushed Canadians to export 464,000 feeders to the United States while only importing 19,000. The trend continued in 2003 before the border closed.
The Adams brothers expect that opening the border initially will negatively affect the prices they receive for their slaughter cattle, but in the long term the consumer and industry will win.
"It's right for the consumer, it's right for the industry long term as long as the safeguards are in place," Jerry Adams said.
Market analysts still say there is a price advantage of nearly $150 this week for U.S. cattlemen buying Canadian feeder cattle.
"That still a pretty good difference," said Rich Nelson, a livestock analyst for Allendale Inc., an agricultural marketing service.
Canadian officials have projected that U.S. operations will import as many as 300,000 feeder cattle this year. U.S. meatpackers will import as many as 700,000 fed cattle for slaughter.
People on both sides of the border expect that it will take a while for the feeder cattle to start arriving here. It took nearly a month after the border was reopened to Canadian boxed beef for the first shipments to arrive in the United States.
"I would not be surprised if things take some time to develop in that market as well," said Cindy McCreath, a spokeswoman for the Canadian Cattlemen's Association.
Regulations imposed on feeder cattle will slow the process. A certified veterinarian must be on hand when cattle arrive at the feedlot to break the seal on the trucks. Once on the ground, the Canadian cattle cannot be moved to a different feedlot in the United States, and when they are sent to the packer they must be shipped exclusively with other Canadian animals. Feedlot owners also must provide detailed information to the packers on the animals.
Contact the Omaha World-Herald newsroom
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Take care.
~
Published Monday
February 28, 2005
Canadian Stampede Unlikely
BY CHRIS CLAYTON
WORLD-HERALD STAFF WRITER
--------------------------------------------------------------------------------
»
Cattle shipment battle festers
BROKEN BOW, Neb. - Cattle feeders such as Bill and Jerry Adams, whose feedlot here is the state's largest, wonder whether it will be worth the hassle to import Canadian cattle once the border opens.
An employee checks one of the many pens at Adams Land & Cattle Co. near Broken Bow, Neb., last week. Bill and Jerry Adams, the feedlot owners, say plans to reopen the U.S. border won't necessarily lead to a big influx of Canadian cattle.
While Canadian cattle buyers already are lining up slaughter cattle for U.S. meatpackers, brokers say there is little movement by U.S. feedlots to import cattle when the border reopens, potentially as soon as March 7.
"Everybody is still trying to digest what it's going to take to get the cattle down there," said Andy Drake, a Manitoba, Canada, cattle buyer for feedlots. "It depends a lot on whether feedlots down there want to go through the hoops of having Canadian cattle in their lots."
Despite Canadian feeder cattle being cheaper than U.S. cattle, Bill Adams, president of Adams Land & Cattle Co., said he doesn't think he will buy Canadian feeders just yet. That's not because he thinks there is anything wrong with Canadian animals.
"They've got some good cattle up there," Adams said.
At least 20 Nebraska feedlots purchased feeder cattle from Canada in the eight months before the border closed in May 2003 because of a case of mad cow disease in Alberta. Adams Land & Cattle was the state's largest feedlot buyer of Canadian cattle during that time, importing 19,000 animals in the eight months before the closing.
"That time was probably the one time we bought a lot of Canadian cattle," Bill Adams said.
A number of factors converged to make Canadian animals a good buy: Producers culled herds because of a drought; feed prices were high; and the exchange rate increased the U.S. dollar's buying power.
"It did work out so we could get a few cattle out of that area," Bill Adams said.
Jerry Adams, vice president of Adams Land & Cattle, said they've recently looked at buying Canadian animals but don't think it is as financially attractive as in 2002. The exchange rate with the Canadian dollar is higher than two years ago and feed is cheaper in Alberta, which is Canada's largest province for cattle feeding.
"For the feedlot industry, there won't be a lot of feeders coming south in the very near future," Jerry Adams said. "The dynamics have really changed economically, and that will really discourage a lot of cattle coming across."
Drake agreed that it is now cheaper to feed cattle in Alberta than in the States. It's even possible that next year U.S. calves and yearlings will head north to Alberta.
"It's not out of the question we could have cattle going to Canada in the next two years," Jerry Adams said. "It will put a whole new twist on how the cow-calf man looks at this issue."
From 1999 to 2001, Canada actually imported 183,000 more feeder cattle from the United States than the U.S. imported. That all turned around in 2002, when drought pushed Canadians to export 464,000 feeders to the United States while only importing 19,000. The trend continued in 2003 before the border closed.
The Adams brothers expect that opening the border initially will negatively affect the prices they receive for their slaughter cattle, but in the long term the consumer and industry will win.
"It's right for the consumer, it's right for the industry long term as long as the safeguards are in place," Jerry Adams said.
Market analysts still say there is a price advantage of nearly $150 this week for U.S. cattlemen buying Canadian feeder cattle.
"That still a pretty good difference," said Rich Nelson, a livestock analyst for Allendale Inc., an agricultural marketing service.
Canadian officials have projected that U.S. operations will import as many as 300,000 feeder cattle this year. U.S. meatpackers will import as many as 700,000 fed cattle for slaughter.
People on both sides of the border expect that it will take a while for the feeder cattle to start arriving here. It took nearly a month after the border was reopened to Canadian boxed beef for the first shipments to arrive in the United States.
"I would not be surprised if things take some time to develop in that market as well," said Cindy McCreath, a spokeswoman for the Canadian Cattlemen's Association.
Regulations imposed on feeder cattle will slow the process. A certified veterinarian must be on hand when cattle arrive at the feedlot to break the seal on the trucks. Once on the ground, the Canadian cattle cannot be moved to a different feedlot in the United States, and when they are sent to the packer they must be shipped exclusively with other Canadian animals. Feedlot owners also must provide detailed information to the packers on the animals.
Contact the Omaha World-Herald newsroom
~
Take care.
