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Cattlemen in U.S. Hurt by a Ban on Canada
International Herald Tribune, March 08, 2005
by Alexei Barrionuevo The New York Times
Here in this American state's largest beef-processing plant, knife-wielding workers attack cattle carcasses, excising cuts of meat from the round to the chuck, and automated conveyors package 1,000 boxes an hour of 150 products.
But in a conference room inside the plant recently, there was a palpable gloom among 10 of the state's cattlemen, whose farms provide the cattle that keep this Tyson Food plant running.
A ban on live cattle from Canada has forced slowdowns at Pasco and other Tyson beef-processing plants. The ban threatens to make life more expensive for the cattlemen here and could force a contraction of the Northwest market, which depends more than any other region of the United States on Canadian cattle to fill seasonal shortfalls.
The ban was instituted in May 2003, after mad cow disease was found in an Alberta beef cow, and was supposed to have been lifted on Monday. But that was delayed by an injunction from a government judge in Montana keeping the border closed for the time being.
Then last Thursday, the U.S. Senate agreed by a narrow margin to a legislative measure keeping the border closed indefinitely, citing concerns that Canadian cattle were still infected. The House of Representatives will now take up the issue, although President George W. Bush has threatened a veto to force the border to be reopened.
Unlike the cattlemen from the Midwest and Upper Plains states who have supported the continued ban on Canadian cattle, Washington state cattlemen see the effort to keep the border closed as nothing more than a protectionist smoke screen. To them, the border closing is a fiction: Despite the ban on live cattle, Canadian boxed beef continues to be imported into the United States. Boxed beef imports are down 6 percent from 2002, but they jumped 45 percent in 2004 from 2003, to 659 million pounds, or 299 million kilograms, according to the U.S. Census Bureau.
"We are getting more Canadian product here, just in a different form," said Mike Para, who owns a feedlot north of Pasco.
His brother, Jake Para, who co-owns a ranch with him, added: "Everything that protectionism does adds to the cost to the consumer. They are the ones that are going to pay before it's all over."
As the price of U.S. beef has gone up because of the limited supply of cattle, Canadian boxed beef has seemed a relative bargain to retail and wholesale buyers, even though the Canadian dollar has recently increased in value relative to the dollar.
More than anything, what worries the Washington cattlemen are Canadian cattlemen, who have used the ban to begin to develop their industry into a more sophisticated competitor to the dominant beef trade in the United States.
Last year, Canadian cattlemen, with some government assistance, began investing in processing plants, increasing their country's capacity by 22 percent. While Canada's capacity to process 4.4 million head a year is just 12 percent of U.S. capacity, Canada's growth has caused some U.S. companies to lobby furiously to reopen the border.
Tyson and Cargill, the largest U.S. agricultural company, is making the biggest investments in expanding capacity north of the border. But it also favors lifting the ban, citing the broader importance of regaining access to Asian markets, which have been closed to U.S. beef since mid-2003.
But the Canadians have done more than just expand processing capacity. Faced with an oversupply of cattle, Canadian cattle groups have forged marketing partnerships with grocery chains to sell more Canadian beef at home. In British Columbia, ranchers and their families regularly work behind meat counters on weekends to help spur sales.
"Canada is learning to do things on the marketing side that it has never done before," Mike Para said. "The industry has changed forever, even if we do open the border. Those folks are learning to be more independent. They are going to learn how to sell their products to Japan. They are going to do whatever it takes to get those jobs done."
For now, with too few Canadian cattle to slaughter, the pressure continues to build on the U.S. meatpacking industry. On Friday, Cargill said it was making more production cuts at its seven beef plants in the United States. The company attributed the cutbacks to tight supply and the continued border closing.
In the wake of the Montana judge's order to continue the ban for the time being, some banks have begun calling smaller packing plants, asking how long they can hang on, said Rosemary Mucklow, executive director of the National Meat Association, a trade group that represents U.S. meat packers and processors.
"Some of the smaller packers won't survive."
At Pasco, production is down a quarter, to about 2,500 cattle a day, from mid-2003. The plant operates 32 hours a week, down from 45.
Cody Easterday, who owns an 18,000-head feedlot south of Pasco, said, "We have awakened a sleeping lion, no doubt
International Herald Tribune, March 08, 2005
by Alexei Barrionuevo The New York Times
Here in this American state's largest beef-processing plant, knife-wielding workers attack cattle carcasses, excising cuts of meat from the round to the chuck, and automated conveyors package 1,000 boxes an hour of 150 products.
But in a conference room inside the plant recently, there was a palpable gloom among 10 of the state's cattlemen, whose farms provide the cattle that keep this Tyson Food plant running.
A ban on live cattle from Canada has forced slowdowns at Pasco and other Tyson beef-processing plants. The ban threatens to make life more expensive for the cattlemen here and could force a contraction of the Northwest market, which depends more than any other region of the United States on Canadian cattle to fill seasonal shortfalls.
The ban was instituted in May 2003, after mad cow disease was found in an Alberta beef cow, and was supposed to have been lifted on Monday. But that was delayed by an injunction from a government judge in Montana keeping the border closed for the time being.
Then last Thursday, the U.S. Senate agreed by a narrow margin to a legislative measure keeping the border closed indefinitely, citing concerns that Canadian cattle were still infected. The House of Representatives will now take up the issue, although President George W. Bush has threatened a veto to force the border to be reopened.
Unlike the cattlemen from the Midwest and Upper Plains states who have supported the continued ban on Canadian cattle, Washington state cattlemen see the effort to keep the border closed as nothing more than a protectionist smoke screen. To them, the border closing is a fiction: Despite the ban on live cattle, Canadian boxed beef continues to be imported into the United States. Boxed beef imports are down 6 percent from 2002, but they jumped 45 percent in 2004 from 2003, to 659 million pounds, or 299 million kilograms, according to the U.S. Census Bureau.
"We are getting more Canadian product here, just in a different form," said Mike Para, who owns a feedlot north of Pasco.
His brother, Jake Para, who co-owns a ranch with him, added: "Everything that protectionism does adds to the cost to the consumer. They are the ones that are going to pay before it's all over."
As the price of U.S. beef has gone up because of the limited supply of cattle, Canadian boxed beef has seemed a relative bargain to retail and wholesale buyers, even though the Canadian dollar has recently increased in value relative to the dollar.
More than anything, what worries the Washington cattlemen are Canadian cattlemen, who have used the ban to begin to develop their industry into a more sophisticated competitor to the dominant beef trade in the United States.
Last year, Canadian cattlemen, with some government assistance, began investing in processing plants, increasing their country's capacity by 22 percent. While Canada's capacity to process 4.4 million head a year is just 12 percent of U.S. capacity, Canada's growth has caused some U.S. companies to lobby furiously to reopen the border.
Tyson and Cargill, the largest U.S. agricultural company, is making the biggest investments in expanding capacity north of the border. But it also favors lifting the ban, citing the broader importance of regaining access to Asian markets, which have been closed to U.S. beef since mid-2003.
But the Canadians have done more than just expand processing capacity. Faced with an oversupply of cattle, Canadian cattle groups have forged marketing partnerships with grocery chains to sell more Canadian beef at home. In British Columbia, ranchers and their families regularly work behind meat counters on weekends to help spur sales.
"Canada is learning to do things on the marketing side that it has never done before," Mike Para said. "The industry has changed forever, even if we do open the border. Those folks are learning to be more independent. They are going to learn how to sell their products to Japan. They are going to do whatever it takes to get those jobs done."
For now, with too few Canadian cattle to slaughter, the pressure continues to build on the U.S. meatpacking industry. On Friday, Cargill said it was making more production cuts at its seven beef plants in the United States. The company attributed the cutbacks to tight supply and the continued border closing.
In the wake of the Montana judge's order to continue the ban for the time being, some banks have begun calling smaller packing plants, asking how long they can hang on, said Rosemary Mucklow, executive director of the National Meat Association, a trade group that represents U.S. meat packers and processors.
"Some of the smaller packers won't survive."
At Pasco, production is down a quarter, to about 2,500 cattle a day, from mid-2003. The plant operates 32 hours a week, down from 45.
Cody Easterday, who owns an 18,000-head feedlot south of Pasco, said, "We have awakened a sleeping lion, no doubt
