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Feb 13, 2005
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White House - AP Cabinet & State

Agency Projects Slower Beef Production

Tue Feb 22, 7:31 PM ET White House - AP Cabinet & State

By LIBBY QUAID, Associated Press Writer

WASHINGTON - Beef production will be slower than expected after Canadian cattle are allowed back into the United States next month, the Agriculture Department said Tuesday.

Cattle prices should remain relatively high because of competition between U.S. and Canadian packing houses, according a report by the Agriculture Department's chief economist.

Banned since the discovery of mad cow disease in May 2003 in Alberta, live cattle imports from Canada are scheduled to resume on March 7.

"Based on increased slaughter of steers and heifers in Canada, U.S. packers will have to compete more aggressively for the pool of slaughter-ready cattle, somewhat dampening an expected decline in fed steer prices," the report said.

Average prices for slaughter-ready cattle should be $80 to $85 per 100 pounds, the report said. The 2004 average was $84.75, the report said.

Commercial beef production is estimated to be 25.7 billion pounds this year, according to the report.

That's 400 million pounds less than the department had projected for 2005. The change was because Agriculture Secretary Mike Johanns decided last week not to allow meat from older Canadian animals into the United States on March 7.

Now, imports of meat as well as live cattle will be restricted to animals younger than 30 months. The brain-wasting disease is thought to pose less of a risk to younger animals.

The department also dropped its estimate for cattle imports, saying it expects Canada to ship about 1.3 million head to the United States, not 2 million as previously projected.

Ranchers have been seeing near-record prices for their cattle, and a ranchers' group is suing to keep the border closed.

A meatpackers group is suing to open the border even wider, expanding what's allowed to include older animals as well. Packers say the ban has cost their industry more than $1.7 billion in revenues.
I'd be willing to bet the number of cattle that go across the US border this year will be well under a million. It will be autumn before we get the infrastructure back to even start shipping on a serious basis.

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