• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Impact Of "Over-30" Cattle Impacts Will Be Minimal

Cal

Well-known member
http://beef-mag.com/cowcalfweekly/impact-over-30-cattle/

Impact Of "Over-30" Cattle Impacts Will Be Minimal

Mar 23, 2007 2:29 PM

Many U.S. cattle producers have serious concerns over expanding allowable beef imports from Canada. They believe a recent proposal by USDA to open the U.S. border to cattle, and products from cattle, more than 30 months of age will trigger a deluge of additional low-price beef imports, driving down domestic cattle prices.

But the impact of this trade action depends to a great extent on whether it causes a net increase in U.S. beef supplies -- or whether imports from Canada simply replace imports from other countries.

Imports of "over-30" beef and cattle have been banned since the discovery of BSE in Canada in May 2003. It's the last stage to a full reopening of the cattle and beef trade between the U.S. and Canada.

"The proposed expansion of allowable beef products will likely increase U.S. imports of Canadian cull cows, cull bulls and Canadian processing beef," explains Gary Brester, Montana State University professor of agricultural economics in Bozeman. Brester and his colleague John Marsh recently analyzed the impacts of resuming Canadian cull cow and beef imports.

"It's recognized that increased imports of over-30 beef could potentially reduce U.S. cull cow prices," Brester says. "But changes in U.S. cull-cow prices will depend on the quantity and timing of these imports -- and the degree to which processing-beef imports from Canada displace processing-beef imports from other countries."

However, regardless of the form of imports -- processing beef or cull cows -- the primary consideration is the extent to which the expansion of allowable beef imports increases the supply of processing beef available to U.S. consumers.

"It seems more likely that the Canadian imports will simply displace other imports." Marsh says. "If so, the USDA proposal will have little impact on U.S. cull-cow prices."

Apart from Canada, four countries (Australia, New Zealand, Argentina and Uruguay) are major sources of U.S. beef imports. Most of these imports are used to produce ground beef. The 1995 Uruguay Round Agricultural Agreement altered the U.S. Meat Import Act by converting U.S. import quotas for fresh, chilled or frozen beef and veal to tariff rate quotas (TRQ).

A 10% in-quota ad valorem tariff was established for fresh and frozen boneless beef. The over-quota tariff was set at 31.1% for 1995. By 2006, the in-quota tariff had been reduced to 4.9% and the over-quota tariff had been reduced to 26.4%.

Brester and Marsh single out Uruguay, explaining that increased U.S. imports of beef from Uruguay have more than offset decreased imports from Canada (including the decline in Canadian cull-cow imports). Beginning in 2003, imports of beef from Uruguay increased substantially -- averaging 415.5 million lbs. (carcass weight basis) between 2004 and 2006. Most of these imports exceeded Uruguay's TRQ of 20,000 metric tons (61 million lbs. carcass weight).

"The added transportation costs and over-quota tariffs may make Uruguay's processing-beef imports more expensive than similar imports from Canada," Brester explains. He adds that imports of Uruguayan beef by U.S. processors did not appreciably exceed Uruguay's TRQ until 2003 -- the year U.S. beef imports from Canada were halted.

Both Brester and Marsh say that if USDA's proposed trade policy initiative increases U.S. beef supplies, U.S. cull-cow prices may decline by $1.55/cwt. if imports are not displaced. Cull-cow prices would fall 78¢/cwt. if only half of Canadian cull-cow and processing beef displaces beef imports from other sources.

"The timing of increased imports could influence total revenues received by U.S. cattle producers," Marsh says. "The impact would be less if the increased imports occurred from February through September."

In addition, the ability to import Canadian cull cows may allow U.S. cow-slaughtering plants to operate more efficiently, which would have positive effects on U.S. cattle prices.

Finally, the estimated impacts assume that beef demand by U.S. consumers isn't adversely affected by the prospect of additional imports from a region having a relatively higher prevalence of confirmed BSE cases than the U.S.

"The proposed trade initiative could help U.S. negotiators reopen important U.S. beef export markets," Marsh concludes.

Most economists believe the consumption of ground beef is relatively responsive to its price. Therefore, Brester says small declines in ground-beef prices could increase U.S. consumer beef expenditures as consumers substitute away from other meat products.

-- Clint Peck
 

rkaiser

Well-known member
Spoke with a Canadian fellow just the other day who sells Grain Fed Uraguay beef to a retail chain in Florida. I would mention the name of the chain, but it may distract the Rcalf crew from their current mission of playing the packer puppet on the Canadian border. :wink:
 

rkaiser

Well-known member
Why not Robert? Do you actaully think that cows will flood into America from Canada and ruin price for you? America will get it's fill of Beef from somewhere will it not? Would you rather deal with a bunch of us Canackleheads with the safest beef in the world, or some third world country that has more hidden agendas than the USDA?
 

RobertMac

Well-known member
rkaiser said:
Why not Robert? Do you actaully think that cows will flood into America from Canada and ruin price for you? America will get it's fill of Beef from somewhere will it not? Would you rather deal with a bunch of us Canackleheads with the safest beef in the world, or some third world country that has more hidden agendas than the USDA?

Hold your horses, Randy...the joke is the displacement theory. There will be no reductions in imports until supplies increase enough to pressure the price of USA live cattle. A reduction in the price of the 120,000 head/day use of USA live cattle is the pot of gold for the big packers. One only has to remember that 40-50% of each fed cattle is ground beef...so goes the ground beef market, so goes the beef complex. Also the speculator's perception of the effect of the Canadian border opening will be an exaggeration of the actual effect. The reason USA cattle prices are high, is because of tight supplies with respect to demand. Until supplies increase (or the perception of increased supplies) there will be no subtenant increase in exports and imports will increase where ever and when ever possible. Nothing evil, just simple business 101.
 

rkaiser

Well-known member
I guess I am not understanding you Robert. Will increased imports of Canadian cull cows affect American prices or not?
 

Cal

Well-known member
Not to change the subject too much, but I have a question for the Canadians; You have a large amount of Asian tourists, anything from the ones getting on cruise ships loaded with high end meats and hamburger at Vancouver, to just about anywhere else. Have you honestly ever heard of any of them having concerns about eating Candian Beef while in your country? I would doubt it, but if there are legitmately any concerns, I wouldn't think that they would be contained within their own borders. It seems like actions would speak louder than dubious polling data and contrived trade barriers. JMO
 

Work Hard and Study Hard

Well-known member
rkaiser said:
I guess I am not understanding you Robert. Will increased imports of Canadian cull cows affect American prices or not?

Canadian Cull Cows will drop the price of American prices and you know it. Whether you have BSE or not it will drop the prices. Add in the risk of your BSE problem and it is a no win situation for the American producer.
 

canadian angus

Well-known member
Working in the dark, how can our few cows hurt you, like walking on egg shells, make some noise but that is all. Our cows are all but gone and I hope your dependance on us will be soon gone, forget the oil, forget the wood, forget the water, how about draw a curtain and then the world won't know that we are neighbors. Yah right, unless a great awaking happens your goimg to be as ugly tomorrow as I am.

CA

And tired of Work Less And know nothings submissions, Oldtimers parrot.
 

Work Hard and Study Hard

Well-known member
canadian angus said:
Working in the dark, how can our few cows hurt you, like walking on egg shells, make some noise but that is all. Our cows are all but gone and I hope your dependance on us will be soon gone, forget the oil, forget the wood, forget the water, how about draw a curtain and then the world won't know that we are neighbors. Yah right, unless a great awaking happens your goimg to be as ugly tomorrow as I am.

CA

And tired of Work Less And know nothings submissions, Oldtimers parrot.

As of now the Oil, Wood, and Water that comes from Canada seems safe to use. I can't say the same for Canadian beef. You also have to remember the companies that import those products aren't near as independent as the US cattleman is. You would see things much different if you were on this side of the fence. Keep up your fight and we'll keep up ours.
 

canadian angus

Well-known member
Red (interesting) white(isn't that pure), and blue (does that go with black) all over, grow a neck and stick in the red sand. Life is good if you don't look around.

We live only once, some in a haze and some look around, yes you have the power and the might but the big one will only know.

As I remember the posts, you may have been in diapers then, the name calling went on but there still is only one sand box, remember spread rumours, if you want to get off, get a broom or hitch a ride.

CA
 

DiamondSCattleCo

Well-known member
Work Hard and Study Hard said:
Canadian Cull Cows will drop the price of American prices and you know it.

Did you not see the article on Uruguan beef simply taking Canada's place when the border closed? All the opening of the border will do is allow Canadian beef to replace some of your other imports, not affecting your prices at all (except in the very beginning when speculators will screw with the market). So you'd rather send your money to Uruguay?

Rod
 

RobertMac

Well-known member
Rod said:
Did you not see the article on Uruguan beef simply taking Canada's place when the border closed? All the opening of the border will do is allow Canadian beef to replace some of your other imports, not affecting your prices at all (except in the very beginning when speculators will screw with the market). So you'd rather send your money to Uruguay?


Rod, is Uruguayan beef cheaper than USA beef? Canadian beef?
Tell me again, why importers would stop importing Uruguayan beef?
 

rkaiser

Well-known member
They likely will not stop, and thus like the American market for the Japanese was lost to the Australians, a small part of the American market may be lost to Canadian Beef (I say the term Canadian loosely as Canada does not truly export beef to the USA --- Cargill and Tyson do)

I'll ask you a question I posed of Sandhusker (who is likely still sleeping). If we - and I will say we as in Canadian and American producers bought Tyson foods here in Canada, would you stop the talk of the border being evil.

I have a plan for the folks in the USA and the folks in Canada who despise the control exerted by Tyson and Cargill to buy the Tyson plant first and then buy the Cargill plant in High River shortly after. Tyson would be first due to the fact that they are whining about labor. My goodness; who would want to work for the Mafia anyway? I'd just bet we could find a better working relationship with labor.

Just dream with me for a moment - those folks who belong to Rcalf for more reasons than helping the LMA boys line their pockets could invest with Canadian BIG C supporters, and the likes, to buy the Tyson plant at Brooks. Not many plants left in the North West anyway due to Rcalf's support of the packer controlled border issue. Cattle could flow to where they are produced the best (Montana grasslands for cow/calf and Alberta irrigation enriched finishers) And then into OUR plant at Brooks Alberta to be custom harvested OR marketed with the help of producer dollars from both the NCBA and the CCA.

Add to the dream if you like Robert - maybe even start another thread. Or continue to try to prove that the only answer is a closed border like Sleepy Head.
 

RobertMac

Well-known member
RK said:
Do you actaully think that cows will flood into America from Canada and ruin price for you?

Do you believe the USA has an unlimited capacity to take beef from around the world?

RK said:
America will get it's fill of Beef from somewhere will it not?

Call me an ugly American with a protectionist attitude, but I'd like to see USA citizens get their fill on USA beef!!!!!!!!! But we're all rich down here...we shouldn't be so selfish...some USA producers should just fall on the sword, get out of the business and let some foreign producer have his market share. Spread the wealth...sorry Randy, a little too socialist for me.

RK said:
Would you rather deal with a bunch of us Canackleheads with the safest beef in the world, or some third world country that has more hidden agendas than the USDA?

Randy, you know consumer perception is very important in selling them a product...or you wouldn't be starting your beef venture under the perception that it is better!!!!! Canada has well documented BSE...opening the border to OTM cattle from Canada will cause another wave of USA consumers to stop eating beef because of their perceived disregard for their safety. If you want a share of our market, put your name on it and send it south.

I don't know why I'm arguing this...It will only help my business. :???:
 

RobertMac

Well-known member
RK said:
...like the American market for the Japanese was lost to the Australians...

The USA lost the Japanese market because of a Canadian cow with BSE.
Sorry Randy, you left yourself wide open for that one. :wink:

I've said before that I would have little problem with Canadian beef coming into the USA IF it is labeled as a 'Product of Canada' to the final consumer. Good luck with the dream! :)
 

rkaiser

Well-known member
What do you mean "good luck" Robert, are you in or are you out. I'm ready to write the letter to good old Johhny Tyson asking if we can help him out of this BSE mess he has on his hands here in Canada. Can't find good help, well we're here to help. What's your price Johnny? Sleepy Head already told me his bank would finance the deal and he and I and all of the American and Canadian producers who support the plant would pay off the loan with a levy. Might have to be a pretty high levey cause Tam and Big Muddy and their freinds would obviously not support a proposal like this. :wink:

Come on Robert, chip in some positves. I think you and I are on to something here. Not to socialist for you is it?

I had to laugh at how you blamed that Canadian cow for your lost Japanese markets. Think you got me on that one Robert? Seriously?
 

Jason

Well-known member
Tyson might be slower than Macon to give you a price Kaiser. :shock:

I'd be interested in finding out what that plant is worth to them. I bet it's as expensive as a new one.
 

rkaiser

Well-known member
Help us out here Jason and give old Johnny boy a call. You must be in his good book. Just tell him that you are willing to help him out with his labour and BSE problems up in Canada and would like to buy his plant. I bet you would get a better price than I would. Don't worry about investors Jason - I'll look after that. :wink:
 
Top