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OTM decision could be damaging to US producers

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Feb 10, 2005
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Southern Manitoba
Delayed US Acceptance of Older Cdn Beef Disappoints Cdn Industry

Winnipeg, MB, Feb 10, 2005 (Resource News International via COMTEX) -- A US decision not to allow imports of Canadian beef from cattle over 30 months when the US border reopens to younger live Canadian cattle March 7, came as somewhat of a disappointment to the domestic industry. Canadian industry sources felt the decision was politically based, but could limit export potential for both countries in other markets.

The Canadian Cattlemen's Association (CCA) was disappointed, but not surprised by the US decision, said CCA president, Stan Eby. He said the Canadian industry and government will now be lobbying to get a supplementary ruling in place as soon as possible.

Ted Haney, president of the Canada Beef Export Federation (CBEF), said US Agricultural Secretary, Mike Johanns took the middle ground in his decision, as US cattle groups had been lobbying both sides of the issue. On the one side, R-Calf would have liked to see the border remain closed to all Canadian cattle and beef products. Meanwhile, other groups were behind a complete opening.

Haney said the ruling was most in line with the National Cattlemen's Beef Association (NCBA) position, which advocated a staged opening. The NCBA maintained that there is an unbalance with allowing the beef from the older cattle, but not the animals themselves, said Haney.

Haney said, Johanns' partial decision was couched in politics, rather than science. He thought the US would have been better off admitting they were protecting domestic interests, rather than trying to tie the decision into science and food safety.

Haney was concerned because there is no legitimate debate on the safety of beef derived from cattle over 30 months of age, where the specified risk materials (SRM's) have been removed. Any country which hasn't already opened its borders to Canadian cattle products has done so because of political or economic reasons, not science, he added.

The fact the US did not admit to the lobbying pressure is detrimental to the beef sector in both countries, as it plays to protectionist attitudes in other nations, said Haney. "It makes it more difficult for both countries to resume trade with other nations for beef from cattle over 30 months," he said.

The Asian markets, including China, Japan and Taiwan all have enough scientific information to initiate trade, said Haney. However, they feel no obligation to do so as long as there are still restrictions in North America, he added. Haney thought the Asian countries were waiting for North America to lead the way before opening their borders.

The US will have difficulty convincing other countries to take their beef from older cattle, if the country does not allow Canadian imports, said Haney. Canada's ability to trade those same products internationally will also be delayed. The move will reduce the level of price recovery in cull cows, said Haney, putting Canadian producers at a disadvantage.

Processing the older animals will be less profitable in Canada, as the markets for the products will be limited to Canada, Macau and a few other smaller markets, said Haney. However, he said there will be some liberation of capacity as more of the younger animals move south.

US packers may also see some detriment if they are unable to obtain the older Canadian cattle, said Haney. He thought Canadian packers will have more markets available to them, and could be more profitable.

Herb Lock, a cattle analyst with Farm$ense Marketing, felt the decision not to allow beef from older animals at this time could be seen in a positive light, as it will allow the Canadian industry the chance to move forward with developing its own cow slaughter plants.

"The bureaucracy had to give the dissenters something, and this is the least harmful option," said Lock.
The NCBA maintained that there is an unbalance with allowing the beef from the older cattle, but not the animals themselves, said Haney.

Is someone spinning this?

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