Perhaps It's Time To Step Back On Canadian Situation
I understand the Canadian border situation is a deeply emotional issue, one where an overwhelming majority of producers feel USDA's rule to reopen the border March 7 is fundamentally flawed.
While I also feel for Canadian producers devastated by the loss of their markets, I feel a much greater loyalty to U.S. cattle producers and my own pocketbook. After all, it's difficult to ignore the loss of more than $3 billion in U.S. beef export markets due to a single cow of Canadian origin.
I identify strongly with the concept that the U.S. treat Canada as we would want to be treated -- based on sound science. And, many believe that, to nudge the rest of the world to behave responsibly, we must behave responsibly ourselves.
I believe the science and economics can be brought into balance, and we can enact sound policy with its implementation tied to the adoption of the same science by our trading partners.
Interestingly, despite our unity in opposition to the proposed conditions for reopening the border, the industry still remains deeply divided on the issue. I believe it's due in large part to our strict focus on achieving outcomes without considering the consequences of the tactics pursued.
Despite all the rhetoric, the industry's opposition isn't based on science, just economics. Not that economics and self-interest are bad reasons to oppose this rule, but we must realize that while we're short-term beneficiaries of a closed border, a long-term closure has significant negative implications for global beef trade. If countries decide they can ignore sound science and internationally accepted standards, we've opened a big can of worms for ourselves.
BSE is the most over-hyped, overstated issue with which the industry has ever dealt. England had nearly 200,000 cases of BSE in its cow population; we're talking about four cases in all of North America. Some 15-20 years ago, the risks of BSE were greatly misunderstood, and we're still dealing with that perception. The science and understanding of BSE has come a long ways since then, and it's highly irresponsible for our industry to prey upon those initial and incorrect perceptions in order to achieve our policy goals.
The record price levels we've enjoyed aren't the result of the Canada border closure. That it's not a supply-driven phenomenon is attested to by the fact that the 2004 U.S. net beef supply was the second largest on record, while per capita net meat supplies were the largest ever, according to Cattle-Fax. No, the prices U.S. producers have enjoyed are mostly due to the increased demand that saw 2004 consumer beef spending jump by more than $8 billion dollars in 2004, and by roughly $25 billion since 1998.
While economists estimate the loss of Canadian live cattle has added up to $2/cwt. to the price of fed cattle, the loss of U.S. export markets has subtracted far more than that. USDA data shows we went from a surplus of more than $1 billion to a deficit of nearly $2.5 billion last year. Demand growth outpaced our losses, but our markets would have been significantly better if we were to return to our trade levels prior to BSE.
While it's controversial, most scientists believe BSE occurs randomly in about 1 in a million cows over the age of 30 months. Thus, despite all of our protections, it seems possible BSE will be discovered in a domestically produced animal. This means following sound science and ensuring consumers understand the real risks of BSE must be of paramount importance. Not to mention that following internationally accepted standards is integral to maintaining our global markets in the future.
Using food safety as a means to institute protectionist policies is dangerous in both the short and long term. Perhaps it's time to step back from the euphoria to determine if our tactics will create prosperity or future problems.
By Troy Marshall of Cow Calf weekly
I understand the Canadian border situation is a deeply emotional issue, one where an overwhelming majority of producers feel USDA's rule to reopen the border March 7 is fundamentally flawed.
While I also feel for Canadian producers devastated by the loss of their markets, I feel a much greater loyalty to U.S. cattle producers and my own pocketbook. After all, it's difficult to ignore the loss of more than $3 billion in U.S. beef export markets due to a single cow of Canadian origin.
I identify strongly with the concept that the U.S. treat Canada as we would want to be treated -- based on sound science. And, many believe that, to nudge the rest of the world to behave responsibly, we must behave responsibly ourselves.
I believe the science and economics can be brought into balance, and we can enact sound policy with its implementation tied to the adoption of the same science by our trading partners.
Interestingly, despite our unity in opposition to the proposed conditions for reopening the border, the industry still remains deeply divided on the issue. I believe it's due in large part to our strict focus on achieving outcomes without considering the consequences of the tactics pursued.
Despite all the rhetoric, the industry's opposition isn't based on science, just economics. Not that economics and self-interest are bad reasons to oppose this rule, but we must realize that while we're short-term beneficiaries of a closed border, a long-term closure has significant negative implications for global beef trade. If countries decide they can ignore sound science and internationally accepted standards, we've opened a big can of worms for ourselves.
BSE is the most over-hyped, overstated issue with which the industry has ever dealt. England had nearly 200,000 cases of BSE in its cow population; we're talking about four cases in all of North America. Some 15-20 years ago, the risks of BSE were greatly misunderstood, and we're still dealing with that perception. The science and understanding of BSE has come a long ways since then, and it's highly irresponsible for our industry to prey upon those initial and incorrect perceptions in order to achieve our policy goals.
The record price levels we've enjoyed aren't the result of the Canada border closure. That it's not a supply-driven phenomenon is attested to by the fact that the 2004 U.S. net beef supply was the second largest on record, while per capita net meat supplies were the largest ever, according to Cattle-Fax. No, the prices U.S. producers have enjoyed are mostly due to the increased demand that saw 2004 consumer beef spending jump by more than $8 billion dollars in 2004, and by roughly $25 billion since 1998.
While economists estimate the loss of Canadian live cattle has added up to $2/cwt. to the price of fed cattle, the loss of U.S. export markets has subtracted far more than that. USDA data shows we went from a surplus of more than $1 billion to a deficit of nearly $2.5 billion last year. Demand growth outpaced our losses, but our markets would have been significantly better if we were to return to our trade levels prior to BSE.
While it's controversial, most scientists believe BSE occurs randomly in about 1 in a million cows over the age of 30 months. Thus, despite all of our protections, it seems possible BSE will be discovered in a domestically produced animal. This means following sound science and ensuring consumers understand the real risks of BSE must be of paramount importance. Not to mention that following internationally accepted standards is integral to maintaining our global markets in the future.
Using food safety as a means to institute protectionist policies is dangerous in both the short and long term. Perhaps it's time to step back from the euphoria to determine if our tactics will create prosperity or future problems.
By Troy Marshall of Cow Calf weekly
