January 5, 2004



Resumption of Canadian Cattle Imports Into US Delayed


The resumption of Canadian cattle imports into the United States may be delayed following the mad cow incident in the United States.


Last Friday, U.S. chief veterinarian Dr. Ron DeHaven revealed various options are now being considered for dealing with the Canadian cattle trade after investigators linked the U.S. mad cow case, found in Washington state, to Canada, saying they believe the animal came from a Leduc-area ranch.


"There are several options that ... are under consideration within the department right now," DeHaven told a press briefing in Washington, D.C.


These include proposing entirely new rules for reopening the border, reopening and extending the deadline for the public comment period, or merely deciding on a rule change based on current comments and the U.S. government's own observations.


A late-afternoon USDA press release said the public comment period on cattle trade rules will close as scheduled on Monday, but may reopen at a later date, depending on the results of the investigation into where the diseased Washington state cow was born.


DNA tests in both countries are determining whether the link with the Alberta ranch is true, with results expected early next week.


Analysts and industry leaders in Canada were originally pointing to a March resumption of the live cattle trade, worth $1.8 billion in 2002.


Even a few months of delay could batter an already fragile market, said Kevin Grier, a senior market analyst for an Ontario agriculture think-tank, the George Morris Centre.


"The longer it goes, the longer finished cattle prices will be abnormally low," Grier said.


Prices for finished cattle, or ones fattened for slaughter, plunged this week, according to the Alberta Beef Producers. Friday's prices were in the 70-cents-per-pound range, down about 16 cents on the week.


Earlier this week, federal Agriculture Minister Bob Speller and his Alberta counterpart Shirley McClellan decried any foot-dragging on the border issue, arguing that the science and low risk supports more trade.


Politicians and industry leaders have begun discussing additional compensation packages that Canadian ranchers might need.


About half of Alberta's live-cattle business is U.S. exports, said Arno Doerkson, the Alberta group's chairman.


"By May, we'll be in a situation where we've been a year since any live cattle have gone south," he said. "We have more cattle on feed here than we would normally kill in Canada."


It won't matter if next week's DNA tests link the diseased cow in the U.S. to Alberta, Grier said. Markets have already been operating on that assumption.


Possible delays to live-cattle trade also stoked fear. Livestock auction marts throughout Alberta will reopen next week for the first time since the crisis began, but uncertainty is already scaring away business.


Guy Paris, general manager of the Rimbey Auction Mart, said 15 ranchers have called him to say they're reconsidering selling their cattle.


"That's about 800 or 900 head right there," he said. In a normal January sale, his stockyard will show 1,100 head of cattle.


Prices for feeder calves -- which are sold to be fattened in feedlots -- had been edging up in recent months, as optimism rose that cross-border trade would be renewed.


Vimy rancher Ross Lyons planned to ride that wave of optimism into January, and has waited to sell his calves until now. Then the U.S. case of mad cow, or bovine spongiform encephalopathy, was announced.


"It was kind of hard on the stomach, and didn't make for an easy Christmas," he said. "Everybody's been thinking we were going to finally see the light."


Now, Lyons stands to lose tens of thousands of dollars if he sells. So for now, he'll stand at the sidelines, watching how far prices drop.


The largest U.S. ranchers' group, the National Cattlemen's Beef Association, has urged the USDA to extend the comment period on rule changes for as long as investigation continued into the origins and extent of the U.S. mad cow outbreak.

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