January 14, 2004

 

 

Canadian Ranchers Battered By Mad Cow Scare

 

For Canadian rancher Arno Doerksen, 2003 can be summed up with two dates: May 20, when mad cow disease was diagnosed in Canada, and Dec. 22, when it was discovered in the United States, and subsequently linked to Canada.

 

These are dark days for Canada's giant beef industry, with foreign markets closed, falling prices and rising inventories of cattle. Producers are unsure when the United States and other nations will resume importing Canadian beef.

 

"Canada has been in the penalty box since May," Doerksen said of the date a Black Angus cow in Alberta was found to be infected with mad cow disease.

 

The discovery was a huge blow to Canada's beef industry and to cow towns such as Pincher Creek, which is home to the "World's Best Beef Festival." Producers across the country have already lost $1.45 billion in exports, according to the Canada Beef Exporter Federation.

 

Prices and confidence were starting to rise again when the U.S. case was discovered on a farm near Mabton, Washington, on Dec. 22. The U.S. Agriculture Department announced shortly after that it believed the sick Holstein dairy cow came from a farm north of Edmonton, Alberta.

 

Last week, officials in both countries said genetic testing confirmed the cow was born in Canada.

 

That was a double blow because Canada had recently negotiated a deal to allow some beef and cattle to be shipped to the United States. Now the U.S. government says the ban will remain in place indefinitely.

 

Canadian ranchers typically ship half their beef to the United States.

 

The Canadian beef industry, centered on the plains of Alberta and Saskatchewan, consists of more than 90,000 farms and ranches and produces about 3.3 billion pounds (1.5 million tons) of meat per year. Beef is the country's largest single farm product. Alberta contains more than half of the country's 13.5 million cattle.

 

There is little doubt about the importance of cattle in Pincher Creek, which sits on windswept plains broken by the jagged peaks of Waterton Lakes National Park.

 

The entrance to town is adorned with steel sculptures of cattle being herded by cowboys. A radio station bills itself as "the official Alberta beef country station." Signs supporting the beef industry can be seen all over town. In the lobby of a hotel, there is a full-size cutout of a cowgirl with the slogan "If it ain't Alberta, it ain't beef."

 

"We're an industry in trouble," said Len Vogelaar, a Pincher Creek rancher.

 

Cindy McCreath, spokeswoman for the Canadian Cattlemen's Association in Calgary, said the May discovery caused cattle prices to drop from as high as $1.10 per pound (nearly 1/2 kilogram) to 35 US cents per pound.

 

Prices had recovered to more than 80 cents per pound before the December case. Now Canadian cattle are fetching 68 cents to 72 cents per pound, which is below the break-even point, she said.

 

"It's too early to tell if a recovery will occur," McCreath said.

 

Doerksen, who ranches near Gem, Alberta, and is chairman of the Alberta Beef Producers, also runs a feedlot, which he said has particularly suffered. Feedlots work on narrow profit margins, he said, squeezed between the price they pay ranchers for livestock, and the price they can later charge processors.

 

"We were losing $300 to $600 a head on fatted cattle, depending on what the market was at," Doerksen said.

 

Such losses have many feedlots holding onto their cattle and waiting for markets to reopen, which increases costs and reduces income.

 

Rick Paskal, a ranch and feedlot operator in Pitcher Butte, Alberta, estimated the value of his cattle has dropped by half since May. "If I sold my cattle today, I am basically broke," he said.

 

Paskal is considering layoffs among his 60 employees, who tend 40,000 head of cattle. "We're wandering aimlessly in the dark right now," he said.

 

Many Canadian ranchers are upset over the closing of the U.S. market, saying it appears to blame Canada for the disease while ignoring the reality that the cattle industry in North America is deeply intertwined. Cattle and feed have long moved freely across the border at all stages of production, and the exact cause of the two cases is not yet known.

 

Before Canada identified its first case of mad cow disease in May and the United States banned imports of Canadian cattle, Canada exported more than 1.5 million cattle annually to American farmers and slaughterhouses.

 

Mad cow disease, formally called bovine spongiform encephalopathy, is a concern because humans who eat brain or spinal matter from an infected cow can develop a brain-wasting illness. In Britain, 143 people died of it during a mad cow outbreak in the 1980s.

 

Canadian ranchers contend there are numerous protections to prevent infected meat from reaching the food supply.

 

"There is no question in my mind we are producing a safe product in the U.S. and Canada," said Neil Jahnke, who runs 1,200 head of cattle on his ranch in Gouldstown, Saskatchewan, and is president of the Canadian Cattlemen's Association.

 

Canadian Agriculture Minister Bob Speller announced last Thursday that testing for mad cow disease will increase to about 8,000 cattle a year from 5,500. He said the increased testing should be sufficient to restore confidence in Canadian beef.