November 21, 2003

 

 

Struggle To Cull Old Cows in Canada After BSE Case
 

After weathering six months of trade bans sparked by a single case of mad cow disease, Canadian farmers are struggling to find more profitable ways to put old cows out to past.

 

Prices for calves and young, fat cattle have rebounded to near-profitable levels from a July low, when cattle industry leaders agonized how business could recover after the case of bovine spongiform encephalopathy (BSE) was found on May 20.

 

The case shut export-dependent Canada out world beef markets. But since then, Canada has convinced top customers such as the United States and Mexico to start buying some cuts from young livestock.

 

"I don't think anybody's making any money, but we're keeping the wolf from the door," said Neil Jahnke, a Saskatchewan rancher who is president of the Canadian Cattlemen's Association. He expects better profits in six more months.

 

Still, farmers are trying to digest the fact that a small segment of the business they usually count on to put them in the black is showing no signs of recovery.

 

Annually, beef and dairy farmers normally cull about 10% of their cows, most of which used to end up between hamburger buns in the United States.

 

But the animals are typically over 30 months of age, old enough to develop the brain-wasting ailment if they had been exposed to tainted feed, and no foreign markets seem likely to want to buy them.

 

Before Canada lost its BSE-free status, Ontario farmers were getting 50 to 60 Canadian cents (38 to 46 cents) per pound for their cows, said Ian McKillop, a rancher near Dutton, Ontario.

 

"We have to realize that those days are gone," McKillop said, noting farmers can now expect 8 to 15 Canadian cents per pound.

 

Canadian farmers are expected to take a loss of nearly C$850 million on more than 1.1 million older beef and dairy cattle, according to a new study by Serecon Management Consultants of Edmonton.

 

Some farmers have decided to take the matter into their own hands. Groups in three provinces are looking at buying or building slaughter plants to handle cull cattle so they can glean part of the upstream profits.

 

Others are holding off on selling at a loss. On his farm in central Alberta, Tom Coppock said he'll sell a dozen of the 30 cows he wanted to cull this year. He sold a few last week for C$228 per head, less than a third of what he got last fall.

 

But he plans to keep the rest in the hope they'll produce calves next spring, and be worth more next year, betting a winter's worth of feed on his decision.

 

"I'm like everybody else: the biggest thing is cash flow, with cull cows not being worth anything," Coppock said. "That's where the crunch is coming, part of it."

 

Agriculture Minister Lyle Vanclief is set to announce today an aid package for farmers selling cull cows, although farm groups fear it could further depress market values.

 

Apart from the cull cow issue, cattle industry leaders are pleased that the worst of a crisis that has cost an estimated total of C$3.3 billion seems to have passed.

 

"Quite frankly, I didn't think we'd be as far along as we are," said Jahnke. "There were people, including myself, wondering if it would be years rather than months (before trade resumed)."

 

In July fat cattle prices fell as low as 37.8 Canadian cents per pound, despite a massive investigation that failed to turn up any more cases of the brain-wasting disease.

 

But Canada became the first country with a case of mad cow disease to see domestic consumption rise rather than fall, and the first to export meat to a BSE-free country, Jahnke said.

 

October fat cattle prices averaged 79.07 Canadian cents per pound. Calf prices have been surprisingly buoyant as buyers expect the United States to allow young live cattle to cross the border as early as spring, he said.

 

"We're probably never going to see ... cow prices what they were before BSE, but we can learn to live with that," Jahnke said.

 

($1=$1.30 Canadian)