December 27, 2004

 

 

Canadian Beef Producers Face Uncertain 2005

 

19 months after the single reported bovine spongiform encephalopathy case in Canada, the battered industry is still reeling. Producers have suffered huge losses even though beef consumption has remained strong on both sides of the border.

 

In 2002 Canada exported 1.025 billion kilograms of beef and cattle worth just over $4 billion. In 2004 exports were projected to plummet to 435 million kilograms worth $1.89 billion.

 

Overall, Canada's beef sector has lost an estimated $5 billion since May 2003.

 

As government officials in Ottawa talked about using science to sort out BSE, producers watched helplessly in 2004 as some Americans played politics with the issue, dragging out the process of reopening the border during a U.S. election year.

 

The recent visit to Canada by President George W. Bush, and his vague comments about restoring the trade, haven't given them much solace or hope for 2005.

 

There were about 92,000 beef producers in Canada before BSE.

 

Stan Eby, president of the Canadian Cattlemen's Association, acknowledges the mad cow situation has taken its toll. He is urging producers to hang on.

 

Eby said he hopes the U.S. border will reopen to young cattle within the first three months of 2005. Older cattle will take more time.

 

But even if the border reopens in the first quarter, he cautioned profit margins for Canadian producers will remain tight.

 

"It's been very difficult, I realize that," said Eby, who runs a family cattle operation near Kincardine, Ont.

 

"When the border reopens, our prices will strengthen, but not dramatically. It could be tough in the early parts of the year.

 

"It is very important that we work through this. I'm always concerned about false optimism, but I'm very optimistic that the light is at the end of tunnel."

 

Dairy farmers across the country have also been squeezed hard by the mad cow crisis.

 

Producers such as Jeannie and Rejean Neveau usually sell off up to 30 per cent of their herd every year, older animals that are no longer prime milk producers.

 

Before BSE, they got about $800 each for their culled cows. Since BSE that amount has dropped to $150.

 

The difference has eaten up the net profits of their family farm, located northeast of Montreal.

 

"We've gone into our retirement savings; otherwise no bills would have been paid in our house. We've been working for the past 18 months for zero cents," said Jeannie, 60.