From Agriweek
<b>No dough
The production side of the meat industry isn’t the only one stressed</b>
The federal government has categorically rejected calls made several weeks ago, including by the Canadian Cattlemens Assn. and the Canadian Meat Council, for financial assistance to packers forced by federal regulations to incur costs of removing specific risk material from carcasses of cattle 30 months or older.
American packers do not have these costs, which are estimated at $32 per carcass. There is no prospect that U.S. regulations will be tightened to match Canada’s. The rule has been in effect since 2007 to prevent the use of possible BSE-risk material in any animal feed, including pet food, and in fertilizer. Such material was previously rendered but must now be removed and disposed of in landfills or by incineration. The procedure is more costly than expected.
The CMC requested a payment of $31.70 per head for each animal slaughtered, or about $24 million a year on an over-30-month kill of 750,000 head. The packing industry received a total of $130 million in funding to offset the impact of the mad-cow crisis, some of which was intended to assist packing plants with developing procedures and making physical changes to accommodate the new SRM rule.
Cattle producers are paying for this excessive regulation. Packer bids are based partly on packing margins, which the SRM rule directly reduces. Low -ball local bids also reduce what American packers must pay to get Canadian cattle. If prices are reduced by $30 per head and U.S. processors avoid an additional cost of this size, it gives them a $60-a-head advantage over Canadian competitors. An industry source predicted 5% of Canadian packing capacity will be lost in the immediate future if there is no further compensation to offset the SRM regulations.
<b>No dough
The production side of the meat industry isn’t the only one stressed</b>
The federal government has categorically rejected calls made several weeks ago, including by the Canadian Cattlemens Assn. and the Canadian Meat Council, for financial assistance to packers forced by federal regulations to incur costs of removing specific risk material from carcasses of cattle 30 months or older.
American packers do not have these costs, which are estimated at $32 per carcass. There is no prospect that U.S. regulations will be tightened to match Canada’s. The rule has been in effect since 2007 to prevent the use of possible BSE-risk material in any animal feed, including pet food, and in fertilizer. Such material was previously rendered but must now be removed and disposed of in landfills or by incineration. The procedure is more costly than expected.
The CMC requested a payment of $31.70 per head for each animal slaughtered, or about $24 million a year on an over-30-month kill of 750,000 head. The packing industry received a total of $130 million in funding to offset the impact of the mad-cow crisis, some of which was intended to assist packing plants with developing procedures and making physical changes to accommodate the new SRM rule.
Cattle producers are paying for this excessive regulation. Packer bids are based partly on packing margins, which the SRM rule directly reduces. Low -ball local bids also reduce what American packers must pay to get Canadian cattle. If prices are reduced by $30 per head and U.S. processors avoid an additional cost of this size, it gives them a $60-a-head advantage over Canadian competitors. An industry source predicted 5% of Canadian packing capacity will be lost in the immediate future if there is no further compensation to offset the SRM regulations.
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