Ron DeHaven Says BSE North American Issue

[rsomer]

rpkaiser: You are right the Australians have moved in to fill the void created because of the ban of U.S. beef and for that matter Canadian beef. It is interesting to note the Australians only test about 500 head a year, less than anyone. The Japanese did increase their tariff on imported beef to 50% from about 37% at approximately the same time this all started which suggests they were indeed looking to protect their industry. It will be very interesting to see what arrangement is eventually worked out in the talks between Japan and the U.S. that are predicted to be finalized sometime this summer.

pandiana: Interesting point about creating a Canadian made industry versus a North American industry. I tend to think our best hope of regaining access for our live cattle is a harmonized North American industry. It would be a fair comment to make however that the minute the going got rough the U.S. forgot all about North America in order to save their own sorry selves. When I think about how integrated we really were with the U.S., it will be very difficult to say forget it and go it alone. Going it alone would be an uphill battle now that we are carrying the baggage of our own BSE cow. We tend to be tied in with the U.S. whether we like it or not because of NAFTA and our common border. Not to overlook the fact that the U.S. is a fabulous market for our beef and because of climate, location, culture, historical trading relationships we are ideally suited to fill that market.
I admire the Australian industry and its ability to trade with partners around the world. Their historical trading relationships are different however and we would have great difficulty suddenly moving into new world markets in competition with established suppliers such as Australian and the U.S.
COOL is certainly not part and parcel of a North American beef industry but the latest I have heard on COOL is that the industry wants it to be voluntary. If the U.S. were to end up with mandatory COOL then I question where that leaves Canada in a "North American beef industry".

cakadu: You said "The second case they cannot definitively prove was infected in Canada, yet they are still singing that tune". There are so many tunes being sung that the melody has been entirely lost. Just more noise. In the end actions will speak louder.

[cowman]

The whole COOL issue is sort of a scam at the best of times. It doesn't affect sales to restaurants anyway or hamburger for that matter? And I suspect if the American housewife sees the label "Product of Canada" and tries it because it is cheaper than "product of the USA", she just might realize that hey this is a better product! I've had corn fed beef and I wasn't impressed! I believe I'd rather eat chicken.
In the 2002 drought, when every man and his dog was feeding corn, Western Feedlots continued to feed barley, because their largest steak house customer told them if they fed corn they would not buy from them!
I have also heard that a very large portion of the beef going to Japan pre-BSE was loaded right off the trucks from Alberta feedlots, slaughtered, slap on the USDA stamp and onto the boat! Maybe that is why the Japanese think American beef is superior?

[greybeard]

DeHaven is going "by the book" on this one . If you keep saying there is "no" risk and a cow turns up there may be panic in the marketplace and consumer rejection as in UK and Japan. They have to say it will happen but the risk to you as an idividual is very small.
This is what will get R-Calf in the end.

[pandiana]

rsomer, when I refer to a Canadian industry it is not that a truly integrated North American industry wouldn't be better if it really worked without the politics. My point is that, in reality, we have been pushed out of the North American integrated industry for the forseeable future and, based on our recent experience, we could and probably would be pushed out again at the whim of the big players. I agree with Cam Ostercamp on this point. I feel that we need a solution that is best for 'our' industry for both the short and long term.

Right now, we are dealing with livestock producers that are sitting on the brink. It is beginning to look like the border will stay closed to most cattle indefinately, or as long as it works for the US. As willowcreek points out, the USDA has been blocked by R-calf and who knows how long to resolve this issue. I realize that some US industries are hurting (packers and feedlots), but so far their lobby has not been heard. Even if we could predict that the border would open to bone-in beef say July or November for that matter how many producers can hang on this long. How many cattle can be fed on drought-stressed pastures? How many times can you go to the bank to buy feed for cattle that are worth less than the feed to keep them? How many off farm jobs will be required to keep going?

Obviously, there is no easy answer. But I agree that wishing the border would open has done nothing to help our situation, and in fact may have deepened our trouble. Instead of biting the bullet we have continued to fund a losing battle.

I agree that testing all animals in itself is not the solution, although I do believe it could work in our favor if we actually had a Canadian industry.

As you and others have pointed out, the first step to any solution must be to have a made in Canada packing industry that will add value to our own cattle. Producer owned would be great. We could then test or not test and let the market decide what they want.

I also feel strongly that the only strong suit that we have in negotiating fair trade is to pursue NAFTA and rethink it if necessary. Whether primary producers across the country could provide enough momentum to get the ear of our 'business oriented' government is debatable but this would appear to be our only 'legal' avenue.

Finally, it is beginning to look like we will have far too many cows in the short term to sustain this industry. I believe the government is going to have to address this problem...and soon.

[jensend]

on this one i think dehaven and veneman are trying to do some damage control in advance like greybeard says but i don't think it has anything to do with prudence. i think things are starting to get out of control in usda and they know someone's going to spill the beans. the americans are going to screw up the whole n. american industry given enough time and now it's time for us to put some distance between the two countries. rsomer can award debating points all year long if he wants but analysis of the situation is of no use at all if there's no action following and it's totally useless if the thesis is wrong and the thesis of sound science is looking shakier all the time. scientists finding evidence of prions in muscle cuts and different organs of both humans and animals is going to necessitate universal testing and all the past 'knowledge' will become foolish wishful thinking. other parts of the world have dealt with bse and maybe it's time canadians took responsibility for their own future and food supply and learned from someone other than the americans. they have little interest in dealing with bse; the control of the canadian cattle industry by a few large packing companies is the only policy justifying actions over the past year. imho.

[rsomer]

Pandiana: the original CUSTA agreement did contain a provision which was to be signed at a future date that would have effectively removed political influence on trade between the two countries. When CUSTA was rolled over to NAFTA that provision disappeared and we are left with a significantly different agreement than what was originally envisioned.
Further to a North American market for beef, the future impact of the U.S. free trade agreement with Australia (which would see Australia have unlimited access for its beef into the U.S. after 18 years and increased access after a short initial period) has disturbing implications for a North American market. Prior to this the NAFTA partners had reciprocal free trade agreements with each other, now the U.S. has unilaterally formed a free trade agreement with Australia on its own.
I frankly do not see how this can work within the context of NAFTA. The U.S. reaps the benefits of its free trade agreement with Australia by having increased access to Australia for its goods and services while Canada and Mexico are forced to accept Australian goods by default of cross border trade.

[pandiana]

I am somewhat at a loss to understand why, because a cow/calf producer perceives that the feedlots may have got a better deal from the government largesse, that the cow/calf producer is antagonistic towards feedlots. Of course not. Envious maybe.

[pandiana]

Your comments, rsomer, further reinforce my feeling that for all primary 'resource' based industry NAFTA doesn't work.

We have traditionally fueled the manufacturing or in our case the fabricating industry similar to other 'third world' countries. Although this has been a recognized problem by our governments for decades they have always taken opted for expediency by selling out to the big players (Other than a brief period when we initiated crown corporations eg Petro Canada). They justify this by saying a lot of the money stays home in terms of jobs and spin off to service industries. However, it's not too hard to see that when looking at some of the corporate financial statements to see that more money leaves the country than is paid to all employees.

We have often talked about needing leverage as primary producers. The reality is we have it but are reluctant to use it. The US industry would soon grind to a halt without the raw material to keep it running.

It has been said that Canadians are not risk takers and therefore not willing to risk buying into their own industry. Is this what we are seeing still? Would we rather see the US come in and build our packing plants, control our production and skim off the cream for their 'risk-taking' shareholders?

[rsomer]

Interesting comment about Canadians not being risk takers. The reality is that the risk of building a packing plant is different for Canadians than for Americans. When Japan blocked imports of Canadian beef, our government did very little. Japan blocks American beef, trade delegations including Vice President Cheney go to Japan and set up talks with a deadline of this summer. Our Canadian government has been accused of not doing enough to get our border open with the U.S. The U.S. government is pulling out all the stops to get trade in their beef resumed. The U.S. treats American owned plants importing Canadian beef differently than they would treat a Canadian plant importing Canadian beef into the U.S. It is not that Canadians are risk adverse when compared to Americans, it is just the risk is different for Canadians. I would go so far as to say that if Canadian were to invest in a packing plant in Alberta, they should seriously consider incorporating in the U.S. and operate in Canada as a U.S. subsidiary. It is that bad.

As far as NAFTA goes, I noticed that Mexico was able to block imports of American beef after the Washington Holstein. It seems that the U.S. and Mexico are within their NAFTA rights to block trade in beef and live cattle due to BSE. I wonder if a link was ever established between oil and nvCJD if the U.S. would still accept our imports.