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Posted by HAY MAKER on Oct-22-04 1:08pm
A group of Canadian ranchers has filed a multimillion-dollar lawsuit against the U.S. government in a bid to force the reopening of the border to live cattle. Their lawsuit was filed under a provision of NAFTA and they are seeking cumulative damages since May 2003 when our northern border was closed. The group, Canadian Cattlemen for Fair Trade, want to be reimbursed by our government for as much as a billion dollars. That number could even go higher as some analysts estimate that Canadian beef producers have lost up to $2 billion since the closing of the border. Just the first five claims that were submitted amounted to $113 million in damages.
Ranchers across Canada are signing petitions calling on both governments to quickly open the border to Canadian live cattle.
One Canadian politician heaped blame on the U.S. by saying, "There is an increasing level of frustration that the border may not have been closed legitimately, and that the border has not reopened quick enough."
More and more Canadian ranchers are blaming R-CALF for keeping the border shut and blistering attacks on the group are prevalent in the Canadian cattle press.
The Canadian Cattlemen's Association met this summer with the NCBA "to further develop a joint strategy to accelerate the opening of the border to live cattle." In view of the fact that all international health organizations agree that Canada has not complied with basic standards relative to the control and elimination of BSE from their herd, and that Canada remains a high-risk country for BSE, one has to wonder why the NCBA would be in such a hurry to reopen the border.
As the frustration north of the border grows so does their cattle herd. According to Canadian statistics there are a million more beef animals in Canada than there were a year ago. Canada's cattle herd grew to 16.8 million animals as of July, which is 6.5 percent higher than at the same time last year. These numbers practically ensure that the Canadian cattle industry will remain in a deep depression for the foreseeable future. And it's all our fault. Or so they say.
The Problem With Going Global
At least one Canadian rancher has dug a little deeper into the problem and has come to an alternative conclusion. Cam Ostercamp says that "merely reopening the border will not solve Canadian cattlemen's problems either in the long or the short term."
Ostercamp says that "Canada produces approximately 2 percent of the world's beef, yet they are the fourth largest exporting nation of beef. That is a very dangerous position to be in," says Canada's Ostercamp. "But even more so when you couple this stat with the fact that we only consume domestically 28 percent of our nation's production, and at all times are forced to market 72 percent of our production as an export. In the past, this delicate balance has been exacerbated by beef imports from other countries dictated by trade agreements. What has made our position even more precarious is the fact that over 70 percent of all our beef exports have traditionally been sold to one customer: the U.S.A. Yet of all the beef we exported to the U.S., that amount annually rarely exceeded 6 percent of their total nation's use. This created a huge dependence on America by Canada, but literally no dependence on us by America," wrote Ostercamp.
Ostercamp continues: "For every cow in Canada, there are 8.5 beef cows in America. Statistics show that America consumes 90 percent of their beef and exports 10 percent. However, when you examine their situation, they eat literally every pound of beef they produce nationally and export what they purchase annually after processing and adding value. That's good business. Bear in mind that what they buy from Canada is only 6 percent of their annual use. If they lose their export market, their own domestic production is still being processed and consumed at home with little or no effect on the U.S. producer, processor or any other sector of agriculture or industry."
Recent events in the market show that Ostercamp's analysis is exactly right and can be supported by looking at recent cattle prices on both sides of the border. According to Ostercamp, in May of 2003 slaughter cows in Canada were selling for between 52 and 58 cents per pound (Canadian). In July, after the mad cow incident, slaughter cow prices in Canada ranged from two to 12 cents per pound . . . if you could find a buyer. Canadian fat cattle were selling in May 2003 for $1.08 but by July the price had dropped to as low as 36 cents per pound. While this was happening in Canada the fat market in America was taking off. And so to recap . . . Canada lost its export markets and their market crumbled. We in this country lost our export markets too, but the price of cattle actually went up. Says Ostercamp, "BSE did not affect the U.S. cattle industry because they do not depend on selling beef outside their borders."
It truly makes one wonder about the strategy of importing strategic necessities. One need look no further than the gas pump to see the lunacy of such a blueprint.
Aiding And Abetting
Rather than point a lazy finger at R-CALF, Canadians should do as Ostercamp did and really look into what is causing their internal strife. "Leaders in the Canadian beef industry like to point out that Canada ramped up the beef production here by 60 percent in the last 10 years," says Ostercamp. (At the same time this was happening the cow herd in the United States was shrinking in size.) But who benefited from the increase in Canadian cattle numbers, wonders Ostercamp? "The profit in the Canadian cattle industry over the last 10-15 years seems to have been enjoyed more by Cargill Foods and Tyson Foods than by individual producers. We were sucked into the ‘bigger is better' philosophy."
American-owned meat packers have really cashed in on Canada's mad cow crisis. Alberta's three big slaughterhouses have almost tripled their profits in the wake of the mad cow according to provincial Auditor General, Fred Dunn. "In the 12 months prior to the May 20, 2003, BSE-positive announcement, the three meatpackers netted an average of $79 a head," said Dunn.
"Since then, that average has soared 281 percent to $216.52 a head!" (If you read nothing else read that last sentence again.)
The American-based packers were able to buy Canadian fat cattle significantly cheaper, process them in their Canadian plants and then sell the meat to the U.S. for prices that were actually higher than before the mad cow. "Canadian governments have aided and abetted American commerce to flourish in Canada," says Ostercamp. "By buying Canadian-fed animals at a highly discounted price from Canadian producers, processing them in their American plants operating on Canadian soil, and firing processed, boneless boxed beef into the American market (which for the last 12 months has been anywhere from 30 percent to 80 percent higher than the captive Canadian market) American players have profited on the backs of Canadian producers. Again, at what cost and to whom have we developed the Canadian beef industry?" asks Ostercamp.
The packers would have made even more money but lack the capacity to kill more cattle in Canada. According to Ostercamp, "in the U.S. there are over 40 plants capable of 1,000 head or more per day kill capacity. In Canada, there are barely 6 plants capable of over 1,000 head per day kill — the two largest being American owned."
Rubbing Salt In The Wound
It's bad enough that the packers were making exorbitant profits off Canadian cattle but they also took some of the 2.2 billion dollars in BSE money that was handed out by the Canadian government, at all levels, in an attempt to help cattlemen weather the storm. A 559-page list of 22,312 check recipients was released to the public and it showed that more than half the compensation went to just a handful of operations.
The numbers showed that Lakeside Farm Industries [owned by Tyson Foods] received about $33 million in taxpayers' money since May 2003. Agri-foods giant Cargill Foods, Ltd. [Cargill also owns Excel] got $9 million. About 50 feedlot operations raked in about $240 million of the $400 million in one taxpayer-funded program alone.
According to Ostercamp, "The problem with government announcements of huge cash infusions was that the packers simply dropped the price they bid for fat cattle, knowing that the producer was going to sell because the government had guaranteed to make up the difference between actual cash received from the packer and the benchmark price the government determined to be an industry average. At times, the packer bids dropped to as low as 30 cents (live), leaving the government to pay as much as 60 cents or more to prop the feedlot operator back up."
In trying to ascertain how much of the bailout money the packers received the Commons Agriculture Committee found Lakeside Packers and Cargill in contempt of Parliament for refusing to open their books. While the committee recommended the companies be fined $250,000 per day for not disclosing the financial information, Conservatives MPs blocked the move.
"Isn't it ironic," wrote Ostercamp, "that the two foreign packers operating on Canadian soil, stealing captive beef from Canadian producers, selling it into their American market at a 50-70 percent markup, should also qualify to collect a subsidy check from all of us, the doctors, the bakers and the candlestick makers of this country they are raping."
Canadians Held Captive Too
Ostercamp says that Canadian and American cattlemen share a common enemy: captive supply. "A major point of contention in the feedlot sector is packer ownership of huge numbers of cattle on feed in various custom feedlots around the country," says Ostercamp. "There is no law in Canada controlling packer ownership. This enables packers to purchase tens of thousands of feeder cattle in the fall at the same time private feeders are filling up their empty pens. This is advantageous for custom feedlot operators as their pens are full of cattle at no risk to themselves and their feed bills are paid on time. The problem with this scenario is that these tens of thousands of packer owned cattle finish at exactly the same time as the private feeders' cattle do, creating a "captive market" for the American-based packers bidding on privately owned cattle. Yet none of our politicians or industry lobby groups want to discuss fundamental changes to policy and law at home in order to strengthen our position. When you simply look at the big picture what we see is the legalized prostitution of the Canadian Beef Industry by the largest American agriculture power brokers on the planet. As it stands now, we do nothing to resist."
"It is very important," says Ostercamp, "to realize that the three huge power brokers in agriculture in America, Cargill Foods, Tyson/IBP Foods and ConAgra, collectively control almost every food item that hits the supermarket shelf in America and to a large extent, Canada as well. This includes fast food chains, institutional food supplies, and a huge amount of overseas food supply. These three players also control agriculture related commodities such as fertilizers, a big percentage of agriculture chemicals, and most of the North American grain trade. For as long as there has been farming in Canada, almost all agriculture commodity prices have been set for Canada by the Chicago Board of Exchange, the New York Stock Exchange, Wall Street, etc. Says Ostercamp, "We live in the shadow of the giant – when they shoot, we dance."
Political Science
Ostercamp thinks that Canada could solve a lot of its problems by merely agreeing to BSE test all the animals they produce. Canada has only tested about 900 high-risk animals and they have had two BSE herds. The U.S. has tested more than 40,000 (more as of this writing) with no cases of U.S. origin BSE, with plans to test 268,000! And yet Canadians are baffled as to why their border remains closed!
Says Ostercamp, "It is a fact that the USDA has taken a stand against mandatory testing for BSE because it is viewed as cost prohibitive to the three big players in the U.S. It is also a fact that they are telling Canada not to initiate a policy of mandatory testing because if we did, consumers would get nervous in America and demand the same. We are being expected to knuckle under to these demands under the veil of "science."
Ask any leader of any beef industry lobby association and they all give the same hollow, pat answer — "Science says . . ." It is simply too big a stretch of the imagination to think that all of these collective minds have arbitrarily arrived at the same negative opinion of other options and other markets at the same time. You don't suppose their strings are being pulled?" suggests Ostercamp.
Meanwhile, many Canadian cattlemen continue to point a finger at R-CALF for causing their misery when their time would be far more efficiently and effectively spent by forming an organization exactly like it. Until they do silly science will prevail. . . political science that is. If you don't think it's all about politics and the power of big business just watch how soon after this November's presidential election the border gets reopened to the crossing of live Canadian cattle. With our northern neighbor's herd bursting at the seams and poised to head southward that's when we will all get an opportunity to share in Canada's misery
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R CALF HAY MAKER Oct-22-04 1:08pm
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Posted by HAY MAKER on Oct-22-04 1:08pm
A group of Canadian ranchers has filed a multimillion-dollar lawsuit against the U.S. government in a bid to force the reopening of the border to live cattle. Their lawsuit was filed under a provision of NAFTA and they are seeking cumulative damages since May 2003 when our northern border was closed. The group, Canadian Cattlemen for Fair Trade, want to be reimbursed by our government for as much as a billion dollars. That number could even go higher as some analysts estimate that Canadian beef producers have lost up to $2 billion since the closing of the border. Just the first five claims that were submitted amounted to $113 million in damages.
Ranchers across Canada are signing petitions calling on both governments to quickly open the border to Canadian live cattle.
One Canadian politician heaped blame on the U.S. by saying, "There is an increasing level of frustration that the border may not have been closed legitimately, and that the border has not reopened quick enough."
More and more Canadian ranchers are blaming R-CALF for keeping the border shut and blistering attacks on the group are prevalent in the Canadian cattle press.
The Canadian Cattlemen's Association met this summer with the NCBA "to further develop a joint strategy to accelerate the opening of the border to live cattle." In view of the fact that all international health organizations agree that Canada has not complied with basic standards relative to the control and elimination of BSE from their herd, and that Canada remains a high-risk country for BSE, one has to wonder why the NCBA would be in such a hurry to reopen the border.
As the frustration north of the border grows so does their cattle herd. According to Canadian statistics there are a million more beef animals in Canada than there were a year ago. Canada's cattle herd grew to 16.8 million animals as of July, which is 6.5 percent higher than at the same time last year. These numbers practically ensure that the Canadian cattle industry will remain in a deep depression for the foreseeable future. And it's all our fault. Or so they say.
The Problem With Going Global
At least one Canadian rancher has dug a little deeper into the problem and has come to an alternative conclusion. Cam Ostercamp says that "merely reopening the border will not solve Canadian cattlemen's problems either in the long or the short term."
Ostercamp says that "Canada produces approximately 2 percent of the world's beef, yet they are the fourth largest exporting nation of beef. That is a very dangerous position to be in," says Canada's Ostercamp. "But even more so when you couple this stat with the fact that we only consume domestically 28 percent of our nation's production, and at all times are forced to market 72 percent of our production as an export. In the past, this delicate balance has been exacerbated by beef imports from other countries dictated by trade agreements. What has made our position even more precarious is the fact that over 70 percent of all our beef exports have traditionally been sold to one customer: the U.S.A. Yet of all the beef we exported to the U.S., that amount annually rarely exceeded 6 percent of their total nation's use. This created a huge dependence on America by Canada, but literally no dependence on us by America," wrote Ostercamp.
Ostercamp continues: "For every cow in Canada, there are 8.5 beef cows in America. Statistics show that America consumes 90 percent of their beef and exports 10 percent. However, when you examine their situation, they eat literally every pound of beef they produce nationally and export what they purchase annually after processing and adding value. That's good business. Bear in mind that what they buy from Canada is only 6 percent of their annual use. If they lose their export market, their own domestic production is still being processed and consumed at home with little or no effect on the U.S. producer, processor or any other sector of agriculture or industry."
Recent events in the market show that Ostercamp's analysis is exactly right and can be supported by looking at recent cattle prices on both sides of the border. According to Ostercamp, in May of 2003 slaughter cows in Canada were selling for between 52 and 58 cents per pound (Canadian). In July, after the mad cow incident, slaughter cow prices in Canada ranged from two to 12 cents per pound . . . if you could find a buyer. Canadian fat cattle were selling in May 2003 for $1.08 but by July the price had dropped to as low as 36 cents per pound. While this was happening in Canada the fat market in America was taking off. And so to recap . . . Canada lost its export markets and their market crumbled. We in this country lost our export markets too, but the price of cattle actually went up. Says Ostercamp, "BSE did not affect the U.S. cattle industry because they do not depend on selling beef outside their borders."
It truly makes one wonder about the strategy of importing strategic necessities. One need look no further than the gas pump to see the lunacy of such a blueprint.
Aiding And Abetting
Rather than point a lazy finger at R-CALF, Canadians should do as Ostercamp did and really look into what is causing their internal strife. "Leaders in the Canadian beef industry like to point out that Canada ramped up the beef production here by 60 percent in the last 10 years," says Ostercamp. (At the same time this was happening the cow herd in the United States was shrinking in size.) But who benefited from the increase in Canadian cattle numbers, wonders Ostercamp? "The profit in the Canadian cattle industry over the last 10-15 years seems to have been enjoyed more by Cargill Foods and Tyson Foods than by individual producers. We were sucked into the ‘bigger is better' philosophy."
American-owned meat packers have really cashed in on Canada's mad cow crisis. Alberta's three big slaughterhouses have almost tripled their profits in the wake of the mad cow according to provincial Auditor General, Fred Dunn. "In the 12 months prior to the May 20, 2003, BSE-positive announcement, the three meatpackers netted an average of $79 a head," said Dunn.
"Since then, that average has soared 281 percent to $216.52 a head!" (If you read nothing else read that last sentence again.)
The American-based packers were able to buy Canadian fat cattle significantly cheaper, process them in their Canadian plants and then sell the meat to the U.S. for prices that were actually higher than before the mad cow. "Canadian governments have aided and abetted American commerce to flourish in Canada," says Ostercamp. "By buying Canadian-fed animals at a highly discounted price from Canadian producers, processing them in their American plants operating on Canadian soil, and firing processed, boneless boxed beef into the American market (which for the last 12 months has been anywhere from 30 percent to 80 percent higher than the captive Canadian market) American players have profited on the backs of Canadian producers. Again, at what cost and to whom have we developed the Canadian beef industry?" asks Ostercamp.
The packers would have made even more money but lack the capacity to kill more cattle in Canada. According to Ostercamp, "in the U.S. there are over 40 plants capable of 1,000 head or more per day kill capacity. In Canada, there are barely 6 plants capable of over 1,000 head per day kill — the two largest being American owned."
Rubbing Salt In The Wound
It's bad enough that the packers were making exorbitant profits off Canadian cattle but they also took some of the 2.2 billion dollars in BSE money that was handed out by the Canadian government, at all levels, in an attempt to help cattlemen weather the storm. A 559-page list of 22,312 check recipients was released to the public and it showed that more than half the compensation went to just a handful of operations.
The numbers showed that Lakeside Farm Industries [owned by Tyson Foods] received about $33 million in taxpayers' money since May 2003. Agri-foods giant Cargill Foods, Ltd. [Cargill also owns Excel] got $9 million. About 50 feedlot operations raked in about $240 million of the $400 million in one taxpayer-funded program alone.
According to Ostercamp, "The problem with government announcements of huge cash infusions was that the packers simply dropped the price they bid for fat cattle, knowing that the producer was going to sell because the government had guaranteed to make up the difference between actual cash received from the packer and the benchmark price the government determined to be an industry average. At times, the packer bids dropped to as low as 30 cents (live), leaving the government to pay as much as 60 cents or more to prop the feedlot operator back up."
In trying to ascertain how much of the bailout money the packers received the Commons Agriculture Committee found Lakeside Packers and Cargill in contempt of Parliament for refusing to open their books. While the committee recommended the companies be fined $250,000 per day for not disclosing the financial information, Conservatives MPs blocked the move.
"Isn't it ironic," wrote Ostercamp, "that the two foreign packers operating on Canadian soil, stealing captive beef from Canadian producers, selling it into their American market at a 50-70 percent markup, should also qualify to collect a subsidy check from all of us, the doctors, the bakers and the candlestick makers of this country they are raping."
Canadians Held Captive Too
Ostercamp says that Canadian and American cattlemen share a common enemy: captive supply. "A major point of contention in the feedlot sector is packer ownership of huge numbers of cattle on feed in various custom feedlots around the country," says Ostercamp. "There is no law in Canada controlling packer ownership. This enables packers to purchase tens of thousands of feeder cattle in the fall at the same time private feeders are filling up their empty pens. This is advantageous for custom feedlot operators as their pens are full of cattle at no risk to themselves and their feed bills are paid on time. The problem with this scenario is that these tens of thousands of packer owned cattle finish at exactly the same time as the private feeders' cattle do, creating a "captive market" for the American-based packers bidding on privately owned cattle. Yet none of our politicians or industry lobby groups want to discuss fundamental changes to policy and law at home in order to strengthen our position. When you simply look at the big picture what we see is the legalized prostitution of the Canadian Beef Industry by the largest American agriculture power brokers on the planet. As it stands now, we do nothing to resist."
"It is very important," says Ostercamp, "to realize that the three huge power brokers in agriculture in America, Cargill Foods, Tyson/IBP Foods and ConAgra, collectively control almost every food item that hits the supermarket shelf in America and to a large extent, Canada as well. This includes fast food chains, institutional food supplies, and a huge amount of overseas food supply. These three players also control agriculture related commodities such as fertilizers, a big percentage of agriculture chemicals, and most of the North American grain trade. For as long as there has been farming in Canada, almost all agriculture commodity prices have been set for Canada by the Chicago Board of Exchange, the New York Stock Exchange, Wall Street, etc. Says Ostercamp, "We live in the shadow of the giant – when they shoot, we dance."
Political Science
Ostercamp thinks that Canada could solve a lot of its problems by merely agreeing to BSE test all the animals they produce. Canada has only tested about 900 high-risk animals and they have had two BSE herds. The U.S. has tested more than 40,000 (more as of this writing) with no cases of U.S. origin BSE, with plans to test 268,000! And yet Canadians are baffled as to why their border remains closed!
Says Ostercamp, "It is a fact that the USDA has taken a stand against mandatory testing for BSE because it is viewed as cost prohibitive to the three big players in the U.S. It is also a fact that they are telling Canada not to initiate a policy of mandatory testing because if we did, consumers would get nervous in America and demand the same. We are being expected to knuckle under to these demands under the veil of "science."
Ask any leader of any beef industry lobby association and they all give the same hollow, pat answer — "Science says . . ." It is simply too big a stretch of the imagination to think that all of these collective minds have arbitrarily arrived at the same negative opinion of other options and other markets at the same time. You don't suppose their strings are being pulled?" suggests Ostercamp.
Meanwhile, many Canadian cattlemen continue to point a finger at R-CALF for causing their misery when their time would be far more efficiently and effectively spent by forming an organization exactly like it. Until they do silly science will prevail. . . political science that is. If you don't think it's all about politics and the power of big business just watch how soon after this November's presidential election the border gets reopened to the crossing of live Canadian cattle. With our northern neighbor's herd bursting at the seams and poised to head southward that's when we will all get an opportunity to share in Canada's misery
--------------------------------------------------------------------------------
Current thread:
R CALF HAY MAKER Oct-22-04 1:08pm
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