Canada will export about 2 million head of live young cattle to the United States in the 12 months after trade resumes on March 7, U.S. Agriculture Department chief economist Keith Collins said . "Live cattle imports from Canada" during the year after trade resumes will be "2 million head," Collins told reporters. He noted that Canada had been exporting about 1.7 million head of cattle annually before trade was banned in May, 2003, when Canada found one case of domestic mad cow disease. Collins also noted that the United States will slaughter substantially fewer cattle this year, about 32.5 million head, down from 35 million to 36 million in recent years. As a result, Collins noted the United States will have the capacity to handle the new Canadian imports.
Chicago Mercantile Exchange live and feeder cattle futures ended sharply lower on Wednesday due in part to widespread talk that Washington this week would release its plan to lift the ban on Canadian cattle, CME traders said. An hour after the market closed, USDA held a press conference and announced that rules on Canada cattle trading will be published Jan. 4 and would become effective March 7. CME live cattle closed down 1.925 to 1.175 cents, with December off 1.925 cents at 90.075 cents per lb and February off 1.925 cents at 88.625 cents. Feeder cattle were the hardest hit by the Canada talk because it is believed most of the imported Canadian cattle will be feeder cattle. Feeder cattle closed down 2.725 to 1.500 cents, with January off 1.900 cents at 103.050 cents per lb and March off 2.725 cents at 97.825 cents.
"Today's announcement by the United States Department of Agriculture has been a long time coming and is the result of a tremendous amount of work that has taken place on both sides of the border," says Stan Eby, president of the CCA. "Canada's cattle producers are delighted. This announcement will put confidence into the live cattle market in Canada. Getting slaughter cattle back moving to the U.S. will help relieve the bottleneck at the packing plants that has been the main reason for depressed cattle prices in Canada. "The cattle industry continues to recognize the need to expand slaughter capacity in Canada and CCA remains committed to finding solutions to this issue. We will also continue to work on regaining access for all categories of live cattle, including breeding cattle, so we may have totally unrestricted trade within North America. We're also committed to regaining and expanding markets for Canadian beef around the world. We expect that many other markets will follow the lead of the United States and adopt similar science-based measures." The rule as published is over 500 pages and will take time to completely review. The CCA will be undertaking this review over the next several days.
Tom Walsh, a lawyer with the U.S. Department of Agriculture, said live Canadian cattle must be sent to the U.S. in sealed containers and no breeding cattle will be allowed across the border. Once they reach the U.S., cows will not be allowed to move between feed lots and they must be slaughtered before the age of 30 months. "USDA is confident that the animal and public health measures Canada has in place to prevent BSE, combined with existing U.S. domestic safeguards and additional safeguards...will provide the utmost protection to U.S. consumers and livestock," Walsh said. Walsh predicted American feedlots will import a total of two million cattle by this time next year.
Ottawa on Wednesday applauded USDA's action but acknowledged the proposed rule could face further legal challenges. "There could be some upsets along the way, so we're cautiously optimistic," said Elizabeth Whiting, spokeswoman for Canadian Agriculture Minister Andy Mitchell. A U.S. cattle group called R-CALF has consistently opposed reopening the border to Canadian cattle, arguing this could threaten the health of the American herd. In recent weeks, R-CALF has noted the possibility of a legal challenge. The U.S. Congress, over the next 60 days, also has veto power over the USDA proposal. But so far there has been no evidence of enough opposition in the House of Representatives or Senate.
Chicago Mercantile Exchange live and feeder cattle futures ended sharply lower on Wednesday due in part to widespread talk that Washington this week would release its plan to lift the ban on Canadian cattle, CME traders said. An hour after the market closed, USDA held a press conference and announced that rules on Canada cattle trading will be published Jan. 4 and would become effective March 7. CME live cattle closed down 1.925 to 1.175 cents, with December off 1.925 cents at 90.075 cents per lb and February off 1.925 cents at 88.625 cents. Feeder cattle were the hardest hit by the Canada talk because it is believed most of the imported Canadian cattle will be feeder cattle. Feeder cattle closed down 2.725 to 1.500 cents, with January off 1.900 cents at 103.050 cents per lb and March off 2.725 cents at 97.825 cents.
"Today's announcement by the United States Department of Agriculture has been a long time coming and is the result of a tremendous amount of work that has taken place on both sides of the border," says Stan Eby, president of the CCA. "Canada's cattle producers are delighted. This announcement will put confidence into the live cattle market in Canada. Getting slaughter cattle back moving to the U.S. will help relieve the bottleneck at the packing plants that has been the main reason for depressed cattle prices in Canada. "The cattle industry continues to recognize the need to expand slaughter capacity in Canada and CCA remains committed to finding solutions to this issue. We will also continue to work on regaining access for all categories of live cattle, including breeding cattle, so we may have totally unrestricted trade within North America. We're also committed to regaining and expanding markets for Canadian beef around the world. We expect that many other markets will follow the lead of the United States and adopt similar science-based measures." The rule as published is over 500 pages and will take time to completely review. The CCA will be undertaking this review over the next several days.
Tom Walsh, a lawyer with the U.S. Department of Agriculture, said live Canadian cattle must be sent to the U.S. in sealed containers and no breeding cattle will be allowed across the border. Once they reach the U.S., cows will not be allowed to move between feed lots and they must be slaughtered before the age of 30 months. "USDA is confident that the animal and public health measures Canada has in place to prevent BSE, combined with existing U.S. domestic safeguards and additional safeguards...will provide the utmost protection to U.S. consumers and livestock," Walsh said. Walsh predicted American feedlots will import a total of two million cattle by this time next year.
Ottawa on Wednesday applauded USDA's action but acknowledged the proposed rule could face further legal challenges. "There could be some upsets along the way, so we're cautiously optimistic," said Elizabeth Whiting, spokeswoman for Canadian Agriculture Minister Andy Mitchell. A U.S. cattle group called R-CALF has consistently opposed reopening the border to Canadian cattle, arguing this could threaten the health of the American herd. In recent weeks, R-CALF has noted the possibility of a legal challenge. The U.S. Congress, over the next 60 days, also has veto power over the USDA proposal. But so far there has been no evidence of enough opposition in the House of Representatives or Senate.
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