Court cases

[grassfarmer]

Any updates on the court proceedings in Montana or elsewhere surrounding the border closure? Wasn't there a theory that the border would spring open in April before closing again in July?
It's already May 8th and I don't see anything happening. What a surprise.

[farmers_son]

I have pasted a summary of legal challenges below. Bottom line, the only for sure date is July 27, 2005 when Judge Cebull decides the R-Calf vs USDA case. The USDA appeal of the R-Calf injunction will be heard sometime after May 26.

http://www.albertabeef.org/news.asp?newsindex=271

Summary of Legal Actions Currently Taking Place in the U.S.

R-CALF vs. USDA

· Basis of the case is whether the United States Department of Agriculture (USDA) rule opening the border to imports of beef and live cattle from regions at minimal risk for BSE (including Canada) poses a safety risk to U.S. consumers or economic risk to U.S. cattle producers.

· Amicus curiae (friend of the court) briefs to provide relevant information to the hearing were filed by the Canadian Cattlemen’s Association (CCA) and Government of Canada but were rejected. The National Meat Association (NMA), representing smaller packers in the U.S., requested intervener status and was denied (see National Meat Association Appeal of District Court Decisions below).

· On March 2 in the U.S. District Court for Montana, Judge Richard Cebull of the Billings Division issued a preliminary injunction preventing the USDA rule from going into effect until the case is heard (see USDA Appeal of Preliminary Injunction and National Meat Association Appeal of District Court Decisions below).

· That same day, Judge Cebull issued a written order of preliminary injunction and instructed R-CALF and USDA to propose a schedule for trial on the merits of a permanent injunction by March 16.

· On March 16, R-CALF and USDA filed a joint proposed schedule for hearing the case. Based on this proposal, the Court established a schedule for the parties to file their various motions.

· On March 18 the CCA and Alberta Beef Producers (ABP) jointly filed for intervener status in the case. The request for intervener status argues that the Canadian cattle producers have substantial interests in the outcome of this case, and no other party to the proceeding can adequately represent those interests.

· On April 4, 2005 R-CALF and USDA responded to CCA’s and ABP’s request for intervener status. As expected, they both opposed the request.

· On April 12, CCA and ABP filed their rebuttal to R-CALF and USDA’s opposition.

· On April 21, four Conservative Members of Parliament filed for intervener status.

What Happens Next?

· Judge Cebull will decide whether or not to grant intervener status.

· The case is scheduled to be heard July 27, 2005.

USDA Appeal of Preliminary Injunction

· On March 17 the U.S. Department of Justice, on behalf of USDA, filed a request with U.S. Court of Appeals for the 9th Circuit asking that the court overturn the decision issued in the U.S. District Court in Montana that granted the preliminary injunction.

· On April 15 the USDA filed its brief in the appeal.

· On April 15 the Government of Canada filed an amicus curiae “friend of the court” brief to provide information to the hearing.

· On April 21 the American Farm Bureau, National Cattlemen’s Beef Association, 18 state farm bureaus, 29 state cattle organizations, National Pork Producers Council and individual U.S. cattle producers filed an amicus curiae brief in support of the USDA rule, stating “the court rejected the agency’s explanation for its decision, disregarded the scientific evidence and expert opinion on which that decision was based and repeatedly substituted its judgment for that of the agency. The District Court’s order granting the preliminary injunction (to block the USDA rule) should be vacated.”

· On April 21, Tyson Foods filed an amicus curiae brief supporting USDA’s appeal of the preliminary injunction, stating Tyson has been running its U.S. beef plants at reduced levels of production due in part to the continued U.S. ban on Canadian cattle.

· On April 22 the CCA and affiliated organizations filed an amicus curiae brief stating, “the CCA can provide support for USDA/APHIS’s position by assisting in the presentation and explanation of issues in which the CCA has specific knowledge and interest such as the global evolution of BSE, the status of international cattle and beef markets, the volume of Canadian cattle for export, and the impact of BSE on the Canadian consumer market. With respect to all these issues, the district court overlooked or misinterpreted record evidence that the CCA is in a position of expertise to clarify.”

· On April 22 filed an amicus brief stating the decision of Judge Cebull to grant the preliminary injunction was seriously flawed for three reasons: 1) the district court’s assessment of R-CALF’s likelihood of success on the merits was based on an erroneous view of USDA’s authority under the Animal Heath Protection Act; 2) the district court presumed that there would be a negative effect on the health of U.S. citizens which is completely unfounded; and 3) the district court assumed that the preliminary injunction would not harm other parties or the public interest, which is erroneous.

What Happens Next?

· R-CALF’s response to the brief filed by USDA is due May 12. A hearing is yet to be set, but will be sometime after May 26.

· The Ninth Circuit has advised that the USDA appeal will be heard by the same panel of three judges that hears the NMA appeal.

National Meat Association Appeal of District Court Decisions

· On March 9 the NMA appealed Judge Cebull’s denial of intervener status to the U.S. Court of Appeals, Ninth Circuit, in San Francisco. At the same time NMA also appealed the preliminary injunction. NMA requested that these appeals be heard on an emergency basis.

· NMA also requested that R-CALF be required to post a bond to cover the economic impairment suffered by NMA members for the time that the preliminary injunction is in effect, should the Courts ultimately deny R-CALF’s petition.

· On March 11 the U.S. Court of Appeals, Ninth Circuit, agreed to hear the NMA’s appeal on an expedited schedule.

· NMA filed its opening brief March 21. The Ninth Circuit denied NMA’s request to file USDA’s administrative record, effectively meaning that NMA’s appeal is limited to the question of intervener status. The appeal of the preliminary injunction will have to be heard in the context of USDA’s appeal.

· USDA opposed NMA’s petition to become an intervener arguing that the USDA was in the best position to defend its rule.

· R-CALF’s response brief, due March 28, was submitted March 30.

· NMA’s rebuttal was submitted April 4.

What Happens Next?

· The appeal will be heard on a date yet to be determined.

· The Ninth Circuit has advised that the NMA appeal will be heard by the same panel of three judges that hears the USDA appeal.

[farmers_son]

read an article in today's Edmonton Journal about the closure of more slaughter plants in the US, due to a lack of Canadian cattle. Said the fear is that Canada will win the 'war' in the long run if we have can increase our slaughter capacity significantly.

[rkaiser]

What kind of war is it when the Americans are the only ones expanding slaughter capacity in Canada?

[grassfarmer]

A dirty war but a win:win war situation which the Yanks haven't been in many of since WW2. Clearly however, many in the industry still see it as a US versus Canada problem when in my book it is a Corporate America versus beef producers everywhere battle. Unfortunately the beef producers are losing the battle at the moment.
Thanks for the updates Farmers_son.

[cowman]

You've got to give R-Calf credit. Prices in the USA are doing very well and I doubt they would be that high if the border was open? And that is a direct result of their lawsuit?
I do believe they have not looked at the big picture but for the moment they are putting some major bucks into the American cattlemans jeans?
If Tyson/Cargill really wants to get the attention of the American government they need to start shutting down plants rather than keep saying they will have to?
I do believe this thing will get resolved but it might take awhile. George Bush talks a good line but it is pretty apparent he is not really a free trader and appears fairly petty at times.
Yesterday he lectured Russias' leader, Putin, on how Russia treats her neighbors and how well the USA treats Canada and Mexico! Maybe CNN should have asked a few Canadian cowmen or lumberjacks what they thought of that comment?

[grassfarmer]

I heard the results of a survey on the radio this morning that 53% of Canadians regard the US as their closest ally whereas only 14% of Americans regarded Canada as their closest ally. In both cases there had been a fall in support of the other country since the last time the question was asked.

[farmers_son]

Cowman: I don’t think R-Calf deserves any credit for high prices in the States.

I would point out that Canadian UTM boxed beef is entering the U.S. at about the same rate as pre BSE. The lack of live Canadian cattle is offset by lack of exports to Japan. Pretty much a trade off. Wholesale beef prices should not have changed as a result of any border actions and the lack of live Canadian cattle in the U.S. market has been offset by U.S. packer closures and reductions in days killing cattle.

In the U.S. packers are now in the black and have been for a while.

It is my understanding that Canadian imports of beef and live cattle before and after BSE were actually very low. Numbers below courtesy of the Economic Research Service of the USDA: http://www.ers.usda.gov/news/BSECoverage.htm

Beef imports from Canada as share of U.S. beef consumption:
• 2002: 3.9 percent
• 2002: 3.9 percent
• 2003: 2.7 percent
• 2004: 3.8 percent

Arguments to the effect that the Canadian border being closed is supporting U.S. prices are probably exaggerated and serve the purposes of those who wish to see protectionism continue into the future.

It has been my view that the border is closed not because of R-Calf, but because the U.S. administration is quite happy to see it closed. The Bush administration has successfully deflected criticism from themselves to R-Calf, that is pure politics played by people who are very good at the game.

In any case, the record high prices for cattle in the U.S. are due to factors other than a lack of Canadian live cattle in the U.S. market.

[BWC]

Explain the other factors other than an extreme cow shortage th are creating record U.S. beef prices. The Fact is that the Cargill and Tyson plants in Canada are the only profitable plants in North AMerica

[farmers_son]

BWC: You said “Explain the other factors other than an extreme cow shortage th are creating record U.S. beef prices”. I tried to explain that factors other than imports from Canada must be the reason for the record high beef prices in the U.S as clearly Canadian beef imports as a percentage of U.S. consumption are at the same level in 2004 as they were in 2002 and cannot be the reason. According to Ted Haney of CBEF, world beef prices are at historically high prices and therefore that could be the reason. The crisis in live cattle prices were not a reflection of what our beef was selling for. A lack of domestic competition in the packing industry has caused Canadian producers to miss out on the high prices which the packers captured for Canadian beef product even with BSE.

You also said “The Fact is that the Cargill and Tyson plants in Canada are the only profitable plants in North America” Besides the fact that Canada has 13 federally inspected packing plants all of which I would presume to be profitable I have pasted information from the George Morris Center below that indicates that in the past weeks U.S. packers have been in the black.

http://www.informaecon.com/cca/uploadeddocs/050506.pdf

According to the George Morris Weekly Boxed Beef Commentary:

“US packer gross margins surged higher last week on the
strength of very strong by-product performance and a
slightly lower cattle cost two weeks ago. The last time
net margins were this strong was the second week of 2005
after packers jacked prices higher due to plant closures”

and

http://www.informaecon.com/cca/uploadeddocs/050429.pdf

“US packers enjoyed strong net margins of over $15/head
last week. The string of weeks with black ink is growing”

[BWC]

The U.S plants left standing where they can get supply are in the black, I grant you that. the ones that wereoperating at low level or have gone dark are no longer in the comparative picture. I am very interested in your thoughts and your links are very informative. All of the info on most U.S. links, you have to agree, downplay the situation north of the 49th paralell. The only big player that support the openingof the Canadian border in the U.S. are the AMI,NMA,and Tyson,..... now why would that be... common sense tells me that their bottom line isn't as great as the picture painted in your article.

[farmers_son]

Just off the top of my head, I would think that American support of a reopening of the border to live cattle is based upon concerns that Canada will increase its packing plant capactiy and become a signficant independent competitor globally.

[grassfarmer]

That doesn't make a lot of sense though farmers_son, Tyson will be well aware of the situation in Canada and realise that expanded capacity translates to themselves, Cargill and the Sunterra proposal. I'm sure they don't base their decisions on a fear of all these much talked about small, producer owned plants that are not being built.

[cowman]

When Cargill expanded into Canada in the late 80's there basically wasn't enough cattle to go around, thus we saw the exodus of the Canada Packers chain and the one remaining Burns plant. Lakeside sold out to IBP and they rapidly expanded pushing out the few remaining small operators. XL was a government propped up white elephant that really was the most inefficient company in the Canadian packing scene. Nillson Bros. probably got an ultra sweet heart deal on that dog!
With the expansion of Tyson and Cargill I really doubt there is much room for any small independent packers? Especially if the border ever opens to live cattle? The fact of the matter is these guys are the Walmarts of the packing industry and can outcompete just about everyone?
It is a sad situation, but we should never forget who got us here? It wasn't Cargill and it wasn't IBP! It was our government.