Test is Positive

[grassfarmer]

Let's not forget though the US isn't refusing to buy our beef though all this episode of insulting, gesturing and bad mouthing of them. They are absolutely clamouring for our beef albeit in boxed form rather than boxed and live cattle as before.
But then again that has more to do with the "enemy within" (Cargill and Tyson) and their corporate greed which far overrides national borders and any any sense of nationality, loyalty or decency.

[farmers_son]

Kph: Within NAFTA the relationship between the NAFTA partners would be better thought of as a contractual agreement rather than a buyer/seller situation. The trading relationship between the U.S. and Canada is more complex than a simple buy sell situation in that it involves substantial investment in each others country.

Customers are important, but so are suppliers. I would question the United States treatment of Canada in the BSE crisis, not to mention softwood lumber, salmon fishing and so on. I think the Americans treatment of Canadian cattle producers has been disgraceful.

Canada, with the world’s largest reserves of oil need not take a submissive role in dealings with the United States or any country. We are a world economic power if not a military power and in recognition of that we are a member of the G8.

I, for one, am not gloating that the U.S. has BSE, or more accurately that another BSE positive cow was discovered in North America. However it may help the Americans appreciate the reality that BSE is a North American problem and that the border closure to Canadian beef products and live cattle has been unwarranted. I think the closure of the border to our live cattle has more to do with what the Americans see as their best interest rather than whether we are nice to them. Hopefully the Yanks will now see their best interest being served by opening the border to Canadian live cattle to demonstrate to their consumers that North American beef is safe to eat.

[kpb]

farmers_son, I agree that the NAFTA agreement is basically a contractural agreement among the countries involved and indicates their intentions regarding trade between themselves. However I think it is important to note that NAFTA does not, explicitly, spell out any obligation of any country to buy goods from the other country. Also I would like to point out that a contractural agreement like NAFTA is not, by definition, an agreement between partners with the same interest but rather an agreement between two parties with differing interests who agree to specific terms on one transaction or a series of transactions.

I agree completely that the U.S. will act in its own interests, as it has an obligation to its citizens to act in this way. I also agree that, from our perspective, the Americans have acted terribly in regard to lumber, beef, etc. I would like to point out that the Americans are not alone in acting this way. I recall 10 or 12 years ago when I was involved in commodity trading that the Japanese cancelled several coal contracts that they had with Canadian coal companies and forced these companies to re-negotiate because the market price of coal had fallen after the contracts were signed. These were signed contracts by both countries that had been negotiated in good faith when the price of coal was at one price, then the Japanese unilaterally forced a renegotiation when the price dropped. This resulted in untold misery to the Canadian coal industry, several bankruptcies, etc.

Each country, with the possible exception of ours, will act in its own best interests all the time, regardless of international law or public sentiment or the interests of the nation it is victimizing. The sooner we accept that in Canada, the sooner we'll be able to join all the other grown-up countries and get out of the playground.

Lastly, I think Grassfarmer's point is the most important of all. In both the U.S. and Canada we need to deal with packer control of our industry. Farmers_son, you likely know the correct answer to this because I have found you to be a consistent source of knowledge but I suspect our packing industry in Canada is more closely concentrated now than pre-BSE??? This is despite the plants proposed and built. This, to me, is the biggest problem we face and it will not be resolved until we kick the multi's out and grab hold of the industry ourself. A radical concept perhaps but one that could be achieved if we could get the government onside.


kpb

[farmers_son]

You are correct to point out that the Japanese are quite capable of playing hard ball too.

Keeping to the topic of BSE, how this will play out will be determined by what the U.S. perceives to be its best interest. Given the importance of the domestic market to the U.S. cattle producer, I would think keeping the confidence of the U.S. beef consumer would be first and foremost. If they can possibly keep that confidence by saying U.S. beef is safe but the consumers need to be protected from Canadian beef, then they will do that very thing and the border will stay closed until other interests such as packers closing and people loosing jobs gets sufficient attention.

Myself, I think the U.S. needs to start calling our beef safe if they want people to believe their beef is safe.

[Bruce14]

kpb:"I think everyone on this thread better cool their jets. Anyone in Canada who thinks this is good news is simply living in their own little dream world. There is no way, absolutely no way, that this is anything but bad news for Canada."

One thing to keep in mind is that the ramped up testing in the US was due to end soon. They would then revert back to pre-Dec 2003 testing levels and it would still be viewsed strictly as a Canadian problem. If not for Phyllis Fong ordering this latest test we could well be facing a ban on boxed Canadian beef given the uncertainty of the US court system.

[farmers_son]

Kpb: You would be correct to say that the packers are more concentrated since May 20, 2003 than they were before as a result of the Cargill purchase of Better Beef in Ontario which is still subject to review by government. And if the point you are working towards is that the opening of the border to live cattle will ultimately slow or stop a made in Canada packing industry, then I hear what you are saying.

I view the BSE positive as serving to lessen some of the uncertainty in the industry which will in the long run allow us to concentrate on our packing plants instead of focusing on opening the border. As Bruce14 points out, the issue of loosing boxed beef trade has completely disappeared where it was a threat to the Canadian packing industry before this announcement.

[cowman]

farmers son: Depending on the reaction of the American consumer, things might go either way? If the US consumer loses confidence in the safety of the product, we could see a backing off of beef in the US. If that happens, we very well might see an end to boxed beef trade?
Meanwhile R-CALF continues to slam the USDA and imply they are liars and toadies for the big packers! This is smart? These guys aren't the sharpest knives in the kitchen?
I wonder if they will now stand up with their radical vegetarian buddies and admit American beef is also unsafe and urge the public not to buy it?

[farmers_son]

About R-Calf. I believe their real target is MCOOL. And while I think R-Calf is barking up the wrong tree no one should assume for a minute that their leadership is inept. They may have backed themselves into a political corner by calling the kettle black and now the U.S. has BSE they may loose some credibility. However there will always be American producers willing to listen to the protectionist message.

Producers on both sides of the border need to appreciate that trying to gain an advantage over producers in other countries, especially within your own free trading bloc, only results in creating a cheap pool of cattle in the other country that allows the packers to drive down producer prices everywhere. Part of that solution will remain developing sufficient packing capacity in this country as well as creating mechanisms for competition to determine fair prices for all market participants. U.S. producers have much the same problems as we have here. I would suggest our problems are worse but there still is common ground to work together to get a fair deal for our live cattle.

Given that higher retail prices will likely cause consumers to choose alternative meat products, the solution would seem to be tighter supply chains, fewer middlemen, producers owning their production longer past the farm gate thereby adding more value and getting paid for it. There are no long term benefits to be gained from sticking it to the other producer. Far more results could be realized by creating competition at the farm gate. If R-Calf won't grasp that message another group will.

[pandiana]

The positive test helps to vindicate most Canadians assertion that BSE is a North American problem. Without a doubt it helps to level the playing field to some degree.

We could further speculate that the reason the incidence is still lower in the US (although statistically there is no significant difference) would be differences in the risk level of the animals being tested. Downer animals are not allowed into plants and to my knowledge, they do not have a 4D program.

On the other hand, this is not all good news. R-calf has quickly changed the emphasis from BSE incidence in Canada and the associated health risk to focus USDA's ineptness.

As this lawsuit is against USDA's rule making in allowing Canadian imports, their offense will no doubt be to discredit USDA's ability to make any rule regarding importation of cattle if they can't even get testing right on there side of the border. The two courts refusal to allow intervenor status to ABP/CCA, NMA and others, highlights the fact that this action is against USDA in its narrowist sense and will be defined by the specifics of whether USDA's rule was properly made. I think Willowcreek points this out.

I am not confident that the logic of a North American catle industry will pervail in the court room.