Softwood Lumber

[farmers_son]

Canada and U.S. trade has fundamentally changed as a result of the softwood lumber deal reached yesterday. While NAFTA was originally intended to be a free trade deal, as of yesterday it is a managed trade deal. Canada has agreed to restrictions, under certain conditions, on imports of lumber to the U.S. while the U.S. has unrestricted access for their goods into this country as well as unrestricted access to our energy.

Canadian cattle producers have been waiting for the other shoe to drop for months now in anticipation of a rule allowing imports of cows and cow beef into the U.S. It is clear to me that the rule was on hold pending this softwood lumber deal. We can expect a similar “deal” from the Americans regarding trade in cattle and beef. The next rule will allow for “managed” access for cattle and Canadian beef, not free access. At the same time the U.S. will demand free access for their beef and live cattle imports into Canada.

Obviously NAFTA had no political influence within the U.S. The much touted dispute settlement mechanism did not work as Canadians were forced to reach a negotiated settlement after winning NAFTA ruling after NAFTA ruling. NAFTA is dead, dead as a doornail. In its place is a new deal called NAMTA, the North America Managed Trade Agreement.

[Willowcreek]

farmers son quote: "NAFTA is dead, dead as a doornail."
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I hope you are right- throw it out and get a FAIR trade deal...

But remember concerning cattle- the Canadians were the ones to first put on restrictions and never did open the border to free trade in cattle going north with your "ALL US cattle were considered diseased" policy...

Now when US producers try to protect the US cattle herd- Canada screams protectionism...

You can't have it both ways folks!!!!

[jensend]

the canadian government should step back and see just how dead nafta is and start to diversify markets for all sectors of the canadian economy. within a year the american softwood producers will start another challenge and the whole process will start again and a precedent has been set with negotiating after winning the nafta process. heck, let's ship the oil to china; they aren't any worse to deal with than the yanks. we're only neighbours when we have something they want. btw, willowcreek, are there still any cattle movement restrictions within the usa due to anaplasmosis or bluetongue?

[farmers_son]

What bull...

Here is the straight goods. Diseased U.S. feeders for the last almost 10 years were allowed into this country without restriction during the winter months when the vector to spread the disease did not exist. Even during the summer months all that was ever required was a $5 blood test.

Compare that to the outrageous protectionism that the Americans have been subjecting our cattle industry to because of BSE, a disease which is at a low incidence in both countries, and you see what game is being really played here.

The only thing stopping U.S. feeders from coming into Canada last winter was the U.S. embargo on our live cattle and beef.

Lets see... unresticted access for U.S. feeders in the winter and a $5 blood test in the summer. Or the U.S. position which is absolutely no access for cow beef or live cows and dentition, preg checks, brands, governemnt inspections on our live calves.

BSE is not a communicable disease, both countries have measures in place to prevent the spread of BSE and to ensure the safety of the food product. There is absolutely no excuse for the U.S embargo on our cattle except to protect their producers and manage the level of beef and cattle trade between the two countries.

[Willowcreek]

jensend: "btw, willowcreek, are there still any cattle movement restrictions within the usa due to anaplasmosis or bluetongue? "

Not in about 45 states of the union- but Canada still considers "ALL" US cattle as diseased...

As far as oil goes- both countries have too much invested together in the pipelines and facilities to change...

I read an article yesterday- the reason they are only paying $30 barrel for Montana and ND oil- lack of transport- all the pipelines are tied up with Canadian oil which has purchased priorities on the lines....

[jensend]

ot: As far as oil goes- both countries have too much invested together in the pipelines and facilities to change...

that would be the american pov. the chinese and canadians might not be so committed if a better deal walks in the door. the chinese are already taking equity positions up here. maybe they can help free up some pipeline capacity for you.

r-calf had a chance to do something good and could have gathered more support on both sides of the border but the hillbilly way ain't gonna cut it. you've probably gone about as far as you can. the packers used you as a front to screw the canadian producer and your strategy worked for them to set the stage to do the same down there and you can already see it can't you?

[Willowcreek]

Jensend- Why doesn't Canada send some of that beef to China? Why is it all shirttailed on the US cattleman?

Oh I forgot- you guys have no control over your industry anymore- All American run- sold out to the highest bidder...And Cargill/Tyson want to ship US beef to China and then ship their captive Canadian cattle to the US to keep the US price down-- Win-Win for them-- Lose -Lose for producers...But Canadians are happier then pigs in sh*t- we got our US border open again- we can help the packers screw everyone....

Since the Border opened and the Packers got access to the Canadian cattle so they can manipulate the market- the prices have steadily went down...Looking at $60 fats this summer- and more bankrupt feedlots-- No buyers even offering to buy fall calves-- but Canadians are jumping for joy- we'll get the OTM's open so Americans can have $20 culls too...

[Willowcreek]

I need to clarify my "all Canadians" because their are a few that actually see what is happening-- the rpkaisers, Cam Ostertags, few more- that really can see the manipulation in the market and want to try and do something about it, just like R-CALF is trying...

The rest just set back, give their money to CCA and ABP to carry on the same-o same-o and blame all their BSE and everything else on R-CALF...

[farmers_son]

Willowcreek: You are incorrect. If you check the Live Cattle weekly charts you will see that live cattle futures are at levels that are not lower then they have been since there was BSE in North America. In fact futures prices were at this level approximately each April for the last three years. If you notice every time restrictions were eased on imports of Canadian beef or cattle your futures market responded positively.

In April 2004 the market rebounded after the U.S. lifted restrictions on ground beef and bone in cuts of beef. The market rebounded again in July 2005 after the Appeal Court overturned the R-Calf injunction. I am expecting a similar positive move when the U.S. announces its next rule on imports of Canadian cattle. Unfortunately that has been delayed. You are incorrect when you say “Since the Border opened and the Packers got access to the Canadian cattle so they can manipulate the market- the prices have steadily went down...” The opposite was the case every time.

The border being closed or restricted to Canadian live cattle has resulted in further consolidation of the U.S. packing industry, I would think to the detriment of producers on both sides of the border. Canada has build packing capacity on this side of the border, unfortunately too much of that packing capacity is in the hands of two major players which works against needed increased competition.

[Willowcreek]

farmerson- I don't know what futures market you are looking at- must not be the same one I am...What I do know is that:

Border open- years of low and hohum prices...

Border closed- Record high prices on calves, culls, and fats....

Border open again- Prices going back into the dumps....