AR-News: (CA) Beef farmers facing insolvency

[Barry Kent MacKay]

May 31, 2004

OCA Press Release

Guelph - Canada has now passed the one-year anniversary of the BSE 
crisis and beef farmers are reaching the point of insolvency. The 
current economic situation and the related morale of beef farmers in 
Canada is grim.

The magnitude of this crisis is the primary factor that has driven 
Canadian farm income to its lowest level in 25 years. Losses to 
Ontario's 21,000 beef farmers alone have reached $200 million. Without 
government assistance over the last 12 months, this amount would have 
totalled $300 million. Add losses to truckers, packers, auction barn 
operators, dealers and exporters to the mix and losses are estimated at 
about $23 million per week in Ontario - or more than $1 billion. BSE 
has far escalated past a beef issue and now threatens all of rural 
Canada.

In the beginning farmers were optimistic that sound science would 
prevail and that the borders would soon reopen. It's now been almost 13 
months since the announcement was first made, though, and there has 
been no indication of normal trading practices resuming. Although an 
American comment period ended on April 7, the cattle industry continues 
to await an announcement by the United States Department of Agriculture 
(USDA) on its proposed rule to allow live Canadian cattle back into the 
USA.

Beef farmers in Ontario have appreciated the efforts and support of 
political leaders at both the federal and provincial levels of 
government. If the border doesn't open within the next few weeks, 
however, government and industry representatives will need to begin 
determining steps to be taken. The current situation is simply not 
sustainable.

Dale Pallister, a feedlot director with the Ontario Cattlemen's 
Association, said that prices fell immediately following the 
announcement of BSE last May. While markets were somewhat more stable 
last fall and in the early winter, the last few weeks have resulted in 
a total market collapse. Said Pallister, "Prices have spiralled 
downwards over the last few weeks as everyone loses hope of the 
marketplace returning to normal. Market-ready cattle on my farm have 
dropped in value by a further $185 each in only three weeks. Businesses 
cannot operate with these losses."

Pallister explained there's no sector of the beef industry that hasn't 
been affected by the downward turn. In one week, calves being sold into 
feedlots (also known as replacement cattle) have dropped in value by 
about $72 per animal. Commercial cows are worth about $500 per head 
less than they were a year ago.

Until the crisis hit, beef was Ontario's second largest commodity in 
terms of annual farm gate receipts with a value of approximately $1.2 
billion in 2002.
_________________________

  Barry Kent MacKay
  Canadian Representative
  ANIMAL PROTECTION INSTITUTE 
  www.api4animals.org