The Canadian Cattlemen's Association (CCA) has been under severe pressure since doors all over the world slammed shut on Canadian exports in May 2003. With domestic grumbling growing that CCA wasn't doing enough to represent Canadian producers' interests, CCA unveiled a plan this week focused on building Canada's packing capacity.
The Canadian press made a lot of noise about one suggestion that called for shipping cattle to the U.S. for processing in an idled plant with all the product then shipped back to Canada. But, Canadian leaders made it clear this concept wasn't even on the drawing board.
But, what was on the drawing board calls for increased slaughter capacity, tax incentives, loans, cash advances and increased surveillance and removal of any cattle born prior to the feed bans being implemented. The plan also looks at ways to speed up the resumption of trade, and rebuilding Canada's relationship with the U.S.
In addition, a government cull program has been receiving a lot of consideration. But Canadians fear such a system could implode. And, for obvious financial reasons, government officials show little desire to implement a cull program.
With current capacity, it's estimated Canada will have more than a 500,000-head excess of fed and non-fed cattle to be processed this fall and winter. The lack of processing capability in Canada has led to record cow numbers and an expanding cowherd despite the country's harsh economic environment.
Canadian exports have fallen in U.S. dollars from $3.9 billion to $1.4 billion in the year following BSE. And it's expected to remain at less than 50% of pre-BSE levels this year, as well.
Statistics Canada data shows the cattle inventory increased by 1 million head to 16.8 million, 6.5% larger than a year ago. While not unprecedented, it reflects a significant increase. With the Canadian industry relying on U.S. packing and feeding capacity, Canada's system will likely be stretched beyond its limits.
But, while Canadian producers have been severely injured as a result of their reliance on U.S. processing, U.S. producers have benefited to some degree. Unless the border is opened quickly, the two industries will be forced to realign that capacity. Canada's industry will struggle in capitalizing this realignment, while U.S. producers will face less competition and access if it occurs.
Canada sees three options -- open the border, increase harvest capacity and/or depopulate the herd. Obviously, the first option is Canada's first choice, but it's also the one over which Canadians have no control.