A handshake and a cup of coffee may be the first step toward friendlier relations between Canadian and American cattle producers.
Meeting their colleagues boot to boot on their own turf, Canadians took a 10-day whirlwind tour of Montana where they held town hall meetings and answered the Americans’ questions about the impact of trade on the beef livelihood on both sides of the 49th parallel, said Brenda Hunik.
“There is a mindset in some parts of the state that an open border is harmful to their marketplace,” said Hunik, of the Northwest Beef Producers Association.
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The association is a grassroots group of western Canadian, Washington state and Montana cattle producers who oppose the American anti-dumping tariff imposed on Canadian live exports. The duty of 5.57 percent on the sale price is about $50 on a finished steer.
So far, the new association has collected more than $175,000 in donations from worried producers. They fear the duty could become permanent.
“We are astounded at the support we have received from the community,” said Hunik, who was hired to develop a professional campaign against the tariff.
The association spent about $70,000 to host the meetings, as well as advertise in newspapers and radio about the negative effects of the duty.
State senators attended the meetings held at the end of August. The association has also contacted senators Max Baucus and Conrad Burns who have a reputation for favoring tougher trade sanctions against Canada.
The full effect of the duty has not been felt so far on the markets. There are fears it could cause cattle prices to plunge over the next year, as those bidding on cattle will have to calculate the cost of the duty into what they are willing to pay for calves.
Many producers are willing to gamble that Canada will win the final injury decision and will get its money back. For some selling cattle south, the duty is as high as $200,000 per shipment. That money goes directly to the U.S. treasury with no guarantee it will come back to agriculture.
The duty will not help American producers, says a recently published study. Led by Montana state agricultural economist Gary Brester, the study said the tariff will likely increase costs for the U.S. beef processing sector. Reduced access to Canadian slaughter cattle will see plants running below capacity.
“It is likely U.S. beef packers will increase imports of Canadian carcasses as replacements for the loss of live cattle imports in order to maintain fabrication line efficiencies,” the study said.
Further expected price increases for Montana or Washington feeder cattle may only rise by between five to 39 cents per hundredweight because of the reduced Canadian demand for feeder calves from these regions.
The tariff will also reduce the price and production of fed cattle in Canada because Canadian packers will not have to bid as aggressively against U.S. packers for Canadian cattle.
Another thorn in the American cattle producer’s side is the stiff health regulation regarding bluetongue and anaplasmosis. The Americans argue the regulations keep their cattle out of Canada with unnecessary and expensive testing for a disease they don’t have in the northern states.
A meeting of cattle groups and federal minister Lyle Vanclief was held Sept. 13. The cattle producers were promised an announcement regarding the health protocol for these diseases to ease American concerns.
