John Masswohl knows there will be fear mongering in the United States over the next two months by those opposed to a resumption of Canadian live cattle imports.
Part of his job as director of international relations for the Canadian Cattlemen’s Association is to explain to Americans how reopening the border will be good for their cattle and packing industries.
One fear percolating south of the border is that when live cattle trade resumes, possibly in early March, a glut of animals will hit the United States market, dragging down prices for producers there.
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Masswohl has assembled reasons why he believes that will not happen.
“If there’s going to be any negative impact on the U.S., you’re talking about a very temporary short-term blip,” said Masswohl, in Brandon last week for the Manitoba Cattle Producers Association annual meeting.
The first argument rests with the Canadian trucking industry’s diminished capacity to move cattle, he said. Trucking companies scaled back over the past 20 months due to the loss of cattle shipments into the U.S. laid off drivers went elsewhere in search of work.
Canada has also been expanding its domestic slaughter of cattle. Before the confirmation of BSE in an Alberta cull cow in the spring of 2003, Canada could slaughter 72,000 head per week, he said. It now can kill about 84,000 head per week.
Masswohl calculated feedlot inventories are down 12-18 percent from a year ago.
He estimated only about 180,000 head have not gone to slaughter because of the shortfall in killing capacity arising from the closed border. Those 180,000 animals are equivalent to about two days slaughter in the U.S., he said.
“The other big thing that has happened is the Canada-U.S. exchange rate. The Canadian dollar has appreciated nearly 30 percent in the last year and a half versus the U.S. dollar. That would tend to imply more northward movement of animals.
“When you add all these things up, we just don’t see a large glut.”
Masswohl could not estimate how many Canadian cattle might be shipped to the U.S. in the days and weeks following the reopening of the border. He said feedlot operators still are trying to get a handle on what that figure might be.
