The amount of money that Canadian cattle producers lose due to
discrimination will double if country of origin labelling is enforced,
members of the Canadian Cattlemen’s Association were told at their
annual convention.
It is another layer of harassment that will bite at Canadian beef’s
access to the U.S. market, CCA executive vice-president Dennis Laycraft
said.
“The plants that don’t handle a lot of Canadian or Mexican cattle will
probably find it easiest to just not buy any,” he said.
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Canadian cattle producers already suffer from commercial discrimination
on sales into the United States. Canadian beef cannot be branded “USDA
Choice,” the label for top quality meat, even if it is of exactly the
same quality.
The CCA reckons that costs about $7 per hundredweight on live cattle
sold into the U.S., and about $35 per head for animals slaughtered in
Canada and exported to the U.S.
If country of origin labelling comes into effect, as it is slated to in
2004, the live cattle discount will rise to $10 per cwt. and the meat
discount will probably double to $70 per head. Most Canadian exports
are beef, not live cattle.
Laycraft said the CCA doesn’t think American consumers will purposely
avoid buying Canadian beef. However, costs will go up for slaughter
plants and retailers because they will have to segregate foreign beef
and cattle. The increased costs will be passed back to Canadian
producers in the form of lower prices.
He said smaller packers may find Canadian cattle too much hassle to
slaughter. As a result, they won’t buy Canadian animals, which will
tend to depress prices.
Some bigger slaughter houses will have to keep slaughtering Canadian
animals because they can’t run their plants at full capacity without
them.
They will probably lower their bid prices for Canadian cattle to cover
their new costs, he added.
However, the extra cost of segregation may push them out of the North
American market altogether.
“Will the two balance out so that they’re still able to make money
handling Canadian cattle, or will they just close?” Laycraft said.
Beef export sales prices will probably be hurt because some smaller
buyers won’t want to buy beef that has to be specially labelled.
Laycraft said hotels, restaurants and institutions will still buy
Canadian beef, but will probably demand an extra discount from Canadian
beef exporters if they sense they can do so.
