SASKATOON – To hear Montana cattle trade specialist Linda Young tell it, American cattle industry suspicion of Canadian imports is as much an issue of perception as it is of reality.
She told a University of Saskatchewan trade conference Nov. 7 Canadian beef and livestock exports into the United States have had little impact on American prices, perhaps reducing them by one percent.
But real cattle prices continue to decline in the North American market, down 52 percent in 35 years.
Despite a largely open border in cattle trade, there are differences in policies and support systems in the two countries, she said.
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“These inequities, though of limited economic consequence, attract attention and breed tension,” said the economist from the trade research centre at Montana State University in Bozeman.
“And while trade between the two countries has increased over the last 10 years, the United States has consistently been a net importer of cattle and beef from Canada, at times giving rise to the belief that these regulations and policies, not economic incentives, are the cause for the net import position of the United States.”
In 1997, the U.S. imported 1.4 million head of Canadian cattle, four percent of the national slaughter. Just 41,189 head came north, less than one percent of the Canadian inventory, Young said.
The same year the Americans imported 711 million pounds of beef and veal, while American firms sent less than 300 million pounds north.
She said results like that lead some American cattle producers to think Canadian import rules cause unfair trade imbalances. That causes actions ranging from inspections of cattle trucks at the South Dakota border last September to the anti-dumping and countervail action launched recently by the Ranchers-Cattlemen Action Legal Fund, supported in part last week by the National Cattlemen’s Beef Association.
Young said expansion of the Alberta feedlot and packing industries will mean an increase in the number of American live cattle heading north. Implementation of the North West Cattle Pilot Project will help. Canada has agreed to waive some health and sanitary testing on feeder cattle being shipped from Montana and Washington states to Alberta.
But she also argued that as long as there are two countries with different programs and different trade negotiating goals, there will be difficulty in moving to a single market.
“The creation of strong ties between the national commodity groups across national borders may not occur until governments do not provide incentives for lobbying on the basis of national need,” Young wrote in her presentation to the conference.”Until then, further progress to achieving a single Canadian-U.S. cattle and beef market may be slow.”
