NIAGARA FALLS, Ont. – They’ve been through some of the toughest years in memory, suffered multibillion dollar losses, watched some of their competitive edge erode as the Canadian dollar soared and had their faith shaken in the reliability of the trading system.
Yet the leaders of the Canadian cattle industry who gathered last week for the annual summer meeting of the Canadian Cattlemen’s Association board had a spring in their step.
“I think we saw some real optimism here,” CCA president Hugh Lynch-Staunton said Aug. 16 at the end of the meeting.
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“We’ve come through a pretty big storm. We’ve been battered around quite a bit but the sun is starting to shine.”
He said part of the industry buoyancy is based on the belief that it survived BSE in better shape than most had dared hope, despite an estimated $7 billion in lost sales. Now, with the American border open for younger cattle and an American vow to try to completely open it by 2007, profitability is coming back.
“I don’t think we took the hammering that we thought we were going to on BSE,” said the first-year CCA president. “We got hit badly, there’s no doubt, and I don’t think there’s anybody in the industry who didn’t take a financial hit, but I think we are better off than we thought we were going to be at this point. The momentum is in the right direction and we’re starting to see some profit from time to time.”
Speakers sprinkled the day with reasons for industry optimism.
After swelling to record size last year, the Canadian cattle herd started to shrink as sales to the United States and increased domestic slaughter capacity began to eat into the surplus. By July, the national herd had declined 4.7 percent to 16.2 million head.
Canadian consumers continue to maintain high per capita beef consumption levels and consumer trust in the safety of the beef supply is the highest in Canada of any country included in a recent international survey.
Trade has been restored to 80 percent of pre-BSE levels, reducing projected sales losses to $400 million annually from more than $2 billion at the height of the closed border crisis.
Trade relations with the U.S. are improving now that the Conservative government has agreed to deal with the long-standing irritants of restrictions on imports of American cattle because of bluetongue and anaplasmosis.
The expectation that a biofuel industry will be built offers the prospect of a cheap feed source for the Canadian industry.
And a once-frosty relationship between the cattle industry and government has become decidedly more friendly and co-operative since the BSE crisis started in May 2003.
“We need public policies that meet our needs as an industry and we haven’t always been very good at that,” Lynch-Staunton said in his state of the industry address. “But during the BSE crisis, we have learned to work with our federal and provincial governments more than we ever have before and I think we can build on that.”
Brad Wildeman from PoundMaker Agventures in Lanigan, Sask., vice-president of the CCA, said in an interview no one in the industry would have dreamed during the darkest days of the BSE crisis that the rebound could start as quickly.
“It shows how resilient the industry is,” he said.
Of course, there also were warnings about potential problems.
While the U.S. administration has promised to try to get the border open for older Canadian cattle and breeding stock, U.S. Department of Agriculture official Chuck Lambert said protectionist interests in the American cattle industry will try to block it.
Alanna Koch, a board member at Agricore United and vice-president of the Canadian Agri-Food Trade Alliance, warned that if World Trade Organization talks fail, the growth of the Canadian industry will be hampered by growing trade barriers and subsidies in competitor countries.
Wildeman said a WTO deal is the single best thing that could happen for the industry, even if it is based on subsidy and tariff reduction offers on the table when talks stalled in July.
“Even it wasn’t everything we wanted, it was a lot better than what we have,” he said.
“In the world, beef is one of the most protected products.”
