On June 9, United States agriculture secretary Mike Johanns issued a stark warning to the American cattle and beef industry during a day of BSE discussions at the University of Minnesota.
The unjustified continuing closure of the border to Canadian cattle is hurting American interests, he said. In the absence of live export opportunities, the Canadian packing industry is expanding and becoming a competitor to the U.S.
Within 24 hours, a regular Statistics Canada report provided the proof of his warning.
In April, Canadian meat exports worth $463.4 million were a single month record and part of a trend that has seen sales abroad surge in 2005.
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“Canada’s meat processing industry has expanded substantially in the face of an export ban on live cattle imposed by the United States,” said the federal agency in its explanatory text.
Agency official Anne Couillard said June 13 that the expanded packing capacity is the major industry change: “That is the only explanation we can find for the increased sales.”
Canadian Cattlemen’s Association president Stan Eby said the export numbers are a clear sign the Americans’ border closing is backfiring on them.
“It shows that our repositioning strategy in Canada is working,” he said. “Packing capacity is expanding, we are taking more market share and this is coming back to the producer level as well. Feeder cattle prices have been strong for some time.”
Johanns told his American audience Canada has little choice but to become a competitor.
“I am in no way critical of Canada for having a pro-growth attitude,” he said. “Canadian officials have made it very clear they would prefer to work with us as trading partners than to compete with us by encouraging American businesses to migrate, but they too must face economic reality.”
The choice is stark, he said.
“For them, the reality is that because they are unable to export their cattle and beef to the United States, they must try to import processing and work to compete against us in other markets. They are working aggressively to do so and they are succeeding.”
The Statistics Canada report said April meat sales to the U.S. increased seven percent to $254 million. Japan, Mexico and Australia were the next three biggest purchasers.
