Mandatory country-of-origin labelling on beef hurts the two most important customers of United States, said Greg Doud, chief economist for the National Cattlemen’s Beef Association.
Canada and Mexico are the primary buyers of U.S. export beef and supply American feedlots and packers with millions of live cattle.
“Here we are discussing how we stick our finger right in the eye of our two biggest customers,” Doud said at an NCBA committee meeting during the organization’s annual convention in Phoenix, Arizona, last week.
Buyers have been discounting Mexican and Canadian live cattle by $60 to $120 per animal since the interim rule went into effect in the fall. Mexico ships one million to 1.5 million lightweight feeders to the U.S. each year.
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Canada exported 557,000 feeders and 733,000 fat cattle in 2008.
Mexico’s agriculture minister, Alberto Cardenas, said the country is proceeding with its World Trade Organization complaint about the U.S. rules on meat. Canada has said it will hold off on its WTO case until it sees how the final rule works, where some mingling of cattle from different nations is allowed.
The labelling law has been a financial blow to Mexican and Canadian producers.
“In Mexico, there are some radical groups that don’t like being charged $60 a head on calves that weigh 400 pounds,” said Enrique Cubillas of the Mexican cattlemen’s organization, Confederacion Nacional Organizacions de Ganadera.
“There were times last year when we imported $5 million (worth of beef) per day,” he said.
Besides the price discounts, the Mexicans pay more for freight and health costs. This is too much to bear and he argues that eventually all cattle bids will be lowered for all beef producers.
Saul Mercado, consultant to the NCBA, said Mexico might keep its feeders home to supplement its domestic production where beef is in short supply.
“If we keep those million and a half head of cattle, we might be able to supply it,” he said.
All three nations would be better off working together under the North American Free Trade Agreement to compete against the rest of the world, he said.
“We ask our friends, the Canadians and the Americans, to work together and maybe we can come to an understanding.”
Brad Wildeman, president of the Canadian Cattlemen’s Association, agreed.
Canada and the U.S. produce a unique quality grain-fed beef and the North Americans should co-operate to develop international trade or lose it to another large beef producing region.
“We are the largest grain-fed cattle exporters in the world and there are lots of opportunities to grow that market,” Wildeman said.
“We believe we need to change our focus to growing international trade.
“We learned a fairly serious and sobering lesson when borders closed due to BSE. We thought our key Asian markets couldn’t live without our grain-fed beef production,” he said. “After a while they may even forget about us.”
