While not as hard hit as other sectors of the livestock industry, Canada’s dairy industry is also hurting from the BSE crisis, a dairy leader told MPs last week.
Bruce Saunders of Ontario, vice-president of Dairy Farmers of Canada, told the House of Commons agriculture committee Sept. 30 that the industry risks losing up to $300 million a year because it cannot sell cull cows or bred heifers into the United States.
Since the identification of one case of bovine spongiform encephalopathy in Alberta May 20, the U.S. border has been closed to most Canadian beef and all live cattle.
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Saunders said sales of culls and bred cows represent up to 20 percent of the income of an average dairy farm.
“For many producers, the sale of culled cows and breeding heifers was their net profit at the end of the year,” he said. “The drop in price and border closure also means a significant shortage in cash flow.”
He said there are some side effects as well.
Holding onto cows that normally would be taken out of the herd means that controlling the milk supply and keeping surpluses out of the system is more difficult. And if the government does not reconsider an industry plea for money to help farmers move low-valued cull cows into the market, farmers will begin to destroy them on the farm, Saunders said.
This could tarnish what has been a strong and positive industry image in consumers’ minds.
“The worst case scenario probably is the instance where there are farmers who decide that if an animal has no value they will not send it to market but rather they will dispose of it at home,” he said.
“There are proper ways of doing that and I’m sure our farmers will do just that, composting, but none of that has a good image for any industry.”
Saunders said culling and the inability to export cows younger than 30 months is a particular issue for the dairy industry because the cull rate is typically 20 percent per year, compared to a beef industry average of 10 percent.
He said the industry had expected to sell as many as 100,000 bred dairy replacement heifers this year into domestic and U.S. markets, worth as much as $200 million. Sixty-five percent of those would go south.
By May 20 when the border closed, just $69 million worth of heifers had been sold and now the export market is lost and domestic prices have fallen.
Saunders received varying degrees of sympathy from MPs. Manitoba Progressive Conservative Rick Borotsik noted that dairy producers are talking about a revenue loss of 10-20 percent, while cow-calf and feedlot operators sometimes have lost all revenue.
“So I have sympathy for you but I have to say it’s not quite as much as you’d probably get from me (normally).”
Saunders said he understood others were hit more quickly and deeply by the BSE issue.
