Canada’s ban on the use of specified risk materials from cattle carcasses in all feed, pet food and fertilizer products has saddled the packing industry with millions of dollars in costs and lost revenue that their American competitors do not face, cattle industry officials complained last week.
The result is a less-competitive industry and an increase in Canadian cattle heading south to be slaughtered because the American plants can offer higher prices.
The Canadian Cattlemen’s Association last week told a Senate agriculture committee meeting that between 15,000 and 20,000 feeder cattle were sent south each week this autumn, compared to a historic norm of 2,000 to 3,000 a week.
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“It begs the question is this good or bad,” CCA president Hugh Lynch-Staunton said Nov. 22. “If we could sell them here at higher prices, they would not be going south. The product flows to the highest market.”
He said the Canadian packing industry is suffering both underuse and higher costs.
“One thing that emerges clearly in our times of trouble in our packing industry is that our American packing houses have a lower cost base than ours have,” he said. “It might be some comfort that the American packers are losing money generally as well but not as much money as our packers are losing.”
He noted that Canada went through “a great deal of trouble with the BSE crisis to increase our packing capacity (and) we are at risk of losing it.”
Meanwhile, a Canadian Food Inspection Agency leader said last week the gap between Canadian and American packing costs related to SRM removal may soon narrow.
CFIA executive vice-president Brian Evans conceded during a Nov. 21 appearance before the Commons agriculture committee that Canadian packers have incurred higher costs than their American counterparts for the past decade because Canada’s feed rules are tougher.
He said the U.S. Food and Drug Administration is close to making public for comment new SRM rules that should close some of the gap between the two countries.
But since Canada’s rules have been tougher since 1997, “we are fully cognizant that there were costs associated with that.”
He said CFIA will be proposing in December some changes in how the SRM ban is administered to reduce some costs.
At the Senate agriculture committee hearing Nov. 22, a Quebec farm leader laid out some of the extra costs packers have faced since July when the enhanced feed ban took effect.
Michel Dessureault, president of the Quebec beef producers’ federation, told senators that the ban on SRM is costing the Montreal-based Levinoff-Colbex plant owned by producers $35 per head more than American plants face.
The extra costs come from SRM disposal and the fact that in the U.S., plants still can sell some SRM material for manufacture of other products.
He called on Ottawa to increase the amount of money it has made available to the packing industry to deal with the increased costs.
Meanwhile, Lynch-Staunton also called on the CFIA to move beyond the regulation and administration of Canada’s food inspection system to become an active trade promoter for the products it inspects.
“They have a huge influence on trade advocacy and very good people in that area but they do not have enough of them,” he told senators. “Trade and commerce is not the priority. Therefore, expansion of that work with industry is critical to us for moving ahead.”
