Anti-dumping duties on Canadian cattle going into the United States will hurt the American ranchers they are supposedly designed to help, says a market analyst with the George Morris Centre.
And the centre, an agricultural think tank in Guelph, Ont., believes Canadian trade officials have been asleep at the wheel, allowing a “ridiculous” trade law to stand unchallenged.
Kevin Grier, livestock analyst with the centre, said if the duty continues to stand, Canadian cattle producers will suffer significantly and unfairly.
Nothing to gain
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And the hurt is pointless because the American farm group that launched the anti-dumping case, called R-CALF, or Ranchers-Cattleman Action Legal Fund, will gain no benefits and will probably be hurt in the long term.
“Contrary to what the folks at R-CALF seem to think, Canadian cattle will not just disappear,” Grier wrote in the centre’s publication Canadian Cattle Buyer on July 9.
He thinks some feeders will gamble that the anti-dumping duty will be overturned and will continue to ship to the U.S., hoping for a refund of the 4.73 percent market value duty.
But more fed cattle might stay at home for slaughter instead of crossing the border, he said.
“This beef, in turn, will be shipped to markets in the U.S. – markets that would have previously been supplied by U.S.-produced beef.
“As a result, this duty will result in more value-added work in Canada. R-CALF is exporting value-added jobs to Canada.”
The duty will also hurt the North-West Project, the deal worked out between the two countries last year to allow more U.S. feeder cattle into Canada. The deal would have caused about 200,000 U.S. cattle to move north next year, Grier said.
If the duty forces more Canadian cattle to stay at home, then feedlot buyers will have less reason to import American cattle and that won’t help cattle producers in the U.S. Northwest, the place where R-CALF gets most of its support.
If the duty stays, it will hurt packing plants in the U.S. Northwest.
“At least two to five U.S. plants depend on Canadian fed cattle and cows to fill out their kills. Without those cattle, plants will close,” Grier said, adding the reduced demand will hurt U.S. prices.
Larry Martin, the centre’s director, said the definition of dumping should provide work for Canadian officials.
“Somebody should have been questioning this because it is obvious to me this is the perfect thing for the Americans or anybody to use because at some point in its cycle, a commodity is going to be sold at less than its cost of production,” he said.
And the U.S. is opening itself up to anti-dumping duties because much of its agricultural production in the last year has been sold at less than the cost of production.
“A lot of people could have some fun with the U.S. on this, citing the beef case as an interesting precedent.”
