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BSE-Testing Argument Continues To Have Financial Potential

Lawyer and Alberta rancher David Pope is on a one-man crusade to gain market access for Canadian beef in Japan.

For the cost of a $15-per-carcass BSE test, Pope argues Canadian cattle could fetch as much as $500 per head above current prices. Pope has been waging his crusade for the past five years, but says he’s been ignored, declined and denied by the Canadian government and the industry powers that be.

He’s also having a hard time convincing other producers.

“Most people have been told for so long by people they trust that there is no solution, except the American market, that they believe it,” says Pope.

About 74 per cent of Canada’s total beef exports – more than 285,000 tonnes worth about $933 million – travelled south to the U.S. market in 2009. However, Canadian carcasses sold in the U.S. fetch about $150 less than their American equivalent. Over-30-month (OTM) cull cattle are selling at a discount of about $500 per head due to limited demand.

Pope says the Americans continue to tell our beef industry to “wait a little longer” but many producers haven’t been able to. The Canadian beef herd, which numbered five million head pre-BSE, is forecast to drop to 3.2 million head in the next year or two.

Seven years after BSE hit the cattle industry, Pope says it’s high time to ask, “Why are we waiting?”

Rather, he argues, Canada should go after the Japanese market, which pre-BSE, purchased about 400,000 tonnes of North American beef (95 per cent American), or about 1.5 million head, for a total value of $1.5 billion per year.

Today, Japan’s imports of North American beef have been slashed. Only beef from age-verified cattle under 21 months is allowed and Canada’s exports to Japan are just 10,000 tonnes. The government is equally strict with its own producers and there is mandatory BSE testing on every beef carcass in the country. Given the strict rules that apply to their own beef, they are unwilling to import another country’s beef on an untested “trust us, it’s safe” basis.

CUSTOMER IS ALWAYS RIGHT

Pope argues that the customer is always right, and asks why we wouldn’t test for BSE in order to regain market access? He notes Japanese consumers prefer grain-fed beef to grass fed and the only two countries able to grain feed in large numbers are Canada and the U.S.

Given that the U.S. has firmly stated they will not BSE test, Pope says he sees a “hell of an opportunity” for Canadian beef, and argues our industry could have a virtual monopoly on a market that used to buy 400,000 tonnes annually.

The Alberta Beef Producers, Canadian Cattlemen’s Association, and both the federal and provincial governments are opposed on three grounds: The U.S. will get angry and restrict market access in retaliation; the BSE test is not sound science; and if we test for BSE for international customers, domestic customers will demand the same.

Pope has responses to each concern.

First, he argues that the U.S. can’t afford to decrease our market access, since they’re getting an extremely good deal on our undervalued beef. But, in the unlikely case that a market limitation did happen, Pope says that it wouldn’t matter significantly since we’d have an equivalent-size market in Japan that would actually pay what the product is worth.

“How bad would it be if the Americans got mad?” he says. “They can’t do anything more to us than they already have.”

In response to the second concern, Pope argues that it makes no difference whether BSE testing is sound science or not. This issue is not about science, he says, rather it’s about market access. He says if the customer wants rainbowcoloured polka dots on every carcass and is willing to pay as much as $500 more than another customer, we should be getting out our paintbrushes rather than asking whether the demand makes scientific sense.

As for others requesting the same test, Pope says, “If we can make $500 per carcass, who cares if the domestic customers want the $15 BSE test too? Just do it! I’ll pay that with a smile on my face!”

THE REAL CONCERN?

There is a fourth, though less widely stated, concern. If we mandatory test all of our animals, what happens if we find a whole lot more BSE?

Not much, says Pope, because the presence of BSE in national herds is no longer the issue it was.

Countries all over Europe have been testing for a decade and when they run into infected animals, the animals are removed from the kill floor, the public remains happy, and the country can claim their meat is 100 per cent BSE free, he says.

“Japan doesn’t care if we find lots of BSE,” says Pope. “They find lots of their own but they get rid of them all because it’s fully tested. It doesn’t matter how many they find because they can say that all meat is BSE free.”

Pope has a final argument. He says that the Canadian Food Inspection Agency has protocols already in place to immediately institute mandatory testing on all animals if the borders ever fully close again.

“They don’t want us to die in one fell swoop,” he says, “but they’re willing to watch us die by a million cuts.”

———

“Ifwecanmake$500/carcass,whocaresifthedomesticcustomerswantthe$15BSEtesttoo?Justdoit!I’llpaythatwithasmileonmyface!”

– DAVID POPE

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