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COOL demise not affecting livestock trade

Industry officials say they are glad it’s gone but the effects aren’t noticeable yet

The end of the U.S. country-of-origin labelling program hasn’t translated into an export boon for Canadian cattle and pig producers, but they’re still glad that border impediment is gone.

Brian Perillat, manager and senior analyst at Canfax, the market analysis division of the Canadian Cattlemen’s Association (CCA), said in an interview that it’s hard to pinpoint the impact of COOL because “markets move so fast.” While there’s no doubt that COOL impacted livestock prices in Canada for the last eight years, “it’s hard to decipher” the relationship between all the factors.

In its complaint to the World Trade Organization, Canada claimed that COOL was inflicting about $3 billion annually in lower prices and lost marketing opportunities on its farmers.

Perillat said a big herd expansion in the United States has also dampened the market for finished cattle from Canada. Production of feeder cattle in Canada has been soft in recent years and farmers “need a clear signal that it’s time to expand. They’re still being cautious.” That will delay an increase in the number of cattle on feed in Canada.

“It may be a bit too soon to predict market access resulting from the end of COOL,” said Garry Stordy, spokesman for the Canadian Pork Council. “In the short term, the demand for Canadian feeder pigs by American farms may be greater than for finished pigs.”

Ron Davidson, director of international trade with the Canadian Meat Council, which represents the processors, said COOL primarily affected the export of live animals to the United States. His group supported the farm groups in seeking an end to COOL to make American programs “conform to international trade rules. Any meat products packaged in Canada for sale at retail in the U.S. are identified as product of Canada.”

“The chief benefit of the end of COOL is that it removes a major impediment to the full operation of the North American beef market. We’re getting open arbitrage in the marketplace,” Perillat said.

The lower value of the loonie will also help the Canadian livestock industry gain sales in the United States and overseas, he added.

Research by the CCA shows that for every one per cent drop in the loonie, beef and cattle prices rise by one per cent.

The CCA also says a lower dollar also increases packer competitiveness through lower labour costs compared to American companies. That means they will pay better prices in Canada.

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