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Packers Need Government Support For Processing Old Cows

The packing plants processing cows over 30 months of age need a federal support payment of $31.70 a head urgently to offset the high cost of Canada’s SRM rules, the industry told the Commons agriculture committee Nov. 2.

In a rare show of unanimity, the Canadian Cattlemen’s Association, the Canadian Federation of Agriculture and packer representatives addressed the committee and presented the MPs with copies of a letter they sent jointly to Agriculture Minister Gerry Ritz outlining their request. They estimated the cost would be about $24 million a year.

The SRM regulations, which require the disposal of brain and nervous system tissue that could carry the BSE prion, came into effect during the summer of 2007 with the support of the industry that figured the tough measures would help attract overseas customers scared off by Canada’s BSE cases and would also force the Americans into adopting similar rules.

MINIMAL RULES IN THE U. S.

In fact, the U. S. recently brought in very minimal SRM processing rules that cost their packers about eight cents an animal compared to the $32-a-head cost facing Canadian packers, even the small provincially registered plants. Cattle over 30 months of age, known as OTMs, are most at risk of carrying the prion, which means cull dairy and beef cows have to be handled separately.

“In a nutshell, the cost of removing and disposing of SRMs is one of the biggest threats to the long-term sustainability of the cattle and beef industries in Canada,” says CCA president Brad Wildeman. “Since we compete in a North American cattle and beef market, it is not sustainable for the Canadian industry to incur these costs while the U. S. does not. As long as this imbalance exists, a growing percentage of Canadian cattle will seek higher prices in U. S. slaughter facilities.

“We are already experiencing this movement, and we have seen many plants closed or bankrupted because of their inability to compete with U. S. packers. At the same time, a growing percentage of the beef offered by Canadian retailers and food service is imported from the U. S. and elsewhere.”

ERADICATION EFFECTIVE

Canada has “an extremely effective set of BSE eradication policies, but it will be of little benefit to either the Canadian industry or Canadian consumers if Canadian beef is either not available, or priced out of the domestic market,” he added.

CFA president Laurent Pellerin said the government frequently tells the agriculture industry that it needs to be competitive. “But in this case, we can’t compete because of the government regulations.”

He warned there was a real risk of the OTM processing sector disappearing completely, which would hurt Canadian farmers as well as throwing thousands of people out of work.

He also said farmers are disposing of deadstock on their farms because they can’t afford the $100 fee to have the dead animals removed.

LITTLE SUCCESS

Brian Read, chairman of the Canadian Meat Council, said while Canada has regained many overseas beef markets, it has had little success in finding customers for beef from OTMs despite the tough SRM rules. It’s also important to remember that the U. S. is Canada’s main competitor in selling beef from older animals. The industry would like to work with the government on ways the SRM rule could be changed that would lessen the cost to the packers and lower the amount of subsidy they require, he said. The situation facing packers is especially tough right now because so many cull cows are coming on to the market from beef and dairy farms. About 750,000 OTM cattle are slaughtered annually.

“For the OTM cattle, since dairy cattle are affected as well as beef cattle, we have come together with our colleagues at Dairy Farmers of Canada and the Canadian Federation of Agriculture to submit our joint request to Minister Ritz,” Wildeman said.

“If we fail to achieve this objective, we will lose thousands of jobs throughout the nation, and Canadian beef and dairy cattle producers will be at the mercy of any disruptive U. S. trade rules that may be introduced in the future. All the excellent work you are doing to re-establish market access for Canadian beef will be wasted if we lose the capacity to slaughter our own cattle in Canada.”

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