“It’s a very significant disruption.
– John Masswohl, CCA
Canada’s cattle shipments to the United States are plummeting as the new country-of-origin labelling (COOL) rule takes effect.
Some U. S. packers are taking a hands-off approach to Canadian cattle as uncertainty reigns over how to handle slaughter animals from another country.
The impact became noticeable even before the interim COOL rule went into effect September 30. Canada exported 13,000 fat cattle to the U. S. during the week ending September 27. That was 3,000 head fewer than two weeks earlier and down 35 per cent from the same period in 2007.
“Fats are dropping off significantly,” said Rob Leslie, a senior analyst with Canfax Research services in Calgary.
Manitoba cattle producers have learned Tyson Fresh Meats is no longer accepting Canadian slaughter cattle at its Midwest U. S. plants.
Tyson is not taking cattle from Canada at its packing plants in Lexington, Nebraska, Dakota City, South Dakota and Jocelyn, Illinois, said John Masswohl, international relations director for the Canadian Cattlemen’s Association.
The Lexington plant actually stopped buying Canadian cattle in spring after South Korea agreed to reopen its borders to beef from the U. S. Tyson has dedicated the plant to supply the Korean market exclusively with U. S. beef.
But COOL is the reason for the ban at the Dakota City and Jocelyn plants, Masswohl told Manitoba Cattle Producers Association district meetings last week.
U. S. Midwest plants are a favoured market for Manitoba cattle shippers because of their convenient location. Losing access to them is a blow, said Masswohl.
“It’s a very significant disruption, in our view.”
Tyson will still buy Canadian cattle at its plant in Pasco, Washington. But that’s less convenient for Manitoba producers because of the longer distance, higher transportation costs and greater cattle shrink, Masswohl said.
“Instead of going from Manitoba to Nebraska, where the truck can be there and back in a day, now it’s a day out to Pasco and a day back.”
It’s also possible Pasco may accept Canadian cattle only on certain days, adding to logistical problems, he said.
That leaves Alberta and Ontario as the main options left for Manitoba shippers.
Confusion over which U. S. slaughter plants are buying Canadian is widespread.
Sheila Mowat, MCPA general manager, told producers her office has phoned around to get some answers. JBS Swift plants in Greeley, Colorado and Hyrum, Utah were still taking Canadian cattle as of October 1. Another Swift plant in Grand Island, Nebraska, said it was not.
But the situation changes almost daily as U. S. packers try to figure out how to apply COOL.
“It seems to be who you talk to and on what day,” said Shane Sadorski, MCPA policy manager.
Mowat said the real effect of COOL on Manitoba won’t be known until at least January.
COOL, which came into effect September 30, requires fresh meat sold in the U. S. to be labelled according to its country of origin. The interim rule becomes final in April 2009.
Meat exclusively from animals born, raised and slaughtered in the U. S. must be in packages marked USA Origin (Category A). Meat from animals imported into the U. S. receives multiple-country labelling (Categories B and C).
For example, meat from animals born in Canada and finished in the U. S. is labelled Product of the United States and Canada (Category B). If an animal is imported into the U. S. for immediate slaughter within 14 days, the label reads Product of Canada and the United States (Category C).
Recent clarification allows mixing B and C together using the C label.
But the U. S. Department of Agriculture, under pressure from politicians, recently warned suppliers not to try to lump everything into a multiple-country label.
USDA’s crackdown on skirting the rules is causing some packers to avoid Canadian animals rather than go through the hassle of segregating them.
Masswohl said Canadian cattle will continue to go to the U. S. despite COOL. He suggested U. S. plants that now say they won’t accept them may ultimately find ways to do so anyway.
“It’s definitely still evolving. I wouldn’t put it in the bank that what the situation is today is what it’ll be next month.”[email protected]