It’s been nearly seven years since BSE nearly wrecked the Canadian cattle industry and producers have never fully recovered.
But Martin Unrau believes things are finally improving.
“I’m very confident we’ve turned the corner,” said Unrau, a cow-calf producer from MacGregor, Man.
Of course, producers, who have been down so long it looks like up, have heard this before ever since May 2003, when a case of BSE in Alberta abruptly cut off Canada’s beef and cattle export markets and sent market prices plunging.
A hoped-for recovery evaporated in 2008, just as prices began strengthening, when the world recession hit.
But Unrau, the Canadian Cattlemen’s Association new vice-president, says this time for sure – maybe.
Several signs point to a market recovery, said Unrau, elected during the CCA’s annual meeting in Ottawa last week, at which Travis Toews of Beaverlodge, Alta. became the association’s new president.
CME prices have moved up 12 cents a pound in the last 90 days, evidence that the recession which has battered beef markets may be easing.
A shortage of beef, globally and in North America, may further strengthen prices as meat-deprived consumers gradually return to their former eating habits.
“I’m very confident that we’re going to see better prices this next fall and they’ll probably continue to increase in the next three or four years,” Unrau said.
Prices aren’t the only issue for Canada’s beef producers, who also face trade and policy challenges at home and abroad.
An immediate problem is the U. S. country-of-origin labelling (COOL) rule, which has American packers either avoiding live Canadian cattle or price discounting them by $30 to $40 a head because of segregation costs.
Canada has launched a World Trade Organization challenge to COOL, which may take years to work through the system before a final ruling is announced.
But Unrau said COOL, while certainly an irritant, may not be quite the ogre everyone predicted.
Some U. S. packing plants are importing Canadian cattle to meet their slaughter capacity. So the basis (the difference between U. S. and Canadian prices, minus freight) is not as wide as it might be, he said.
The better-than-expected basis helps offset the price-depressing effect of the robust Canadian dollar on exports.
Here at home, Canadian packers are engaged in some “pretty aggressive bidding” to meet their own capacity, said Unrau.
Still, some cattle producers continue to sell their herds and exit the business, not just for economic reasons.
The lack of a business risk management program for livestock producers severely hinders their efforts to ride out hard times, according to Unrau.
CCA is pushing for a government-run price insurance program to help smooth out market highs and lows for cattle producers.
A national livestock traceability system, scheduled for 2011, has producers worried the technology to track animals’ movements at auction markets may not be up to the task.
But Unrau says producers will have to get used to the program.
“What form of traceability, or what exactly it’s going to look like, is still a little unsure. But I’m sure by August we’ll have a better idea exactly how it’s going to look.”
Unrau, who’ll be 48 in May, says he’s looking forward to serving as CCA vice-president and continuing on the association’s foreign trade committee, which he chairs.
Traditionally, the vice-president moves up to the president’s position in a year or two. The last Manitoban to be CCA president was Ross Mitchell of Brandon in 1970-71.
Right now, though, Unrau has more pressing business. He has 250 cows and spring calving is still underway. [email protected]