Farmscape for May 21, 2009
The Canadian Cattlemen's Association reports ongoing uncertainty over U.S. Mandatory Country of Origin Labelling continues to depress the value of live Canadian and Mexican cattle.
Last week a delegation representing the Canadian and Mexican cattle, hog and meat processing industries traveled to Washington to discuss the impact of COOL with U.S. decision makers.
Canadian Cattlemen's Association spokesman John Masswohl says the rule immediately impacted the number of U.S. packing plants willing to accept live Canadian cattle when it took affect last fall.
Clip-John Masswohl-Canadian Cattlemen's Association
We went from about a dozen packing plants that we would ship from Canada into the U.S. down to about three or four and even those three or four we had were limited to certain days of the week and there were price discounts.
During that period we estimated the cost to the Canadian cattle sector was about 90 dollars per head.
Now since that time the USDA did change the rule and implemented the final rule in March and there was a small but very important change for us.
They said the Canadian cattle that are fed in the U.S. can be co-mingled with the Canadian cattle imported direct for slaughter and those can receive the same label.
Just by making that small change it enabled these U.S. packers to say O.K. we can manage our inventories a little easier now and we got a number of the U.S. packing plants back taking those cattle imported direct for slaughter again.
So we think the logistical shipping costs are not as high as they were during the interim period.
The price discounts are still there, we're still limited to certain days of the week so we think the impact is something less than the 90 dollars per head but we're still trying to get enough data to get a good sense of what it is.
Masswohl says there appears to be very little room for flexibility on the part of the Americans and it appears a World Trade Organization ruling will be required to settle the issue.
For Farmscape.Ca, I'm Bruce Cochrane.
*Farmscape is a presentation of Sask Pork and Manitoba Pork Council