Border opening welcome news to district cattlemen

Like the first pale streaks of dawn in the eastern sky after a long, sleepless night, news last week that the United States will begin accepting imports of some live Canadian cattle came as tremendous relief to district beef farmers.
Last week, the U.S. government announced it would allow the shipment of live Canadian cattle under 30 months of age into, and through, the country as of March 7.
The border has been closed to all live cattle, and many other forms of beef, since a single case of bovine spongiform encephalopathy (BSE), or mad cow disease, was discovered in an Alberta cow in May, 2003.
The consequences to the beef industry in Canada has been estimated at more than $5 billion, and has resulted in a glut of animals—particularly older ones—across the country.
Although other parts of the country have been more severely affected, farmers in Rainy River District have seen a precipitous drop in prices at most sales and auctions.
Kim Cornell, who operates a beef farm in La Vallee, said local farmers have been insulated from the kind of devastation visited upon those in other parts of the country because virtually everyone in the district has some form of off-farm income to help them through the crisis.
Nevertheless, he shares the feeling of relief reverberating across the country.
“It’s been damned tough,” Cornell admitted Monday over the phone from his farm. “My balance sheet looks pretty grim compared to a couple of years ago.”
But as far as he knows, Cornell is not aware of anyone in the district who actually has lost their farms as a result of rock-bottom prices and severely restricted markets.
“I don’t think there are a whole lot of people here at the abyss because everybody has other sources of income,” he reasoned. “The same is true in Alberta, where they have oil revenue under their pastures.
“But the folks in southern Saskatchewan and Manitoba, they will have been hurt more.”
Over the past 20 months, farmers have seen the price for cull cows drop from $700 to an average of $150. At such low prices, farmers, in many cases, have been forced to carry these older animals over the winter because the cost of shipping them to slaughter might not be covered by the price they fetch.
Cornell thinks that price eventually will double, but he doubts it will ever see the heady pre-BSE levels in the future.
He also is not convinced the U.S. government’s pledge to re-open the border will necessarily come off on time because of resistance from certain special-interest groups south of the border.
One such group—the Ranchers-Cattlemen Action Legal Fund (R-CALF)—has threatened legal action against the U.S. government if the border is re-opened as planned.
Conversely, other groups representing American meat packers have threatened to do the same should the border remain closed.
Cornell said assuming the Americans sort out their legal issues, farmers here should be seeing better prices from domestic packers. “They [packers] will have to bid on a broader cross-section of cattle,” he predicted.
Tom Morrish, past president of the Rainy River Cattlemen’s Association, operates a beef farm north of Devlin. Like Cornell, he is viewing the border re-opening as good news, but he’s not convinced that, in itself, will solve all the problems in the industry.
“It’s going to be a long, slow process,” Morrish predicted yesterday while taking a break from his farm chores. “It will bump prices a little, but it’s not going to change everything.”
Morrish explained the drop in cattle prices was not due entirely to the U.S. border ban. Rather, he said the market tends to operate in roughly 10-year cycles and the BSE issue happened to hit while things were at the peak.
The BSE case and subsequent border closure merely precipitated the drop.
“We were at a peak, so there was going to be a downturn anyway,” he reasoned. “Of course, what we got was a crash instead of a slide.”
Morrish predicted it could take as long as 10 years to get things back to how they were, but in the meantime, there are things farmers and governments can do to help prevent a recurrence.
He is particularly annoyed by the lack of response from the federal government to what he sees as essentially a trade dispute as opposed to a health issue.
“The government was no help,” Morrish charged, dismissing the compensation packages offered to some farmers as being the wrong the approach.
Like Cornell, however, he believes the district, as a whole, weathered the storm fairly well because of the diversity within it and the lack of dependence upon a single source of income.
“There’s no one here who is going to lose their farms over this,” Morrish remarked, although he noted sales of new farming equipment have dropped somewhat as farmers were forced to tighten their belts and defer planned purchases.
And with the next big cattle sale not happening until the fall, there should be time to recover.