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Canada's beef industry after BSE

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The worst effects of the BSE crisis have passed for Canada’s cattle producers. The U.S. border is open again to live Canadian animals (but only those less than 30 months of age that are feeders and fed cattle). Producers are shipping hundreds of thousands stateside and shrinking their herds to more manageable levels. Older animals, however, still cannot be sent to the United States.

The border was reopened in July 2005. In the year following, the national herd declined from a peak of 17.1 million head to 16.2 million head in July. The herd shrank in all parts of the country, but three-quarters of the 2006 decline of 810,000 head occurred in the prairie provinces.

Before the border was closed in May 2003 because of a single case of BSE, more than 1 million head of live cattle, including many older cattle, were exported to the United States annually. After the U.S. and other borders were shut, the national herd swelled. Canada lacked the slaughterhouse capacity to process those extra animals.

Cattlemen were stuck with tough choices: sell as many animals as possible in Canada at depressed prices, or hold onto them and pay for feed that added no value to their product.

In 2004 and the first half of 2005, producers sent a record number of cattle for processing. Canada’s slaughter capacity was expanded, domestic beef demand held strong and some packaged meat was exported to the United States and other countries.

The age restrictions permit export of younger animals headed straight to slaughter or for a final month or two of feeding before slaughter. However, the ban on older animals, many of which are breeding stock, has hurt producers who used to sell breeder cattle south of the border.