Make That A Cheeseburger

The border isn’t going to be fully opened, however, even with the recent decision. The cattle have to be under thirty months of age. They have to be tagged and tracked. There has to be paperwork verifying their age and origin. The shipper has to meet all the requirements for sending goods to the US, a task that grows more formidable with every security regulation introduced. The truckers have to be licensed and even their route to the border approved. The costs are considerable and the increased hassle is enormous. A lot of truckers who were hauling before the BSE crisis are not willing to jump through the hoops required of them, having found other employment in the meantime. A shortage of transportation for live beef to the US could well be the next chapter in the story.

To add to the confusion and uncertainty, Lakeside Packers, a major packer in Brooks, Alberta owned by the US company Tyson, is very likely facing a strike by its employees due to the workplace abuse those workers receive. A strike at Lakeside packers will be another crisis Canadian beef producers cannot afford.

Two US-owned packing plants, Lakeside in Brooks and Excel in High River (owned by American agricultural giant Cargill) process 60% of the beef packaged in Canada. Those same two packers made record profits during the first year of the BSE crisis, taking 10% of the total aid offered to beef producers. They were found in contempt of parliament for refusing to open their books to the parliamentary committee investigating their sudden increase in profits. The committee required unanimous consent to levy fines, however. Conservative and Bloc Quebecois Members of Parliament on the committee refused to impose fines on the American-owned packers.

There are signs that Canada is slowly learning from our experience with the United States and US-owned meat packing facilities in Canada. Farmers, ranchers, and governments have been talking about increasing our domestic packing capacity.

It is about time that we begin to rebuild our packing capacity. The US is a net exporter of beef, producing more than they can consume. Canada is also a net exporter. We actually export 60% of what we produce. Since we entered into free trade with the United States, we have reduced and concentrated our domestic slaughter capacity. The result is that we send our cattle south to be processed for export for foreign markets. That costs Canada jobs and value added profits, negatively impacting our economy.

The solution to this is not clear. Ideally Canada would benefit greatly by the establishment of several small, regional packers. It would cut down transport costs for live cattle, create employment in several small cities, allow markets for niche products such as free range and kosher beef to be developed, and ensure that Canadian beef producers have a market for their product.

Such packers do not have a good survival rate in the era of free trade, however. Setup costs are high, new staff need to be trained, and markets for the beef need to be found in an atmosphere that favours multinational corporations over smaller concerns. Many attempts to create such facilities have failed in recent years. In the end the multinational corporations have benefited because they have been able to buy the equipment for pennies on the dollar.

The high failure rate of small packers has caused some to argue that Canadian beef producers should buy an existing facility. The case they make is that such a facility already has a built in market, so is more likely to be successful. Expansion could then take place to increase capacity as more markets are developed. The main drawbacks to buying a large existing facility are that it does not develop niche markets and if it fails, it will cause massive ripples throughout the industry.

This leaves Canadian beef producers in a bit of a conundrum. Although there are still plans to expand our domestic slaughter and packing facilities and calls to diversify our markets so we are less susceptible to the vagaries of politically motivated US protectionism, finding an effective way to achieve these goals may prove to be impossible in the present pro-corporate political climate.

An interim senate report entitled Cattle Slaughter Capacity in Canada came up with several recommendations on ways to expand our domestic beef packing industry. Those recommendations included financial incentives to domestic packers and an increase in producer-owned, either in the form of co-ops or majority shareholder controlled facilities. To make such a move feasible, markets must first be created though.

One way that can be achieved is to test every animal for BSE. While most of the scientific community feels that such testing is unnecessary, trade considerations are not always, or even usually, science-based. Even in the domestic market, beef that could be labelled BSE free based on every animal being tested could be marketed at a premium. Testing every animal, at least at some facilities, opens the possibility of access to markets that are presently closed not only to Canadian beef, but to beef produced in the United States. Since the US government, under pressure from large meat packers, has countered attempts by small American packers to open up that particular niche, it would give Canadian producers a significant advantage in international markets.

So far the US and Canadian governments have been slow to introduce measures to counter and detect BSE. Our reticence to take strong actions has been influenced by the same large multi-national agricultural corporations that were instrumental in creating the practices which allowed the spread of BSE in the first place. The United States is showing few signs of moving away from the present model and Canada should be moving swiftly to use that to our advantage.

While smaller facilities are more financially risky, they are also more readily able to change to adjust to changing market conditions and to service any niche markets that can be developed. Large facilities are not so adaptable and tend to have a disproportionate influence over legislation that may affect them.

The border opening to live cattle under 30 months should not be allowed to lessen plans to change the structure of the Canadian beef industry. Farmers and ranchers all across the country have seen firsthand how our over-dependence on a single market and the political influence of foreign-owned multi-national corporations can endanger their industry.

It is time for the Canadian and provincial governments to get together and do everything in their power to facilitate the expansion of our domestic slaughter capabilities and to encourage expansion into non-US markets. Our reaction to the crisis caused by the border closure was ridiculously slow. We seem reluctant to learn from the mistakes of the past and terrified of alienating our neighbours to the south no matter how much they alienate us.

Instead or worrying about the best path to take, it is time we took both paths simultaneously. We should, by all means, encourage a producer-owned buy-out of one or more existing packing plants. We should also create new regional plants so that, at the very least, people living in any given province can readily support their own beef producers. If a facility wants to test every animal, they should be encouraged to do so. If a facility wants to brand their product as being from Alberta or Manitoba or Prince Edward Island, that should be encouraged as well.

It is time for us to get past our dependence on a single market for our major exports. It is time that we made the multi-national corporations understand too little too late.