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Background

In 2002, Canada exported 41% of its slaughter cows and 70% of its culled bulls to the United States. Since May 20th, the loss of the US export market to live cattle has resulted in a steady accumulation of cull beef and dairy cows on farms across the province. The inability to move meat from cows killed in Canada to the US translates into an additional 110 million lbs. of meat on the domestic market. The primary production industry is working closely with processing stakeholders on product development and innovative marketing solutions.

This situation, however, is complicated further with severely depressed prices and limited cow slaughter capacity. Canfax estimates that 770,000 cull cows and 70,000 cull bulls would be marketed in Canada in 2003. To manage the current cow backlog, 17,000 head per week would need to be slaughtered before year-end.

With the exception of the federal-provincial BSE Disaster Relief program, compensation programs in Ontario have not provided support for cull cow management. Design of a federal cow program has been problematic due to regional differences in cull cow demographics, disposal options and slaughter capacity. Additionally, the marketing of cull animals, unlike that of finished animals, can often be delayed for several months which served to minimize the seriousness of the situation. However, five months into the BSE crisis with winter and feed issues imminent, the issue can no longer be deferred.

In response to industry pressure, the federal government initiated discussion on the design of a national cull cow program that would address both economic and welfare issues. A federal cow program has been proposed that includes proof of slaughter as eligibility, a $1/day feed component to address slaughter capacity limitations and payment only following slaughter. A beef cow cull rate had been proposed at 9%. At this time, details continue to be negotiated. Stakeholders involved in Ontario discussions include Dairy Farmers’ of Ontario and OMAF.

Ontario Situation

• Ontario has virtually no cow slaughter. There has been some indication that Prime Tender (formerly MGI), when federally approved, will process cows one day per week. Most cows are being transported to Levinoff in Montreal.
• In the absence of a cow program, many producers have been holding their cows, rather than selling at severely depressed prices.
• The cull cow market in Ontario is divided between dairy and beef cows. Of an approximate 80,000 cows culled annually, 19,000 are beef with the balance from dairy farms. From the period between May and August an estimated 40,000 cows have been backlogged and have yet to reach the market place. To compound this situation, we are entering into the heaviest months for culling annually.
• Ontario disposal options: on-farm slaughter for personal consumption, deadstock removal, composting and on-farm burial

Ontario Cattlemen’s Association- Position Statements

• OCA supports national efforts to suspend import permits indefinitely to create a market for domestic product
• OCA has written to CFIA to indicate the importance of opening the former MGI plant as a partial solution to the backlog of cull animals
• OCA agrees that any 40% provincial contribution to a national cow program must not be tied to a federal framework - provinces require flexibility based on needs unique to their situation
• OCA will continue to provide input into the design of a cow program through OMAF, CCA and the National Round Table committees (meeting November 3,4)
• Federal discussions have required proof of slaughter for program eligibility. OCA has concerns with a producer payment being subject to proof of slaughter because of limited cow slaughter capacity and welfare issues. If proof of slaughter is required a minimum floor price must be established
• A cash advance option must be provided to producers to purchase feed and other inputs
• A reference price (ie. Fall 2002 average) should be the basis for any cull cow program
• A Boxed Beef Report for commercial cow meat should be developed
• Ontario producers must recognize that re-establishment of trade for cattle over thirty months may be well over a year away. Prices for cows will likely stabilize at a new normal low.