Go Back

Minister Vanclief Announces Cull Cow program

OCA Commentary

On November 21, Federal Minister Lyle Vanclief announced a program that would provide $120 million in federal funds to deal with the cull cow issue. The program will be based on a maximum cull rate of eight percent for beef herds and 16 per cent for dairy herds. The program will provide $95.40 per animal from the federal government to producers once their cows are slaughtered. To be eligible for the program, cows must be slaughtered between September 1, 2003 and December 31, 2004. If individual provinces contribute an additional 40% funding to the program, producers could receive as much as $159 per animal. An additional 60 cents per day feed cost ($1 per day for producers in provinces who participate) will be provided for cows being fed between December 16, 2003 and May 24, 2004. This gives producers additional time to consider marketing options.

Throughout negotiations on the program, OCA shared concerns of other industry groups about the government’s requirement that animals must be slaughtered. Experience has shown this will reduce the payment made by the marketplace for these animals, and little additional money will go into the producer's pocket. It will also still be difficult for producers in some parts of the country where there are no plants processing older animals to even get those cows to market in order to qualify for the payment. Program application forms are not yet available.

The Ontario government’s contribution has not been guaranteed and OCA is working with Minister Steve Peters on how best to allocate provincial funds. Minister Peters has assumed the role of chair of Ontario’s BSE task force (with membership from OCA, Dairy Farmers of Ontario and the Ontario Federation of Agriculture) and will lead discussions to develop a strategy for cull cows in Ontario.

Agriculture and AgriFood Press Release:

MINISTER VANCLIEF ANNOUNCES CULL ANIMAL PROGRAM

OTTAWA, November 21, 2003 – Agriculture and Agri-Food Minister Lyle Vanclief today announced the Cull Animal Program that would pay producers up to $320 per cow when their older animals are sold for slaughter. Mr. Vanclief introduced the new program, following discussions with his provincial and territorial colleagues and industry, to help Canadian cattle producers deal with older animals that need to be culled from herds. It is one additional step in the Government of Canada's continuing response to Bovine Spongiform Encephalopathy (BSE).

The Government of Canada is committing $120 million as base funding for all regions of Canada and has offered to cost share the program with provincial and territorial governments on a 60-40 basis, which could bring total program funding to $200 million.

As borders remain closed to some Canadian meat products following the discovery of a single case of BSE in May, 2003, the Cull Animal Program will take targeted measures to assist the industry in adjusting to the current business environment, and to minimize on-farm slaughter and disposal of older animals.

"The Government of Canada recognizes the hardship people in the industry are going through, and we have already taken action to help through initiatives like the BSE Recovery Program," said Mr. Vanclief. "While we remain focused on getting borders fully open and markets operating as quickly as possible, we are now taking steps to help our domestic market adjust in the interim."

With provincial and territorial government participation, the program for cattle would offer:

• a payment of $159 per animal slaughtered between September 1, 2003, and December 31, 2004; and,

  in addition to the $159, a dollar a day per animal from December 16, 2003, up to the date of sale for slaughter or May 24, 2004, whichever is earlier, to help offset higher winter feed costs.

These amounts are in addition to the regular prices paid to producers when they sell their cattle to buyers. Eligible animals are those owned by a producer on September 1, 2003, up to a cull rate of eight per cent for beef cows and a cull rate of 16 per cent for dairy cows. Cattle will have to be slaughtered by December 31, 2004, to qualify.

Producers of other ruminants affected by border closures will be offered a comparable program.

Mr. Vanclief noted that he had consulted closely with his provincial and territorial colleagues and industry throughout the development of the program, and that the measures announced today reflect the best option for taking responsible steps to help ensure the long-term health of the industry.

The Government of Canada will also ensure that the beef industry remains capable of responding to current pressures by providing $1.5 million to the Beef Information Centre (BIC). This funding will ensure that the marketing expertise of the BIC will continue to be available.

Discussions are currently ongoing with provinces and territories about further program details. More information, including how producers can apply, will be released shortly.

-30-

For more information, media may contact:

Donald Boulanger
Press Secretary
Minister Vanclief's Office
Ottawa
(613) 759-1761

Media Relations
Agriculture and Agri-Food Canada
Ottawa
(613) 759-7972

Cow Statistics - from the Canadian Cattlemen's Association

• Approximately 700,000 older cattle are culled each year as a normal attrition rate.
• Out of these 700,000, approximately 450,000 are beef cattle and 250,000 are dairy cattle.
• The normal culling rate in a beef herd is 11% of the herd each year. The normal culling rate of a dairy herd is 25% of the herd each year.
• The average age of a beef cow when culled is nine years. The average age of a dairy cow is five years.
• Approximately 250,000 tonnes of beef is produced each year from older culled cattle.
• Prior to May 20, between 30 and 40% of culled cattle were exported for slaughter in the U.S.
• Prior to May 20, approximately 60% of beef from these older animals was exported internationally with the U.S. being the largest customer.
• Last year 55,000 metric tones of beef was imported under supplementary Tariff Rate Quotas. Much of this beef would have been lean grass-finished beef, similar to cow beef.
• The amount of supplemental TRQ beef imported last year was equivalent to 240,000 head of cull cattle.
• Mid November 2002 the average price for cows was .90 per lb on the rail; .45 live weight.
• The week prior to May 20 the average price for cows was 1.15 per lb on the rail; .57 live weight.
• Last week (week of Nov. 10) the average price for cows was .30 on the rail; .15 live weight.
• Last year the average carcass weight for cows was 700 lbs.