|
Beef Farmers facing insolvency - press
release June 1, 2004
May
31, 2004 (
Guelph
) –
Canada
has now passed the one-year anniversary of the BSE crisis and beef farmers
are reaching the point of insolvency. The current economic situation and
the related morale of beef farmers in
Canada
is grim.
The magnitude of this crisis is the primary factor that has driven
Canadian farm income to its lowest level in 25 years. Losses to
Ontario
’s 21,000 beef farmers alone have reached $200 million. Without
government assistance over the last 12 months, this amount would have
totaled $300 million. Add losses to truckers, packers, auction barn
operators, dealers and exporters to the mix and losses are estimated at
about $23 million per week in
Ontario
– or more than $1 billion. BSE has far escalated past a beef issue and
now threatens all of rural
Canada
.
In the beginning farmers were optimistic that sound science would
prevail and that the borders would soon reopen. It’s now been almost13
months since the announcement was first made, though, and there has been
no indication of normal trading practices resuming. Although an American
comment period ended on April 7, the cattle industry continues to await an
announcement by the United States Department of Agriculture (USDA) on its
proposed rule to allow live Canadian cattle back into the
USA
.
Beef farmers in Ontario
have appreciated the efforts and support of political leaders at both the
federal and provincial levels of government. If the border doesn’t open
within the next few weeks, however, government and industry
representatives will need to begin determining steps to be taken. The
current situation is simply not sustainable.
Dale
Pallister, a feedlot director with the Ontario Cattlemen’s Association,
said that prices fell immediately following the announcement of BSE last
May. While markets were somewhat more stable last fall and in the early
winter, the last few weeks have resulted in a total market collapse. Said
Pallister, “Prices have spiraled downwards over the last few weeks as
everyone loses hope of the marketplace returning to normal. Market-ready
cattle on my farm have dropped in value by a further $185 each in only
three weeks. Businesses cannot operate with these losses.”
Pallister explained there’s no sector of the beef industry that
hasn’t been affected by the downward turn. In one week, calves being
sold into feedlots (also known as replacement cattle) have dropped in
value by about $72 per animal. Commercial cows are worth about $500 per
head less than they were a year ago.
Until the crisis hit, beef was
Ontario’s second largest commodity in terms of annual farm gate receipts with a
value of approximately $1.2 billion in 2002.
-30-
For
further information:
Mike McMorris, OCA Executive Director,
519-824-0334
|
