Canadian Beef and the Impact of BSE

In May of 2003 a single startling discovery has resulted in a crisis within the farming community. What we all once took for granted has now been tainted with a very broad brush. May 20th 2003 was the day a beef cow from Canada tested positive for Bovine Spongiform Encephalopathy (BSE) or commonly referred to as Mad Cow Disease.

This disease and the problems for the victims, consumers and farming community it creates are immense. BSE hurts all aspects of the cattle industry and has caused changes in the consumption of beef. This has resulted in beef being sold in some cases at incredibly low prices just to get rid of it. The new reality for many farmers is they now have a product that is almost worthless. One could possibly see such a reduction in numbers over the coming year that the majority of beef farms will have to change what they produce or go out of business. What once was a thriving industry in Canada could now be reduced to a mere fraction of its former self.

In 2002, Canada was the third largest exporter of beef in the world. We have been exporting about 6 million tonnes of beef per year. We export a large portion of all the beef produced in Canada and the vast majority of that goes to the United States. That market and many others are now closed to us. When it will re-open is anyone's guess.

The economic scope of this case is likely to result in a reduction of consumption of beef products in general. The UK experienced a decline of about 20% when BSE was discovered there, and it has taken several years for the consumption of beef to return to previous levels. Already we have seen many auction houses and slaughter plants lay people off. They are some of the first to be impacted. The beef producer can try to hold on to livestock for a while hoping the extra feed costs will be offset by higher prices. However, eventually the cattle must be moved to market and the time to postpone the decision is for many rapidly advancing. Many of our Canadian farmers must soon decide their strategy before the cost of over-wintering becomes a factor.

Whatever the result of this crisis,the long-term outcome will be felt the most in Western Canada. Alberta, Saskatchewan and Manitoba have about 70% of the 15 million head of cattle in Canada. The area has already had several hard years with drought and low grain prices. As a result, the ability of farmers to support yet another crisis is very difficult.

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