Truck News


Latest case of BSE jeopardizes border re-opening

CALGARY, Alta. - Just weeks after the U.S. promised to lift a 20-month ban on live Canadian cattle as of March 7, the plan was jeopardized by the discovery of a young BSE-infected Canadian cow. The third case of mad cow disease surfaced in Canada...

CALGARY, Alta. – Just weeks after the U.S. promised to lift a 20-month ban on live Canadian cattle as of March 7, the plan was jeopardized by the discovery of a young BSE-infected Canadian cow. The third case of mad cow disease surfaced in Canada Jan. 11, and this case has prompted more alarm than a previous case discovered in Alberta.

That’s because this BSE-infected cow was less than seven years old, meaning it was born after the Canadian ban on ruminant feed which was intended to stop the spread of the disease.

The U.S.-based National Cattlemen’s Beef Association (NCBA) has been supportive of the re-opening of the U.S. border to live Canadian cattle ever since it was closed in May 2003. Now, that influential organization is having second thoughts.

“Based on this information, the U.S. Department of Agriculture and the Food and Drug Administration should determine how to proceed,” NCBA president Jan Lyons said. “Once the questions concerning Canada’s compliance with its BSE firewalls have been adequately answered, NCBA members will consider their position on the Canadian rule and efforts to re-open the border.”

“We are very, very concerned with the age of this animal and compliance with the feed ban,” added NCBA spokesperson, Karen Batra. “Our position on re-opening the border – we’ve got some concerns on that.”

As recently as Jan. 2, the NCBA was fully supportive of its government re-opening the U.S. border to Canadian cattle, despite the fact an older Canadian cow had recently been confirmed to have BSE.

The U.S. Department of Agriculture is sending a technical team to Canada to examine its practices and procedures. American beef remains banned in some Asian countries because of its own BSE problems and some industry groups are concerned that allowing Canadian cattle into the country could prolong those bans.

Still, as Truck West went to press, the plan remained to re-open the U.S. border as of March 7 – but few cattle haulers were celebrating. The U.S. has refused to accept live Canadian cattle since a single case of Mad Cow disease was discovered on an Alberta farm in May 2003.

Since then, many Canadian livestock carriers have been forced to downsize, diversify or get out of the cattle hauling business altogether.

Even before the latest case of mad cow disease, cattle haulers that survived the ban remained skeptical despite the Dec. 29 announcement.

“It’s not just a matter of ‘Okay, the border’s open now,'” says a frustrated Roger Roberge of cattle carrier Roberge Transport. “Who’s going to invest $5 million on equipment and people if they can shut the border back down in a moment? Not me.”

Like many other cattle transport companies, Roberge was forced to downsize during the long-running beef ban.

One of Canada’s largest cattle transport companies, Roberge Transport saw its business decline by more than 50 per cent at one point.

Prior to the ban, about 38 per cent of the fleet’s miles were run south of the border.

Many of the company’s lease operators left for greener pastures and Roberge says it won’t be easy to lure them back.

“They had to find other work to pay the bills,” he says.

As for the company itself, Roberge says it survived – but barely.

“We’ve stayed in livestock hauling domestically, downsized and basically lost a lot of money.”

The company will resume its U.S. runs once the border re-opens, but Roberge remains concerned that it can once again be closed with little or no warning. With so many previous attempts to open the border thwarted for various reasons, one can’t blame him for taking a wait-and-see approach before investing in new equipment.

“I don’t know how to comment on the U.S. regulations until the rules are better defined,” he says. “There are 500 pages of documentation and we’re still sifting through it.”

Jim Ryan is in charge of Butte Grain Merchants’ trucking operations. The company has seen its fleet reduced from 18 trucks to 11 as a result of the cattle ban. He too remains skeptical about the re-opening of the U.S. border to young Canadian cattle.

“We have a healthy sense of skepticism around here,” he admits. “My truck drivers are fairly skeptical about going south at the moment.”

That said, Ryan admits his company will be among the first to cross back into the U.S. with a load of cattle. Although Butte Grain Merchants lost many of its owner/operators, the company was able to keep a small stable of drivers employed by allowing them to haul non-traditional freight.

“The key (to survival) was we had to hustle up work for our drivers. We were hauling potato chips and reefers and some flatdecks,” Ryan admits.

Cattle producers expressed more enthusiasm about the re-opening of the U.S. border.

“It is a major breakthrough that some thought would take many years,” Ted Haney of the Canada Beef Export Federation told Alberta media immediately following the announcement. He added about 95 per cent of the pre-BSE trade in beef and cattle could be resumed in the new year as a result of the announcement. “Some in the U.S. worked for it; others worked hard to avoid this day.”

But while producers are counting down the days to when they can ship that first load of cattle south, the question remains: With so many experienced cattle haulers exiting the business, just how will the demand be met?

Alberta Motor Transport Association (AMTA) executive director, Kim Royal, estimates 50 per cent of cattle haulers have left the business altogether. He says it will take up to a year for the industry to be able to haul pre-BSE volumes of cattle.

“Livestock haulers will see a greater demand for their services than they will be able to fulfill in the short term,” Royal warns, adding there is pent-up demand to remove cull animals from the farm. Still, he lauded the U.S. decision to re-open the border.

“This is good news for the livestock trucking industry,” Royal says.

“Before the ban, Canada sold more than 70 per cent of its live cattle to the U.S. Opening the border will allow the livestock carriers to gain some relief from the economic hardship they have suffered since May 20, 2003.

“The lifting of the ban should also see an increase in cut beef products that will benefit refrigerated carriers with U.S. lanes,” he adds.

Still, the shortage of capacity has both cattle haulers and producers a little bit uneasy.

“It’s going to be pretty painful for the first little while,” admits Ryan. “We lost a lot of our lease/ops and we sold off some of our trailers. The lease/ops went off and found new jobs – some went to the oilfields and some went flatdecking. I would estimate it will take five years to get back to where we were and that’s only if we can ship without too many problems.”

And that comment comes from one of the more fortunate cattle haulers (it was able to survive largely because the company also runs some of Canada’s largest feedlots). Ryan says many smaller southern Alberta livestock carriers have simply vanished from the trucking landscape altogether.

“We lost quite a few companies around here,” he says. “We’re down at least 50 per cent of what we used to be in this area, possibly even 60. The ones that stuck around diversified and started hauling pigs and other freight.”

This hasn’t gone unnoticed by cattle producers. Cindy McCreath, a communications officer with the Canadian Cattlemen’s Association (CCA) told Truck West that a recent poll among association members suggests there will be about a 20 per cent shortage of trucks when the border re-opens.

“It has been identified as a concern,” she admits. “It is an issue but there’s no plan at the moment as to how, or if, CCA is going to take a role in addressing this issue…It will be discussed further.”

Keith Robertson, executive director of the Manitoba Cattle Producers Association (MCPA), says a shortage of capacity will “be a bit of a concern from the get-go. But we feel they’ll be able to ramp it up fairly quickly. The equipment is still around and it’s going to be a gradual thing.”

Rick Wright, manager of Manitoba-based Heartland Livestock Services, recently
told local media that more expensive American trucks could be used if Canadian carriers can’t meet the demand.

However, Butte Grain Merchant’s Ryan says it may not be that simple.

A Billings, Montana-based cattle carrier that occasionally works for Ryan’s fleet said the cattle hauling situation is also bleak south of the border.

“He was telling me their situation is not quite as bad as ours but they’ve lost a lot of cattle haulers too because of high fuel prices,” points out Ryan.

MCPA’s Robertson says Canadian producers must be less reliant on U.S. processing plants to avoid another catastrophe in the event of a border closure.

“We’ll keep as many cattle as possible here in Canada,” he insists.

It was a thought echoed by many in the industry, as well as some high-profile politicians.

“We’ll work hard to develop our own packing industry in Canada,” Clay Serby, deputy premier of Saskatchewan told reporters following the announcement.

“We’ve all recognized when you put all your eggs in one basket you can find yourself in a situation like we did here in Canada when the border gets closed to us.”

It is estimated the U.S. ban on Canadian beef and cattle cost the industry about $5 billion. While $1.6 billion in aid was provided to producers, none of that financial assistance was extended to cattle carriers.

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