PICTURE BUTTE, Alta. - In the self-professed livestock capital of Canada, there are mounting concerns about the long-term repercussions of a single case of mad cow disease in Canada.Picture Butte, Alt...
COW CRAZE: Farmers aren't the only victims.Photo by CP
PICTURE BUTTE, Alta. – In the self-professed livestock capital of Canada, there are mounting concerns about the long-term repercussions of a single case of mad cow disease in Canada.
Picture Butte, Alta. is situated just north of Lethbridge.
It’s home to some of the biggest feedlots in the country and a strong contingent of livestock truckers who are doing whatever they can to wait out the storm that’s been brewing since a single Alberta cow was discovered to have Bovine Spongiform Encephalopathy (BSE) on May 20.
“At the moment, we have guys out doing work that we don’t normally do,” said Sharon Filsbe, an employee with MacLean Transport, a five-truck livestock hauling operation.
“We normally just do livestock but now we have guys hauling watermelons, kitty litter, furniture, potatoes – anything at all just trying to make a living.”
It’s been a struggle to keep the wheels turning, but like many livestock hauling companies, MacLean Transport is just trying to stay afloat and helping find ways to enable its drivers to keep putting food on the table, Filsbe said.
“They’re scraping by, but those truck payments have been put on hold which makes it more expensive because then they have interest on top of that,” she said.
Rumours are swirling about the demise of several livestock trucking companies, Filsbe said.
“I’ve already heard rumours that there are trucks sitting behind Peterbilt in Lethbridge where guys have taken their keys in and said ‘I’ve had enough,'” she said.
“Our rate sheet has not changed for many years but all the costs that are related to it – be it insurance, diesel, the cost of living, tires, repairs and the cost of the truck (keep rising). How much can they take?”
That’s a question also being asked by Jim Ryan, manager of Butte Grain Merchants’ truck fleet.
It runs about 18 trucks – 14 of which made routine runs into the U.S.
Those trucks are also being put to use hauling other freight while the U.S. border remains closed to Canadian beef.
“We’re hauling all the grain into the feedlots with the trucks,” Ryan said.
“We normally only have one truck hauling grain, but now we have five hauling grain.”
The company’s O/Os are also hauling potatoes, chips, reefers and any other loads they can scrounge up, he added.
But although Ryan was right in the heart of the crisis, there are still so many unanswered questions that he didn’t know how long those drivers could hang on.
“What it comes down to is all the uncertainty,” Ryan said.
“Nobody knows when the border’s going to open up so there’s just a lot of anxiety about what’s going to happen in the future.”
Butte Grain Merchants operates eight feedlots, but there hasn’t been a single load delivered to any of them since May 20.
“It’s a bad deal, really,” lamented Ryan.
“Who knows if the Americans are trying to punish us for our Prime Minister’s smart comments or whether it’s not backing them in the Iraq war? But they are punishing us and they’re using every little excuse to get that point across.”
Now, nearly two months after mad cow disease was detected in a lone Alberta cow, the U.S. and other international markets remain closed to Canadian beef.
It has cost the province’s cattle industry more than $500-million, but the impact has been felt right across the country.
Some industry representatives have pegged the running cost of the beef ban at $11 million per day in Canada.
While the federal and provincial governments have offered aid packages to farmers to help slow the bleeding, livestock haulers have seen up to 100 per cent of their business evaporate, according to recent discussions between the Alberta Motor Transport Association (AMTA) and cattle haulers.
In Alberta, cattle haulers have experienced an average of a 60 per cent loss in gross income since May 20, when the case of mad cow disease was confirmed, according to the AMTA.
Even domestic cattle carriers have felt the crunch, with traffic to feedlots and auction markets slowing to a trickle.
Prior to the mad cow scare, 200 truckloads of cattle were delivered to Alberta’s two largest feedlots each day.
That traffic was practically stopped in its tracks in late May, as were the 200 truckloads of fat cattle that would normally leave the feedlots for delivery to slaughterhouses.
In all, 99 per cent of produced meat, edible meat products and livestock are moved by truck, according to the AMTA.
Fleets specializing in refrigerated cargo have also been stung by the mad cow crisis, suffering an average of a 20 per cent loss in income, the AMTA reports.
While some livestock haulers like MacLean Transport and Butte Grain Merchants have found alternative freight to haul during the shutdown, that has often come at the expense of other carriers creating an overcapacity situation that is hurting the entire industry.
The AMTA estimated bankruptcies would be inevitable if the U.S. border remained closed to Canadian beef through July.
“The first ones (livestock haulers) will be going bankrupt sometime this month, based on the information we’ve gotten in the last little while. Things are getting more and more desperate,” said Kim Royal, executive director of the AMTA.
He said there are 1,000 livestock haulers in Alberta alone.
“We’ve got a lot more carriers fighting for the same, much smaller pie…Some drivers have already gone onto other companies (and gotten out of hauling livestock altogether)…If there is a disaster relief package, it should include trucking.”
Most importantly, Royal feels the border must be re-opened immediately.
“We’re not talking a few weeks, we’re talking within a week. In a few weeks, there will be bankruptcies,” he said.
After discussions with affected livestock haulers and other carriers, the AMTA wrote a position paper that was forwarded to the provincial and federal ministers of Transport, Agriculture and Human Resources and Employment (HRE), “requesting that efforts continue to negotiate the re-opening of U.S. and international borders to Canadian cattle and beef products and that any disaster relief funding includes the transportation industry in its scope.”
But as Truck News went to press, a quick solution seemed unlikely. In fact, increasingly desperate Canadian officials were hinting at retaliation – a move that could spark a full-blown trade war with the U.S.
Deputy Prime Minister, John Manley recently said that Canada may consider banning U.S. beef if the border isn’t opened to Canadian meat soon.
That suggestion gained momentum when provincial agriculture ministers met July 8 to discuss possible retaliation.
“People anticipated that border would be closed for a very short time, maybe three to four weeks. We’re now into eight weeks,” Manitoba Agriculture Minister Rosann Wowchuk told reporters following a meeting of provincial and territorial ministers.
“We have cattle that are backed up on the farm. We have cattle that are backed up on feedlots.”
Alberta Agriculture Minister Shirley McClellan agreed: “When the science would to us determine that those borders should open and they’re not opening, then I think you have to start talking about some extraordinary actions. (Restricting U.S imports) may be the least desirable, but can you continue to allow your product to be displaced by other product?”
But some trade experts warned against taking such action, including Perrin Beatty, president of Canadian Manufacturers and Exporters.
“As a rule of thumb, everybody loses in a trade war,” he told local media.
“What we don’t have, unfortunately, in the United States right now is that degree of goodwill and desire of resolving problems before they become crises that we really need in a situation like this. They’re being asked to choose between the politics and economics, which would argue in favour of keeping the border closed, and the science and the friendship with Canada that would argue in favour of re-opening it immediately. Our goal has to be to get them to do what they know to be the right thing.”
But not all news emerging durin
g the second full month of the crisis was bad news.
Montana voiced its support for re-opening the border on June 24. And on July 7, Mexico’s Ambassador to Canada, Maria Teresa Garcia de Madero, said that nation hopes to be the first to re-open its border to Canadian beef.
“I can say we’ll be the first country to re-open the borders to Canadian beef,” Garcia de Madero said while on a visit to Calgary.
That encouraging news came on the heels of a telephone discussion between Canadian Prime Minister, Jean Chretien and U.S. President George W. Bush.
Their brief phone call was dominated by the U.S. refusal to re-open its border to Canadian beef and while the Prime Minister’s Office was encouraged by the talks, no firm dates were discussed.
Making it difficult for the U.S. to allow Canadian beef to once again flow into the U.S., was Japan.
The biggest international importer of U.S. beef announced in late June that it would ban U.S. beef if it lifted the ban on Canadian meat.
Because the U.S. currently does not separately identify Canadian and U.S. beef, it would be unable to assure Japan that no Canadian meat entered its supply if the border was re-opened.
After spending the morning perusing the U.S. Department of Agriculture’s Web site, Ryan said it makes no sense for Japan to carry so much weight.
“It seems like a drop in the bucket compared to what Canada and the U.S. trade,” he said, after comparing export figures.