050608 Plant Closure Partly Blamed on Canada Cattle Ban

Gering, NE - A company closing its slaughterhouse/packing plant in Gering says the U.S. ban on Canadian cattle choked the cattle supply so much that the plant was impossible to keep open profitably.

Experts on both sides of the border have said that the ban could force such closures of U.S. slaughterhouses and packing plants and fuel corresponding growth in Canadian operations.

A senior vice president for Green Bay, Wis.-based Packerland Packing, Steve Van Lannen, said:

"We based our decision to close the Gering plant on the fact that procuring cattle to maintain production levels at this facility is a unique challenge, a situation largely due to the ban on importing cattle from Canada into the United States."

The ban also tightened the supply of U.S. cattle.

"The Gering plant has not been profitable for some time," he said. "And given that the prospect of reopening the Canadian border anytime soon is dim and the corresponding outlook for the cattle supply is poor, the Gering plant would have remained unprofitable for the foreseeable future."

The company said it will help the 205 plant employees find new jobs.

As Canada processes the cattle kept north of the border, the effect on Nebraska's beef industry could be enormous, an official of the Canadian Cattlemen's Association says.

Brad Wildeman, a feedlot operator from Saskatchewan and chairman of the association's foreign trade committee, said there will be fewer Canadian cattle headed to Nebraska even after the border reopens.

"These plants aren't going to continue to lose money forever before they shut down," said Wildeman late last week before addressing the Nebraska Cattlemen in North Platte.

Richard Ulrich, a Canadian consul and trade commissioner for agriculture, was traveling with Wildeman.

By early next year, he said, Canadian slaughterhouses will be able to handle all of Canada's cattle.

The USDA shut the border to live Canadian cattle in May 2003 after Canada reported a case of bovine spongiform encephalopathy, or BSE. People can contract variant Creutzfeldt-Jakob disease, which is rare but usually fatal, by eating BSE-contaminated meat.

In March, the USDA was set to lift the ban on live cattle under 30 months old when a U.S. district judge issued a temporary order halting the plan. The USDA has appealed the injunction to the 9th U.S. Circuit Court of Appeals.

In April, the Nebraska Cattlemen said it was joining state and national organizations in the appeal.

Some cattle producers are worried that lifting the ban could jeopardize efforts to persuade countries to buy U.S. beef products if they believe Canadian cattle supplies aren't safe.

Other producers, however, say reopening the border would help U.S. meatpackers that are suffering without Canadian cattle.

Wildeman said the U.S.-Canada border closing to cattle hurts both countries' exports.

"The fact is that U.S. exports that used to make up 17% in all the world's trade in beef is now down to 3%," he said.

RETURN TO HOME PAGE

E-mail: sflanagan@sprintmail.com