After months of anticipation and billions of dollars in losses, Canadian cattle ranchers were prepared to welcome the re-opening of the US border to Canadian cattle and beef, which was scheduled to take place on Monday the 7th. But a surprise announcement Wednesday from U.S. District Judge Richard Cebull granted US lobby group R-CALF a court injunction to keep the border closed for the time being.

It’s been nearly two years since the United States banned the import of Canadian cattle after a single case of mad cow disease was discovered in an Alberta cow. Since then, two more cases of BSE have been found in Alberta cows- still within the limits of what is considered safe, but a concern to some lobbyists in the US.
R-CALF lawyer Cliff Edwards told the US court Wednesday that opening the border to Canadian cattle would be "insane" in light of the two recent reports of BSE. Despite assurances from the US government’s lawyer that the Canadian cattle was safe and would not pose a public health risk, Judge Cebull rules in favor of keeping the border closed temporarily.

It’s a disappointing blow to Canadian cattle producers, but it may not all be bad news. In the last 21 months, the Canadian beef industry has begun to adapt to the closed border, and the Canadian industry could stand to benefit from the changes in the long run.

Since the ban was implemented Canada has increased its slaughter capacity – butchering and processing cows in Canada that would have been sent live to the United States. This poses a long-term threat to the American packing plants which were traditionally dependent on Canadian beef. If the ban to continues to drag on much longer, it is likely that Canadian productivity in this area will continue to improve.

This threat is the main reason the US National Cattlemens Beef Association, the official organization of US cattle producers, is in favour of having the border re-open, according to Cindy McCreath, a spokesperson for the Canadian Cattlemens Association.

She describes R-Calf- the U.S. ranchers lobby group that succeeded in getting the court injunction against the border reopening- as "a very small group of cattle producers who take a protectionists attitude towards trade".

McCreath says Canadian slaughter capacity has increased by 20% since the border closed to live cattle in May 2003.

“If the border were to remain closed that would encourage more processing capacity in Canada,” she said.

The result is closed U.S. plants, reduced hours for plant workers and a weaker processing industry in the United States.

"The National Cattlemen’s Association recognizes that in order to have a strong industry they need to have a strong processing sector and they don't want to see all that moving to Canada."

Alberta rancher Tim Barnes agrees. He has seen processing facilities make a hefty profit from the backlog of cattle waiting to be slaughtered and the plummeting price of Canadian cattle.

"The packers have made money, there’s no doubt about it...it’s supply and demand. If you really think about how the market works, they haven't done anything any other business wouldn't have done.”

Packers have made record profits since the border closed due to a steady demand for processed beef and a surplus of cattle for sale.

“I would like to have some of the profits that the packers have made but I'm not going to begrudge them the fact they've been able to make money because we've got excess supply," said Barnes.

Barnes and McCreath both say Canada needs to improve the processing side of its beef industry.

Barnes sees a lack of integration among ranchers, processors and retailers as a major weakness in the Canadian beef industry.

“Any kind of integration into the industry would be better than what we have today. Its fairly confrontational and it always has been...the cow calf producer doesn’t like the feedlot, the feedlot doesn't like the packing plant, the packing plant doesn't like the retailer. We all need to do our jobs better than we have been doing. "

He suggests that different sectors within the industry don’t see where value is added to their shared product and end up competing where they could be working together.