Mon, 24 Jan 2005

Mad cow helps R-CALF's pitch

I will have to confess to becoming less and less of a "free trader" as I see more and more of the policy's overall effect. For instance, when they open the Canadian border up for cattle imports again, my salvage value on my cattle assets will drop by about 70% - that's a $5000 loss (on paper). It won't effect me too much, because I'm so small: we only own 10 head. But if I was a little larger, with large lines of credit against those cows, or if I'd been trading cattle to build my herd (as larger producers must, all the time), this could be a devastating blow. I'd have feeder calves that I paid, say $400 a head for a few months ago that'll soon be worth about $150 each.

This will happen because of the tremendous inventory of cattle that's been held north of the frontier for the last several months due to the mad cow scare. Supply and demand, you know.

But even worse for large producers, this will hurt their ability to export beef: Japan and the EU both have bans in place on Canadian beef, and when our herds start mixing freely again, that'll be a perfect excuse to extend those bans.

There's a lot of unintended consequences to policy decisions in agriculture: I just wish somebody in Washington would wake up.

Leo McDonnell used a story about apples to warn his fellow cattle producers meeting here about free trade.

(link) [Omaha World Herald]

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