The Canadian Press | By Judy Monchuk | Dec. 22, 2003
CALGARY (CP) - In a world where super-sized is the norm, the $1.27 cheque Todd Fraser recently received for selling his cow wouldn't pay for a junior cheeseburger.
"It's not even worth the diesel to haul her in to market," said Fraser, whose seven-year-old slaughter cow would have likely fetched $600 to $800 before a lone Alberta breeder cow tested positive for mad cow disease May 20. But in early December, Fraser's 445-kilogram animal brought $19.60 at auction -under five cents a kilo paid by a feedlot operator. After fees, commissions and GST, all that was left was $1.27.
As well, Fraser didn't realize he had to stipulate the animal be purchased by a slaughterhouse to qualify for $159 in federal compensation.
The single case of mad cow, also known as bovine spongiform encephalopathy, or BSE, sent the cattle industry into crisis in 2003 as all major importers closed their borders to Canadian beef.
Many Canadians feel the crisis that has cost cattle exporters alone more than $1.9 billion has abated since September when the United States began accepting some boneless beef cuts.
More than 60,000 metric tonnes of beef has since moved into the U.S. and Mexico - all from animals under 30 months, which are believed at lower risk of contracting the brain-wasting disease.
Yet economic ripples continue to be felt across rural Canada. Nowhere is that more evident than in Alberta, home to more than half of the country's 13 million cattle.
The value of Fraser's 150-head cow-calf operation near Raymond, Alta., has plunged more than 75 per cent. Bills are piling up for the 25-year-old, who has a wife and baby to support.
Fraser's family has raised cattle since before Alberta was a province. His great-great-grandfather, determined to survive on a combination of crops and livestock, came to the province from Utah in the late 1800s.
But Fraser isn't sure how long he can hold on to his operation. He faced two years of drought and a flood before the mad cow crisis and his reserves are long gone.
"I hope there's nothing else out there," he said. "I'd hate to be the last Fraser on the farm."
While cattle producers took the brunt of import bans in 2003, the real economic dominoes aren't expected to fall until after the U.S. border reopens to live cattle, expected early in 2004, and banks learn which businesses can't keep standing.
In southern Alberta, bankruptcy trustee Sandy Lyons has seen his files swell 30 per cent since May 20.
It's not cattle producers he has dealt with up to this point - it's businesses and individuals that rely on the industry. They don't qualify for the hundreds of millions in aid pledged by governments in recent months.
Truck and farm machine sales are down. Restaurants sit empty. Corral cleaners who would normally be working around the clock spreading manure after cattle are taken to market are instead idle because feedlots don't have the money to clean pens. Truckers who hauled live cattle to the United States have had to find other means of survival.
"I think we're still on the upside curve of the blip. I don't think we've seen the peak yet," said Lyons, whose territory with KPMG covers the heart of cattle country.
That includes the County of Lethbridge and Feedlot Alley, an expanse of rolling valley where 650,000 cattle are fattened for slaughter. Most are fed in family-run operations that hold 3,000 to 15,000 head of cattle.
With 60 per cent of Canadian beef production bound for export, hopes for salvation are pinned on opening the American border to live cattle.
The U.S. Department of Agriculture is seeking feedback until Jan. 5 on a proposal that would lift a ban on animals under 30 months.
It will be weeks or even months after that, however, before a final rule outlining the new reality for cattle exports is written and the border finally opens.
Nicki Murray of Picture Butte, Alta., never imagined it could last this long. She can look out her front door at the feedlot operation her husband Shawn has struggled to keep going - and knows her neighbours are going through the same thing.
"The banks could fold on many of us, but they're hanging in there, too," said the mother of five.
Lyons says no one wants to be the first financial institution to pull the pin but says time is running out.
"You're going to see banks in a position where they have to deal with the issue," he said.
Bill Kruczko recalls that as a child in the 1930s he helped his father take a wagonload of cattle to the train station in Piapot, Sask., to be shipped to Winnipeg for sale. The proceeds didn't even cover the freight bill.
Almost 70 years later, Kruczko can't even give away his cattle. He tried to donate three cows to the Salvation Army, but the local abattoir was too busy to slaughter the animals.
"At this stage, we're reaching up to touch bottom," said the 75-year-old rancher from Maple Creek, Sask.
But some believe the industry is poised to bounce back.
Ted Haney of the Canada Beef Export Federation predicts 2004 will be a transitional year from crisis to prosperity.
Part of that is because prices for American beef soared once Canadian products were out of the international marketplace. Some foreign customers felt they were victims of predatory pricing.
"This has resulted in enhanced demand for our products in Mexico," Haney said. "Importers and distributors are aggressively purchasing Canadian product and they're doing that at price parity with the United States."
Industry officials say one of the legacies from the BSE crisis is that international markets will be viewed as more precious and precarious than before.
"We believed on an operational level that exporting beef was a right of Canada," said Haney.
"Instead it should be viewed as a privilege that must be earned through animal health and food safety standards and performance."The Canadian Press:
