Blackie rancher takes aim at Canadian policy on BSE

By John Barlow
Editor

A discussion paper penned by a Blackie rancher regarding the alleged mishandling of the mad cow crisis by the Alberta government and industry leaders has sparked a firestorm of reaction within the Alberta beef industry.
Cam Ostercamp’s telephone has not stopped ringing since he released his lengthy document entitled “Behind the Veil of Science: How the mishandling of the BSE crisis could lead to the downfall of the Canadian beef industry.
The discussion paper is not the ranting of a frustrated cattle rancher, it is based on Ostercamp’s own research and decades of his own experience in the cattle industry.
“What needs to happen is not only agriculture people to realize the folly and blunder of how the BSE issue has been handled, but the taxpayers across the country need to see this,” said Ostercamp during an interview on Sunday.
For Canada’s beef industry to recover from the mad cow crisis Ostercamp makes three suggestions: mandatory testing is a must; expand Canada’s processing capacity; and actively seek out new global markets for Canadian beef thus eliminating Canada’s dependency on the US market.
Prior to bovine spongiform encephalopathy (BSE) being discovered in Alberta more than a year ago, Canada produced about two per cent of the world’s beef. However, Canada consumed only 28 per cent of the industry’s production domestically meaning 72 per cent of Canada’s beef is exported. What makes Canada’s position precarious is that more than 70 per cent of Canada’s total exports were sold to one customer —the United States.
The magnitude of that precarious position became more than evident last May.
"Our almost total dependency on the US market and the American consumer for Canadian beef set the stage for us to be in this hole," said Ostercamp. "We have been lazy during the last 20 years because of the American vacuum down south - it has been a handy place for us to get rid of our beef."
That was until BSE down all of Canada's export markets last year including the United States.
As a result, Canada does not have a surplus of about 1.1 million mature cows that cannot be exported nor does this country have the capacity to process them domestically.
To address both issues, Ostercamp suggests the federal and provincial governments put their aid money to good use instead of pouring billions of dollars in to aid packages that do little to alleviate the crunch on Canadian cattlemen.
Last year the federal and provincial governments established the Cull Cow Recovery Program where he cattle producer in Canada received $180 per head on eight per cent of their breeding herd.
"A 100 head cow herd may yield the producer a welfare check of $1,800 - the government's answer to addressing our woes," Ostercamp wrote in his paper. "It does nothing to stop the hemorrhaging. If we do the math, we see what a ridiculous waste of money this is."
He said instead that money should have been used for "bricks and mortar" to establish labs to ensure each Canadian cow is tested for BSE and help private industry increase slaughterhouse capacity.
By establishing mandatory testing it would relax fears on the world market of Canadian beef and markets such as Japan and Asia would be more willing to open their borders to Canadian product.
"I recognize we can never quit trading with America, but it should be below 50 per cent (of Canada's total beef export)," explained Ostercamp. "The rest should be sent to at least four other customers with about 12 per cent each."
Interestingly, Ostercamp suggested Japan and Asia are currently ripe markets ready to be picked by Canadian producers.
Since BSE was discovered in the United States in December, Japan and Asia also closed their borders to American beef. Like Canada, the United States has staunchly refused to a mandatory testing policy.
Should Canada establish a 100 per cent testing policy not only could this country regain some of its lost markets it could expand on them.
It seems logical, but why then has Canada's governments not seriously discussed mandatory testing?
According to Ostercamp, he believes it is pressure from the large American agribusiness such as Cargill Foods and Tyson/IBP.
"The biggest problem we face is that we are told by the United States not to test because science says you don't have to - I am so sick of hearing that," said Ostercamp. "Believe it or not, it is not science telling us not to test, it is political science."
Canada has only six slaughterhouses that process more than 1,000 head per day and the two largest, Cargill in High River and Lakeside in Brooks (owned by Tyson/IBP) process more than 4,000. Therefore, to establish BSE testing labs at these plants would be bargain, it would be cost prohibitive south of the border as the United States has almost 10 times the number of cattle in Canada.
If Canadian consumers are eating beef that has been tested, the fear is American consumers would demand the same.
Besides, there is little incentive for the United States to install mandatory testing as it does not depend on the export market for its beef as almost every pound of beef produced in the United States is used to feed its own 300 million citizens.
"BSE did not effect the US cattle industry because the do not depend on selling beef outside their borders," said Ostercamp. "Testing is virtually unnecessary for them, as they eat everything they produce domestically."
To back up his claim, Ostercamp states that before BSE slaughter cattle sold for about $1.08/per pound live weight in Canada. By July 2003 the price dropped to as low as 36 cents per pound. In contrast, American slaughter cow prices were 44 cents/pound on Dec. 18, 2003. One month after BSE was discovered in Washington the price was 42 cents per pound.
So, if testing is too costly for American processors and they do not need Canadian beef, why would the United States rush to open the border?
That is the crux of Ostercamp's argument - they won't.
Especially since he believes the likes of Cargill and Tyson/IBP are steering American policy on BSE and trade.
"By buying Canadian fed animals at a highly discounted price from Canadian producers, processing them in their American plants operating on Canadian soil and firing processed, boneless boxed beef into the American market American players have profited on the backs of Canadian producers," alleges Ostercamp. "At what cost and to whom have we developed the Canadian beef industry?"
In his discussion paper Ostercamp addresses a number of other issues including shrinking profit margins that have driven production levels and the lack of Canadian laws controlling packer ownership (Ostercamp suggests American-owned packers received between $40 million and $100 million in feedlot subsidies last fall).
His goal is to make the mishandling of the mad cow crisis an election issue in the federal election that is set for June 28.
Ostercamp's complete document can be downloaded at www.lgunderson.com.

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