02/07/05 USDA reduces estimate of Canadian cattle

American Rancher February 7, 2005 The USDA now says the economic impact on U.S. cattlemen of reopening the border to most Canadian cattle is less than department analysts first projected. USDA chief economist Keith Collins told a Senate hearing last week that the impact would be about a $3 per hundredweight decline. Collins: "Fed cattle prices in the United States would decline from $85 a hundredweight in 2005 to $82 a hundredweight. You could argue if that is large effect or a moderate effect. But if the analysis that were done subsequent to ours that suggests 900-thousand are to come across the border, then that effect would be even be smaller." USDA's original estimate had been between 1.5 to two million more head, however that estimate has been revised downward to between 800-thousand and one million more cattle coming into the U.S. market once the U.S.-Canadian beef border has been reopened. Collins also noted the impact a low in the U.S. cattle inventory and the lack of Canadian cattle is having on U.S. meatpackers. Collins: "Without opening the border up to Canada slaughter numbers are going down, capacity utilization is going down, packer costs are going up. So we have a situation that with no trade with Canada, the packer industry is under some stress." Agriculture Secretary Mike Johanns told the committee he feared a permanent shift of jobs from the U.S. to new beef packing plants in Canada if the border is not reopened soon. I'm Bob Hoff.