New cattle feed rules aimmed at cutting out BSE and restoring Canadian beef in the export market are a costly proposition for cattle feeders and processors.
This is only the most blow in what's been a several year downer for Canadian feeders and packers. As far north as Canada is, the growing season is short, forcing the import of corn and other feedstuffs Alberta cattle feeders need. This is expensive, even more so with $4 and more diesel fuel. Now the new feed rules tighten down the feedlot ration even more, causing costs to skyrocket.
Packers have always had trouble in Canada maintaining a steady, year-around supply of slaughter-ready cattle. Meat packing really doesn't work as a seasonal activity. A plant and staff must be kept busy, due to the heavy investment involved. This necessitates moving cattle back and forth between Canada and the U.S. when supplies north of the border run short. That's even tough, because the major U.S. fed cattle supply is in Kansas and the Texas-Oklahoma panhandle, a long haul from Canada. And fuel costs have made that an even more costly proposition.
These factors always made U.S. observers wonder how meat packing could possibly work in Canada, and now the question has been answered: it probably can't.
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