Cattle producers are enjoying profitable times, but those profits will be slashed if the United States imposes import tariffs on Canadian products.
President Trump has set February 1st as the planned date to make an announcement.
Ryder Lee is the General Manager of the Canadian Cattle Association. He says no one can accurately say what is going to occur.
“I can’t predict whether saber-rattling is happening or (this is) the road that’s ahead of us. We’ve already seen that it’s not necessarily happening. Hopefully the work we’re doing of making that clear is having that impact and cooler heads will prevail.” He adds that the economic damage won’t be surgical, because it will splash all over the place.
Lee says there will be hurt in both countries, with consumers paying higher prices for beef and the possibility of reduced slaughter at US packing facilities. About 30 per cent of the cattle processed in the US Pacific Northwest comes from Canada. A similar situation exists in southern states with Mexico, which is also under the tariff threat issued by President Trump.
More certain that the tariffs will be imposed, is well-known Ontario-based livestock market analyst Kevin Grier. He says the United States will eventually impose tariffs on all Canadian imports, including beef.
Grier says US President Trump has made it clear that he wants to improve border security and is willing to use tariffs as a means to create change.
“He said they were going to go on, not for economic reasons, but for security reasons for our border. It was a very specific reason. I think they will go on because we don’t seem to be able to get our act together to be able to address what the concerns are.”
Grier believes Canadian cow-calf producers will be able to ride out the tariff situation, but it will be more difficult for feedlots and packers. There was a significant increase in the number of feeder cattle sold in Western Canada this month—likely a combination between record prices and tariff concerns.
Meanwhile, Will Lowe from Kyle is the chair of the National Cattle Feeders Association. He says the North American cattle industry is very integrated.
“The Pacific-Northwest relies on 30 per cent of their fed kill of Canadian cattle. If they don’t get that 30 per cent number, and they’re running their plants at 65-70 per cent capacity, there is going to be some major business implications for those packing plants,” Lowe explains.
It could mean layoffs or reduced hours for employees. US consumers would also pay more for beef and the same thing would likely happen in Canada, if our government imposes retaliatory tariffs against the United States.
