NMPF Disappointed Over Decision to Open Canadian Border to Dairy Animals

Thursday, September 20, 2007 9:05 AM CDT

The National Milk Producers Federation (NMPF) says it has "serious reservations" about the impact of a renewal of Canadian dairy animal exports to the United States. The USDA announced last week that it will reopen the U.S. border on Nov. 19 to all types of Canadian cattle, including those intended for slaughter, as well as those for breeding purposes, which includes dairy heifers.

The U.S. closed its borders to Canadian beef and live cattle four years ago, following the discovery of BSE, or mad cow disease. In 2005, the USDA reopened the border for younger animals destined for slaughter and for meat from younger animals.

The new regulation will allow exports of all forms of Canadian cattle born after March 1, 1999, including milk cows for breeding.

"The USDA has dismissed as 'negligible' the economic impact of this decision, but dairy farmers are very concerned about what this will do to their milk prices," says Jerry Kozak, president and CEO of the NMPF. "Our analysis shows that a return to export levels of 2003 will reduce milk prices by 18 percent over the next five years, cutting dairy farmer income by $5 billion."

Those figures were shared earlier with the USDA and the Office of Management and Budget, which has the responsibility to assess the impact of major changes in federal regulations. The NMPF estimates that additional annual imports of between 47,000 and 60,000 Canadian dairy heifers could increase milk production by 0.5 percent per year over the next five years, which "is a large enough quantity to generate significant damage in the milk checks of dairy farmers," Kozak says.

In addition to a reduction in milk prices, a surge in Canadian dairy animals will reduce the current value of a farmer's dairy herd, "substantially reducing" his net worth, Kozak adds.

The NMPF is also concerned that while Canada is being classified as a "minimal-risk" country, it could export more animals infected with BSE, with harmful effects for beef prices and milk prices. There have been seven cases of BSE in Canadian cattle born after the implementation of a feed ban in 1997 to prevent the spread of mad cow disease. Five of those were born after March 1, 1999, and could have been sent to the U.S. under the terms of the new regulation.

"Our dairy farmers can't take any comfort from USDA's probabilities and statistical projections. The reality is that animals infected with BSE in Canada become our problem when they arrive in the U.S.," Kozak says, pointing out that the first case of BSE in the U.S. in 2003, in an animal in Washington, was born in Canada.

"The existence of BSE-infected animals could substantially undercut demand for beef, as it has done in Europe. It could also lead to greater discounts for dairy cows at slaughter," Kozak warns.

NMPF staff met earlier this month with officials from the OMB, asking for an opportunity to further help with a full review of the potential impact of this proposed regulation.

Kozak says the NMPF has "laid a clear and coherent foundation for any future action that may be necessary to protect the integrity of our national dairy herd. We are examining what additional recourse we may have in this matter."

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