Canadian cattle producers have already lost an estimated CDN$5 billion since the discovery of a single BSE- infected cow in Canada, according to a new report from the Bank of Montreal (BMO) Economics Department.

"In economic terms, the closing of the border has been devastating to Canadian ranchers and their families," says Rick Egelton, Senior Vice-President and Deputy Chief Economist, BMO Financial Group. "Cattle producers have been hit by lower output, weaker prices, and narrowing margins."

The report claims that although cattle prices have risen from their lows immediately following the May 2003 announcement, they remain weak today. Moreover, the large increase in the number of cattle on farms suggests that prices could remain soft during the next year, even if cross-border markets are reopened. Cattle producers, therefore, have continued to face poor market conditions in 2004, with cash receipts through the first six months close to 30 per cent lower than the average for the five years ending in 2002.

The report adds that the longer-term viability of the sector will be dependent on the degree to which consumers remain confident in the beef supply.

The US border has been shut to live Canadian cattle since May 2003, when a single cow with bovine spongiform encephalopathy was discovered in Alberta. That animal was condemned at slaughter, so no meat from the carcass entered the food system.

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