Last week’s ruling by a US District Court Judge (Montana) to grant a preliminary injunction preventing the implementation of the US minimal-risk rule that would have allowed a resumption of US imports of live cattle from Canada is fuelling the impetus to increase cattle slaughter capacity and expand beef processing in Canada. With access to the US market continuing to remain shut for up to 1.5 million head of cattle annually, the Canadian cattle industry and the Canadian and federal governments have turned their focus from BSE producer-aid packages to investments in the cattle processing industry that will certainly transfer some of the advantage of the North American beef value-chain to Canada.

In 2002, the year prior to the Canadian discovery of BSE (in May 2003), total Canadian cattle and calf slaughter was 3.8 million head. In 2003, the year disrupted by BSE and border closures, total slaughter slipped to 3.5 million head.  During 2004, total slaughter increased to 4.4 million head as players in the Canadian packing industry, big and small, began making the structural adjustments and investment necessary to expand cattle slaughter and beef marketing strategies due to the uncertainty of market access to the United States. Canadian cattle slaughter for 2005 is forecast at about 4.7 million head.  Other announced projects across Canada are projected to raise total Canadian slaughter to 5.0 million head by the end of 2006.

In a sudden turn of events last week, a federal judge issued an order to temporarily postpone reopening the US border to Canadian live cattle due to questions about bovine spongiform encephalopathy disease, asserting that the USDA's decision to allow Canadian cattle back into the United States was premature because of the two new cases of BSE found in Canada within the last three months.

The preliminary injunction is likely to stand until the trial is over. No specific timeframe is known at this time.

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