By Tom Collins
ATHENS — In February of 2003, Eastern Ontario beef farmer Kim Sytsma had just become one of the newest board of directors of the Ontario Cattlemen’s Association (now known as Beef Farmers of Ontario) after the board shrank from 50 directors to 12. She was also elected to the Canadian Cattlemen’s Association at the same time. Beef prices were at record highs and cattle numbers were increasing every year.
Three months later, on May 20, 2003, the U.S. and many other countries closed its borders to Canadian beef after a single case of Bovine Spongiform Encephalopathy — known by many as BSE or simply mad cow disease — was found in an Alberta beef cow. Beef prices dramatically dropped by 50 to 80 per cent, devastating cattle inventories.
“It was a very tough time,” Sytsma remembered. “We had been working on expanding (our farm), but because the price of cattle was so low, the heifers we had kept, we had to sell them to pay bills. It slowed down our expansion. We culled cows that needed to be culled. Tractors and things that needed to be replaced weren’t replaced. You didn’t go on vacation. You were very careful what you spent money on.”
Fifteen years later the industry is still feeling the effects. It took five years before the U.S. border fully re-opened to Canadian beef. Some countries still won’t allow Canadian beef. The number of Ontario beef farms continues to drop. Last year, Sytsma went on her first vacation since 2003, when she and her husband visited her husband’s nephew’s dairy farm in British Columbia.
Many farmers left the business. Many part-time operators got out. When the market finally got back to normal prices about 10 years later, older farmers used that as an opportunity to get out. Statistics Canada says the number of Ontario beef cattle went from 376,000 in 2002 to 243,100 this year. The number of Ontario beef farms dropped from 11,550 in 2002 to 8,665 in 2014.
New guidelines allow a country to have two BSE cases in any 12 consecutive months for every one million cattle over the age of 24 months to retain a minimum-risk status. There have been a total of 19 BSE cases in Canada since 2003, the latest in 2015.
Steve Kay, publisher of Cattle Buyers Weekly newsletter, wrote in the Canadian Cattlemen’s Association magazine in 2014 that “The full costs of BSE might never be known. But to date, BSE has cost the Canadian industry CDN $5 billion to $7 billion and the U.S. industry more than US $16 billion.”
Former Canadian Cattlemen’s Association president Dan Darling estimated that “95 per cent, if not more,” of the decline in the number of beef farms can be linked to 2003 BSE case.
Darling said many countries are still wary of accepting Canadian beef. Canada was Japan’s major supplier of beef before 2003. When the borders closed, Japan switched to Australian beef and hasn’t looked back. There is now a large tariff on Canadian beef going to Japan, which is why trade deals such as the CPTPP are so important. Over time, those tariffs will be removed, said Darling.
Indonesia used to accept 80 per cent of Canadian beef offal (intestines, stomach, etc.). After closing its borders in 2003, Indonesia eventually started accepting offal again. However, the southeast Asian country closed its border again after the last BSE case in 2015 and say they will no longer accept offal from Canada, said Darling.
“Packers have to pay to dispose of it,” he said. “Instead of money coming in, it’s going out. (As well,) in order to move product, we’ve had to remove a fair bit of the material around the spinal column. That cuts down on the amount of product we have to sell, but also, it’s more work involved and more costly.”
While many farmers cut back on the number of animals after BSE, larger farms grew. Darling’s farm went from 100 to 200 in the months after BSE, and is now up to 300. He said since he uses the same equipment to feed, he might as well feed more. He also changed the way he markets cattle. Instead of selling cattle based on the time of year, he waits until they are about 900 lbs. By putting extra weight on fairly cheaply, there’s more money as there are more pounds on the animal.
“I think we have to become a little bit better business people,” he said. “You’ve got to be a really sharp-penciled businessperson in order to survive in the beef industry now.”
Three big issues facing the industry today are trade, access to land (crop and supply-managed sectors are driving up land prices) and animal welfare. Darling said there’s a lack of knowledge by people making the final decisions about the food industry. He said while every industry has a few bad apples, the challenge for producers is to educate consumers on exactly how farmers care for their animals.
Joe Hill, president of the Beef Farmers of Ontario, said other factors — such as the country-of-origin labelling (COOL) — played a role in decreasing cattle prices.
“We eventually won the trade dispute on that, but we were severely discounted on price for seven years because of it,” he said. “That has taken a toll on the industry.”
Hill, who runs a feedlot operation at Wellington in Western Ontario, said there were a number of farms where the next generation was going to take over, but the economics didn’t allow that for that to happen. So the younger generation left to work elsewhere, and never returned.
Hill said there is now a desire by young farmers to invest in and grow the beef sector, but a lack of confidence in the industry is holding people back.
“Trying to build optimism is still a challenge,” he said. “It’s really about focusing on the future and where we can go. Most markets have returned in some shape, way or form. Some of the larger trade deals have created more opportunity for export markets. There’s been a slight increase in consumption domestically.”
