The current U.S. border closure to all live cattle and meat from animals older than 30 months now prevents Canadian access to the U.S. packing infrastructure. This situation has created a huge oversupply of live cattle that cannot pass through the bottleneck of Canada’s domestic packing capacity, although Canadian packers have been slaughtering at a rate close to their maximum capacity during fall 2003 and winter 2004,[4] in response to the partial reopening of the U.S. and Mexican borders to some categories of beef in August 2003.
The country’s cattle herd has been growing in size,[5] and cattle prices have remained very low (see Box 1). Cow-calf and feedlot operators have suffered a sharp loss of income and equity that has reduced the availability of cash flow and access to financing. Mr. Neil Hardy, President of the Saskatchewan Association of Rural Municipalities, estimated that the cow‑calf sector lost $3 billion in equity due to the decline in the value of the breeding stock. For some farmers, it meant the loss of a lifetime’s earnings, and in some extreme and painful cases the seizure of cattle because they could no longer be fed.