Canada says it will take steps to prevent a flood of cattle into the U.S. once the ban on Canadian live cattle and beef is ended. But it's not clear how the Canadian plan to monitor beef exports would prevent disruption to the U.S. cattle market.
The trouble began on May 20th when Canadian officials reported a case of Mad Cow disease. While it was an isolated case, major importers like the U.S. closed their borders to Canadian beef. The result of the action has been a dramatic swing in prices on both sides of the border.
Before the ban, about 25 percent of Canada's cattle were going to the U.S. While the border closing has crippled Canada's beef industry, America's cattle producers have been enjoying a bull market.
A look at the August Cattle futures contract reveals a significant upward trend. The rally has translated into higher prices for cash cattle, as well. In recent weeks, fed cattle have been over 80 dollars per hundredweight in the Plains -- marking the first time ever that cash cattle have sold for 80 dollars in July.
North of the border, the ban has been disastrous for Canadian cattle producers. Canadian cattle prices have plummeted to 25-dollars per hundredweight, down more than $50 since the border was closed.
The ban is impacting other industries, as well, including truckers and farm equipment dealers. And, cattle producers say the problems will only get worse when cow-calf farmers bring spring-born calves to market in coming weeks.