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Thursday, July 14, 2005

(Ottawa, Canada) - Fundamental restructuring in the North American beef industry is becoming so pronounced that it may soon become irreversible, according to the American Meat Institute (AMI), the Canadian Meat Council (CMC) and the Canadian Cattlemen's Association (CCA). The three groups spoke publicly together today in a press conference at the Canadian Press Club in Ottawa.

"Two nations that had been strategic global partners are being driven apart by a protracted and unscientific cattle embargo," said AMI President J. Patrick Boyle. "More than 7,800 jobs have been lost in the U.S. meat packing industry and many more are at risk each day that the cattle and beef embargo remains in place."

Boyle said that several U.S. plants have closed, while others are operating on a reduced schedule. He pointed out that many plant employees are struggling as they work dramatically reduced hours each week. "And this, in turn, has a ripple effect in local communities."

"What has been a globally competitive, North American beef industry is now becoming two competing nations. Two industries that were allies are becoming competitors. And in the end, this is to North America's detriment," Boyle said.

The embargo on U.S. imports of Canadian cattle and some Canadian beef products is now in the hands of the U.S. courts. Yesterday in Seattle, the Ninth Circuit Court of Appeals heard the U.S. Department of Agriculture's appeal of a lower court ruling, which granted a preliminary injunction in March to prevent the border from reopening. R-CALF-USA, an isolationist organization that was founded a decade ago to oppose free trade, had requested the injunction in the U.S. District Court for the District of Montana.

Meanwhile, Canada is fighting back from its initial economic struggles following the diagnosis of its first case in May 2003 and is positioning itself to become a larger and stronger beef industry.

"We are seeing diametrically opposite outcomes in the U.S. and Canada," said Jim Laws, executive director of the Canadian Meat Council. "We are investing to expand our beef processing industry. The bricks and mortar investments that we've been making to process the cattle that we used to export to the U.S. are quite literally 'concrete.’ They will not be dismantled if the border opens later this month.

The Canadian beef packing industry has expanded its employment by an estimated 1,500 jobs. Canadian packing capacity is expected to expand to 5.15 million head by the end of 2005. Meanwhile, the U.S. beef industry has its hands tied by a court ruling,” with U.S. packing capacity expected to be 31.7 million head in 2005, down from 35.7 million head in 2002.

John Newman, Chairman of the Beef Information Centre, a division of the Canadian Cattleman's Association, said that while CCA's members hope that U.S. courts will rule against the embargo, the outcome of an American legal battle over beef and cattle trade with Canada remains uncertain.

"Before the embargo, we sent, on average, a million head of cattle a year to be processed in the U.S.,” says Newman. "Since May 2003, we've sent none. Cattle aren't like tires that you can store in a warehouse. We've done what we had to do to expand slaughter capacity and process these animals, but we'd rather continue our strategic relationship with the U.S. industry so that together, we can be a stronger North American beef industry, better able to compete with the cattle and beef industries of South America and Oceania."

For more information contact:
David Ray
Vice President, Public Affairs
Janet Riley
Sr. Vice President, Public Affairs

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