Calgary Herald from Calgary, Alberta, Canada • 4

A4 CALGARY HERALD Thursday, March 3, 2005 TOP NEWS BORDER CLOSED TO CANADIAN CATTLE FromAI Cattle -mf Grant Black, Calgary Herald Auctioneer Bob Balog of Balog Auction Services near Lethbridge works on a sale of cattle Wednesday as the impact of a U.S. court ruling sinks in. Court ruling 'a big surprise and a huge disappointment' Canadian politicians refuted sug-; gestions that this was backlash from Prime Minister Paul Martin's deci- sion last week to opt out of the U.S. i missile defence shield. "This is not a decision of the U.S.

government that has taken place here," Agriculture Minister Andy Mitchell told reporters in Ottawa. "The USDA stands by the rule that they are putting in place for the re-; sumption of trade. This is a decision by one judge in one district court in the state of Montana." Cebull delivered his decision after a three-hour hearing that pitted attorneys for R-CALF against lawyers representing the USDA and U.S. Justice Department. He ordered attorneys to agree within 10 days to a proposed timeline for holding a full trial on R-CALF's I request for a permanent injunction against the USDA's planned resump- tion of live cattle trade with Canada.

However, Ted Haney, President of 'the Canada Beef Export Federation, said there is no time frame associ-1 ated with when the new trial will begin. "We don't know what comes next," Haney said. The export federation called on the federal government to initiate trade action against the U.S. if trade has not resumed fully by Monday. The Billings-based R-CALF United Stockgrowers of America sought the temporary injunction so it could proceed with a lawsuit filed in January that argues the USDA's plan to resume imports of young Canadian cattle is premature and puts U.S.

consumers and cattle pro-', ducers at risk While lawyers for the USDA ar-; gued Wednesday the plan is safe, Ce-; bull told the court he wanted to hear testimony from experts in order "to clear up some significant issues." Whether the USDA would appeal the injunction to the Ninth Circuit Court of Appeals in San Francisco was not immediately clear. USDA spokesman Ed Loyd said the depart-'. ment first needs to review the judge's written decision to see what the appropriate "next steps" are. "But our commitment to establish- ing our trade based upon science is undaunted," he said. Bill Bullard, chief executive officer of R-CALF, said he was pleased with the judge's decisioa "We greatly appreciate the opportunity to further prove the science of our position," Bullard said.

Not everyone in the U.S. was as pleased as Bullard, however. U.S. Agriculture Secretary Mike Johanns said he was "very disap-' pointed" with the ruling as he again I reiterated the USDA's confidence in Canada's safety measures against As recently as Tuesday, Johanns reaffirmed his commitment to the March 7 border opening in front of the House of Representatives com- 1 mittee on agriculture. Still, Johanns said Wednesday's ruling is not a reflection on the sub-j stance of the USDA's minimal-risk i rule that allows for the resumption of trade, "but rather a procedural while the judge considers the merits of the case." The American Meat Institute said there is no legal or scientific reason to justify the continued ban on im- porting Canadian beef and cattle.

"We believe its enforcement is ar-i bitrary and capricious and will ultimately be struck down by the courts," stated AMI president J. Patrick Boyle. Jim Peterson, Canada's Interna- tional Trade Minister, said he understood the opening of the border would be based on science "not on politics, not on lobbying." "This is a real setback on this issue, but we are going to do everything we can to fight this decision and work on behalf of our cattle producers," he said. With files fwom Canwest News Service gteeltheherald.canwest.com i 1 1 i 1 1 I 1 I Grant Black, Calgary Herald Roelof Scholten, left, Dick Stronks and Frank Nemeth discuss the border situation over coffee in a Picture Butte cafe. thought this was going to be based strictly on science, not on politics, and that's exactly what's happening." Like other operators in the area, he had been preparing to start exporting at the end of next week, but now says he'll be stuck with some fat cattle.

He pulled back on orders for cattle in Manitoba, British Columbia and Saskatchewan and was sitting tight at the sale in Lethbridge. 'We don't have any indication when it might open up," he said. "When it gets into the courts, it's anyone's guess how long this will take." Other producers said the injunction was not entirely unexpected and hoped it would be mean only a few more weeks delay while the decision was appealed by the U.S. Department of Agriculture. Steve Quinton raises 200 purebred Charolais cattle near Cardston, and came in for the afternoon to see what effect the announcement would have.

"I think it's a big negative, but I think prices are going to rebound," he said. "I might even buy if the price is right." Some said the only solution was increasing slaughter capacity in Alberta, leaving ranchers less dependent on U.S. processing plants and an open border. "Maybe it should stay shut and we can get our plants going here, that would straighten everything out," said Bruce Geigle, of Elkwater, who sold one of the larger lots of 230 cattle at the sale. While some ranchers had harsh words for R-CALF, others vented their anger at the federal government, accusing Ottawa of not doing enough to ensure the border opening.

Some linked Canada's recent decision not to join the U.S. missile defence program as ammunition for the U.S. to drag its feet on the file. "I really kind of blame the prime minister, I think he should get along better with the U.S. than he is," said Darlene Larsen, who drove in from Wardner, B.C.

to sell about 20 cattle on Wednesday. "Maybe if (Paul Martin) would have kept his mouth shut until next week it might have helped," added Bill Duncan of Warner, as he waited to sell 60 yearling heifers. As the sale progressed, most agreed the prices were far better than a year ago, when there were no plans in place to resume the live cattle trade to the U.S. "They're nervous, but they are still playing the game," Balog later said of the bidders at the sale, noting that prices on quality cattle were down only a few cents from the previous week. Don Curtice, co-owner of Little Red Feeders Ranch in Innisfail, a feedlot with 3,000 head of cattle, said he was doubtful the border would reopen Monday.

"It's no surprise," said Curtice. "R-CALF is resilient They didn't want the border to open, and the U.S. is in an extremely protectionist mode right now. "This is a good motivator to push our own plant construction so we can LISA SCHMIDT Calgary Herald LETHBRIDGE 1th less than an hour to auction time, Bob Balog started getting the calls from panicked ranchers telling him to sell their cattle no matter how much the price dropped. News was spreading through feed-lot alley that Montana-based group R-CALF had won an injunction to keep the U.S.

border closed to Canadian cattle imports, set to open in days. And fear was rising that prices might be even worse next week. "That is unfortunately how gun-shy, susceptible and scared the Canadian cattle industry has become in the last 20 some months," said Balog, owner of Balog Auction Service Inc. "We've been slapped in the face so many times with these wonderful promises about borders opening and things getting better." After 25 years in the auction sale business, Balog said it was the first time he didn't know what to do. "I have 2,000 cattle out there I can't continue, and the cattlemen can't continue to play politics." Disappointment hung over the sale with bidding slow off the start, frustrating sellers and producers who had come to watch.

"I lost 10 cents a pound because of the announcement," said Marv Kony-nenbelt, a Nobleford-area farmer who brought three cattle to the sale. "It's not good. I'm probably going to have to give my cattle away, that's the way it's looking. The price won't be there." Seats were filled with buyers representing feedlots and slaughterhouses, but many were hesitant after the ruling. "It's a big surprise and huge disappointment," said John Vander Heyden, who operates a feedlot at Picture Butte.

"Most of the operators granted a temporary injunction to R-CALF, a U.S. cattlemen's group, postponing the flow of Canadian cattle due to ongoing concerns about mad cow disease. "If we had done something wrong, I could swallow this. I can't swallow it anymore," said Tony Saretsky, a cattle exporter from Ponoka. After intense investigations, the USDA had determined in December that Canadian cattle fell under its so-called "minimal risk" rule, but Judge Cebull didn't see it that way.

He bought arguments from R-CALF lawyers that Canadian beef can't be safe with two more confirmed cases of Canadian BSE this year. "It's obvious liis decision wasn't based on scientific information. It was based on the emotion of the moment," said Saretsky. Most in the industry expect the ruling to be appealed and overturned. And the real loser, they say, will ultimately be the U.S.

itself. "The tragedy is that a small group can almost be holding the U.S. government up for ransom," said Steve Primrose, a cattle exporter from Leth In the end, real loser may be the U.S. itself become self-dependent as quickly as possible. You can only bang your head against the wall so many times before you realize it hurts." According to Mark Daines, an auctioneer with the Innisfail Auction Mart, cattle prices did not drop at all during Wednesday's auction.

He said he's still optimistic, despite Wednesday's setback. "Actually, I really did think the border would open. I'm shocked it's not going to," said Daines. "But if we keep fighting it'll happen." Clinton Kaotz, a rancher who lives near Rocky Mountain House, was not as optimistic. "It's never ending, but it's always going to be that way, said Kaotz.

"A lot of my financial plans, a lot of the things I was going to do this summer, are on the back burner." With files from Sean Myers and Emma Poole, Calgary Herald lschm1dttheherald.canwest.com production capacity locally. "The key is that we want to ship as much as possible in a box, as opposed to on the hoof, because that gives us the flexibility to move from market to market," Horner said. Saretsky said he has American slaughterhouses who are crying for the border to be reopened. "I have substantial American customers who are desperate for our cattle. They are going to lose their businesses.

They are going to close their doors. These people (R-CALF) are just thinking very narrowly," Saretsky said. "Do we disallow Wal-Mart from opening because they're going to shut down all the mom and pop stores in Canada? It's ridiculous thinking. Practically every retailer in downtown Calgary and every friggin' oil company is American. Do we tell them they have to leave because they're going to hurt Canadian business? That kind of thinking is 100 years old.

It's archaic." Adds Primrose: "Justice will prevail in the end and we will be a stronger industry because of this." RREMINGTONigiTHEHERALD.CANWEST.COM ROBERT REMINGTON OPINION The frustration in the Canadian cattle industry Wednesday was palpable. You could hear it in the voices of ranchers, cattle brokers, truckers and politicians. After waiting nearly two years for tectionists using the court system in the United States to circumvent what their government wants to do. "It may even be somewhat embarrassing to the adrninistration that a District Court judge in Montana is holding up what they view is a U.S. trade rule," Horner said.

Mike Johanns, the U.S. agriculture secretary, expressed dismay at the judge's decision. "I am very disappointed in today's ruling by the court," he said in a statement. "We remain fully confident in the underlying risk assessment which determined Canada to be a minimal-risk region. "We continue to believe that international trade in beef, founded on science-based regulations, should be reestablished in an expeditious manner," Johanns said.

Horner said Alberta will continue to increase its slaughter capacity in response to the ongoing closure. For R-CALF, that could result in the age-old rule of unintended consequences: by keeping the border closed, the Canadian industry becomes stronger by continuing to increase bridge. "There are a lot of cattlemen across that line who know that they have to get this resolved very quickly for the sake of U.S. trade issues around the world." Doug Horner, Alberta's minister of agriculture, said the ruling was petty protectionism and an awkward development for the Bush administration. "The world is watching how the U.S.

is treating their trading partners and certainly the U.S. administration is very cognizant of that," Horner said in a conference call with reporters. The U.S. has one confirmed case of BSE, from a cow imported from Alberta. Experts believe it is just a matter of time before more American mad cow cases emerge.

The U.S. government isn't opening its borders to be nice to us. It's doing it because it wants to be treated on the world stage the way it is treating Canada. And right now, thanks to a judge in Montana bending to protectionist forces, things are not going the way the Bush admin-rstration had planned. "It's very disappointing and damn frustrating," said Horner.

"What you have is a small group of emotional pro- next Monday's expected reopening of the U.S. border to Canadian cattle, their hopes were thwarted by a federal District Court judge in Billings, Mont, with the appropriate name of Richard CebulL Canadian cattlemen could see bull, all right Despite assurances from none other than President George W. Bush and a ruling by the US. Department of Agriculture that the border would reopen March 7, Judge Cebull 1.