Cattle producers should see improved prices for cull cows as a result of a federal slaughterhouse program launched last month.
Ottawa will spend $25 million, or $31.90 per animal, to help packing plants cover the extra cost of removing specified risk materials (SRMs) from beef carcasses.
That’ll encourage Canada’s packers to bid more for cows, which are currently going in record numbers to slaughter plants in the U.S., where SRM removal costs are lower, according to the Canadian Cattlemen’s Association.
Ultimately, that’ll mean better prices for producers, said John Masswohl, CCA’s government and international relations director.
“For the packers to get the $31.70 from the government, they have to kill the cattle. To kill the cattle, they have to buy the cattle. And to buy the cattle, they have to bid more for them than the Americans are bidding for them,” said Masswohl.
“Canadian bids have been depressed because of the cost of this SRM removal. So too many of these cattle have been going to the U.S.”
The federal government released details of the the Abattoir Competitiveness Program July 5. The one-year program, which ends March 21, 2011, pays eligible packers for the volume of SRM materials produced from cattle over 30 months of age (OTM) during 2010. The calculation is based on 58 kg of SRM per OTM animal at 55 cents/kg.
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