990704 Canada Cattle Prices Stable Despite New U.S. Duty

Winnipeg - Prices of live Canadian cattle sold to the United States reacted little on Tuesday to a recent U.S. move to impose anti-dumping duties on exports.

“We started to trade cattle this morning and there's little effect locally as of yet,” said Ann Dunford, senior market analyst for Canfax, the marketing division of the Canadian Cattlemens' Association.

“But that will change from week to week, and from day to day,” she said from Calgary in Alberta, Canada's largest cattle-producing province.

The U.S. Commerce Department issued a preliminary ruling, to impose anti- dumping duties of up to U.S.$50 per head on imports of live Canadian cattle, on Canada's July 1 national holiday.

But Dunford said demand by U.S. packing plants was currently high and they were willing to overlook the duties.

“The buyers need supplies,” she said.

Trade resumed on Tuesday after the U.S. markets re-opened following the long weekend to observe Independence Day on July 4.

Canadian federal and provincial government officials have promised to fight the ruling, which they said found Canadian prices during the investigation period were at times below the Canadian cost of production.

International Trade Minister Sergio Marchi said Canada could challenge the ruling, to undergo a final Commerce Department review in September, under the North American Free Trade Agreement (NAFTA) or the World Trade Organization (WTO).

“North American prices are determined by North American supplies, not Canadian supplies, and it is ludicrous to allege that Canadian cattle are responsible for low prices in the U.S., when the U.S. industry is eight times larger than hours,” Canadian Agriculture Minister Lyle Vanclief said.

“It is regrettable that particular groups fail to recognize that it is a North American cattle cycle that dictates the market on all sides of the border,” he said in a statement.

The duties, which will require companies to pay 3.90% to 6.81% on cattle exported across the border, were welcomed by U.S. cattle producers after the Ranchers-Cattlemen Action Legal Foundation (R-CALF) filed the complaint last November.

Vanclief and Marchi said the U.S. investigation coincided with a low point in the continental cattle price cycle, made worse by soft demand and record North American cattle numbers.

“Both ministers said they are confident the Canadian inustry will be vindicated in the final ruling expected later this year,” the statement said, adding provisional duties collected would be returned -- if Canada wins.

If the September ruling supports the most recent one, the case will go to the U.S. International Trade Commission for a determination of how much harm was suffered by the U.S. domestic cattle industry.

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