Canada Braces for Backlog with New U.S. Meat Tests

(Reuters)

Canadian meat exporters braced for delays in shipments to their biggest export market after the U.S. Agriculture Department said it would begin on Friday to double its testing of shipments crossing the border.

Late on Thursday, the Canadian Food Inspection Agency and Canadian beef processors said they still did not have all the details on how the new testing program would work.

“There's a lot of questions that perhaps might not be answered until we hit the ground running,” said Robert Meijer, spokesman for Cargill Ltd, Canada's top beef processor.

Until more details are available, Cargill will not export meat destined to become ground beef, Meijer said. Cargill has not cut Canadian production ahead of the new measures, but the company may have to consider that if the testing process causes major snarls at the border, he said.

The USDA first announced last Saturday that it would test Canadian beef, pork and poultry for bacteria that cause food poisoning, and hold shipments at the border pending results.

On Thursday, the USDA clarified what types of meat it would test, the rate of testing, and how it would recall contaminated shipments. It also said that it would consider alternatives to holding product at the border.

In 2006, Canada shipped 303,000 tons of beef, worth C$1.1 billion ($1.2 billion), and 363,000 tons of pork, worth C$1.032 billion, to the United States.

Canadian meat is already tested and inspected at processing plants. But U.S. officials ordered an added level of inspection and testing to be done at the U.S. border after a recent U.S. outbreak of E. coli food poisoning was traced to Rancher's Beef Ltd of Balzac, Alberta.

Canadian and U.S. officials continue to investigate that plant, which has since closed for unrelated reasons.

Earlier this year, a routine audit of some Canadian plants turned up sanitation and other problems. U.S. inspectors are revisiting the plants to ensure the issues were addressed.

Most new testing measures will stay in place until U.S. officials review test and audit results.
But added tests for imported beef used to make hamburger will become permanent for Canadian and all other foreign suppliers, starting at the beginning of 2008, the USDA said.

Canadian inspection officials said the measures were unnecessary because Canada's meat is safe, and is already tested and inspected to a level equivalent to U.S. standards.

“We are working with (the USDA) very closely to investigate the E. coli case and we are reaffirming to them that Canada has internationally respected inspection and safety procedures,” said Frederique Moulin, manager of international meat programs with the Canadian Food Inspection Agency.

Moulin said she expects the USDA will reconsider the new tests after the investigation and audit are complete.

“The problems uncovered at Rancher's Beef Ltd are not an indication of a failure in the Canadian meat inspection system,” she said.

The new measures come as the Canadian beef industry struggles with losses caused by the sharp rise in the Canadian dollar, labor shortages at major packing plants, sky-high grain prices, and other costs not faced by U.S. competitors.

“We don't need any more negative market shocks, and this unknown risk is very much of a challenge to the industry,” said Ted Haney of the Canada Beef Export Federation.