* Fed cattle prices hit C$118/cwt last week
* Plant unable to ship beef to U.S., Mexico
By Rod Nickel
WINNIPEG, Manitoba, Dec 4 Western Canadian
prices for slaughter-ready cattle have recovered to hit the
year's high, after bottoming out this autumn when the discovery
of tainted meat forced the temporary shutdown of the XL Foods
Canadian government authorities allowed the XL plant at
Brooks, Alberta to reopen in late October. It was closed for
about a month because it produced beef contaminated with E. coli
At least 18 people have been sickened in Canada and the
recall of beef products spread across Canada and most U.S.
The plant is one of the two biggest in Western Canada -
alongside Cargill Ltd's High River, Alberta plant -
and slaughters about 40 percent of all Canadian cattle. Its
closure forced ranchers and feedlots to feed their animals
longer and caused prices for slaughter-ready cattle to plummet.
But last week, prices of fed cattle reached about C$118 per
hundredweight, the year's high price and just off the previous
year's top, said Brian Perillat, senior analyst at CanFax, a
Canadian cattle analysis firm.
"Things have improved quite a lot, especially on the fed
cattle side," Perillat said, adding that prices in November are
typically among the year's highest. "It's very encouraging to
see how rapidly prices have recovered."
Canada is the world's sixth largest exporter of beef and
Western Canada didn't build up a large backlog of cattle
during the XL plant's closure as feared, because ranchers and
feedlots exported many of the animals to U.S. packers, he said.
Weekly exports of slaughter-ready Canadian cattle to the
U.S. more than quadrupled from early September to over 17,000
steers and heifers shortly before the plant reopened in late
October, Perillat said.
Overall Canadian cattle exports to the United States totaled
nearly 711,000 head year to date as of Nov. 17, according to the
U.S. Department of Agriculture, up 15 percent from the
The XL plant, managed by JBS USA Holdings Inc, is
awaiting regulatory approval to resume shipments to the United
States and Mexico, Canada's top two beef export markets. A JBS
USA spokesman did not respond to a request for comment.
Through September, Canadian beef and veal exports to the
United States are down 12 percent year to date, according to
Statistics Canada. Lower demand and shrinking Canadian supplies
are two of the reasons for the decline earlier this year, but
the drop accelerated in September after the U.S. stopped buying
beef from the XL plant, said livestock analyst Diane Kelly of
the federal Agriculture and Agri-Food Canada department.
The U.S. Department of Agriculture's Food Safety and
Inspection Service (FSIS) is reviewing an assessment by Canadian
authorities before deciding whether to designate the XL plant
eligible to export to the United States, said Lisa Gauthier,
spokeswoman for the Canadian Food Inspection Agency (CFIA).
"It's in their hands and they could come back asking for
more info or they could say it's fine," she said.
FSIS did not respond to requests for comment.