Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

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. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Thursday, July 14, 2005

The Continuing U.S. Ban on Canadian Beef

The U.S. continuing ban on Canadian beef was due for a hearing before the 9th Circuit Court of Appeals on Wednesday. From the Globe and Mail:

The U.S. Department of Agriculture insists it is safe to resume the imports, despite a ruling by a Montana federal judge who sided with ranchers warning about dire economic and health consequences from a potential mad-cow outbreak in the United States.

Feedlots and packers maintain that ranchers are concerned only about their profits.
A panel from the San Francisco-based 9th U.S. Circuit Court of Appeals travels to Seattle on Wednesday to hear the federal government's challenge to the judge's ruling.
I may be missing something, but what's the big deal? Like a vast majority of economists, I favour free trade, and I am disturbed that the U.S. ranchers are still seeking protection against competition from Canadian beef farmers. But the protection they are getting is pretty miniscule:

The National Meat Association says its members have lost $1.7-billion in revenue, idling some packing houses and prompting layoffs. In 2002, Canada shipped 1.6 million cattle to the United States, its largest foreign market.

Meanwhile, the U.S. appetite for beef is being supplemented by imports, including Canadian beef processed to remove parts susceptible to mad-cow disease – including brains, bones, eyes and spinal cords – before crossing the border.
So Canadian beef is pre-dressed (or whatever that process is called) in Canada before it is shipped to the U.S. I don't see how this helps U.S. beef farmers all that much. I do understand why U.S. packers and feed-lot operators are upset, though. And in the meantime, does the present U.S. ban on Canadian beef mean that Canadian beef packers are running flat-out?

The 9th Circuit reserved judgement in the case. For more, see here.

On a related topic, here is an intriguing puzzle on sampling properties and economics: what is the optimal number of cows to sample to inspect for mad-cow disease?
Canada and the United States each test about 1 per cent of the herd at slaughter, compared with 25 per cent by the European Union and 100 per cent in Japan, said Diane Farsetta, a senior researcher at the centre whose work supported the 1997 book, Mad Cow USA: Could the Nightmare Happen Here?
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