Cover Story Assessing the fallout f fa ut The impact of the The impact of the 2012 drought unfolds 2012 s BY STEVE KAY meatpoultry@sosland.com (Photo by Frank McMains) N orth America’s meat and poultry industry must feel it is in constant crisis mode. From the first BSE (bovine spongiform encephalopathy) cases in Canada and the US in 2003, to the H1N1 virus to avian influenza, the beef, pork and poultry sectors have each faced and overcome severe animal-health issues. They’ve had to defend against animal activists over crates and cages, and endured national and social media attacks that nearly eliminated a legitimate beef product. Now the industry faces a challenge with threats, at least for the US beef sector, that are as far-reaching as BSE. The damage from this year’s widespread drought in the US has already impacted businesses on both sides of the border. Two of Canada’s larger hog producers in early September sought the equivalent of bankruptcy protection, citing high US feed prices. US hog producers began to experience some of their heaviest losses in several years and cattlefeeding losses remained in triple digits. Operating margins for fed-beef processors turned negative for the fi rst time since the spring and poultry producers saw their feed costs sky-rocket. 20 • Meat&Poultry • October 2012 • www.MeatPoultry.comhttp://www.MeatPoultry.com