July 15 (Bloomberg) -- The U.S. is ``immediately taking steps'' to resume imports of Canadian cattle after an appeals court overturned an injunction blocking such shipments on concerns about mad-cow disease, Agriculture Secretary Mike Johanns said.

``USDA's Animal and Plant Health Inspection Service is already in contact with the Canadian Food Inspection Agency to prepare to certify cattle for shipment,'' Johanns said yesterday in a statement after the decision by a three-judge panel of the U.S. 9th Circuit Court of Appeals in San Francisco.

The judges overturned an injunction issued by a federal judge in Montana that barred the USDA from resuming some cattle imports from Canada on March 7. The U.S. had banned cattle from Canada in May 2003 after a cow with mad-cow disease was found in Alberta. A ranchers group had sued the government, arguing that the Agriculture Department plan endangered U.S. cattle and consumers.

Canadian cattle imports will ease a shortage of slaughter- ready animals that has hurt profits at Tyson Foods Inc., Cargill Inc. and Swift & Co., the three largest U.S. beef packers. Canada normally supplies about 5 percent of the 35 million animals slaughtered each year by the U.S. beef industry.

``This is great news for meatpackers,'' said Tim Ramey, an analyst with D.A. Davidson & Co. in Lake Oswego, Oregon, in an e- mail. Ramey said the added cattle supply will help increase profit margins for meatpackers such as Tyson. Ramey reiterated a ``buy'' rating on Tyson after the court decision.

Shares of the Springdale, Arkansas-based Tyson rose 87 cents, or 4.7 percent, to $19.39 at 10:07 a.m. in New York Stock Exchange composite trading. A 4.7 percent gain would be the biggest one-day increase for the shares since January 26, 2004.

Order `Effective Immediately'

The court said in a two-page order that the injunction blocking a U.S. plan to lift the ban ``must be reversed'' and said it would issue an opinion later giving its reasons. The court's order is ``effective immediately,'' the judges said.

U.S. District Judge Richard Cebull issued the injunction at the request of the Ranchers-Cattlemen Action Legal Fund, a Montana- based group representing 18,000 ranchers and feedlot owners. The group, known as R-CALF, argued that opening the border to cattle from Canada, which has had four cases of mad cow disease, would increase uncertainty about the safety of U.S. beef and encourage other countries to shun the meat.

``We are disappointed'' in the ruling, said Bill Bullard, R- CALF's chief executive. ``The 9th Circuit gave no reasons for their action, so there isn't much we can do until we see those reasons.''

The group hasn't considered its legal options, including asking a larger group of 9th Circuit judges to review the decision, said Shae Dodson, an R-CALF spokeswoman, in a telephone interview.

Cebull has scheduled a July 27 hearing on the R-CALF lawsuit.

`Premature and Unjustified'

R-CALF is confident it will be able to demonstrate at the hearing that the USDA's actions are ``premature and unjustified,'' the group said in a statement.

Cattle futures may not fall today as traders have already anticipated larger cattle supplies, Donald Selkin, director of equity research with Joseph Stevens & Co. in New York, said yesterday.

``The decline over the past couple weeks has already discounted this ruling,'' said Selkin, who added that it will take some time before Canadian producers are ready to ship animals across the border in large numbers.

Futures

Cattle futures for August delivery fell 0.175 cent to 78.95 cents a pound yesterday on the Chicago Mercantile Exchange. Futures have dropped 3.9 percent since June 10, when the USDA said it may have found a new case of mad-cow disease. The case was confirmed June 24.

The government had planned to allow Canada to resume shipping cattle less than 30 months old and bone-in beef from younger animals on March 7. The U.S. has allowed imports of boneless beef from Canadian cattle under 30 months of age since August 2003. Cattle that young are thought to be at the lowest risk for mad-cow disease.

Large numbers of cattle from Canada won't be shipped south until the U.S. and Canada agree on procedures, including how to document an animal's age, Bernard Etzinger, a spokesman for the Canadian Embassy in Washington, said yesterday. ``There are a lot of certifications that are required,'' he said.

`Minimal Risk'

In arguing against the injunction, the USDA, Tyson and meat industry groups told the appeals court that Canada's cattle posed a ``minimal risk'' of spreading mad-cow disease in the U.S. Both countries take the same measures to prevent the disease, including banning the practice of feeding livestock ground-up parts of other cattle.

``This is good news not just for Canadian cattle producers but for those sectors of the U.S. beef industry that have been economically devastated by the disruption in trade,'' said Stan Eby, president of the Canadian Cattlemen's Association, in an e- mailed statement.

Opening the border on March 7, as the USDA had planned, would have allowed more than 1 million cattle into the U.S. from Canada this year, the agency estimated. About 10.8 million head of cattle were being fattened for slaughter in feedlots in the 17 major U.S. cattle-producing states on June 1, down from 11.3 million on Jan. 1, according to the government.

The U.S. has lost about 7,800 beef packing industry jobs as a result of the cattle embargo, American Meat Institute President Patrick Boyle said yesterday in Ottawa. The Washington, D.C.-based AMI represents Tyson Foods and other large meatpackers.

Earlier this year, both Tyson Foods and Cargill Inc.'s Cargill Meat Solutions, the two largest U.S. beef packers, announced plans to expand beef processing in Canada, to take advantage of lower processing costs.

Cheaper in Canada

The USDA, in an economic analysis released in December, said the cattle ban had created a situation where Canadian meatpackers had been able to buy cows for as little as 17 cents a pound and sell the processed beef in the U.S. for about $1.23 a pound, while U.S. packers were buying similar animals at 55 cents a pound.

Mad-cow disease is a brain-wasting livestock illness that scientists say is spread in cattle by tainted animal feed. It has a rare but fatal human variant that has been blamed for the deaths of 150 people in the U.K., where it was first reported in the 1980s.

The U.S. imposed its ban on cattle from Canada in May 2003 after the first Canadian case of mad-cow disease, which is clinically known as bovine spongiform encephalopathy, or BSE. Since then, three other animals born in Canada were diagnosed with BSE, including the cow found in Washington state in December 2003, which prompted dozens of nations to ban U.S. beef. The U.S. confirmed its first native-born BSE case last month.

The case is Ranchers-Cattlemen Action Legal Fund v U.S. Department of Agriculture, 05-35264, 9th U.S. Circuit Court of Appeals, San Francisco.

To contact the reporter on this story: Daniel Goldstein in Washington at dgoldstein1@Bloomberg.net.

Last Updated: July 15, 2005 10:14 EDT