Market Access Key To Stabilizing Canadian Beef Industry

Expanding export opportunities and reducing unnecessary regulations are the best ways to restore profitability to the Canadian beef industry, cattle producers have told the Commons agriculture committee.

About 65 per cent of the beef produced in Canada is consumed by Canadians, but that is a fairly stable market facing increased competition from imports, John Gillespie, a beef producer and chairman of the Beef Information Centre, told the committee March 10.

Imported beef accounts for about 20 per cent of the annual sales of one million tonnes of beef in Canada, he adds. “We have seen significant increases in the amount of U. S. beef being imported into Canada, however, and this is primarily due to the tightened supplies as a result of economic factors such as the higher labour and processing costs that are in Canada making the Canadian beef processors less competitive than their U. S. counterparts.”

The potential expansion of exports of Canadian beef, now about 35 per cent of annual production, represents a real growth opportunity, he says.

Gib Drury, a Quebec cattle producer and chairman of the Canadian Beef Export Federation, said growing exports is “the be all and end all” for the cattle business. He dismissed suggestions from the National Farmers Union for some form of supply management to cure the industry woes.

“Producers have a job to do themselves in getting organized and branding their product and doing the traceability required to access these foreign markets,” Drury says. Ontario farmers are doing that with a campaign to label corn-fed beef and organizing steady deliveries to the packer.

The best support Ottawa can offer the industry “is get us access to out-of-Canada markets,” he adds. “They will add more value to our products and put money not just in the producer’s pocket, but in the processor’s and the exporter’s pockets. It pales in comparison to the $40 Saskatchewan gave or the $120 Alberta gives. Get us into these foreign markets. Do whatever is required to get us access and a lot of the money problems will solve themselves.” Exports are also important because they include markets for parts of the animal Canadians don’t consume.

Ron Bonnett, vice-president of the Canadian Federation of Agriculture and an Ontario cow-calf producer, also said growth in exports was crucial to the long-term viability of the beef industry. While there’s a rising international demand for meat products, there’re also a lot of technical trade barriers to confront.

He urged the government to keep negotiating with the United States over COOL but be ready to resume the WTO challenge against it if the Obama administration backs off on labels that will keep Canadian beef and pork out. “We have to make sure our trading partners live up to the terms of the trade deals.”

He also said governments have to make policy decisions based on science not emotion. Whether it’s banning hog barns in Manitoba or pesticides in Ontario or new animal welfare rules in Ottawa, “we need to have decisions that are based on science.”

CBEF president Ted Haney said Canadian farmers “are significantly restrained, constrained from generating revenues in many of our international markets. And as such, that historic self-sufficiency of beef-processing capacity in 2006-07 at about five million head has dropped now to a beef-processing capacity of about 4.4 million head. A large part of that was the inability to run full-capacity runs because we don’t have access to international markets such as we did before BSE and cannot generate the revenues to be profitable.”

Increased exports “is the solution toward moving back and bringing capacity back into our industry profitably, maintaining that capacity and going back toward an eventual self-sufficient level,” he said.

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