Ranchers hear good and bad news on trade front

Checkoff increase proposal approved at Manitoba Beef Producers district meeting as organization deals with decline in checkoffs from shrinking cattle herd

The Lord works in mysterious ways.

Imports of communion wafers are apparently one of the Canadian beef industry’s trump cards in its ongoing battle to overturn Washington’s country-of-origin labelling Law (COOL).

“It’s not that the government of Canada doesn’t like Catholics,” Manitoba Beef Producers general manager Cam Dahl said at the recent District 6 meeting.

“It’s because there happens to be a particular U.S. representative who really likes COOL, and one of his strong supporters exports a lot of communion wafers to Canada.”

After ending up on the wrong end of a World Trade Organization ruling, Washington “doubled down” on the discriminatory practice requiring all meat products to have labels indicating whether the animals had been born, raised and slaughtered in the country.

The original labelling law struck down by the WTO cost Canadian producers $45 to $50 per head, but the revised version is much worse, with the industry estimating the cost of segregating foreign cattle at packing plants at $90 to $100 per head.

“If the WTO rules in our favour again, we will be in the position to retaliate for around $1 billion a year,” said Dahl.

A “very strategic” list of American products, communion wafers included, that could be subjected to 100 per cent tariffs has been published, he said. It’s hoped that — along with a legal action, supported by American packers — will pressure American lawmakers to make changes before a second WTO ruling, which is about 18 months away.

“Hopefully, that will lead to a legislative solution, which is the right solution,” said Dahl.

Dahl also briefed producers on an agreement in principle between Canada and the European Union that could open up new tariff-free market access for 65,000 tonnes of hormone-free beef worth $600 million a year — roughly the equivalent of Manitoba’s entire annual production.

But the deal must first be translated into 21 different languages, and then ratified by 29 governments, including Canada.

“I’m confident that’s going to be done,” said Dahl. “There’s some really strong political arguments in favour of it, but it’s going to take time.”

The Japanese market is also boosting the industry’s fortunes by about 20,000 tonnes per year after Tokyo agreed to allow beef from animals under the age of 30 months (versus 21 months previously). The deal, once beef starts flowing, will be worth about $75 million a year.

In response to the growing potential for new markets, formerly mothballed small- to medium-size packing plants, such as Natural Valley in Saskatchewan and Rancher’s Beef in Alberta, are being reopened, said Dahl.

New markets may be opening up, but the question of heifer retention and a possible expansion in the provincial cattle herd remains unsettled.

Robin Hill, manager of Heartland Livestock in Virden, said contrary to expectations, the liquidation of cows and heifers appears to be accelerating in his area.

“They’re going,” said Hill, noting that unusually high numbers of cows are being sold even with the traditional cull cow selling season still weeks away.

If the herd continues to decline, it will reduce Manitoba Beef Producers’ budget, which relies on a $2-per-head refundable checkoff, said president Trevor Atchison.

Last year, reserves were used to cover a budget shortfall of $6,000, and this year’s deficit is on track to exceed $40,000.

A resolution proposing a 50-cent increase in the checkoff next year, to be followed by a further 50-cent increase in 2015-16 was approved by District 6 and will be forwarded to the association’s annual general meeting in February.

A 50-cent increase in the checkoff would generate $250,000 and put the group back on the funding level that it enjoyed two years ago when the provincial herd was much larger, said Atchison.

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