A strong demand for ground beef, driven partly by the recession, may cause Canada to exceed its non-NAFTA beef import quotas this year for the first time since 2003.
Canadians are eating more hamburger and less prime rib because of the economic downturn. Add to that a sharp reduction in the national beef cow herd and there’s a resulting shortage of low-grade beef trim which overseas countries are eager to fill.
So this year, beef imports from New Zealand, Australia and Uruguay are up 67.5 per cent, 94.7 per cent and 203.7 per cent respectively, figures released at the Canadian Cattlemen’s Association national convention showed.
At this rate, Canada will import 77,408 tonnes of offshore beef in 2009. That’s just above its 76,409-tonne annual tariff-rate quota for non-North Amercian Free Trade Agreement (NAFTA) beef, said Andrea Brocklebank, research manager for CanFax, the CCA’s market research arm.
Canada is allowed to apply beef import restrictions under World Trade Organization rules. The U. S. and Mexico are exempt under NAFTA.
Canada remained well below its beef TRQs after BSE hit in 2003, cutting off international markets and causing surplus beef to pile up.
Depressed market prices forced cattle producers to start reducing their herds. Canada’s beef cow inventories, which peaked in 2005, were down 6.6 per cent from the previous year as of January 1.
Canada’s non-fed beef output so far this year is down 21.6 per cent, creating a demand for imports, Brocklebank said.
The U. S. upped its beef shipments to Canada during the first half of 2009 by 1.6 per cent to 61,511 tonnes, according to figures from Agriculture and Agri-Food Canada.
But most U. S. beef is grain fed and finds its way into higher-end markets. Australian and New Zealand beef is largely grass fed and used for grinding, which is where the real demand now lies, Brocklebank said.
Non-NAFTA beef imports between January 1 and July 11, 2009 totalled 35,124 tonnes, up 81.6 per cent over the same period last year.
Beef imported from non-NAFTA countries above the TRQ level is subject to a 26.5 per cent tariff rate. But today’s economic conditions make it worthwhile, despite the duty, said Brocklebank. North America is a high-value market and the strong Canadian dollar favours imports. [email protected]