The volatility that shook the cattle markets in late September brought an end (at least temporarily) to the record price run that had been sustained for much of the last year. Although the dip in cattle prices reflect typical seasonal price fluctuations, the impact of the falling price in the markets is felt far more keenly now on a per-head basis due to the high price environment we’re in. With uncertainty in China’s economy and a faltering Canadian dollar ensuring such volatility will likely be the norm moving forward, it’s a good time to think about how important it is for producers to use risk management tools.
The Western Livestock Price Insurance Program (WLPIP) is among the tools available for producers in some parts of Canada. The WLPIP is a forward-looking, market-based, insurance-style program that allows producers to manage price risk. The Canadian Cattlemen’s Association (CCA) continues to advocate for the WLPIP to be made permanent and expanded to be national in scope.
The CCA’s first preference is that there be sufficiently funded national agriculture programs that are delivered consistently across all jurisdictions. Programs should minimize the risk of adverse impacts on international and interprovincial trade, minimize distortion of market forces and minimize influence on business decisions. Programs must not disrupt the competitive imbalance between agriculture sectors or regions. Until a single sufficiently funded national program exists, the CCA encourages the federal government to contribute to each jurisdiction’s existing livestock insurance program.
Despite a tough early season in parts of Western Canada this year, producers have done an excellent job of ensuring their cattle have had plenty of feed. I’ve been really impressed with the condition of the cattle I’ve seen on my travels throughout the Alberta countryside. Most producers impacted by extreme weather utilized a variety of management practices that enabled them to continue to care for their animals throughout the difficult times. Good management practices and animal care are top priorities for producers at all times.
As I write this, I am preparing to travel to Atlanta, Georgia for what’s hoped will be the concluding round of negotiations for the Trans-Pacific Partnership (TPP) agreement. The ministerial meeting with the 12 TPP countries follows an effort in Hawaii in July where, despite gaining much momentum, the meeting ended without an agreement due to the complexities of the negotiations. Teams of negotiators have met regularly since July.
More than 90 per cent of Canadian agriculture and family farms depend on world markets and are benefited by free trade. For Canadian beef producers, the TPP is an opportunity to eliminate the 38.5 per cent tariff on Canadian beef in Japan and restore Canada’s competitive position with Australian beef. Australia already implemented an FTA with Japan earlier this year and enjoys a growing tariff advantage that will eventually make it difficult for Canadian beef to remain competitive in Japan.
A TPP agreement will ensure Canadian beef producers can improve access to Japan and other growing markets in Asia. With an agreement, Canada could double or triple its annual beef exports to Japan to nearly $300 million.
Without a TPP or with a delayed entry, Canada will not keep pace with our competitors and we can say goodbye to the Japanese market. That puts Canada in the unacceptable position of walking away from more than $100 million a year in annual Canadian beef exports to Japan. But that’s what’s at stake if we do not secure the restoration of tariff parity with Australia and other beef competitors.
We need TPP to catch up to Australia, which already has a significant tariff advantage (it is at 31.5 per cent on fresh and 28.5 per cent on frozen); and keep pace with the U.S. and New Zealand.
Other potential wins for Canadian beef producers in the TPP include achieving elimination of beef tariffs in Vietnam and Malaysia, two countries that have not traditionally been significant beef consumers, but have been identified as potentially important markets in the future as their level of economic development increases. The TPP should also address the exclusion of some beef access from previous agreements with Peru and Chile.
Fall meetings provide a great opportunity for producers to learn more about the industry and where it’s headed. The National Beef Strategy for instance has generated a lot of thought-provoking discussion about the future direction of Canada’s beef industry. Producers can learn about the National Beef Strategy in detail at their provincial association fall meetings.
The Cattlemen’s Foundation is also about the future — specifically supporting the sustainable advancement and legacy of the Canadian beef industry. The foundation has three main focus areas: to create and/or support education, leadership development and outreach programs to serve youth involved with beef cattle; to facilitate and encourage stewardship practices and conservation activities that preserve and/or enhance the environment, biodiversity and wildlife habitat on working agricultural landscapes; and to support beef industry sustainability through research and awareness.
A registered charity, the foundation offers a variety of giving options and can help donors customize a giving approach that takes into account personal interests and tax-planning needs. The foundation works with The Calgary Foundation to manage its investments. For more information visit calgaryfoundation.org.