For all the uncertainty some producers have endured this year as a result of extreme weather, the one constant that has enabled everyone to stay focused is the market price for cattle. Calf and feeder prices continue to sell incredibly strong. As we head into the fall run, limited supplies and strong demand for Canadian calves allow prices to be very resilient. Producers were ecstatic with prices a year ago, and calves have added another 50 to 70 cents/lb. this fall, enough to soften the blow of any decisions a producer may be forced to make due to circumstances beyond his control. The weaker Canadian dollar has been a big contributor to the Canadian cattle market. Many producers have taken advantage of these strong prices, as a significant number of calves were forward sold for fall delivery as producers have been proactively marketing cattle through less traditional channels.
While the good times continue to roll on the markets, the federal election fast approaching on October 19 likely has many producers wondering what else fall may bring. Resolving the World Trade Organization (WTO) dispute with the U.S. over country-of-origin-labelling (COOL) is the Canadian Cattlemen’s Association (CCA) highest priority, as outlined in our Federal Election Priorities document.
The CCA specifically requests all parties seeking to form the Government of Canada in the 42nd Parliament to declare their intention to swiftly impose retaliatory tariffs on U.S. exports the moment Canada is authorized to do so by the World Trade Organization if the U.S. has not eliminated the incentive to segregate imported livestock by that time.
The CCA attended the WTO arbitration panel hearing in Geneva regarding U.S. COOL in mid-September. The panel, which heard arguments from Canada, Mexico and the U.S. on their respective calculations, is expected to release its decision later this year.
Canada has requested authorization to impose tariffs on more than C$3.1 billion per year of U.S. exports. Mexico is requesting authorization for over US$713 million in retaliatory tariffs.
The U.S. estimates the costs related to COOL arbitration at US$91 million. The CCA notes that the U.S. estimate of an arbitration amount ignores any valuation related to segregation of cattle, transportation issues or price suppression in the Canadian market. Given that the WTO has already found these issues to be at the core of the COOL violation, the CCA feels confident that our calculations will be strongly considered by the arbitrators.
In addition to resolving COOL, the CCA election priorities document recommends utilizing resources in a targeted manner to achieve the following highest priorities:
- Successfully negotiate and implement the Trans-Pacific Partnership Agreement to address the 38.5 per cent tariff imposed by Japan on Canadian beef;
- Establish technical conditions that enable commercially meaningful beef exports to the European Union and implement the Canada-EU Comprehensive Economic and Trade Agreement (CETA);
- Remove the “temporary restrictions” imposed by Korea, Taiwan, and Indonesia on Canadian beef products since February 2015;
- Restore access for over-30-month beef to Mexico;
- Secure full access for Canadian beef exports to China;
- Ensure expeditious procedures and resources exist to facilitate importation to Canada of live breeding stock and genetics.
The CCA election priorities document outlines a number of issues that can help create the operating environment for beef cattle herd expansion in Canada, like fully funding programs that help producers manage risk and investing in infrastructure, investment in research and sustainable practices and access to sufficient labour to work on farms and to process the meat.
Canada prides itself on its testing and surveillance networks and we had another demonstration of the strength of our systems in September when bluetongue virus (BTV) was found in beef cattle in Ontario through Canada’s Bovine Serological Surveillance program. There is no risk to human health associated with BTV and this occurrence will not affect exports of Canadian live cattle to the U.S. or exports of meat or meat products.
Bluetongue is an animal health disease transmitted by a species of biting midge. Cattle typically show no signs of clinical infection but BTV can cause serious illness and death in sheep, deer and potentially other wildlife. There is no effective treatment for BTV.
Most of Canada is free of the disease given our climate — midge activity ceases with the first hard frost.
Five of the six known occurrences of BTV in Canada in the past 30 years have been in the Okanagan Valley. This latest occurrence of the virus appeared on a birth farm outside of its normal region in Canada, impacting Canada’s status with the World Organization for Animal Health (OIE) as a country free of BTV. In beef cattle the impact of BTV is primarily to the genetics industry.
As a result of not being able to claim freedom for BTV, Canada suspended several certificates for live ruminants and semen and embryos due to current certificate requirements. These certificates will have to be renegotiated with the respective countries to meet requirements for bluetongue, and will become available as negotiations proceed. The U.S. and Mexican markets remain open as the virus is already endemic in these countries.
According to OIE rules, it will take up to two years for Canada to regain its BTV-free status provided it meets requirements.