While many Canadians started to enjoy summer downtime, July and August did not bring any decrease in activity for the Canadian Cattlemen’s Association (CCA) on a number of important matters having an impact on the beef industry. The need for predictable rules-based trade in the international trading environment, climate as it relates to sustainable beef production and business risk management topped the list. These and other important issues will be discussed in detail at CCA’s semi-annual meeting being held in conjunction with the 2019 Canadian Beef Industry Conference. With the conference just days away from getting started in Calgary, Alta., this column will focus on the issues CCA will discuss in its various committee meetings and in other meetings with elected leaders from fellow beef producer organizations in the U.S., Mexico and elsewhere.
One of the items of discussion will be how to manage trade disruptions such as the current suspension of access for Canadian beef to China. China of course stopped accepting imports of Canadian pork and beef in late June and earlier halted exports of Canadian canola seed and soybeans.
To manage such events, CCA has made proposals to further diversify and secure market access and has formally asked the government to support an export diversification funding request to assist in further market development. Export diversification is an essential tool for industry to manage closures when unexpected trade issues arise. CCA has also requested the establishment of a meat market access group (like what was formed for canola) and for the Western Livestock Price Insurance Program (WLPIP) to be permanent and expanded beyond the western provinces.
Market diversification can help Canada’s beef industry navigate its way through the temporary market interruption with China in a reasonable manner. Demand for high-quality Canadian beef in the global marketplace is strong and continues to grow; weekly Canadian slaughter volumes in July 2019 reached the highest level since July 2010, which is a good indicator that we are working our way through this.
The CCA will work closely with the Government of Canada to resume stable trade as quickly as possible. Shipments of Canadian beef to China represented 2.6 per cent of Canada’s total beef exports last year.
As to China’s halting imports of U.S. agricultural products in early August in response to President Trump’s new 10 per cent tariffs on $300 billion of Chinese goods, the bigger impact will be to pork. Without secure and predictable access, the U.S. has not been a big exporter of beef to China, and there is limited potential for the halt in U.S. shipments to work in Canada’s favour in terms of reinstating trade to fill the resulting void. The CCA is undertaking an analysis of protein supplies and likely forecasts for filling the void created by the ban on U.S. agriculture products.
The timeline to ratification of the Canada-United States-Mexico Agreement (CUSMA) will also be discussed. The U.S. House of Representatives recessed without moving forward on their domestic ratification process for the trade agreement. Thus U.S. ratification of the U.S-Mexico-Canada Agreement (USMCA) before the start of the Canadian federal election is unlikely.
A delay in implementing the new agreement is not a significant concern for the beef sector as long as the existing North American Free Trade Agreement (NAFTA) remains in effect.
In June, Mexico became the first of the three nations to ratify the new trade agreement. In May, Prime Minister Justin Trudeau tabled Bill C-100 or the enabling legislation to implement CUSMA. The bill did not pass prior to parliament adjourning for the summer. The prime minister has committed to moving in sync with the U.S. on ratification.
Other significant trade topics will be the creation of additional protocols for certifying eligibility of cattle for the European Union, post-BREXIT access to the U.K., expansion of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and work to gain recognition for Canada as a BSE negligible-risk country.
CCA appreciates that the initial list of eligible regions for the Livestock Tax Deferral Provision was released months earlier this year than in the past. Making this tool available in the summer, rather than the typical late-fall time frame for the announcement, is a positive step that the CCA has advocated for and will provide added time to help producers make more informed herd management decisions as they face feed shortages. CCA has also recommended that the provision be further improved by granting producers the ability to use the tool through individual election rather than a geographic determination. This would reduce the risk of excluding access for producers who fall outside the boundary lines but are still dealing with extreme weather challenges.
Canada’s beef industry is the most sustainable in the world and one of the many ways we continue to prove that is through showcasing the Environmental Stewardship Award. I am excited to see who the 2019 recipient is and ask producers to continue to demonstrate the benefits of our production system to the world. Cows are part of the climate change solution. Canadian beef cattle help to preserve one of the world’s most endangered ecosystems on this planet. Grazing cattle is also a recognized practice to help mitigate the risk of wildfires, and is currently used as such in B.C.