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CCA Report: Drought concerns and trade talks

From the August 2015 issue of Canadian Cattlemen

It’s been a busy summer for the Canadian Cattlemen Association (CCA), with plenty of activity on a number of ongoing files. CCA officials were in Charlottetown, P.E.I., for the annual July meeting of the federal, provincial and territorial ministers of agriculture, where workforce issues, social licence and the extreme dry conditions in pockets of Alberta and Saskatchewan were among the discussions.

The CCA participated in the National Cattlemen’s Beef Association (NCBA) summer meeting in Denver. We compared notes with our U.S. and Mexican counterparts on the status of herd rebuilding and it seems while many areas in Saskatchewan, Alberta and California are suffering from dryness, some pockets in those regions have been receiving enough showers to carry them through, at least over the short term. Nevertheless, most of the U.S. is experiencing great growing conditions and all indications are pointing to herd expansion phase there.

Still, U.S. beef exports have contracted this year as the high U.S. dollar has made them uncompetitive against competitors like Australia. They are focused on driving exports and talked about the need for unfettered market access to key Asian markets. One of the advantages the U.S. feels Canada has in these markets is traceability. The animal ID system has given Canada the competitive edge in access to places like China.

That’s something to keep in mind this year as producers deal with challenging weather. Although recent spotty rains have helped, forage supplies continue to be in short supply. Pastures have been suffering, while hay crops in most areas are well below average. Availability of forage supplies which is critical to carry the cow herd through the winter may depend on if/how much grain crops can be salvaged for forage to be used for cattle feed.

Parkland County Council (west of Edmonton) declared a State of Agricultural Disaster on July 14 due to the impact of extreme drought and severe weather conditions across the rural municipality. In some areas grasshoppers also devastated crops. In Saskatchewan, provincial Environment Minister Herb Cox and Agriculture Minister Lyle Stewart announced that approximately 90,000 acres of Fish and Wildlife Development Fund (FWDF) land will be made available to cattle producers facing dry conditions.

Parts of Saskatchewan are also enduring extremely dry conditions this year, making feed an issue for affected cattle producers.

At the FPT meeting, ministers acknowledged the adverse weather conditions faced by Canadian producers and committed to continue to work together to ensure existing programs deliver the needed support.

The CCA continues to urge those who manage the programs to make decisions in a timely manner to allow producers to make timely decisions that are best suited for their operations.

Turning to market access, mandatory U.S. country-of-origin labelling (COOL) was among the topics of discussion at the NCBA trilateral leaders’ meeting. Clearly, there is still work to do in states represented by U.S. senators that are advancing an alternative to full repeal. The CCA made it clear that we cannot accept the voluntary program being raised by some senators as it remains based on U.S. origin being reserved for cattle born and raised in the U.S. and therefore would maintain segregation.

Meanwhile, the next steps at the WTO regarding arbitration should be known later this fall. On June 17, the World Trade Organization (WTO) held a special Dispute Settlement Body meeting at which Canada requested authority to retaliate against the U.S. regarding COOL. Canada requested authorization to impose tariffs on more than C$3 billion per year of U.S. exports. Mexico is seeking authorization for more than US$713 million in retaliatory tariffs in a separate action. As anticipated, the U.S. objected to the dollar amount presented by Canada and requested arbitration.

As soon as the WTO arbitration process is complete and the arbitrator’s report is issued — likely later this fall — Canada and Mexico will be in a position to implement retaliatory tariffs on key U.S. exports. At that point, all decisions regarding the tariffs — when they go on, how high they will be, which products will be affected, etc. will rest entirely with Canada and Mexico.

CCA officials will be heading to the latest, and hopefully last, round of Trans-Pacific Partnership (TPP) negotiations in Hawaii. The negotiations will enter their most intensive phase so far and could well be concluded at this meeting of the trade ministers of the 12 countries.

The plan was for chief negotiators to meet starting on July 24 and then be joined by the trade ministers on July 27. The meeting was scheduled to wrap up on July 31, but was open to the possibility that ministers could continue meeting past that date if it appears an agreement could be reached by doing so. The CCA was there to advise and support International Trade Minister Ed Fast and his team for the duration.

Without a TPP, the Japanese tariff on Australian beef will continue to drop lower and lower, while remaining fixed at 38.5 per cent on Canadian beef. Worse yet would be a TPP agreement where Canada is excluded or comes in later than the other 11 countries. Canada simply will not be able to keep pace with its competitors and the result will be the rapid erosion of what had been over $100 million in Canadian beef exports to the Japanese market.

About the author

Contributor

Dave Solverson is a past president of the Canadian Cattlemen’s Association. With his brother Ken and daughter Joanne they 
operate Woodwind Ranch, near Camrose, Alta. 
He can be reached at 780-679-9625 
or [email protected]

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