There have been a number of great successes in breaking down barriers in international markets recently that beef producers should take stock of. In September, Chinese Premier Li Keqiang met in Ottawa with Prime Minister Justin Trudeau and announced that China will allow bone-in Canadian beef from cattle under 30 months of age (UTM) effective immediately. This is an important threshold in the staged access process Canada is engaged in with China and is a significant result for the Canadian beef sector. The Canadian Cattlemen’s Association (CCA) is planning to send a representative to China with Agriculture and Agri-Food Minister Lawrence MacAulay in November to take advantage of the expansion of access.
The addition of bone-in UTM access is expected to add an additional $10 million per year in exports to China in the short term while the Canadian beef cattle herd remains contracted. In 2015 China stepped in as a major buyer of Canadian beef while our product was temporarily shut out of Korea and Taiwan and the Canadian dollar was weak, purchasing $256 million. Through July 2016, Canadian beef sales to China are comparable with the first seven months of 2014, when annual sales totalled $40.1 million, up from $27.5 million in 2013 and $4.7 million in 2012.
In addition to the expanded access, the CCA is pleased that this important trading partner has recognized the rigour of Canada’s bovine spongiform encephalopathy (BSE) control measures and has taken this step to move forward in normalizing import conditions for Canadian beef.
The recent expansion of access to Mexico and Taiwan is also very positive for increasing opportunities for Canadian beef producers. If we can also get the Trans-Pacific Partnership implemented and viable access to Europe, the long-term potential should send the right signal for beef producers to increase their herds. In my view, we can produce more beef with confidence if we know markets will be open to purchase it.
The CCA enjoys an excellent rapport with the Government of Canada and appreciates its tireless efforts to achieve these and other market access expansions. The CCA’s annual fall picnic, an always popular all-party event in Ottawa, gives the CCA opportunity to thank the Government of Canada for the work it does in partnership with us to ensure that the people who operate Canada’s 68,500 beef farms and feedlots can continue to make their living raising beef cattle.
Held in the East Block Courtyard of Parliament Hill on September 27, about 250 members of parliament, senators, their staff and other key influencers attended to enjoy delicious Canadian beef sponsored by the Canadian Meat Council. During his remarks to the crowd, Agriculture Minister MacAulay expressed his appreciation for the strong and co-operative working relationship with CCA, indicating that we are always more likely to succeed by working together.
On the same day, the CCA met with a number of MPs to discuss priority issues for the beef industry and CCA’s recommendations for solving them. The CCA also had the opportunity to appear before the Standing Committee on Agriculture to discuss the work being done through the beef research clusters that helps drive that innovation.
The CCA will continue to represent the interests of beef producers in Ottawa to make sure the beef sector can continue to be an engine of growth and creator of jobs across Canada. This is achieved in part through continuous innovation in production practices to ensure we retain a competitive edge both here at home and around the world.
Canada is a leader in sustainable beef production and was recognized as such in October as the world came to Banff for the annual conference of the Global Roundtable on Sustainable Beef. The work being done in these areas will help industry maintain public trust and we know that we need to re-earn it every day.
Finally, I would like to address Western Feedlots Ltd.’s decision to voluntarily wind down cattle ownership and cattle feeding operations. The privately held company will be suspending feedlot operations to instead focus on its farming operations. Western Feedlots has a standing capacity of 100,000 head. Western Feedlots has three locations (High River, Mossleigh and Strathmore). The Strathmore location has been closed for the last two years.
While we recognize this loss to the industry, and it will take one of the bigger buyers of feeder cattle off the market, there are other feedlots in Alberta that can take on more cattle. Indeed, with the large unused finishing capacity in Alberta, it is anticipated that cattle that would have gone to Western Feedlots will be absorbed by the existing vacancies in other feedlots. Overall however, the eventual wind down is not really expected to have a major impact on the local market.
There is always a flow of cattle to the U.S., and over the past year, the number of feeders moving south has been quite limited; therefore, with this closure, there may be a few more moving south, but not more than historical volumes.
Until next time.
Dan Darling is president of the Canadian Cattlemen’s Association.