The record-high cattle prices that started off the year have persisted into summer and that is a very nice surprise for producers. Typically demand supports higher prices for the first couple of quarters before softening but this year it looks like demand will remain solid for the summer months. There are many factors contributing to the tight-supply, high-demand market scenario at play, the least of which is that Canada produces the best beef in the world.
I’m a proud producer of Canadian beef and am always glad to promote our product, especially in markets where the potential holds significant promise for producers. In June I had such an opportunity and was pleased to promote Canadian beef in China as part of a trade mission led by Agriculture and Agri-Food Minister Gerry Ritz. Canadian beef exports to China have grown rapidly since 2012 reflecting the reality that Chinese demand for beef has outpaced what they are able to produce domestically. According to some forecasts, China could double its annual global imports of beef before the end of this decade.
This is an excellent opportunity for producers but it is not without its challenges. The ability to export more Canadian beef to markets is tempered by the reforms to the Temporary Foreign Workers Program (TFWP) announced in June by Employment Minister Jason Kenney and Immigration Minister Chris Alexander. On-farm primary agriculture, which includes feedlot workers, on-farm workers and the Seasonal Agricultural Workers Program (SAWP), is exempt from many of the major reforms, given the proven acute labour shortages there. The meat-processing sector is similarly plagued with chronic and acute labour shortages across Canada yet is subject to the reforms, which will have a detrimental effect on these businesses. The Canadian Cattlemen’s Association (CCA) has lobbied hard for the unique needs of the meat-processing industry to be recognized and be exempt under any changes to the TFWP. The CCA’s position is that trade agreements and market access expansions only work well if the resources required to maximize the opportunity are available. The CCA as part of an industry coalition will continue to promote this position and seek clarity around the new measures on the meat-processing sector. I’m sure the TFWP issue will be among the more lively discussions at the CCA semi-annual meeting in Charlottetown, P.E.I. in August.
- More CCA reports from the Canadian Cattlemen: Interesting times
Minister Ritz deserves credit for keeping the China agreement on track. Following meetings with his governmental counterparts, Ritz announced that China will work towards the necessary approvals to permit access for Canadian bone-in beef from animals under 30 months of age (UTM) and live cattle. This is the latest in the staged approach to full market access with China first announced in 2010, with initial access for boneless UTM beef. The CCA shifted its priority to include bone-in UTM beef in January 2013 after China approved additional Canadian processing facilities to export Canadian beef to China. The CCA and the Government of Canada continue to work towards restoring full beef access.
The CCA also attended the World Meat Congress and the International Meat Secretariat (IMS) meeting in Beijing where I helped Minister Ritz to promote Canadian beef. The highly collaborative relationship between the CCA and the minister was noted by many stakeholders at the IMS meeting, with some intimating to me that the relationship was a role model for them to aspire to.
On its own, the China agreement holds huge potential for Canada’s beef cattle producers. When combined with other trade agreements the Government of Canada has reached, particularly with Europe and Korea — with the text of the final agreement of the latter free trade agreement tabled in the House of Commons by International Trade Minister Ed Fast in June — producers have a bright future shaping up in front of them for the long term.
Another file on the go is the World Trade Organization compliance panel on country-of-origin labelling (COOL). The wait continues for the final WTO report, to be issued to the governments of Canada, Mexico and the U.S. in late July, which will determine whether the U.S. regulatory amendment on COOL from May 23, 2013 is sufficient to bring the U.S. into compliance with the WTO.
The CCA believes in the strength of Canada’s arguments that were put forth to the panel and continues to hold the view that COOL discriminates against live imports of cattle and hogs into the U.S. marketplace. The CCA believes that the best way to bring COOL into compliance is to amend the legislation to repeal COOL.
Until COOL comes into compliance with the WTO, the CCA will continue to insist that the Government of Canada prepare to impose prohibitively high tariffs on key U.S. exports to Canada, including beef.
The Western Livestock Price Insurance Program (WLPIP) has had a decent level of uptake from producers. The window for the calf program has closed for this year but anyone feeding cattle or backgrounding in Western Canada should consider this tool. The CCA’s goal is for this to become a national program. Having more producers signing up for an account shows that this new program is supported as a way to manage the risk of unforeseen price downturns which is one of the biggest risks cattle producers face.