Barring an unforeseen event, this article should reach you right about the time Dan Darling of Castleton, Ont. has being elected president of the Canadian Cattlemen’s Association (CCA), a position he’s been training for since he accepted the role of vice-president two years ago.
In so doing he joins a long line of ranchers, feedlot operators and mixed farmers who willingly stood up to represent the Canadian cattle industry when their turn came.
Each one of these men would tell you some sacrifice was involved in terms of time spent away from home, and extra chores for their families. In Dan’s case the extra load falls to his wife Mary, his three daughters and his brother.
Each, I suspect, would also tell you it was worth the cost for they’ve had a hand in setting new directions for the industry. Each faced a range of issues, some like the discovery of BSE or the implementation of country-of-origin labelling (COOL) were more serious than others. But none had what you would call a free ride during their tenures.
Dan’s will be no less taxing I’m sure, since he moves to the head of the CCA as the industry is facing something of a crossroads.
- Read more: Dan Darling heads up the CCA
Despite a couple of years of unprecedented prices the Canadian industry still remains cautious about expansion. That’s understandable after 13 years of dealing with BSE and the trade-distorting country-of-origin labelling legislation but this industry cannot grow without an increase in the cow herd.
We have seen small shifts in that direction as noted by analyst Charlie Gracey in our February issue, but as I write this no more than a modest change was expected from the January 1 inventory report due out March 4.
At the same time, the U.S. cow herd rose by four per cent, the second increase in two years, with more heifers in the pipeline.
While any increase in the Canadian herd will be a plus it will still leave us lagging behind the U.S.
The implications of this situation will be something the CCA and entire industry will have to grapple with if they hope to meet the competitive goals set in the new National Beef Strategy.
Brian Perillat, the senior analyst with Canfax notes our federally inspected slaughter in 2015 was just under 2.5 million head, the smallest since 1994, and fourth smallest in the last 50 years.
As a result our packers operated last year at an average 76 per cent of capacity, the lowest level since 2008. If utilization rates don’t improve, he fears we could risk losing another plant.
This is a disappointing number, particularly since exports of live cattle were down across the board last year.
To get back to 80 per cent utilization Perillat says plants need to process another 150,000 head. If they were counting on lower exports to fill that supply the first month of 2016 raised some doubts as nearly 22,000 slaughter steer and heifers went south as of February 6, an increase of 77 per cent over last year. Canadian slaughter rates broached 40,000 per week only once over the same period.
Short term the basis might yet send more cattle into Canadian plants but long term, Perillat says, more cattle will be needed to maintain a healthy packing sector.
More cattle require more markets so it’s not surprising Darling expects trade issues will remain a major point of discussion around the CCA board table over the next two years.
Thankfully COOL has been rescinded in the U.S. so the one issue that consumed much of the CCA’s time and treasure over more than a decade has finally been put to rest.
The OIE clock on BSE in Canada has been reset but after the Canadian Food Inspection Agency finally filed its report on Case 19, shipments resumed to South Korea.
Surely the biggest news on this file was China’s sudden appetite for Canadian beef. In one year sales jumped to 32,869 tonnes from 6,800 the year before, adding $255 million to industry coffers compared to $40 million in 2014. Some of that may have come from shipments that previously went to Hong Kong since sales to the gateway port dropped from $201 million in 2014 to $88 million in 2015.
Either way it appears Canada Beef’s emphasis on China has more than paid off.
No European country rated in our top 16 client list so it is still to be seen what impact the Comprehensive Economic and Trade Agreement will have on our beef exports. Technical discussions are still ongoing for several sectors.
The Trans-Pacific Partnership seems to hold out more immediate benefit but it too may be on a slow boat to ratification now that Trade Minister Freeland has signed the accord.
Of course there will be many more issues to keep Dan and his fellow directors busy in the coming year.
You know, it says something about the beef business when so many capable people stand up and volunteer their time to preserve it.