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CAA Reports – for Aug. 9, 2010

Many producers in Western Canada have been hit hard by excessive precipitation, calf losses in spring blizzards, to flood losses and extraordinary mud conditions increasing cost of gains. In spite of these unfortunate events, there have been some positive developments in our industry.

Market access is improving. The groundbreaking agreement with China marks the first time China has resumed imports of beef from a country that has had a case of bovine spongiform encephalopathy (BSE). The market access agreement with China is directly attributable to confidence in Canada’s strong regulatory controls and the efforts of the Canadian cattle and beef industry to ensure the safety of its beef. Of course, the substantial efforts of the Government of Canada, and specifically Agri-Food Minister Gerry Ritz to regain trade, played a key role.

Producers are excited about this deal — and so are Chinese consumers. I spent Canada Day in Shanghai with Minister Ritz and Governor General Michalle Jean, promoting Canadian beef at the 2010 Expo event. The event was the first opportunity for Chinese citizens to eat Canadian beef since May 2003 and the beef was very well-received. With the fastest growing economy in the world, the China market provides significant potential for the Canadian beef and cattle industry in the next decade.

This is all happening at a time when tighter cattle numbers in North America and around the world are putting some strength back into the market. As economies recover and restaurant demand rebounds, prices for beef and cattle are expected to steadily improve. To ensure that Canadian cattle producers are able to take full advantage of future opportunities, the CCA continues to work on important issues to further promote improvement in our industry.

In July, I presented the CCA’s position on a number of issues to federal and provincial agriculture ministers at the FPT Ministerial Meeting. The following points are my comments to the ministers. Our work to expand the customer base for Canadian beef through the negotiation of a comprehensive economic and trade agreement with the European Union led the discussion.

The CCA strongly endorses the negotiation of such an agreement with the EU, which could be the biggest single opportunity for the Canadian cattle and beef industry since the Canada-U. S. FTA.

Canada has virtually no access to the EU due to prohibitively high tariffs and many layers of technical barriers. We have discussed these in great detail with the negotiators and feel confident that an ambitious outcome for Canadian beef is feasible with minimal impact to Canada’s traditional sensitive areas. All ministers and agriculture officials, federal and provincial, need to work towards an ambitious outcome for Canadian beef in this negotiation.

byTravisToews

The CCA continues to press for a program similar to the Cattle Price Insurance Program in Alberta to be made available nationally. Doing so would give all Canadian producers access to this important market-based risk-management tool in what has become an increasingly volatile business environment.

The CCA welcomed the June announcement from the federal government outlining the latest details of the SRM programs first announced in the 2010 Federal budget. As we all know, the cost of SRM collection and disposal is reducing the competitiveness of Canadian processing plants, particularly for smaller provincial abattoirs.

These programs assist in offsetting the costs of SRM disposal and provide funding for processors to implement new technologies to reduce the volumes and costs of disposal. Costs at most small provincial abattoirs are higher than the maximum program allowances. We urge provincial governments to consider adding to this funding to ensure slaughter capacity doesn’t move away from cattle. Expanding market access opportunities for provincially inspected beef across provincial borders would also provide relief to this sector.

The FPT Ministerial group’s pledge to full traceability by 2011 looms; however it is still not evident that the technology can economically deliver full movement tracking at the speed of commerce. There is also great concern that producers will pick up the ongoing costs. The CCA remains committed to improving and enhancing our traceability system, but we believe timelines and methods must be considered carefully to ensure that we don’t simply add another regulatory cost that will leave our producers less competitive.

AgriRecovery has been activated several times in the past few years. While the program has been very helpful, we believe that triggers should be clearly defined and science-based. This will improve the transparency and predictability of the program, and will enable producers to make timely decisions.

The CCA is concerned that the widespread wet conditions on the Prairies may result in feed shortages. For the benefit of both grain growers and cattle producers, the CCA asked the FPT ministers to ensure the crop insurance programs in their jurisdictions do not provide disincentives to seed when conditions allow.

And finally, our long-standing AgriStability recommendations remain outstanding. In our view, AgriStability will work better for all producers by redefining or temporarily eliminating the viability test, increasing negative margin coverage to 70 per cent from 60 per cent, improving reference margin calculations by allowing the better of the Olympic average or last three years, and eliminating caps.

We look forward to keep pushing on these issues on behalf of Canada’s producers.

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TravisToews ispresidentof theCanadian Cattlemen’s Association

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