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Cca Reports – for Dec. 6, 2010

The annual fall meeting process provides the Canadian Cattlemen’s Association (CCA) with an excellent opportunity to connect with producers at the grass-roots level and hear about the issues that are important to them. It’s also a time for the CCA to let producers know what the CCA is doing on their behalf and the progress made on priority issues.

Ever since May 2003, when we learned first hand as an industry the serious economic consequences of losing the ability to export, trade issues have been a topic of primary interest and this year was no exception. While most producers recognize the necessity of exports, we did in the course of our travels encounter a few people who vigorously disputed our view of the importance of trade to the Canadian cattle industry.

While our herd size has declined, trade remains an essential element to our competitiveness as an industry. We continue to depend on exports for almost half of our production. Even if our herd declined to the extent that Canadians could consume most of the beef we produce, the industry must be able to sell all the various products from each animal into the specific market that maximizes value for each product. For a number of products, that market is not the domestic market. While the domestic market remains our most important market, in order to maximize cut-out value, we must have competitive market access into all the major high-value beef markets of the world.

Trade is also about expanding our market reach and pursuing new opportunities. The ongoing Canada-European Union (EU) free trade negotiations represent such an opportunity.

The CCA continues to assist the Government of Canada’s capable legal team on the U.S. country- of-origin labelling (COOL) challenge at the WTO. The second and final oral hearings took place in Geneva at the end of November, with a panel decision expected in the summer of 2011.

Preferential access for high-quality beef into a market of 500 million affluent consumers will provide serious opportunity for Canada’s cattle producers, and the CCA strongly endorses the negotiation of a comprehensive economic and trade agreement with the EU. There are however a number of hurdles to overcome in this negotiation. In order for the CCA to support a final deal, we must have significant duty-free access for all beef products, an acceptance of our food-safety interventions and processing practices, and no regulatory requirements that will increase our costs.

Already we’ve seen tight cattle supplies and improving international market access contribute to the strengthening market fundamentals for Canadian cattle.

The CCA lobbied hard to secure funding to compensate Canadian abattoirs for SRM handling and disposal costs which are approximately $30 higher than costs incurred by U.S. processors. The objective was to encourage Canadian packers to bid more aggressively to keep processing these OTM animals in Canada. Those efforts resulted in the Abattoir Competitiveness program announced in the 2010 Federal Budget

Following the implementation of the program, the spread between the U.S. and Canadian price for slaughter cows narrowed from $10 in January to under $3 in September. There’s no doubt that the program was a contributing factor in the increase in Canadian slaughter cow prices.

Improved prices contributed to the overall positive mood at the meetings in Manitoba, Alberta and Saskatchewan. I sensed that the vast majority of producers are becoming increasingly optimistic about the future of the Canadian cattle industry. Producers in regions still reeling from extreme weather were the exception. Here AgriRecovery dominated people’s interest, with most wanting to know how the program may help them.

We were able to explain to producers that the CCA is advocating that wherever and whenever possible, AgriRecovery triggers should be based on predetermined criterion to increase the transparency and predictability of the program, and to ensure decisions are not politically based.

Traceability was another topic of interest. There appeared to be a recognition by the majority of producers at the fall meetings I attended that as an industry, we need to continue to enhance our traceability system, albeit cautiously. The fact that the industry implemented an identification system, which has given us herd-of-origin traceability, was a significant factor in Canada gaining BSE controlled risk status at the OIE. Without this status, we would certainly not be in many of the markets that we are today.

As we continue to move forward, we must do so very carefully. At this point, it is still not evident that the technology can economically deliver full movement tracking at the speed of commerce. There is also concern that producers will pick up the ongoing costs. The CCA remains committed to improving and enhancing our traceability system, but our view is that the timelines and methods must be considered carefully to ensure that we don’t add another regulatory cost that will leave our producers less competitive.

There were many other issues discussed and input received at the fall producer meetings. Resolutions were passed that will be considered by our provincial member organizations at their general meetings. These resolutions will assist in providing policy direction for the industry in the year to come.

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TravisToews ispresidentof theCanadian Cattlemen’s Association

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