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Market Access Is The Key

Mr. Ritz

needs to put the gas to the trade secretariat

Gerry Ritz is at it again. The globe-trotting federal agriculture minister was in Peru and Colombia last month negotiating greater access for imports of Canadian agriculture products and scored a win for the beef and cattle sector in Colombia. All of this followed quickly on the heels of the prime minister starting up negotiations on a free trade agreement with the EU.

A U.S./EU agreement to put the long-running beef hormone dispute on the back burner added further spice to the mix. The entire beef trade knows that Canada is attempting to negotiate a separate agreement with the EU, but everyone seems to have been sworn to secrecy when asked for details. From the little bit we were able to piece together before press time it looked like the deal that was on the table with the EU would be more symbolic than substantive, but every door that opens is a new opportunity and welcome news.

The Colombia agreement laid out a firm process for accepting Canada as a controlled-risk country under the OIE standards and granting full access for beef and live cattle to this market. This is all being done under the umbrella of a bilateral trade agreement that when signed will eliminate Colombia’s 80 per cent tariffs on Canadian beef and livestock over 12 years starting with a duty-free quota of 5,250 tonnes of beef and offal.

Colombia isn’t a huge market, possibly $6 million in beef sales to start with and potential for $20 million as tariffs shrink over time. Add another $1 million in sales of embryos, semen and breeding cattle. But this agreement is significant nonetheless in that Colombia will be the first South America country to recognize our OIE status. Equally important, it keeps the impetus going in Ritz’s shop to open new markets.

Ever since Canada stepped away from the policy of full access or nothing borders have been opening to Canadian beef. Full market access is the goal but every step in that direction is cause for celebration.

Supply and demand may drive markets, but market access is the grease that allows individuals to respond to those forces. And every new agreement can have a direct result on cattle prices back home.

CanFax, the market-reporting arm of the Canadian Cattlemen’s Association (CCA), recently estimated access to the U.S., Mexico and Russia for beef under 30 months of age added a combined $18 per cwt to fed cattle prices. Macau added $9.63 per cwt to prices at the time and Hong Kong put $5.65 per cwt on the backs of fed cattle. By comparison, resumption of exports of live cattle to the U. S. raised fed cattle prices by $5.92 per cwt, indicating the ability to export under-30-month beef had a greater impact on fed cattle prices than the increased competition from U. S. packers for fed cattle.

According to CanFax there is still another $10 per cwt in lost value to be had when we regain access to South Korea, Japan for under-30-month beef, and the remaining markets lost in 2003.

In a speech to the B.C. Cattlemen’s Association last month, Travis Toews, vice-president of the CCA, said Canadian cattle lost about $200 in value when the borders slammed shut in May of 2003. In the past six years we’ve gotten back about $120 of that, meaning there is still about $80 per head on the table to be picked up.

Opening new markets is vital to any sustained renewal of this industry. That seems pretty clear. What is less obvious is who is going to lead the charge from here on to open new markets, and keep them open.

We have the Canadian Food Inspection Agency, the Alberta Livestock and Meat Agency (ALMA), the Canadian Cattlemen’s Association and its affiliates, the Canada Beef Export Federation, the Canadian Meat Council and the National Cattle Feeders Association, all with valid claims to a place at the table.

These groups all have different mandates and different objectives but on one thing they can all agree — Canada’s beef industry must have access to export markets to be successful and expand.

The new federal agriculture trade secretariat is the most likely candidate to lead this effort and there is a real need to get it up and running during Mr. Ritz’s term. It’s taken six painful years to come up with a federal government and a minister who is willing to do more than just talk about pushing the trade agenda. I don’t see those same qualities when I view the opposition benches today.

One final note: last month’s comment on the ALMA grants stated the $30 million was for one year. I’ve since been informed that was just the first year of a five-year commitment.

About the author


Gren Winslow

Gren Winslow is a past editor of Canadian Cattlemen.

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