Volume 8 Issue 6 • December 17th, 2012

In This Issue ...

 

CCA participates in TPP negotiations

In early December in Auckland, New Zealand, Canada participated in its first negotiating round since being formally accepted as an official member of the Trans Pacific Partnership (TPP). Although, Canada and Mexico were new to the TPP, Auckland was the 15th negotiating round for the other TPP member countries.

To communicate the objectives of Canada's beef sector for the TPP, the Canadian Cattlemen's Association (CCA) participated as part of a Canadian Agri-food Trade Alliance (CAFTA) mission to the Auckland round. In fact, the CCA made a formal presentation at the stakeholder session outlining the position paper of the Five Nation's Beef Alliance.

While the CCA is seeking the full elimination of tariffs on beef imports in the TPP region, this is largely in anticipation of potential future new member countries in the TPP, as we already have duty free entry to the significant beef importing countries amongst the existing TPP members. We are also placing a high priority on strong rules governing non-tariff trade barriers, such as full implementation of existing World Animal Health Organisation (OIE) and Codex Alimentarius Commission standards (the United Nations' food standards body), within the TPP region.

The Auckland round was an opportunity for the CCA and CAFTA to assess first-hand the overall progress and unresolved areas in the negotiations by meeting with industry and government delegations from several other countries. Our overall impression is that many significant gaps remain in areas where at least one or more TPP countries have sensitivities. There is a notional timeline to conclude these negotiations in the fall of 2013 and a recognition that much difficult work must be done to achieve that. It is encouraging that none of the members are saying it cannot be done and several countries told us that the addition of Canada was a positive contribution to the negotiations.

 

Positive industry developments enable 2012 to close on a high note

December has been a pretty positive month so far in terms of industry developments. As noted in the story above, the CCA's John Masswohl, director, government and international relations, was in New Zealand to work with our Five Nations Beef Alliance partners to build support for our collective TPP platform. The platform is built on the unique opportunity TPP provides to address several trade barriers such as to achieve compliance with existing international standards and to create new standards within the TPP region that have not been achievable globally.

The relisting of Establishment 38 under the management of JBS USA has helped the industry move past the XL Foods Inc. E.coli event which consumed the industry this fall. The United States Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS) gave the facility permission to resume exports of beef to U.S. in early December. The plant can now work towards normalizing capacity which in turn will help to restore normalcy to Canada's beef cattle industry. Click here to read our release.

The World Trade Organization (WTO) arbitrator assigned a firm deadline for the U.S. to ensure its Country of Origin Labeling (COOL) requirements comply with its WTO obligations. The U.S. has until May 23, 2013 to comply with the Panel and Appellate Body reports adopted by the WTO Dispute Settlement Body this past July, confirming that U.S. COOL legislation discriminates against Canadian livestock in the U.S. market. Click here to read our release.

The Government of Canada introduced three new programs under Growing Forward 2 (GF2). These programs align with the CCA's key priorities of research and innovation, competitiveness and market development and will come into effect on April 1, 2013, ensuring continuous funding for critically important existing programs like the Beef Science Cluster. Click here to read our release.

 

Maintaining and growing Canadian beef demand – the value of trade

Canfax Market Briefs

Canadian beef consumption is flat at around 950,000 tonnes. In order to grow the Canadian beef industry or even to maintain its present size, stabilization and growth of exports is needed. Canada is a deficit producer of middle meats, particularly loins. This means we actually import loins, particularly from the U.S. into Eastern Canada. Reducing dependence on U.S. loin imports means we must produce more beef. But if domestic consumption is stable that means that more end meats (shoulders, chucks, briskets) must go elsewhere.

North Americans like their steak and ground beef but they do not value all parts of the carcass. In order to maximize the cutout value the goal is to put each cut into the highest value market around the world (adjusting for transportation and transaction costs). Offals in particular see higher values in Asian markets. Thin meats (skirts, flapmeat) are valued higher in Hispanic markets that have a higher per capita consumption of beef and have a higher cooking skill level in the kitchen. Tongues go to Japan and Mexico; chucks to Mexico and Russia. Chucks in the Canadian market tend to be discounted versus a U.S. equivalent price. In order to maximize the value from this part of the carcass international sales into the Hispanic market of southern California and Mexico are important.

Having access to one market for a particular product is crucial, but having multiple international markets bidding for the same product brings the best return to the producer. Market access is key to achieving this; more open markets mean importers must compete for the cuts they prefer, particularly when a single cut is demanded by multiple markets.

The value of trade by gaining access to some of these markets is important. However, economically viable access is a prerequisite to have volumes move in order to see these benefits occur. Non-Tariff Trade Barriers like zero tolerance for ractopamine can virtually remove a market even if Canada has technical access. At the same time it provides opportunities for niche hormone-free programs to maximize their cutout by accessing these markets.

Having full, direct access is the preferred option where market development (Canada Beef Inc.) can occur in order to command a premium price for Canadian product. The markets Canadian product moves into are large, market development helps distinguish Canadian from the commodity beef. Even in the U.S. where Canada exports around 30 per cent of production; we are actually a small, niche player there representing just 2.4 per cent of U.S. supply.

To understand the implications of limited trade access, one can look to the recent situation at the XL Foods Inc. facility in Brooks, AB., when the facility did not have access to the U.S. In addition to being unable to maximize the cutout value on items that typically go to the U.S., the facility could not slaughter as many cattle – limiting demand for cattle locally. Consequently live exports increased and the basis widened, reducing the price of all fed cattle sold in Canada. Lower fed cattle prices meant feedlots were unwilling to pay more for calves. This makes exports important regardless of whether a feedlot has the ability to export live cattle or not. Therefore the solution is not to export more live cattle, as that does not add value to the Canadian industry. It only deals with the short term supply issues.

The beef industry as a whole focuses on representing beef producers through two avenues:

  1. To increase demand for Canadian beef through trade, by expanding market access (CCA) and commanding premium pricing through market development (Canada Beef Inc.), to ultimately increase the value of beef at all levels of the supply chain from boxed beef to fed and feeder cattle.
  2. Increasing competitiveness by reducing cost of production through production research (BCRC) and regulatory competitiveness (CCA).

The value of beef trade, through investment in market access and market development, comes from the maintenance and expansion of demand for Canadian beef that keep producers in the industry.

 

A retrospect of the Steaks for Soldiers campaign


The Steaks for Soldiers campaign is a favourite cause of the Canadian Cattlemen's Association (CCA), with countless steaks served to thousands of Canadian Forces Base (CFB) personnel and their families in the nearly six year history of the campaign. The campaign has always enjoyed a high level of industry participation from both volunteer and funding perspectives. Around 650 people (nearly all cattle producers) have contributed financially to the effort; to date the campaign has raised more than $120,000 and continues to draw support from the CCA and Canada Beef Inc., as well as agricultural news media and provincial cattle associations.

The initial Steaks for Soldiers event was held in 2007 at CFB Petawawa in Ontario when the first troop rotation came back from Afghanistan. Held in conjunction with the CFB Family Day, the event was created as a way for Canadian beef producers to show their gratitude for the service of the Canadian troops by treating them to a great steak dinner. The CCA sponsored the 1,700 AAA Canadian striploin steaks that were served to the returning troops and their families at this event.

In early 2010, Manitoba businesspeople Harvey Dann and daughter, Jackie Dann, joined the cause and, as part of the 25th Anniversary of their company, Alert Agri Distributors, independently spearheaded fundraising efforts for the Steaks for Soldiers campaign.

Working alongside the CCA, the Dann's efforts have made it possible to bring the event to CFB's across Canada. Since then Steaks for Soldiers events have been held at CFB Edmonton in 2010 and 2012, CFB Shilo in Manitoba in both 2010 and 2012 and at CFB Valcartier in Quebec in 2011. The biggest event to date was Valcartier where 3,800 steaks were served to returning troops and their families; other events served an average of between 1,200 and 1,800 steaks. Moving forward Dann said organizers hope to take the event to CFB Gagetown in New Brunswick and return to CFB Petawawa and CFB Edmonton.

Dann said the Steaks for Soldiers Campaign is a great opportunity for the cattle industry to give back and say thank you to the young men and women who put their lives on the line to defend our freedom. It's also an excellent opportunity for the cattle industry to volunteer their time and show the troops and their families their appreciation by serving up a delicious steak dinner.

Those interested in learning more about the program can visit the Steaks for Soldiers Facebook page.

 

Winter grazing can significantly reduce winter feeding costs when managed well

Grazing into the winter months has a number of benefits compared to traditional winter feeding, such as residue and manure management and reduced costs and labour.  For example, research indicates that swath grazing can reduce total daily feeding cost per cow by 41 to 48 per cent. This is based on a 78 per cent reduction in yardage costs and a 25 per cent reduction in feed costs. Bale grazing and stockpiled forages are also winter feeding options.  Through a bit of research and planning, producers can determine which extended grazing system is best suited to their operation and climate.

While there are several valuable benefits with winter feeding systems, extended grazing in Canadian winters requires added care and management.  Meeting the different nutritional requirements between replacement heifers, young cows and mature animals requires more care when winter grazing than in a confined feeding systems.  It is also necessary to check these cattle daily to ensure they have adequate shelter from the weather, and continual access to water and high quality feed.  Read more…

 

The CCA thanks its Prime Partners

The CCA recognizes and appreciates the continued support of the Canadian cattle industry by Prime Partners: Merck Animal Health, Scotiabank and Farm Credit Canada. To learn more about the CCA Partners Program, visit www.cattle.ca/cca-partners-program.

 

Season's greetings from the CCA

"As we head into the holiday season, may you and your household truly discover the wonder and richness of the season and enjoy a happy and prosperous new year," CCA President Martin Unrau.


 

CCA Action News

Staff Contributors: John Masswohl, Brenna Grant, Tracy Sakatch
Written, edited and compiled by: Gina Teel and Matthew French


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The Canadian Cattlemen's Association is the national voice for nearly 83,000 Canadian beef cattle producers.

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