The Canadian Cattlemen's Association (CCA) recently announced that Canada has secured an agreement with China to resume imports of Canadian beef in a staged process, beginning with boneless beef from animals that are 30 months old or less at the time of slaughter. It is a small yet significant step in broadening the markets for Canadian beef, according to Gordon Graves, a delegate for Alberta Beef Producers (ABP) and the vice chair of the Canadian beef cattle research, market development and promotion agency (National Check-off).
“It will not in all probability show a significant increase at the cow/calf level,” admitted Graves. “However, because it is product sold, it will not be a detriment … it will be good for us.”
He explained that having additional markets for beef helps to stabilize the price and it might result in a penny or more per pound increase.
“The more demand we have for our beef, the more we distance ourselves from June of ‘03,” said Graves. On May 20th of 2003, bovine spongiform encephalopathy (BSE) was diagnosed in a cow that was born in a farm in Alberta. Following that, many countries stopped importing Canadian beef and the industry has since struggled to regain market access.
“The agreement marks the first time China has resumed imports of beef from a country that has a case of (BSE) and is attributed to the confidence in Canada's strong regulatory controls and the efforts of the Canadian cattle and beef industry to ensure the safety,” states a press release from CCA.
Graves estimates it will result in sales of over 300,000 head which is significant “because it is a lot of beef out of the warehouses and out of the system over the course of a year and it has potential to go up.”
The CCA press release says “it is anticipated that Canada could export $40 million per year of tallow and $10 million for boneless UTM beef to China for a total of $50 million in incremental export sale from this first stage.”
Graves explained that if China would open the doors to over 30 month cattle, which is used in the burger industry, it will create even more demand for Canadian beef. The press release indicates that once full access is established to include bone-in products, export sales could increase to $110 million-range annually. “Potentially this is huge,” said Graves.
Graves credits the progress to the collaborative efforts of the federal government, the provincial government and producer organizations to take this first step in the process of opening up Asian markets. “This took a lot of years of work by a lot of different people, including the producers.”
Although local area farmers are encouraged by the news, they remain skeptical about the agreement's long-term impact.
Cliff Martin, who farms near St. Edouard, said that profits from increased sales often do not trickle down to the cow/calf farmer. He added that the United States remains Canada's main market and that the U.S. currently still evaluates the age of cattle based on dentures rather then the tagging system implemented by the government.
Producers can agree that while progress is welcome, it is only one small step in what has been a long journey in marketing Canadian beef.