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Cattle producers must look to world market
this document web posted: Wednesday, February 2, 2005 20050203p79
By Michael Raine
Saskatoon newsroom
Ben Thorlakson and Brad Wildeman agreed that their best years were behind them. Their export-based cattle price years, that is.
The two cattle feeders, Thorlakson from Alberta and Wildeman from Saskatchewan, told those attending a Saskatchewan Stock Growers Association meeting in Saskatoon Jan. 21 that they don't expect to see $1.10 per pound cattle prices any time soon - if ever.
"It's been a good run. I've even seen some $1.25 and (BSE) was not a good way to end it, but we have new export market realities to deal with and we need to start doing that," said Thorlakson, chair of the Canada Beef Export Federation.
Before 2003, a combination of high beef demand, drought in North America's largest beef producing regions, an extended peak of the cattle cycle and a record low Canadian dollar compared to the American currency all led to an extended period of high fed cattle prices.
Despite BSE's effect on Canadian cattle prices, international exports represent a strong future for Canadian cattle, said Thorlakson, who added the industry needs to shed its dependence on American markets.
Thorlakson said 120,000 tonnes of Canadian beef were exported to 50 countries in 2004 versus 128,000 tonnes in 2002.
Wildeman said the American market is important for Canada, but the Canadian industry needs to shed its addiction to it.
Brian Ross, an Estevan, Sask., producer and president of the SSGA, said BSE has started to focus the industry on new markets and "is making us begin to think more competitively. And that means competing against every other beef exporter that is out there."
Thorlakson said BSE has created some new market opportunities for Canadian beef. A beef carcass, including all of its components such as offal, brings as much as $325 more from markets in southeast Asia than it does in Canada or the United States.
Tongues, flanks, short ribs, plate and tripe have low value in Canada and the U.S.
"These go into the (hamburger) grind here. In Mexico and (Asia), they are premium meats," he said.
In 2004, Canada shipped 89,000 tonnes of beef to Mexico, compared to 76,000 in 2002.
"The Mexicans eat beef and lots of it. When we can ship offal, we will have the opportunity to further enhance that market," said Thorlakson.
Mexican cattle feeders are trying to rally opposition to Canadian and American product, but Thorlakson compared them to R-CALF in the U.S. and felt they would have limited effect on stopping the trade.
Macao was one of the first places, along with the U.S., to open to Canadian beef after the May 2003 BSE finding. Last year the former Portuguese colony that is now a partly self governing region of China, imported 7,000 tonnes of Canadian beef. It remains closed to U.S. beef.
Hong Kong also remains closed to U.S. beef but in December and January it imported more than 2,000 tonnes of Canadian product and is expected to maintain 1,000 tonnes per month in 2005.
Thorlakson said Canadian beef is replacing American beef in these markets and "this is an opportunity to create new business for us."
That new business may extend to Japan, but the market remains closed despite steady negotiations. There was tough talk last week from the new U.S. secretary of agriculture, who wanted "a date certain" timing for allowing U.S. beef back in to Japan.
Thorlakson said the Japanese are expected to announce a rule to allow in North American beef, despite negotiating separately with Canada and the U.S.
Part of that new trade rule is expected to contain a traceability feature that the Americans will not be able to meet.
The Canadian industry has that ability already and Thorlakson feels this may create openings with some of the largest buyers in Japan that have "been sewed up for 20 years.
"If this happens it will be big news for Canada," he said about the 124 million Japanese population.
"Japan may be adding value to some of the current calf crop as a result," he said.
South Korea refuses to negotiate with Canada until it completes a new deal with the Americans so it remains out of reach until that arrangement is complete.
"Taiwan would have opened to Canadian beef (the week of Jan. 21). Unfortunately we announced two new cases of BSE. It will likely be summer before it happens now," he said.
That country is a premium market for middle meats.
China is using the BSE issue as an opportunity to leverage other trade items so negotiations there are slowed. Semen and embryo exports have recently been approved but issues surrounding Canadian exports of protein-free tallow must be resolved before beef can be discussed, say the Chinese.
The tsunami affected talks with Indonesia so that market is expected to remain closed for some time.
The European Union is potentially a new market because that group of countries went from exporting 140,000 tonnes of beef in 2004 to becoming an importer of up to 350,000 tonnes in 2005.
"We are examining what it will take to obtain greater access there," said Thorlakson
this document web posted: Wednesday, February 2, 2005 20050203p79
By Michael Raine
Saskatoon newsroom
Ben Thorlakson and Brad Wildeman agreed that their best years were behind them. Their export-based cattle price years, that is.
The two cattle feeders, Thorlakson from Alberta and Wildeman from Saskatchewan, told those attending a Saskatchewan Stock Growers Association meeting in Saskatoon Jan. 21 that they don't expect to see $1.10 per pound cattle prices any time soon - if ever.
"It's been a good run. I've even seen some $1.25 and (BSE) was not a good way to end it, but we have new export market realities to deal with and we need to start doing that," said Thorlakson, chair of the Canada Beef Export Federation.
Before 2003, a combination of high beef demand, drought in North America's largest beef producing regions, an extended peak of the cattle cycle and a record low Canadian dollar compared to the American currency all led to an extended period of high fed cattle prices.
Despite BSE's effect on Canadian cattle prices, international exports represent a strong future for Canadian cattle, said Thorlakson, who added the industry needs to shed its dependence on American markets.
Thorlakson said 120,000 tonnes of Canadian beef were exported to 50 countries in 2004 versus 128,000 tonnes in 2002.
Wildeman said the American market is important for Canada, but the Canadian industry needs to shed its addiction to it.
Brian Ross, an Estevan, Sask., producer and president of the SSGA, said BSE has started to focus the industry on new markets and "is making us begin to think more competitively. And that means competing against every other beef exporter that is out there."
Thorlakson said BSE has created some new market opportunities for Canadian beef. A beef carcass, including all of its components such as offal, brings as much as $325 more from markets in southeast Asia than it does in Canada or the United States.
Tongues, flanks, short ribs, plate and tripe have low value in Canada and the U.S.
"These go into the (hamburger) grind here. In Mexico and (Asia), they are premium meats," he said.
In 2004, Canada shipped 89,000 tonnes of beef to Mexico, compared to 76,000 in 2002.
"The Mexicans eat beef and lots of it. When we can ship offal, we will have the opportunity to further enhance that market," said Thorlakson.
Mexican cattle feeders are trying to rally opposition to Canadian and American product, but Thorlakson compared them to R-CALF in the U.S. and felt they would have limited effect on stopping the trade.
Macao was one of the first places, along with the U.S., to open to Canadian beef after the May 2003 BSE finding. Last year the former Portuguese colony that is now a partly self governing region of China, imported 7,000 tonnes of Canadian beef. It remains closed to U.S. beef.
Hong Kong also remains closed to U.S. beef but in December and January it imported more than 2,000 tonnes of Canadian product and is expected to maintain 1,000 tonnes per month in 2005.
Thorlakson said Canadian beef is replacing American beef in these markets and "this is an opportunity to create new business for us."
That new business may extend to Japan, but the market remains closed despite steady negotiations. There was tough talk last week from the new U.S. secretary of agriculture, who wanted "a date certain" timing for allowing U.S. beef back in to Japan.
Thorlakson said the Japanese are expected to announce a rule to allow in North American beef, despite negotiating separately with Canada and the U.S.
Part of that new trade rule is expected to contain a traceability feature that the Americans will not be able to meet.
The Canadian industry has that ability already and Thorlakson feels this may create openings with some of the largest buyers in Japan that have "been sewed up for 20 years.
"If this happens it will be big news for Canada," he said about the 124 million Japanese population.
"Japan may be adding value to some of the current calf crop as a result," he said.
South Korea refuses to negotiate with Canada until it completes a new deal with the Americans so it remains out of reach until that arrangement is complete.
"Taiwan would have opened to Canadian beef (the week of Jan. 21). Unfortunately we announced two new cases of BSE. It will likely be summer before it happens now," he said.
That country is a premium market for middle meats.
China is using the BSE issue as an opportunity to leverage other trade items so negotiations there are slowed. Semen and embryo exports have recently been approved but issues surrounding Canadian exports of protein-free tallow must be resolved before beef can be discussed, say the Chinese.
The tsunami affected talks with Indonesia so that market is expected to remain closed for some time.
The European Union is potentially a new market because that group of countries went from exporting 140,000 tonnes of beef in 2004 to becoming an importer of up to 350,000 tonnes in 2005.
"We are examining what it will take to obtain greater access there," said Thorlakson
