South Korea opens border to beef

SPRUCE GROVE, Alta. — South Korea’s decision to open its border to Canadian beef younger than 30 months is not the final chapter in the devastating story of BSE in Canada but it helps, said the president of the Canadian Cattlemen’s Association.

“Obviously, on behalf of Canadian cattle producers, we are particularly pleased with this announcement. Opening the market in Korea has been a long road since 2003,” said Travis Toews after the border opening was announced Jan. 20.

“The cattle industry is really beginning to get its economic legs. This market access opening to Korea will further strengthen our economic prospects into the future.”

South Korea is the last major market to open its borders to Canadian beef since BSE was discovered in a northern Alberta cow nine years ago.

Dozens of countries closed their doors to Canadian beef and cattle after the discovery, cutting fed cattle prices in half and crippling the Canadian livestock industry.

With this announcement, it’s expected beef sales to Korea could reach $30 million a year by 2015.

“This is a great New Year’s gift for the Canadian cattle industry and the Canadian economy,” federal agriculture minister Gerry Ritz said while making the announcement at Lewis Farms west of Edmonton.

South Korea was Canada’s fourth largest export market before BSE was discovered in Canada. Canadian beef exports to the Asian country peaked at 21,000 tonnes in 2000, with a value of $99 million.

In 2002, the last full year of trade, Canada exported 17,342 tonnes of beef products to Korea worth $60 million.

Brian Nilsson, past president of the Canadian Meat Council and co-chief executive officer of XL Foods Inc., said Korea may seem like a small market, but it’s a key market.

“Korea takes a certain type of product, they buy a lot of product,” said Nilsson.

He expects Canadian beef to be moving into Korea within 30 days.

A U.S. Meat Export Federation study estimated the sale of short ribs to Korea added $20 per head value to every steer and heifer.

“That shows the importance of a market such as Korea, where their consumers are willing to pay more than North American consumers for a certain product,” said Toews.

Nilsson said XL Foods has a number of initiatives underway to sell beef to Korea.

“Again, it’s a small amount of product, but it is a very specific product and helps support the value of the cutout in the animal, even though it is a small amount of the animal.”

South Korea granted the United States access for its beef in 2008 and Australia never lost its ability to trade.

CCA executive vice-president Dennis Laycraft said it will take work to recapture lost markets, but Canada has regained many of its markets once closed because of BSE.

“Australia went in and captured a significant market share and the U.S. has gone in and grabbled a fair bit of market share since its opened. We do know in every market we’ve gone back into, where we have equal market access, we’ve sold above pre-BSE levels,” said Laycraft.

Canada has regained full or partial access to 90 percent of the pre-BSE markets.

The federal government initiated a World Trade Organization trade challenge against South Korea in 2009 after years of emphasizing there was no scientific reason for banning Canadian beef.

“We were always confident in our case,” said international trade minister Ed Fast.

Laycraft said Canadians became more frustrated with the Koreans’ stalling tactics as negotiations dragged on.

“We truly thought the market should be open,” he said.

While livestock producers are celebrating the partial opening of the South Korean markets, work continues on gaining full access for all beef products to Korea.

“Without it, the U.S. industry will continue to gain as their tariffs decrease and our tariffs remain the same,” said Nilsson.

Toews said they are also working on gaining full access to the key Japanese market.

“Our next goal would be Japan under 30 month access. That would really move the meter significantly for cattle producers. It appears Japan is moving in the direction of allowing expanded imports of North American beef products.

“We are hopeful within 2012 we will see expanded access into Japan, which would really add momentum to an industry starting to roll.”

Saskatchewan Cattlemen’s Association president Mark Elford said South Korea’s decision should prompt Japan to take another look at its policy.

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