Exports key to growth in meat sector

Access to foreign markets is key to growth in the Canadian meat trade, says the president of the Canadian Meat Council.

Beef, pork and grain are the major trade components, and 90 percent of Canadian farmers rely on exports.

The federal government has an ambitious trade agenda, and deals like the Trans Pacific Partnership are needed, said Ray Price, who is also president of Sunterra Meats at Acme, Alta. The company is a major pork exporter to Asia.

South Korea is a key market for pork. The government removed its 49 percent pork tariff following a foot-and-mouth outbreak in which thousands of cattle and hogs were destroyed.

An important market would be lost if the tariff returns and Canada does not get a free trade agreement with South Korea, Price told the International Livestock Congress Aug. 15 in Calgary.

“If we don’t get some of these deals and we cut off $300 million worth of pork sales into South Korea, that is the equivalent of not having a market for 1.5 million pigs,” he said.

Agreements are needed to remove non-tariff barriers as well as duties.

There was a quota on beef going into Japan until 1988, but that changed to a 70 percent tariff in 1991. U.S. and Australian exports quadrupled when the tariff was reduced to 50 percent.

The tariff fell again to 38.5 percent in 2001, but BSE was found in Japan that year and domestic beef consumption shrank. Suppliers changed when the disease was found in Canada and the United States in 2003. Markets are returning, but the tariffs remain.

“If that 38.5 percent went away, I am pretty darn sure exports would go up considerably,” Price said.

He questioned whether the world can continue to afford food tariffs. Many foreign agricultural policies work to keep out imports, which Price called a tax on consumers who struggle to buy food.

Subsidization is a government expense and keeps domestic food prices high. That is not sustainable, he said.

“Korean pigs are about $400 a head. I would be dancing in the streets right now if we were at $200.”

Japanese pigs are about $550, but the subsidies can’t continue if the country joins the Trans Pacific Partnership.

Canada Beef Inc. also sees growth potential, but the organization says it prefers to invest in markets where the best returns are possible.

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