Beef sector missing opportunities

Lack of leadership blamed | Canada depends too much on U.S. beef imports, says think-tank

Canada’s $6 billion beef industry is at a tipping point, lacking leadership and a strategy to cash in on its competitive advantages, says a new think-tank analysis.

In a report published Sept. 10, the government and industry-funded Canadian Agricultural Policy Institute said the sector lacks champions to lead it into a more competitive future.

And while exports to the United States are worth $1.8 billion, shipments tend to be live animals that are fattened, slaughtered and processed in the U.S.

The value of imports of beef products from the U.S. exceeds exports, and the gap is growing.

Despite a raft of off-shore trade deals, the United States remains the key market.

“We increasingly are depending on beef product imports from the U.S.” CAPI president David McInnes said.

Institute researchers spoke to more than 80 sector players last year to prepare the report.

“There is a real feeling that we’re missing an opportunity,” he said. “There is a falling rate of beef consumption in Canada, and an increasing portion of that is imported.”

He said consumers are increasingly interested in local food sources, while the Canadian beef industry continues to concentrate on trade with the U.S.

“I just sense that there is a feeling within the sector that there is little alignment and little leadership,” he said.

The study raises the issue of whether Canada is too dependent on north-south trade, which is increasingly turning against Canada.

It asks some questions.

“The value of our exports to other countries can attract higher premiums than the value of our exports to the U.S.,” says the report. So how can the sector decide what is the proper export mix?

The Canadian cow herd is declining, so does that mean Canada will not be able to meet future export or domestic demands?

As well, the trade deficit with the U.S. in beef trade continues to grow.

“The trade balance of Canada’s beef sector with the U.S. is in decline,” says the report.

“Is this not a strong signal of a loss of competitiveness?”

CAPI, a research think-tank housed on Agriculture Canada property and supported by an Agriculture Canada start-up grant as well as industry funding, says the beef industry has not developed a road map to figure out how it should deal with evolving consumer and market pressures, including the demand for more traceability records and better collaboration with other players in the food chain.

“We are strongly of the view that future success depends on how individual agri-food players work with others in their respective supply chains and among other key players to meet the needs of consumers, address changing expectations for how food is produced and enhance the productive capacity of the environment,” says the report.

CAPI said industry must lead the development of a strategy.

“But governments can then support genuine strategy development and effectively align its investments behind the priorities, such as tailoring its own policies, initiatives, funding and regulations to enable the strategy.”

The CAPI report also calls for more co-ordinated industry leadership, suggesting there is no effective national voice to connect all parts of the sector.

“Each supply chain needs to act,” it said. “In addition, the sector needs to consider whether there should be a national organization with a mandate and the financial means to articulate and support an overall domestic and international strategy.”

The CAPI report suggests that without more co-operation and national leadership across the sector, it could continue to lose its market share internationally and domestically.

“Without such a body, will the status quo be largely maintained?” it said.

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