Canadian producers came to understand the folly of overdependence on one market when BSE was discovered in Canada in 2003 and the United States closed its borders to cattle and beef.
That message was further solidified when the U.S. imposed country-of-origin labelling, which again reduced marketing opportunities across the border.
The portions of COOL that applied to beef and pork were repealed in December, paving the way for improved and relatively efficient sales to the U.S.
Will that cool the industry’s enthusiasm for shipping to the European Union under the Comprehensive Economic Trade Agreement? After all, the U.S. market is close and the Canadian domestic herd is at its smallest in years, limiting the number of cattle available for shipping to any location.
“I don’t see a whole lot more (beef) going over there (Europe),” said Christoph Weder, a beef producer from Hudson’s Hope, B.C.
Other stories in this Special Report:
- Resolving the beefs blocking beef trade
- Doors may be open but welcome mat takes time
- ‘600 million opportunity’ awaits cattle sector
- Dairy sector leery of EU trade
- Will EU trade reap benefits for all?
- Niche growers hope CETA will resolve GM issues
- CETA not silver bullet for European trade
He sees more opportunity for bison than beef because CETA will eliminate the tariff on Canadian bison while U.S. product will continue to face a 20 percent duty.
Canadian Bison Association executive director Terry Kremeniuk said he has high hopes for bison sales potential under CETA.
“For the Canadian industry, the European market is certainly very important,” he said.
Once implemented, CETA will provide 3,000 tonnes of tariff-free quota for bison. That’s a separate allotment, rather than the previous arrangement of inclusion under the Hilton quota for Canadian and U.S. red meat.
Kremeniuk said the new quota equates to $50 million and is equivalent to 10,000 to 12,000 animals. The new quota will be 25 times larger than the current level of EU exports.
As for beef, Weder said he wonders if large numbers of Canadian producers will employ the hormone-free production methods that the EU demands.
Aging demographics in the beef business also play a role.
“The Canadian beef industry just blows me away,” said Weder.
“We’ve theoretically hit the peak (of prices), and Canada never even expanded (the herd). So we’re on the downward slide already. … If anything, I think the Canadian cow herd is going to get even smaller.”
John Masswohl of the Canadian Cattlemen’s Association doesn’t think that is true. He said producers will use the opportunity for additional exports if and when CETA is ratified.
The Canada-Europe deal, the Trans-Pacific Partnership and the recent agreement with South Korea are signals for herd expansion in Canada, he said.
“It’s the phasing in of new market access through these various trade agreements that’s going to keep the expansion going and be our insurance policy against the down side of the cattle cycle,” he said.
“We had a prolonged period of expansion (after the North American Free Trade Agreement was signed) because we suddenly had new unlimited, quota-free, duty-free access to the United States and to Mexico as well.”
CETA and the TPP could prompt the same thing, he added.
Jason Hagel, an Alberta rancher who provides beef to One Earth Farms for the domestic and EU market, suggests the TPP could prove easier for producers than CETA will because it is less restrictive.
“It’s such an onerous program to get into, for one thing,” he said.
In contrast, when shipping to Asia, “you just send the beef and that’s it.”