NEWBROOK, Alta. – When XL Foods sells beef to Japan it is price, not age verification, that seals the deal, said the head of one of Canada’s largest packing plants.
Lee Nilsson, co-chief executive officer of XL Foods, said he asked a Japanese client why he chose Canadian beef.
“I point blank asked him ‘are you here because we age verify our cattle, or are you here because you’re trying to buy the cheapest North American beef?’ It wasn’t one second when he said, ‘I’m buying the cheapest meat. If it’s yours or the American meat, I really don’t care. You’ve got your way of getting it into our country; they’ve got their way. I’m buying here strictly on price,’ ” Nilsson told about 250 producers during an industry meeting July 15.
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By January, all Alberta cattle must be age verified: their birth dates recorded along with a mandatory cattle identification number. By requiring all cattle to be age verified, the Alberta government hopes to tap into lucrative Asian markets and boost the fortunes of cattle producers.
Requiring cattle producers to record every animal’s birthday and submit it to the Canadian Cattle Identification Agency is a cumbersome and expensive way to try and get meat into the Japanese market compared to the American system, said Nilsson.
In the United States, cattle producers aren’t asked to age verify their animals. Instead the age of the carcass is determined by a system called A 40, where an inspector determines the approximate age of the animal based on carcass factors.
If an animal is one day older than 21 months in Canada, it can’t be shipped, yet through the American grading system, cattle ranging from 18 to 24 months old can be shipped to Japan, said Nilsson.
“I’m not a fan of age verification. The fact is it has done us absolutely no favours so far,” he told the group.
John Knapp, Alberta’s deputy minister of agriculture, said Canadians have not done a good job of selling their cattle around the world and age verification will help move more beef into high-value markets.
Mandatory age verification was part of an eight-part strategy released by the provincial government in June as a way to strengthen the provincial cattle industry. The plan includes creation of an Alberta Livestock and Meat Agency to help focus the livestock industry, building a mandatory traceability system and finding ways to differentiate Alberta’s beef.
“There’s 100 million really rich guys out there in Asia that weren’t there 10 years ago. Their economies are just surging. There are a lot of very wealthy people beginning to demand these differentiated high-value beef products,” said Knapp.
Larry Cherniwchan of Bellis, Alta., was skeptical about how many Asians want North American meat, even if it is age verified. South Koreans have protested in the streets because U.S. meat has been let into the country and governments have erected roadblocks to stop North American beef from entering.
“I think we’re creating a job for the government. After all this, no one is going to want to raise cattle. Let’s stop and smell the roses,” he said.
“Let’s dig a big hole and kill half the cattle in Canada and the market will pay us for our cattle. Those who want to exit will. We don’t need this running around the world selling beef to people who eat rats and cats.”
Knapp didn’t agree that shrinking the cow herd would give Canadian producers a higher price for their animals or get beef into lucrative markets.
“If we can get high-value differentiated cuts into those high-value markets, it will justify higher costs of production,” he said.
Nilsson said it’s too late to argue whether age verification is a mistake. It’s a decision producers will have to live with. Instead, the government may get more acceptance if it gave producers $10 or $20 for each animal to pay for the cost of ear tags.
