Building an effective defence against American country-of-origin
labelling legislation is nearly impossible until the final rules have
been written.
“We know there are some areas no matter what we do, that product is
going to have to be labelled,” said Dennis Laycraft in an interview at
the Alberta Beef Producers annual meeting in Calgary.
Revisions to the United States food labelling law are expected in
mid-spring. If labelling requirements become mandatory in 2004, the
consequences could be dire for every sector of the Canadian beef
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industry.
Live prices could drop as much as $100 a head for all classes of cattle.
“Feeder cattle would be hit just as hard as slaughter cattle because
the country-of-origin law applies equally to all cattle,” said Ben
Thorlakson, president of the Canada Beef Export Federation.
“The only way feeder cattle would benefit would be if there was a
change in regulations,” he said.
However, if the clause “born in the U.S.” was removed, thousands of
feeder calves would exit Canada and the prairie feeding industry would
be devastated.
Some hope the recent objections to the label change voiced by the
powerful Texas Cattle Feeders Association could force Congress to
rethink the implications. Texas objected to the law because it imports
about one million Mexican cattle every year.
A cattle feeder and longtime veteran of trade wars with the U.S.,
Thorlakson believes the legislation reached this point because powerful
Democratic senators like Tom Daschle of South Dakota pushed it through
as part of a wider political agenda.
Canadians have about 18 months to come up with a workable defence.
Producers and processors plan to reposition Canadian beef from a
commodity product to a value-added item, recognized internationally for
high quality.
“We do know it will be disruptive so that is why it is important to
secure markets and develop loyalty to brand names,” said Laycraft.
The business must also start grooming new buyers and if there is a
major disruption, Canada will be able to move product there. Sellers
can’t develop fresh markets overnight without a prior relationship
among the customers.
Canada exported about 350,000 tonnes of beef in 2001. Production levels
for 2002 are expected to be similar.
“That meat is going to find a home but the question is at what price,”
said Andrew Raphael of the Alberta Beef Producers’ beef marketing
international division.
Canada has made strides in markets like Mexico and Asia. However the
U.S. also has a presence there and Canada must compete against the
well-funded U.S. Meat Export Federation.
The U.S. farm bill boosted the federation’s market promotion budget
from $90 million to $200 million. It received the largest share of that
money to promote international red meat sales.
Canadians are hoping to find $8 million for market promotion and
enhancement.
“If we can find a secure market for 200,000 tonnes by 2004, we can
mitigate some of the damage,” Thorlakson said.
Packers have indicated they can move 100,000 tonnes to Asia by 2005.
