RED DEER Ñ Canada’s beef exporters must be more sophisticated and savvy in their plans rather than relying so heavily on the United States to absorb the surplus, says a former manager of the Canadian Cattlemen’s Association.
The Canadian beef industry took the world by storm starting in 1987, becoming the third largest exporter of a high quality product by 2002. It hit the skids in 2003, however, when BSE struck.
“We entered the big leagues with a bit of minor league attitude,” Charlie Gracey told an Alberta beef industry conference in Red Deer Feb. 18.
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“Now we are learning that playing in the big leagues is a tough game.”
Starting in 1987, the industry went through a seismic change with substantial growth in Western Canada.
There was a six-fold increase in exports between 1987-2002, with the cow herd growing by 67 percent when the Crow Benefit grain transportation subsidy ended and free trade agreements provided easy access to the U.S.
However, Gracey, who is now a beef consultant, said what seemed like an agricultural success story was actually a position of vulnerability because most of the surplus production went to a single customer, the U.S.
“We awakened a slumbering protectionism in the U.S. with the effectiveness of a cheap alarm clock.”
In 1998, Canada won a U.S. countervail and antidumping duty case against Canadian cattle on a technicality. BSE gave American protectionism and anti free trade attitudes new impetus.
With the latest ban on Canadian cattle, Canada has recourse in international treaties such as the World Trade Organization and the North American Free Trade Agreement when scientific arguments fail. While one group of Canadian producers has launched a suit against the U.S. using NAFTA, Gracey said the federal government has chosen not to use these tools.
He maintains the U.S. will remain Canada’s most important market despite strong efforts among the Canadian Beef Export Federation to diversify.
The markets will grow but will not overtake the U.S.
Plans to sell more beef, open more markets and encourage more packers is a worthy set of goals but the reality is Canada needs an open border with the U.S.
