Food safety scares and a shaky economy in Asia have not dampened the Canada Beef Export Federation’s optimism that it can make a good impression among more than one billion consumers.
Canada exports more than half of its production with 73 percent of that headed to the United States, while the remainder goes to Asia and Mexico. Ultimately, the federation hopes for a 50-50 split with equal amounts going to new markets and the U.S. Those exports to Asia could total $1.2 billion and relieve Canada’s dependence on the American market, said federation chair Larry Sears.
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Challenges remain, but each year the value of products going offshore increases.
“When Canada first seriously ventured into these markets, our initial exports bolstered demand for byproducts and offal,” said Ben Thorlakson, past-president of the Canadian Cattlemen’s Association and federation board member.
“These markets are maturing and now are a strong market for a variety of cuts,” he said during the federation’s annual meeting in Calgary.
Offal products included everything from lips to livers. Demand is shifting however, as higher price premium cuts are starting to move into Japan, South Korea, Hong Kong and Mexico. Canadian packers calculate that demand for offal products added $180 to the total value of a steer or heifer. Intestines, organs and tongues were once considered byproducts only suitable for rendering.
A major challenge for the beef industry is food safety.
Asia’s pork and beef industries have been pummeled by E. coli, salmonella, foot-and-mouth disease and, most recently, reports of bovine spongiform encephalopathy in some Japanese dairy cows. BSE has been linked to a similar brain wasting condition in humans who consume infected beef. It has shaken the confidence of many Asian beef consumers.
“We are suffering the biggest disaster in Japanese beef history,” said Manabu Katayama of Starzen, one of the top five meat handling companies in Japan with sales of $2.8 billion per year. It has been dealing with Canada since the early 1980s when it first purchased frozen pork. Starzen now handles large amounts of Canadian beef.
In addition, a faltering economy has seen Japanese cut back on food and clothing purchases.
The fast food industry has cut prices to encourage sales. For example, a McDonald’s hamburger sells for around 85 cents compared to the popular beef bowl that sells for $3.50.
Overall, Canada has seen its sales stay on target and the value of the product is improving. About three-quarters of Canadian beef going to Japan is frozen, but Katayama said there is potential to increase fresh, chilled sales.
The Japanese have gradually increased their beef consumption from about six kilograms per capita in 1990 to 9.5 kg in 2000, although the demand for cheaper cuts continues.
Last year Japan imported 7.2 million tonnes of various meats, with the majority being seafood at 4.4 million tonnes. Beef imports rested at just over one million tonnes, with Canada’s share at 18,700 tonnes.
The import tariff on beef remains at 35.8 percent and is expected to remain firm until next year. Further reductions will occur only after new world trade agreements are signed.
Canadian beef is making gains in South Korea, but it is not as popular as American beef, which fills 55 percent of South Korea’s needs.
South Korea imported 1.2 million tonnes of meat of which 755,000 tonnes was seafood. It brought in 263,000 tonnes of beef with Canada contributing 20,000 tonnes.
