BANFF, Alta. – Canadian livestock producers will have to unite with American allies to have their best chance at fighting the controversial country-of-origin labelling law in the United States, according to Alberta Beef Producers.
“Clearly, for the legislation to change, it will take significant political will on the part of producers passed on to the congressmen and senators,” said Arno Doerksen, chair of the Alberta Beef Producers.
Doerksen told the Alberta Cattle Feeders Association convention in Banff on Feb. 28 that the legislation is estimated to cost Canadian producers $100 per head with an annual loss of $280 million in discounted or lost sales.
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Live trade will continue, but could drop by 35 to 50 percent. Feeder cattle prices are expected to be volatile and likely depressed once the legislation becomes mandatory on Oct. 1, 2004.
Working with American allies, Canadian beef and pork producers want the labelling provision to remain voluntary.
The U.S.-based National Cattlemen’s Beef Association wants the U.S. Department of Agriculture to hold meetings to explain the implications to producers. The NCBA supports voluntary labelling.
The Food Marketing Institute, which represents American retailers, has said the legislation will add to the final price of fruit, vegetables and meat. However, many fruits and vegetables are already labelled by country of origin so pork and beef expect to feel the brunt.
Bigger retailers are expected to adopt U.S. beef because it will be cheaper and to attract better publicity.
Smaller distributors with less than $230,000 US in sales may be willing to take foreign product, but at a lower price.
Packers suggest sales to food service distributors could increase and divert Canadian beef from retail because the legislation exempts food service.
Potential exists to export displaced meats elsewhere, but Canada will be competing against American beef marketers active in Asia and Mexico.
Mexico has said it is frustrated with the new U.S. law and may retaliate through a trade action.
Fred Free of Cargill Foods in High River, Alta., said that from a packer perspective, country-of-origin labelling will devastate the industry.
Canadians consume the equivalent of 1.6 million head, which one plant could handle.
“If it goes through, it means devastation on our industry in this country,” Free said.
Canadian cattle and beef fill seven percent of the total American supply. Of that amount, four percent is live cattle and three percent is beef.
Canada can initiate trade challenges through the World Trade Organization or the North American Free Trade Agreement, but only after the legislation takes effect.
The Canadian Cattlemen’s Association has already started reworking its global marketing strategy to introduce more branded products to new customers.
Up to $8 million is needed for the next five years to address that challenge. The Alberta Beef Producers has already dedicated $500,000 to the response strategy.
