The North American livestock sector faces sharp challenges involving competitiveness, increasing consumer demands about how food is produced and pressures from government regulation, says a new study developed over 18 months by academics and industry officials in Canada, the United States and Mexico.
“Animal agriculture is at a turning point and we in the industry need to take a comprehensive look at the opportunities,” former U.S. congressman and Texas rancher Charles Stenholm said during a news conference in Ottawa.
“There is no one answer and this report contains no silver bullets, but I am also convinced that this industry has a great future.”
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Former senior Agriculture Canada official Doug Hedley said animal agriculture industries face market access, competition, currency value and regulatory pressures.
“But I don’t think there is any question about its competitive nature not only in North America but in its export markets as well.”
The report says challenges will be particularly tough for smaller operators.
“Small to mid-size producers face serious survival challenges in determining how they can successfully fit into integrated supply chain structures,” said the report released in Mexico City, Washington and Ottawa.
It suggested smaller producers develop specialized products for niche markets and band together into larger marketing groups.
Representatives of Canadian livestock sectors welcomed the report, which was funded by governments and industry groups in the three countries, as an important reminder of issues facing the industry.
“We need to look forward,” said Canadian Cattlemen’s Association vice-president Brad Wildeman. “Much work remains to get us back just to pre-BSE conditions.”
He said market access and liberalized trade are key requirements for future prosperity.
The report, prepared under the auspices of the Chicago-based Farm Foundation, did not offer policy proposals and said it did not set out to be prescriptive. In fact, much of the ground it covered was general and familiar:
- The packing and processing sectors that producers sell to will become more concentrated.
- Producers should involve themselves in “effective supply-chain management” arrangements “that improve cost efficiency and control, food safety and quality and the ability to respond to consumer demand.”
- Food safety, traceability and animal welfare demands from the consuming public will become more insistent, even if not always based on accurate information.
David Blandford from the University of Pennsylvania said voluntary industry-policed animal welfare codes will be a better, more cost-effective alternative for the industry than new mandatory laws and regulations that impose conditions and costs.
- While some regulation is necessary to assure customers about the safety and origins of product, regulation often hurts industry.
“In general, more regulation increases private-sector costs while less regulations reduces costs.”
Many of the speakers at the Ottawa conference said more co-ordination of regulation and policies among North American countries will be essential as the continental market becomes more integrated.
However, they said common agricultural laws in all three countries are not in the cards. Instead, they advised harmonizing inspection, traceability and other rules first and then possibly following with more policy integration.
“I would say a North American farm bill is beyond our grasp right now,” Hedley said.
“But you move toward it by moving on individual files first.”
The report said the most significant trend in the North American livestock sector in the past quarter century has been the increase Mexico and Canada’s share of cattle and hog production.
Canada produces eight percent of North American cattle and 20 percent of hogs, while the American share has dropped.
At the same time, the U.S. portion of dairy and poultry production has increased and Canada’s has shrunk.
