SAN ANTONIO, Texas – A proposal to allow beef grading equivalency between Canada and the United States was tabled at the recent National Cattlemen’s Association meeting.
The question has been on the books in one form or another for years. The Americans have rejected it in the past saying their grading system is a world renowned trademark for quality beef.
“This is a system, imperfect as it may be, that was developed within the U.S. that was used for years to market our product. The question is do we want to allow that it be applied to product that comes in from other places?” said Topper Thorpe of Cattlefax, a beef marketing analysis service.
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He has been analyzing the impact such an agreement could have and said it may be impossible to fully measure how it could affect the industry on both sides of the border.
So far they have more questions than answers.
“Our final recommendation until these questions are answered satisfactorily, it did not seem to us that it was something that had to be addressed right at this moment,” said Thorpe.
A commissioned study from Iowa State University on the impacts of such an agreement was delivered Jan. 28 to San Antonio for the annual meeting. Those involved want more time to digest the report.
Gordon McLean of the NCA grading committee said, “We don’t have a high level of support out in the country on the U.S. side right now.”
Last year, NCA president Bob Drake appointed a task force to look at the feasibility of a grading equivalency between Canada and the United States.
If the Americans agreed, their recommendation for equivalency would go before the U.S. department of agriculture for approval.
Beef packing companies like IBP and Cargill, which own plants in Canada, favor the proposal.
Dell Allen of Cargill’s operations in the United States said the grades are already applied to sides of beef that are cut north of the border. Cattle born in Canada and processed in the U.S. are also graded and labeled Product of the U.S.A.
“We have to realize in this country that the Canadian cattle industry in Alberta is going to grow and continue growing and be a very strong competitor to our industry,” said Allen.
“We now have NAFTA (North American Free Trade Agreement) and it’s really no different than Texas competing with Oklahoma or Oklahoma competing with Kansas. There’s a line there but the trade boundaries are not differentiated,” he said.
The equivalency would be a mutual agreement that says beef products graded AAA in Canada could be sold in the United States as U.S. Choice. Beef graded AA could be handled as Select and A would be equivalent to U.S. Standard. The same labels in reverse could be applied to American beef sold in retail stores in Canada.
Fewer cattle exported
Proponents argue this would make Canadian packers more competitive when bidding on U.S. cattle. Canadian packers would more aggressively buy Canadian fed cattle, reducing the high numbers exported to the U.S.
All Canadian cuts entering the U.S. are labeled “no roll” meaning no grade has been applied and since this product could be equivalent to any U.S. grade, product inconsistency can occur.
The Americans are reluctant and question whether this agreement would contribute more beef to the present oversupply.
However, Thorpe said overall imports of Canadian beef affect only about two percent of the total American market.
Cattle producers were worried about setting a dangerous precedent because other countries may ask for the special consideration as well.
There is also concern that beef from countries other than Canada or the U.S. could end up in this mix and could receive an American grade.
