In our last fiscal year, the Canada Beef Export Federation (the Federation) delivered 388 such individual export development projects, averaging more than one completion every single day. Delivered by our offices in Asia and Mexico, these are the programs that generate recognitions and drive demand for Canadian beef.

We know that these programs are vital and relevant, as Canadian beef and veal exporters attributed 23% of their total trade to Asia and Mexico to the Federation’s programs and services.

Despite market interruptions over the last six years, Canada remains one of the top beef-producing and exporting nations in the world. In 2008, it ranked tenth in the world in terms of total global production and third in total global exports. It is the largest grain-fed beef exporter in the world.

Canadian beef has been welcomed back in many markets around the world. In 2002, Canadian beef was shipped to 66 markets. Currently, 71 markets are effectively open to Canadian beef, clearly demonstrating that the Canadian industry has regained its status to export.

The New Approach to Market Access

Last January the Government of Canada announced that it was acting upon industry’s recommendation that government pursue incremental access – which is commercially significant to the industry. It should be noted that this new approach to trade policy does not require a predetermined time table toward normalization. This new approach delivered results in 2009 with market expansions in Saudi Arabia, Hong Kong and Russia.

• In Saudi Arabia, agreement was reached securing access for Canadian Under-Thirty-Month (UTM) boneless beef and veal. Our industry showed its flexibility by determining that a boneless entry strategy for Saudi Arabia made sense.
• In Hong Kong, Canada has incremental access. The first stage (March, 2009) expanded access for most UTM bone-in beef products. The second stage (June,\ 2009) provided access for Over-Thirty-Month (OTM) boneless beef and rib cuts - and offal from all ages of cattle. The third and final stage was announced by Prime Minister Harper on December 6, 2009 – full access for Canadian beef. The Federation believes this should increase Canadian beef exports to Hong Kong by another $10 million for a total annual export value of $90 million.
• In Russia, agreement was reached in October to expand Canada’s access of UTM boneless beef and selected offal – to include UTM bone-in beef and OTM boneless beef and offal products.
• Comprehensive market access was also achieved in Jordan, Panama, Mongolia, Columbia and Chile.

The Federation believes that utilizing the Canadian Government’s new approach of pursuing incremental access (independent of the timing and terms of US negotiations) in key export markets such as South Korea, Mainland China and Japan would be of tremendous benefit. The Canadian industry has yet to achieve commercially-viable access to these very important markets after almost seven years – and the consequences have been disastrous.

The Need for Global Export Markets

Canada’s beef and dairy cow herd is estimated at 5.6 million head with beef production for 2009 estimated to be 1.5 million tonnes. It takes the production from about 3 million cows to meet the beef consumption needs of our domestic market – which is about one million tonnes. The Canadian market is an excellent one, but it is simply not large enough to absorb the beef production from our 6-million-head national cow herd.

We have to remain focussed on deriving full value from international markets. The extent to which we’re successful in creating commercially-viable access, not only to Asia and Mexico, but also to Europe, Russia, the Middle East and South America will determine the eventual size of our industry.

What lies in the balance is the difference between an industry maintaining six million cows – and one maintaining three million cows. Our industry can not promote itself through market access barriers.

Commercially-viable access to our major markets in Asia and Mexico has the ability to add $85 per head in value for beef derived from UTM cattle over what can be generated in Canada. Further, these markets have the ability to add $100 per head in value over what can be generated for these same products in the US.

As well, a recently completed study (The Importance of Market Access to the Canadian Beef and Cattle Industry, CANFAX, March 2009) indicates that export market openings achieved outside of the US since 2004 have increased Canadian fed cattle prices by $270 per head. The value of markets outside of the US that have yet to normalize trade is estimated to further add $130 per head – for a total of value of $400 in fed cattle price increases. While these increases have not directly accrued to the cow/calf producer, they have offset increased costs to the feedlot sector – via dramatically increased grain prices and fuel costs; a significantly stronger Canadian dollar in 2007 and again in 2008.

It is these values that must be accessible to us in order for our industry to prosper.

Cause for Optimism

The Federation believes that we have reached the turning point and are now on the road to recovery. In 2008, world exports of Canadian beef increased 8.4% over the previous year to 393,000 tonnes ($1.36 billion). Exports to the Federation’s key markets in Asia and Mexico increased 15% to 83,000 tonnes ($320 million) for the same period, representing an increase in market share to 4.8%. Exports to markets outside of the US now account for 23% of Canada’s worldwide beef exports.

There are global opportunities available to us today – and greater opportunities to come with commercially-viable access. In key export markets and in new and emerging markets, the Federation is pursing those opportunities on behalf of our industry.