A decision by the United States to allow bone-in meat cuts across the border could be the start of a series of domino-like moves that will see Canadian beef regain a firm grip on worldwide markets.
Or so hope Alberta’s struggling beef producers and the provincial government.
Mexico, which has dramatically increased its consumption of Canadian beef, is expected to be next with an imminent announcement to accept bone-in beef products from Canada.
Canadian and Alberta officials are hopeful that their behind-the-scenes efforts will also spell success in prying open Asian beef markets over the next few months.
Canadian beef exports to the U.S., valued at $1.7 billion Cdn and running at 75 per cent of pre-bovine spongiform encephalopathy (BSE) levels prior to the U.S. announcement, should soon hit the 85- per-cent mark as the border is re-opened to additional meats.
In addition to bone-in cuts such as rib steaks and T-bones, all edible beef from Canadian cattle under 30 months old is now allowed across the border.
“They didn’t have to do this. They didn’t have to improve access within their current permit system but they did,” said Ted Haney, president of the Calgary-based Canada Beef Export Federation (CBEF).
“Our confidence is somewhat higher than it was. We believe this is communicating their intention to follow through with the rule-making process on a timely basis to re-establish trade in live cattle.”
In 2002, the last full year before BSE reared its head in Canada with the discovery of one case in Alberta, overall Canadian exports were valued at $4 billion Cdn – $2.2 billion of beef products and $1.8 billion of live cattle.
A second case of BSE, found in Washington state last December but traced back to a farm near Edmonton, hit producers when they were already down.
The Philippines, which had been allowing bone-in cuts for about three months, restricted beef imports to boneless cuts after the December incident.
While live cattle and beef from cattle more than 30 months of age are still trade- restricted because of BSE concerns, a bright spot has been Mexico, which has dramatically raised its consumption of Canadian beef products.
If Mexico follows the latest move by the Americans, beef exports to that country should rise by an additional 150-200 per cent over current record levels, said Haney, and account for a total of $800 million Cdn by the end of 2004.
Mexico has become a Canadian success story with first-quarter 2004 beef exports running about 150 per cent above pre-BSE levels of the same period in 2002.
“The performance of trade with Mexico is far higher than we believed possible,” said Haney.
“This gives us confidence for all our other markets that once access is restored, there (will be fewer) problems in the minds of the importers, distributors or consumers. We believe that’s a precursor to what will happen in the larger Asian markets when we resume trade there later this year.”
Haney expects to see positive movement in Asia within a short period, following a recently completed series of nine food-safety seminars between federation officials and 2,200 clients and regulators in countries including Taiwan, South Korea, China, Hong Kong and Japan. Seminars were also held in Mexico.
“I can honestly say there is a high level of confidence throughout these countries in the Canadian industry, in our beef products and in the genetic sector. We met with importers, distributors, retailers and food service representatives. Because of this confidence, we do not expect any downtime in any market once trade has been re-established,” said Haney.
Taiwan, now in the process of doing a risk assessment on Canadian beef, is likely to re-open its border in May or June, said Haney. Hong Kong will be sending a risk- assessment mission to Canada in the second week of May, meaning a resumption of Canadian beef exports could follow a similar timeline.
For South Korea, the hope is that it might accept Canadian beef in the June to July period, said Haney. Internal political problems, including a presidential impeachment, pushed back a hoped-for resumption of trade in May or June. “At this time there seems to be no momentum because they’re in a very difficult situation politically.”
Politics is also playing a role in the return of Canadian beef to China. While it’s possible China will come back to the market by July, seemingly unrelated issues may cause problems.
Haney said he wasn’t sure if Prime Minister Paul Martin’s meeting with the Dalai Lama, which China opposes, will hamper the move to get Canadian beef on Chinese tables, but he said the CBEF “does encourage the Canadian government to focus on the relationship with China.”
