Canadian beef industry at 'tipping point': CAPI
Sept. 11, 2012
by Meat&Poultry Staff
OTTAWA – Canada's beef industry is at a profound tipping point and corrective action is needed if it is going to deliver maximum benefits to producers and industry stakeholders and deliver on its potential of being a reliable contributor to a protein hungry world. So warns a new study released by the Canadian Agri-Food Policy Institute (CAPI).
"Canada's beef industry is falling behind and opportunities are being eroded by a failure to work together," said David McInnes, CAPI president and CEO. "The data and interviews show our beef industry lacks a comprehensive strategy to address challenges and take advantages of the significant opportunities that the future offers."
Canada is at risk of becoming a net importer of beef, the study relays. At present the cattle cycle is experiencing lower production numbers, but there is also no apparent strategy to regain domestic market share, the study adds.
Globally, Canada’s beef industry is extremely reliant on one market — the United States, which accounts for 85 percent of Canada's beef and cattle trade. The US generates $1.8 billion in total sales for Canada — approximately $1 billion in beef exports and more than $800 million in cattle exports. However, Canada is "backfilling" the US market; by relying on Canadian cattle and beef supply, the US beef industry is expanding its exports and taking advantage of higher value and margins. And the Canadian industry appears to be content to let that happen, CAPI charges.
The study said not to blame the Canadian government for this situation. When beef producers and the beef industry needed support, such as after the bovine spongiform encephalopathy (BSE) crisis, the federal and provincial governments helped. The government of Canada is also doing an admirable job of opening new foreign markets, the study continued, but the beef industry is not doing enough to capture new sales, enhanced prices and greater margins.
As a result, the Canadian beef industry must develop its own strategy. Governments can then support strategy development and investment in priorities.
“We either accept that we will remain a primary 'backfill' supplier of beef and cattle to the US — with its consequences and benefits — or we need to make a conscious strategic decision about the markets where we can perform at our best,” McInnes said. “This includes increasing the share of Canadian-beef in our own domestic market, taking fuller advantage of key high value foreign markets where we have or can develop competitive advantage, and deciding how we can better extract more value from the important US market."
Consumers want more information including greater knowledge of production practices, the healthfulness of beef and its environmental footprint, the study states.
The Canadian industry should build a comprehensive, robust strategy involving active engagement from all sectors of the beef supply chain. Information — including market intelligence, production and quality information that easily flows from producers to processors, to retailers and consumers, and information that differentiates Canadian beef from its global competitors — can play an important role in the strategy, the study states.