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A year of speaking up for cattle feeders

As advocates for our province’s cattle feeders, the Alberta Cattle Feeders’ Association champions their interests, freeing them to concentrate on what they do best – producing premium beef for the world.

This past year has been another busy one. Here are the major projects the association has undertaken:

International trade

ACFA worked closely with the National Cattle Feeders’ Association to advance swift passage of several Canadian trade deals:

– Canada-United States-Mexico Agreement (CUSMA), which replaced NAFTA.

– The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which broadens access to Asian markets.

– Opening markets in China for Canadian bone-in-beef products, including the creation of a pilot project to export fresh and chilled beef to China.

– Positive changes to the Restricted Feeder Cattle Program at the Canadian Food Inspection Agency, and postponement of changes to the CFIA Manual of Procedure that would have stalled trade with China.

Labour

To address the chronic labour shortage, ACFA reached an agreement with the Alberta ministry of Labour to facilitate faster and more direct applications for temporary foreign workers, as well as relaxed education, language and income requirements.

ACFA continues to work on this crucial program.

Taxation 

Lobbying for fair taxation has been a top priority. Efforts include:

– $75,000 in funding to appeal Lethbridge County Livestock Head Tax.

– Successfully advocating to drop proposed changes to the taxation of family owned corporations.

– Seeking rebates for carbon tax paid by agriculture.

– Successfully advocating for improved allowances and deductions from federal corporate income tax for capital investment (i.e., new Accelerated Investment Incentive).

Government consultation and submissions

ACFA regularly consults with municipal and provincial governments to represent our members’ interests. This year, ACFA:

– Urged a return to full funding for veterinary schools at the universities of Calgary and Saskatchewan.

– Called for improved regulations for winter manure management.

– Consulted on an Animal Health Pathfinding initiative for Foreign Animal Disease Preparedness.

– Attended the World Organization for Animal Health (OIE) annual meeting, and met with the European vaccine bank.

– Worked with the province and Alberta Veterinary Medical Association on the dispensing of antimicrobial products.

Next week, we will explore upcoming priorities for 2019. In the meantime, we wish you a happy new year.

Trans-Pacific trade deal opens new markets for Canada’s beef producers

A recently ratified agreement between the government of Canada and 10 other countries will provide tariff-free and/or competitive access to key markets in the Asia-Pacific region.

On Oct. 25, The Government of Canada became the fifth member nation to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

CPTPP countries that ratified before Canada were Japan, Mexico, Singapore and New Zealand. The sixth nation to ratify the deal was Australia on 31 October. Because the provisions of the agreement specify that it enters into effect 60 days after ratification by at least 50 per cent of the signatories (six of the eleven participating countries), it will come into force on 30 December 2018.

Canada’s agricultural producers had urged the federal government to be one of the first six to ratify the agreement, allowing Canada to benefit from the early rounds of negotiations and tariff cuts. For beef producers, early ratification is considered key to securing the best terms with the growing markets in Japan, Vietnam and Malaysia.

The Japanese market in particular holds huge potential for Canadian beef producers. The CPTPP will reduce the current 36.5 per cent tariff to 27.5 per cent on Canadian fresh beef and 26 per cent on Canadian frozen beef. Further cuts will eventually bring the tariff down to nine per cent for fresh beef, while frozen beef will ultimately be completely exempt.

The National Cattle Feeders’ Association (NCFA) and Alberta Cattle Feeders’ Association (ACFA) are delighted the Canadian federal government worked so diligently to ratify the deal. The government used a rare walk-around process to pass the 14 Orders in Council required to complete the process.

“Canada is a trading nation,” Jim Carr, Minister of International Trade Diversification, said in a statement announcing the ratification. “The CPTPP will add nearly half a billion consumers to the growing list of places where Canadian businesses can compete and succeed on a level playing field. The ratification of the CPTPP represents another important step toward trade diversification to help the middle class and those working hard to join it to compete and succeed in the global marketplace.”

Revised NAFTA agreement a relief to Canada’s beef producers

Image Credit: KCL Cattle Company Ltd.

After more than a year of negotiations, Canada, the U.S. and Mexico have reached an agreement on NAFTA. The new, proposed agreement is called the U.S.-Mexico-Canada Trade Agreement (USMCA).

The agreement is good news for Canadian beef producers, as it preserves the duty-free trade in live cattle and beef, which has benefited all three partners under NAFTA. The existing rules of origin and the mechanisms for fair dispute settlement also remain intact.

Brian Innes, president of the Canadian Agri-Food Trade Alliance (CAFTA) issued a statement on the new agreement: “We welcome an agreement to renew NAFTA. Free and fair trade has made our agri-food exporters globally competitive. We’re very pleased that free and fair trade of North American agri-food products will continue.”

The U.S. is Canada’s largest trade partner for beef and live cattle, and the new agreement ensures that will continue. “USMCA gives the Canadian beef industry critically important ongoing access to our largest markets: U.S. and Mexico,” said Bryan Walton, ACFA’s president and CEO. “This is an integrated industry here in Canada and free trade in North America benefits producers in all three countries.”

Why diversification still matters

The uncertainty over NAFTA has been trying for Canada’s beef producers, and it has highlighted the need for Canada to expand its global reach and forge new trading partnerships.

Trade with Asia recently received a boost with the signing of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Speedy ratification of this deal is of the essence for Canadian producers to ensure Canada is on the ground floor when it comes to securing lower tariffs with other partners. 

Europe is another market that provides export opportunities to Canadian beef producers. The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is designed to encourage free trade between Canada and Europe, although Canada doesn’t currently fill its quota for beef exports because there are not enough Canadian packing plants qualified to send beef to Europe.

“The most important thing that we got out of reaching this USMCA agreement is we’ve removed most of the cloud of uncertainty that was hanging over the Canadian economy and discouraging investors from moving forward,” said John Weekes, former chief negotiator for NAFTA.

The pursuit of an ambitious international trade agenda is one of the key tenets of Canada’s National Beef Strategy, which is designed to ensure that Canada’s beef producers are positioned to weather challenges and take advantage of opportunities. You can read more about that in ‘4 reasons the National Beef Strategy is important to Canada’.

How regulatory changes could help trade with the U.S.

This week, we’re exploring recent changes to federal regulations that will help ease the trade in live cattle between Canada and the United States. It’s a follow-up to an earlier post in which we explained why trade with the U.S. is so important to Canada’s beef producers.

The governments of both Canada and the U.S. have strict regulations under which cattle can be imported into their respective countries.

One particular concern is to identify where an animal was born in the event of a disease outbreak. The required inspections, paperwork and documentation can be onerous. 

The Restricted Feeder Cattle Program

The Restricted Feeder Cattle Program was implemented to simplify keeping track of feeder cattle imported from the U.S. to a feedlot in Canada and then directly to the processor. The program allows importation without test requirements on a year-round basis but with proper identification and certification. 

The movement of these feeder cattle must be direct to a feedlot registered with the program, and from there, direct to processing. Because these cattle will not be going anywhere else, it makes them much simpler to trace back, so it was possible to relax the regulations.

Why there was a need for change

Typically, more feeder cattle and finished cattle are shipped from Canada to the U.S. than in the other direction.   But in 2017, market conditions changed, and between 150,000 and 200,000 head of feeder cattle were imported into Canada from the U.S. 

The National Cattle Feeders’ Association (NCFA) recognized that changes to the Restricted Feeder Cattle Program could make the process easier and less costly for Canadian feedlot owners, and the Canadian Food Inspection Agency (CFIA) accepted NCFA’s suggestions. 

A summary of the changes

Recent changes to the Restricted Feeder Cattle Program have focused on the following areas:

1. Identification – including the information to be included on RFID tags.

2. Vehicle sealing – making allowance for rest stops for cattle en route.

3. Documentation for importation and border requirements – including allowances for shipments contained in multiple trucks.

4. Inspection at destination, approved feedlot – which can, in some cases, be completed electronically, based on a reading of the RFID tags.

For feedlot owners who are importing large numbers of feeder cattle, these changes will have a  significant impact on their costs, and their ability to justify the import of cattle from the U.S.

Maintaining a regulatory regime that protects people and animals, while simultaneously facilitating free and open trade, will promote a continued, mutually beneficial relationship. That’s why livestock producers will be watching negotiations to update the North American Free Trade Agreement closely.

You can read more about this in the post, Why free North American trade is good for the beef industry and Canada.

Why free North American trade is good for the beef industry and Canada

Since the inception of the North American Free Trade Agreement (NAFTA), in 1994, the beef industries of Canada, U.S. and Mexico have essentially been operating in one single, North American market. In fact, the beef industry is a good example of how the original design and intent behind NAFTA has been successfully accomplished.

In this integrated market, processed beef (fresh, chilled and frozen), as well as live cattle, move across the border relatively unimpeded and entirely tariff-free. The U.S. is Canada’s largest export customer for beef, and Canada’s single largest import supplier.

Did you know?
In 2016, Canada exported 270,00 metric tonnes of beef (75 per cent of our total beef exports) to the U.S. In the same year, 63 per cent of Canada’s beef imports (186,000 metric tonnes) came from the U.S. That same year, Canada also exported 765,395 head of live cattle, primarily to the U.S. The U.S. exported 30,291 head of live cattle to Canada.

 

Why an integrated market benefits beef producers on both sides of the border

Free and open trade between Canada and the U.S. has had two significant benefits.

First, the trade in live cattle and beef products ensure that both countries have a source of supply to meet the demand within their own domestic markets. A steady, and sufficient supply of cattle is critical to the efficient operation of feedlots and beef-packing plants.

Second, the vigorous and dynamic trade in live cattle and beef products has injected a healthy dose of competition into the beef industry on both sides of the border. This has resulted in a more efficient, productive industry that is highly competitive in the global beef market. For example, beef from Canada and the U.S. is proving attractive in the Asia Pacific marketplace, despite the geographical advantages of competitive beef exporters such as Australia and New Zealand. This is because of our ability to compete on quality and price.

The way forward for the integrated market.

Cattle producers on both sides of the border are well aware of the benefits of free and open trade. The National Cattle Feeders’ Association (NCFA) has been working with counterparts in the U.S., such as the Texas Cattle Feeders’ Association (TCFA), the National Cattlemen’s Beef Association (NCBA), and the North American Meat Institute (NAMI) to address any issues that could be an impediment to the continuation of NAFTA.

One such issue concerns the maintenance of a regulatory regime that provides essential safeguards for animal health and disease prevention without imposing unnecessary economic costs or barriers to trade. The right regulatory balance is crucial.

In an upcoming blog post we will write about a set of reforms to Canadian Food Inspection Agency (CFIA) regulations that will make importing and exporting live cattle easier, less time consuming, and less costly – helping to remove impediments to trade, smooth the border, and speed the pace of commerce. Stay tuned.

How protectionist policies for dairy and poultry could harm Canada’s beef producers 

As NAFTA negotiations continue, Canada’s 60,000 beef producers are anxious to see a continuation of free and open trade within North America. Mexico and the U.S. currently import 80 per cent of our beef, and any impediment to that trade would severely impact the industry.

Ironically, North American trade for our beef is in jeopardy due to a Canadian protectionist policy involving a different sector. Supply management agreements protecting dairy and poultry producers are a source of serious contention in the negotiations.

What is supply management?

Supply management is a system whereby production quotas and import restrictions in the form of tariffs limit the availability of dairy, poultry and eggs. This helps keep prices at an artificially inflated level. 

Critics of the system argue that the system eliminates competition and raises prices for the consumer.

“The two planks of the system are quotas (producers need to purchase a licence to produce these commodities) and tariffs (taxes for incoming imports),” said Casey Vander Ploeg, vice-president of the Alberta Cattle Feeders’ Association (ACFA). “Both planks are needed to make the system work.” 

Why beef producers could be negatively impacted by dairy and poultry supply management

President Trump’s complaint with the supply management system is that it negatively impacts the ability of U.S. dairy, poultry and egg producers to export to Canada. To date, this has been a serious stumbling block in the negotiations, and officials are insisting that Canada dismantle the system.

Many of Canada’s beef producers are concerned that the supply management system protects a sector representing only seven per cent of our agricultural output, while putting the majority of Canadian agricultural exports at risk.

The role of the federal government in building agri-trade

The federal government has set a goal of reaching $75 billion in agriculture exports by 2025. “To achieve that goal, government needs to help us make our agriculture and agri-food products as competitive as possible within the international marketplace,” said Casey. “It’s important that supply management does not impede our ability to access those markets.”  

For a full explanation of why NAFTA matters to Canada’s beef producers, read ‘Cattle feeders head to Ottawa to support NAFTA negotiations’.

How membership in the World Organisation for Animal Health helps Canadian beef exports

The 86th session of the general assembly of the World Organisation for Animal Health (OIE), which took place from May 20-25 this year in Paris, France, concluded with some positive changes for Canada when it comes to beef exports.

The Canadian delegation was led by Dr. Jaspinder Komal, Canada’s Chief Veterinary Officer (CVO) and included ACFA’s president and CEO, Bryan Walton.

Setting international standards for the livestock industries

The OIE is an international organization whose primary objective is to set international standards for animal health and the safe trade of animals and animal products.

It was created in 1924 in response to an outbreak of rinderpest disease in cattle in Europe. Since then, its membership has grown from the original 24 European countries to its current membership of 182 countries from around the world.

Member countries follow the standards created by OIE by incorporating them into their own national animal health legislation. The standards are recognized by the World Trade Organization, and are used as a guide to mediate trade disputes between countries.

How Canada takes a leading role in the OIE

We spoke with Dr. Komal to learn more about Canada’s participation in the OIE.

“The development of these standards is democratic,” said Dr. Komal. “Ad hoc working groups draft the initial standards, which are then sent to all member countries twice before the standard is adopted in a general assembly attended by official delegates from all member countries.”

Canada is known for its strong reputation and expertise in animal health. As a global leader and because of the importance of international standards to trade Canada actively influences the development and finalization of OIE standards by providing expertise on ad hoc working groups and specialist commissions, and by sending the official delegate to the general assembly where these standards are adopted. Canada also works with like-minded countries such as the U.S., New Zealand and Australia to influence the development of these standards.

Outcomes from the 86th general assembly

Dr. Komal explained that, in addition to the general assembly meetings, side meetings also take place between delegates to discuss trade issues. This year, Canada advanced trade discussions with 14 countries. Some of the positive trade outcomes include:

    • The Canadian and Chinese delegates met to discuss harmonization of the audit process for pet food or rendering products. They agreed to meet later this year to finalize this harmonization, recognizing each country’s systems and potentially streamlining our trade of pet food with China.
    • The US agreed to collaborate on the Northern Border Port entry project under which Canadian feeder cattle will not be unloaded from the trailer when presented for inspection at the US port of entry. This will help streamline cattle movements across the Canada–US border and address animal welfare issues.
    • The U.S. delegation recognized Manitoba as being free from bovine tuberculosis, which means that breeding cattle being exported to the U.S. no longer require testing.

Dr. Komal concluded by saying, “It’s important to feed the world, and the OIE standards help protect against diseases that can be transmitted from one animal to another, and from animals to humans.”

Next week on this blog we will learn more about Dr. Komal’s role as Canada’s chief veterinary officer.

New partnership gives a boost to transpacific trade

Canada’s beef producers rely on international trade to keep their industry growing in a global economy. That’s why the National Cattle Feeders’ Association (NCFA) was thrilled when the Government of Canada announced it has reached a trade deal with ten of Asia-Pacific’s fastest growing economies.

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) will provide tariff-free and/or competitive access to key markets in the Asia-Pacific region. It is to be signed in March and must then be ratified by the Canadian Parliament and by the governments of the ten other member countries.

We spoke with Claire Citeau, executive director of the Canadian Agri-Food Trade Alliance (CAFTA), to learn why the agreement is so important for Canada’s agri-foods producers, including beef producers.

“Overall the CPTPP will reduce tariffs and non-tariff barriers, open new, growing markets for Canadian agri-food products, and support jobs and prosperity here at home,” said Claire. “It will provide the sector with unprecedented access to the important Japanese market and rapidly growing Asian markets like Vietnam and Malaysia.

“The 11 countries in the CPTPP region include some of our main export markets, including Japan and Mexico, as well as seven new countries,” continued Claire. “Japan in particular is the big prize as it is our third export market and a high value market for Canadian agriculture and agrifood  – it is the largest economy in the CPTPP region, and the third largest in the world. Vietnam and Malaysia are other countries that could represent expanding markets.”

Some of Canada’s main competitors, such as Australia, have free trade agreements with countries in this region, which has given them a huge advantage over Canada when it comes to exports. The CPTPP will help to level the playing field.

Since the U.S. dropped out of the Trans-Pacific Partnership, and does not have free trade agreements with Japan, CPTPP will give Canadian producers a distinct advantage over the U.S. in the Japanese market.

Why speedy ratification is crucial

John Weekes, senior business advisor at Bennett Jones, former ambassador to the WTO and Canada’s chief negotiator for NAFTA, said he attributes Japanese leadership to TPP coming back to life again as the CPTPP – because they saw it as an important way to fill the vacuum that was left in the Asia-Pacific area when the U.S. retreated from the original TPP negotiations early in 2017. The Japanese came to the conclusion that it would be important to have a trade agreement with the sort of provisions that are in the CPTPP, in that part of the world. If Canada had turned its back on CPTPP, we could have faced not having a trade agreement with the Japanese for at least a decade.

John Weekes speaking at a Canadian International Council event in Ottawa on February 12, 2018.

When addressing attendees at the Alberta Beef Industry Conference in Red Deer on February 23, 2018 John stated,

Canada should approve CPTPP in parliament as soon as possible so we get in on the ground floor on tariff reductions and secure lower tariffs as quickly as possible.

Claire Citeau explained that the CPTPP will enter into force 60 days after at least six members ratify it. “We may lose the ‘first mover advantage’ if Canada is not among the first countries to ratify,” she said. “If our competitors ratify and implement the CPTPP before Canada, they will benefit from the initial rounds of tariff cuts and we won’t, putting us at a further disadvantage.”

“Having better and more competitive access to markets like Japan will create further growth and help create jobs in urban and rural areas in Canada,” concluded Claire.

Stay tuned for future blog posts, in which we will keep you updated on the ratification process.

How population changes are driving the beef industry

This is the first in our Spotlight on the Speakers series, featuring speakers from February’s Alberta Beef Industry Conference. This week, Andrew Ramlo, executive director of Urban Futures, spoke with us about the changing faces, places and consumption patterns of the Canadian beef market.

How age, ethnicity and lifestyles are changing the domestic market

Andrew, whose company, Urban Futures, specializes in demographics, explained that the domestic market for beef, and indeed all agricultural products, is undergoing a significant change on three major fronts:

Age: For the first time in decades, the baby boomers are no longer the dominant generation in terms of numbers. There are now more Millennials and Generation Xers than post-war boomers. This shift is having an impact on all factors of the market, including  what people consume and how they consume it.

“This younger generation demands to know where their food comes from, and how it was produced, giving rise to the popularity of niche products such as hormone-free, grass-fed and organic,” Andrew said. They are also increasingly in tune with diet and health, and this affects their food choices.

Lifestyle: “One of the major drivers of the market will be convenience,” Andrew said. “People have busy lives and kids to feed, so they need to have convenience in the ways things are prepared and packaged.”

Ethnicity: With a population that is increasingly ethnically diverse, the types of food eaten by Canadians is changing, and so is the way it is purchased and prepared. Canadian food producers must pay attention to the ethnicities of their consumers, and their eating habits or preferences.

An export market driven by growth

While the domestic market is being driven more by change than by the potential for significant growth, growth can be expected in the export market.

“The Asia-Pacific markets are going to be very significant,” said Andrew. “Particularly in China, there are a lot of consumers who have not historically eaten beef, but who are starting to be able to afford it.”

How immigration could affect beef production

We know immigration is affecting what Canadians eat, and how they prepare their food. But there is also the potential for more immigrants to be employed in the beef production industry.

“The Canadian government has increased their immigration targets from what it has historically been – between 275,000 and 300,000 – to about 340,000 by 2021,” said Andrew. “This is being done by and large in response to our aging population; to give us the ability to fill in the labour force as the baby boomers head toward retirement.”

“The government really needs to look at aspects of our labour market and do more targeted recruitment among potential immigrants.”

You can read more about the impact of demographics on the beef industry in Changing demographics mean changes at the dinner table.

Watch for future ‘Spotlight on the speakers’ posts.

6 issues cattle feeders will discuss at the Alberta Beef Industry Conference

Beef producers from all over Alberta will convene in Red Deer next week for the Alberta Beef Industry Conference.

This annual event is a chance for industry members to find out what’s new and network with others in the industry. As the event approaches, here’s a look at some of the pressing issues ACFA has been following, and that industry members will likely discuss.

#1 The Canadian Agricultural Partnership (CAP)

The government has allocated $3 billion to invest, over the course of five years, in five areas: innovation and research; environmental sustainability; risk management; product and market development and diversification; and public trust. ACFA will look at devising projects and programs to advance the cattle feeding industry, which could attract funding under CAP.

#2 Labour

The Federal Department of Employment and Social Development Canada (ESDC) is currently reviewing the Temporary Foreign Worker Program. This program is a life-saver for cattle feeders when they are unable to find workers from within the Canadian workforce. Past government reviews have accepted ACFA recommendations but there is still room for improvement.  ACFA will continue to be engaged in this file.

#3 Comprehensive and Progressive Trans-Pacific Partnership (CPTPP)

Last month the government announced it will sign onto the new CPTPP trade agreement. This is good news for the beef industry and should result in reduced tariffs in a number of export markets, especially Japan. ACFA will continue communicating with government to stress the importance of the agreement for Canada’s beef industry until it is fully approved and ratified by Parliament.

#4 Other trade issues

NAFTA and trade with China are two other pressing trade issues of great importance to cattle feeders. In June 2016, the U.S. secured approval from China for greater access to that market. Canadian producers need the same access. A new pilot program to export fresh and chilled Canadian beef to China is expected in 2018, but ACFA will continue to press for the same access given to the U.S.

#5 Competitiveness

About 10 years ago, ACFA commissioned a study to assess the competitiveness of cattle feeding in Alberta. The industry’s ability to compete effectively in the international market will continue to be a priority and there will be discussions about whether it is time to update this study.

#6 Industry governance and financing

The mandatory levy on beef sales, known as the check-off, is used to fund research and marketing activities on behalf of the entire industry. ACFA and the Alberta Beef Producers (ABP) have come together to devise a new governance and funding model for the provincial beef industry, and its use of check-off dollars. A plebiscite may be required later in 2018 for a final decision.

As well as conversation and networking, the conference also features a full program of speakers, including former Prime Minister Stephen Harper.

For anyone interested in Alberta’s beef industry, its challenges and opportunities, this is a must-attend event.