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A year of speaking up for cattle feeders

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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.

Revised NAFTA agreement a relief to Canada’s beef producers

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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’.

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

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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.

5 priorities for cattle feeders in 2019 

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Canada’s cattle feeders are urging politicians to consider the needs of beef producers in their platforms for the 2019 federal election. 

Agriculture and Agri-Food is a $100-billion industry that employs more than two million Canadians. The government has identified the sector as one of a few with the potential to spur economic growth.

Canada is in a prime position to benefit from increasing global demand for agricultural products, but the industry requires government support in removing constraints and barriers to growth. 

The National Cattle Feeders’ Association (NCFA) cites five urgent challenges:

Rural infrastructure

Most agricultural operations are in rural municipalities with a limited tax base to provide infrastructure. With little federal funding, some municipalities have implemented counterproductive measures, such as the livestock head tax in Lethbridge County. This is eroding the competitiveness of cattle feeding in southern Alberta.

It is crucial that the federal government identifies critical infrastructure investments in rural communities and dedicates financial resources to make them happen.

Labour shortage

A chronic labour shortage of about 60,000 workers is costing primary agriculture producers about $1.5 billion in unrealized farm cash receipts each year. 

Farmers have been forced to turn to the Temporary Foreign Worker Program to fill positions that cannot be filled by Canadians, but the process is expensive, time-consuming and complicated. 

The program’s processes need to be streamlined and clear a pathway set for permanent residency for temporary foreign workers.

Regulatory barriers

The industry is ever-evolving with new technologies and industry developments. But when regulations don’t keep pace, it hinders our ability to compete in the global marketplace.

In 2016, NCFA released a detailed study entitled The Competitiveness of the Canadian Cattle Feeding Sector: Regulatory and Policy Issues(PDF)

, Costs and Opportunities. It highlighted six areas – enhanced traceability, export regulation and impediments, veterinary drug harmonization, inspection practices, transportation and labour – where reforms could generate an additional $495 million in revenue across the beef value chain.

International market access

Canada exports 45 per cent of its beef production, and those exports are primarily to the U.S. To grow, the industry needs to expand into other markets, including the Asia-Pacific region and Europe.

Agreements such as the North American Free Trade Agreement (NAFTA), the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and the Canada-EU Comprehensive and Economic Trade Agreement (CETA) should be a government priority. They will have a tremendous impact on our ability to trade effectively with these regions.

Consumer education and trust

Government and industry need to work together to ensure consumers are able to make informed choices when it comes to their food, whether the issue is environmental impact, health, or production methods.

Public education should be a pillar of any new national food policy, and Canada Food Guide revisions should reflect the most recent scientific, medical and nutritional research.

In an earlier blog post, we featured John Weekes, an independent business advisor who has worked with NCFA on international trade issues. You can learn more about his work in Meet the international trade expert who is helping support the beef industry abroad.

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

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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’.

4 reasons the National Beef Strategy is important to Canada

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These are interesting times in the beef industry. Our producers face numerous challenges such as declining cattle numbers across the world and consumer concerns about environmental impacts and animal welfare. At the same time, new markets, including those in Asia and the Pacific region, are providing opportunities for industry expansion.

To ensure Canada’s beef producers are positioned to make the most of these opportunities — and overcome the challenges — industry organizations, including the National Cattle Feeders’ Association, came together to develop a National Beef Strategy. 

The goal of the strategy is to position Canadian beef producers for greater profitability and growth and to support their reputation for superior quality, safety, value, innovation and sustainable production methods.

The National Beef Strategy is based on four main pillars and goals:

#1 Beef Demand

To increase the value generated from each animal by 15 per cent. Recommendations include:

  • Product development and the use of under-valued cuts to maximize competitiveness
  • Building recognition and loyalty for the Canadian Beef Advantage brand
  • Pursuit of an ambitious international trade agenda
  • Increasing consumer confidence in food safety, quality and production practices
  • Communication of the sustainability message

 

#2 Competitiveness

To reduce cost disadvantages compared to main competitors by seven per cent:

  • Working with regulators to develop a supportive regulatory environment
  • Improving access to affordable resources such as skilled labour, animal health products, feed grains and forages and new technologies
  • Maintaining and enhancing research capacity
  • Continuous improvement in sustainability and efficient use of resources

 

#3 Productivity

To increase production efficiencies by 15 per cent through improvements in the following:

  • Genetic selection
  • Research and development
  • Enhanced information flow along the production chain through information technology and verification

 

#4 Connectivity

To improve communication within the industry and connect positively with consumers, the public, government and partner industries through:

  • Development of an industry communication strategy
  • Engagement with industry partners and stakeholders
  • Engagement with government, consumers, domestic and international organizations

 

“This strategy is something all stakeholders in the industry can buy into,” said Martin Unrau, co-chair of the National Beef Strategic Planning Group. “There’s strength in numbers and by working together we will build a stronger and more robust industry capable of meeting and responding to the opportunities now and into the future.”

You can read more about some of the challenges facing cattle feeders in ‘Pressing cattle feeders issues discussed with politicians during Ottawa trip’.

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

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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.

Ottawa meetings bring cattle feeder issues to government’s attention

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Each year, at its February board meeting, the National Cattle Feeders’ Association (NCFA) creates an Ottawa Engagement Strategy. This strategy provides a framework for four separate meetings in March, May, September, and November with federal decision makers, including MPs, ministers, parliamentary secretaries, staff, and house committees.

The strategy allows NCFA representatives to advocate for cattle feeders across Canada on major issues such as trade, regulations, labour, and infrastructure.

During the 2018 March and May meetings, the NCFA met with Patty Hajdu, Minister of Employment, Workforce Development and Labour, and with Lawrence MacAulay, Minister of Agriculture and Agri-Food, as well as more than 50 MPs and government officials.

The issues explained

The major opportunities and challenges that form the focus of this year’s meetings include the following:

Opportunities for growth

Barriers to growth

  • Consumer education and trust – To get the government engaged in consumer education, helping ensure, through the Canadian Food Policy, that consumer choice is “informed”, based on facts and science.
  • Labour shortages – To ensure that Canada’s agricultural producers and meat processors have access to the labour they need.
  • Rural infrastructure – To facilitate infrastructure development so that agriculture ties into broader provincial, regional, and national networks.
  • Regulatory barriers – To continue updating regulations so they reflect the day-to-day realities of beef production and keep pace with technological changes and ongoing innovations.

Progress made during the consultations

In early May, Rodger Cuzner, parliamentary secretary for labour, chaired a day-long roundtable on labour needs in agriculture and agri-food. It was announced that the government will no longer require separate Labour Market Impact Assessments (LMIAs) for worker transfers or replacement workers. This removes one of the many Temporary Foreign Worker Program (TFWP) complexities.

Bureaucrats administering the TFWP are currently holding consultations with agriculture across Canada, with meetings in Ottawa, Calgary, Saskatoon, Winnipeg and other cities. Key issues with the program will be raised during the meetings.

As more meetings are held later this year, we will continue to provide updates.

Why graded beef is good for producers and consumers

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Canadian beef is known across the world for its consistently high quality. Here in Alberta, the factors that contribute to great beef production include not only our high standards of animal care, but also our unique weather and farming conditions.

Thanks to a stringent grading system, it’s not only possible to rely on the quality of Canadian beef, but it’s also possible to quantify it.

The Canadian Beef Grading Agency, (CBGA), assesses and grades beef at federally inspected packing plants, based on standards set by the federal government. The five grading criteria are:

  • Maturity (age), as this affects the tenderness of the meat
  • Gender, as the hormone levels in some bulls affects meat colour and tenderness
  • Muscling
  • Fat, including the amount of fat and colour
  • Meat colour, texture and marbling

A top grade will only be assigned if the carcass meets all five quality attributes. The amount of visible marbling will determine the segmentation within Canada’s top grades – Canada Prime, AAA, AA or A. The CBGA also assesses meat yield using a specialized grading ruler and assigns a yield grade. Canada currently has 3 yield grade classes Canada 1, 2 or 3.

Why grading matters to beef producers

Cindy Delaloye, general manager at CBGA, says more than 99 per cent of the meat coming from federally inspected processing plants is graded, even though grading is voluntary.

“The livestock industry sees the value in having their beef graded because it provides a guarantee to their customers that the product in the box is what it says it is,” she said. “In Canada, we’re barbecue demons, so it’s important for us to have the quality and consistency to know that we’re going to have a good eating experience.”

Feedlot operators pay a portion of the grading fee in conjunction with the processor, and grading provides them with an opportunity to command a premium price for a premium product.

What Canadian beef grading means to consumers

Marty Carpenter, CBGA’s board chair, said consumers have learned to trust the grade because the beef they purchase consistently meets expectations.

“We have an exacting grading standard in Canada, whereby if the product doesn’t reach a particular standard in all criteria it doesn’t make the grade,” he said.

Restaurateurs – and retailers particularly – are buying based on quality and want to have confidence that whenever they buy Canadian beef it will have the attributes they expect.

Marty also explained that different cultures value different aspects of the product. “Hispanic buyers in the U.S., for instance, value the fact that Canadian beef is graded on colour as that is an important indicator of freshness to them. Canadians like red meat and white fat. People buy with their eyes,” he said.

Beef grading and exports

Grading is one more way of helping Canadian beef stand out in the global marketplace , helping cement Canada’s reputation as a producer of world-class beef.

Secure labour sources needed to meet $75-billion ag-export goal

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In 2017, the federal government challenged Canada’s agricultural producers to reach an export target of $75 billion by 2025 – fully $20 billion more than current levels. The government has identified agriculture as one of a handful of sectors that could spur economic growth.

Yet the huge potential for increased global trade for Canadian agri-foods is likely to go unfulfilled unless the agriculture sector’s chronic labour crisis is resolved.

Temporary foreign workers

The importance of temporary foreign workers to Canada’s farmers has been explained in previous blog posts. When farmers cannot find enough domestic workers to help them run their operations, access to temporary foreign workers, and the ability to keep them in the country, is crucial to the growth of the sector.

Proposed changes to the Alberta Immigrant Nominee Program and to the Temporary Foreign Worker Program are making it harder for farmers to access that labour lifeline.

Youth unemployment

We spoke with Joe Hersch, managing director of Youth Jobs Canada, who said that young Canadians could also be part of the solution.

“Unemployment rates among youth are in the range of 13 to 14 per cent,” said Joe. “That’s about double the Canadian unemployment rate, which stands at around seven per cent”.

Youth Jobs Canada is the only national employment website that focuses strictly on youth. It makes employment resources available to youth, and helps bridge the divide between them and potential employers. “We wanted to give youth the tools that they need to go after jobs, but also to allow employers to post jobs,” Joe continued.

The response to the site, which launched in October 2017, has been very favourable among employers, but the uptake among youth is growing more slowly. Joe commented that job seekers can sometimes be unrealistic in terms of the level at which they expect to enter a career path.

Youth Jobs Canada is building awareness among young people, primarily through work fairs and social media.

“Social media is where young people live,” said Joe, “and if you can direct your message through social media that’s how you can make sure you’re being seen. Having that interaction is so valuable, so that youth feel comfortable that we’re identifying with what they need.”

Services such as Youth Jobs Canada are valuable tools in the agricultural sector’s recruitment toolkit. Some others include Acme School’s Career Connections, Alberta 4-H, Ag in the Classroom and Alberta Agriculture and Forestry’s Green Certificate Program. Nonetheless, support from the government is the best hope our agricultural producers have of a viable solution to this long-term challenge.