Posts

5 priorities for cattle feeders in 2019 

/15 Comments/in , , , , /by

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 

/13 Comments/in , , /by

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’.

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

/21 Comments/in , /by

 

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.

Canadian beef in demand: feeding the European market and why it matters

/16 Comments/in , /by

Global trade is a mark of success for any business, and that holds true for the beef industry as well.

One market that has not reached its full potential is Europe, where Canadian beef is in high demand. To learn more about this market, and why more Canadian beef doesn’t head east across the Atlantic, we spoke with Jason Hagel of Hagel Feeders.

His feedlot is one of the few in Canada that feeds cattle bound for the European market. The business was started by Jason’s grandfather in the mid 1950s and now feeds about 5,000 head of cattle each year, in addition to a cow/calf operation comprising about 1,000 head. Hagel Feeders can be found just east of Linden, Alberta.

In 2005, Jason was approached by a group of ranchers who had started a brand called Prairie Heritage. They were looking for a feedlot for their beef, which was supplied to local restaurants and grocery stores. The brand was based on providing beef grown by certified beef producers, with an environmental farm plan in place, and without the use of growth promotants or antibiotics. Success in the domestic market was eventually followed by expansion into the European market. “Even though tariffs made the product expensive to the European consumer,” said Jason, “they were hungry for it. About one-third of our product was being shipped there.”

In 2014, the Prairie Heritage brand was sold to One Earth Farms, but Hagel Feedlots continues to feed the cattle.

The cost of European beef exports, and why they matter

The main requirement for export to Europe is that the beef must be produced without the use of growth promotants. “It costs about 18 to 22 per cent more to finish an animal without growth promotants,” explained Jason, “because they take longer to finish, and require more feed.”

The animals must also be segregated, and RFID technology is required to provide the data needed to guarantee that the animals have been raised and fed as stated.

“Nonetheless, it’s very important for Canada to stretch out her arms to countries other than the U.S.,” he continued. “We send the majority of our product down there and that reduces our bargaining power when it comes to price. We have two American packing plants in Alberta, which have no real interest in going to anywhere other than the U.S. because it’s easy and they can buy a premium product for a lower price.”

CETA and tariffs: beef industry implications

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA), ratified in February 2017, is designed to encourage free trade between Canada and Europe. However, Canada already enjoys a tariff-free quota for beef exports. “Right now we don’t send much beef,” said Jason, “so we don’t even reach those quotas. It’s not because we don’t have the beef to send, but because there are not enough packing plants that are qualified to send beef to Europe.”

With the opening of Harmony Beef in Balzac, Alberta, later this month, that may well change. Stay tuned for an upcoming post in which we will feature this new business and discuss the implications for trade and for the Alberta economy.

Europe’s not the only market where our beef is in demand. Check out this earlier post to learn how people in 58 countries enjoy Canadian beef.