CCA IS THE NATIONAL VOICE OF CANADA S 68,500 BEEF FARMS

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1 CCA IS THE NATIONAL VOICE OF CANADA S 68,500 BEEF FARMS Oil & the CDN Dollar January 2016 In This Issue... In November 2015, the U.S. Energy Information Administration reported crude reserves to be 39.9 billion barrels. This is roughly equal to total U.S. crude production in So with the largest production year Oil & the CDN Dollar January 2016 since the 1970s, the U.S. has been able to stockpile the equivalent of one year s worth of oil production. It Agriculture Workforce Update should be no surprise then that U.S. oil prices have dropped more than 70 per cent in the past 18 months, dipping below $30 a barrel for the first time in 12 years. While economists may debate to what degree CYL Goes to Denver energy prices impact the so-called Canadian petrodollar, the loonie has trended downward alongside oil in Canadian Beef Industry Award for this latest slide, plunging to 14-year lows. Outstanding Research And Innovation Oil companies are preparing for a prolonged downturn as analysts say there s potential for further declines. Register Now For CCA Town Hall and The U.S. removed export tariffs the end of December. In addition, the end of sanctions BCCA Tech Transfer Workshop ( against Iran could bring thousands of additional barrels of oil to an already oversupplied market and drive prices down further. Major producing countries are in a fight for market share as countries try to offset lower prices with larger volumes. The glut of oil on the global market may get worse before it gets better putting further pressure on the Canadian dollar in While the Canadian dollar has slipped to 14-year lows, analysts note that it may need to fall even further to reflect economic activity. Analysts differ on how far the Canadian dollar could potentially drop, ranging between US$0.65 and US$0.59, before conditions stabilize. But recovery is only expected at or after mid-year. What does the lower dollar mean for the beef industry? Higher Beef & Cattle Prices - The exchange rate always impacts Canadian beef and cattle prices. The ability to arbitrage means that prices are determined in an open North American market. The depreciating dollar supported live cattle and beef prices in Research has shown that a one per cent depreciation in the exchange rate increases beef and cattle prices by one per cent. Packer Competitiveness - A lower dollar decreases Canadian packer costs compared to U.S. competitors in U.S. dollars. So the labour cost disadvantage is muted, enabling Canadian packers to be more aggressive and keep more cattle in Canada. Feed - The exchange rate also impacts the comparison of feed grain prices and the relative cost of gain between Canada and the U.S. These differences in feed grain prices influence where cattle will be fed. A lower Canadian dollar positively impacts the beef industry throughout the supply chain, supporting prices and competitiveness. However, current market volatility creates uncertainty and risk that producers must also address, regardless of the price.

2 Agriculture Workforce Update An update on agriculture workforce shortages was presented at the Beef Value Chain Roundtable meeting in Ottawa on January 13. Unfortunately, labour shortages continue to be problematic for the livestock sector and meat packing plants. The result of an insufficient workforce is causing Canadian meat packers and processers to reduce the production of value added items and forfeit lucrative export opportunities. This reduction in competitiveness ultimately affects cattle producer s bottom line and is a threat to future operations. Hiring Canadian workers continues to be the agriculture industry s first priority, as recruiting efforts and training incentives remain ongoing. In addition, the industry is working to establish a dedicated program for Agriculture and Agri-Food that provides a pathway to permanent resident status for workers from outside of Canada to augment the Canadian workforce. A particular measure that would be of most strategic help is to designate industrial butchers in the federal Express Entry program. Although this goal is not yet achieved, the CCA, in partnership with a number of agriculture groups working together in the Labour Task Force, will continue to work with Federal Ministers and Officials from Immigration; Refugees and Citizenship; Employment, Workforce Development and Labour; and Agriculture and Agri-Food Canada to implement these changes. Coming up March 14-16, the Canadian Agriculture and Agri-Food Workforce Summit will take place in Winnipeg, Manitoba. This event will provide a forum to discuss agricultural labour issues of concern to farm employers, including finding and keeping domestic workers, and using temporary foreign worker programs. The Canadian Agriculture Human Resources Council will also release the final results of its Labour Market Information project, which includes forecasts of agricultural labour supply and demand. These findings will shed light on how many people will be needed to work in the agriculture industry in the next ten years and make recommendations on how the industry can obtain the workers to meet demand. Interested parties can learn more about the event and register at CYL Goes to Denver Cattlemen s Young Leaders (CYL) participants Shane Klepak, Bethany Storey, Penny Patton, and Laura Ecklund travelled to Denver, CO January for a whirlwind tour to learn first-hand about all the U.S. beef industry has to offer. The trip started with a visit to the Canadian Consulate on the 14th for a Canada- U.S. Young Producers Roundtable. CCA Director Doug Sawyer was among the industry representatives in the group. Topics discussed included social license, environmental challenges and related regulations, integration of meat and livestock industries, and emerging issues such as antimicrobial resistance. Following the roundtable, the CYL group attended an evening reception hosted by the Consulate General of Canada in Denver to celebrate the U.S. Canada agricultural relationship. The group mingled with government and industry representatives to strengthen trade relationships. CYLs, Canadian consul and trade commissioner Maxime Therien (back row, first left), CCA Director Doug Sawyer (back row 2nd from right) and other industry reps at Canada-U.S. Young Producers Roundtable.

3 The next day the CYL group toured the toured National Cattlemen s Beef Association (NCBA) Denver offices and listened to a presentation by Interim Chief Executive Officer Kendal Frazier. This provided a good understanding of NCBA structure and history, relationship with the CCA, and the NCBA convention. The group also enjoyed a tour of the JBS 5 Rivers Feedlot near Greeley, Co, which has a 100,000 head capacity. The weekend was spent touring the National Western Stock Show and rodeo. The CYL group took in shows, sales and display cattle on Saturday and attended the rodeo on Sunday with the Consulate, as it happened to be Canada night. The CYL group was featured in a horse-drawn wagon during the intermission alongside Maxime Therien, Consul and Trade Commissioner (Agriculture) and other dignitaries. It was an exciting part of the trip. Overall the Denver trip provided an excellent opportunity for CYLs to advocate for the Canadian beef industry and learn more about its largest trading partner. CYL, Canadian consul and trade commissioner Therien (3rd from left) outside the National Cattlemen s Beef Association Denver offices. The CYL Program provides industry-specific training and mentorship to assist the beef industry into the future. This program provides producers between the ages of 18 and 35 years a combination of formal and informal opportunities to learn from existing beef cattle industry leaders and other youth organizations undertaking mentorship opportunities. Applications for the CYL program year are now being accepted. Apply before March 31. For further detail and to apply online, visit: CYLers (L to R) Shane Klepak, Laura Ecklund and Bethany Storey enjoying the view at JBS 5 Rivers Feedlot near Greeley. CYL featured at National Western Stock Show and Rodeo on Canada night.

4 Canadian Beef Industry Award for Outstanding Research and Innovation Dr. John McKinnon, a leading expert on beef cattle nutrition and management, is the recipient of the 2015 Canadian Beef Industry Award for Outstanding Research and Innovation. A researcher, professor and the Saskatchewan Beef Industry Research Chair at the University of Saskatchewan, Dr. McKinnon has made significant contributions to advance the competitiveness and sustainability of the Canadian beef industry. Dr. McKinnon s research focuses on nutritional and environmental factors influencing the growth and carcass quality of feeder cattle and the nutrition of the breeding herd. Areas of emphasis in his research include the use of wet distiller s by-products for feedlot cattle, nutritional evaluation of grain screenings for growing cattle, use of real-time ultrasound for predicting carcass quality of breeding and finishing cattle, the impact of the environment on performance of cattle in Western Canada and the use of high lipid feeds for growing and finishing. Tim Oleksyn (Chair, BCRC), Brad Wildeman (Nominator), Dr. John McKinnon (Recipient), Sandy Russell (Nominator) His whole systems approach to beef production and leadership in collaboration and cross-discipline research has been extremely beneficial in improving the competitive advantage of Canadian beef producers. He continues this comprehensive and forward looking approach through his efforts in the development of the Beef Cattle Research and Teaching Unit at the University of Saskatchewan. Dr. McKinnon received his award at the Saskatchewan Beef Industry Conference in Saskatoon on January 21, To read the full Beef Cattle Research Council Release and learn more about the Canadian Beef Industry Award for Outstanding Research and Innovation go to

5 Register Now for CCA Town Hall and BCCA Tech Transfer Workshop Wednesday January 27 is the last day to register for the CCA Town Hall meeting to be held in Fort St. John, B.C. on February 2. Hosted by the British Columbia Cattlemen s Association (BCCA) and sponsored by Farm Credit Canada, this event will provide area producers with the opportunity to hear updates on important beef industry issues, ask questions related to CCA activities and industry outlooks, network with their peers and enjoy a complimentary meal. Given recent successes on crucial trade files like COOL and South Korea, this promises to be an informative session. In addition to CCA s Town Hall, BCCA will be hosting a Technology Transfer Pilot Program series: Evaluating the Environmental Footprint of Cattle Production in Canada. Attendees will hear from experts on the role of beef cattle in maintaining the environment and technologies available to producers to enhance sustainability in their operations. The events are free of charge but interested producers are asked to register in order to provide organizers with an accurate count for the complimentary meal. For more information and to register, visit CCA Action News Staff Contributors: Brenna Grant, Brady Stadnicki, Jolene Noble, Tracy Herbert Written, edited and compiled by: Gina Teel and Stina Nagel The Canadian Cattlemen s Association is the national voice for Canada s beef cattle industry representing 68,500 beef farms and feedlots. To sign up for CCA s Action News: For more information, contact: Visit and click on Action News Signup CCA Communications at feedback@cattle.ca or visit our website at Head office: Ste. 180, th Street NE, Calgary, AB T2E 7H7 Phone: Fax: Ottawa office: 1207, 350 Sparks Street, Ottawa, ON K1R 7S8 Phone: Fax: