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 In This Issue... CCA part of Standing Committee on Finance Pre-Budget consultations Beef Trade 2015 VBP+ to provide assurances of sustainable beef production at the farm level BIXSco Inc. and Cargill Ltd. sign carcass data exchange deal BCRC Webinar: Antimicrobial use and resistance in beef cattle: what producer need to know CCA part of Standing Committee on Finance Pre- Budget Consultations Canadian Cattlemen s Association (CCA) Executive Vice President Dennis Laycraft appeared before the Standing Committee on Finance Pre-Budget Consultations in Ottawa on February 16, His remarks, delivered on behalf of the people who operate Canada s 68,500 beef farms and operations, reviewed for the Committee the key areas where the Government can help the Canadian beef sector to achieve long term competitiveness and secure future prosperity. In short, Canada s beef sector encourages finance policies and a fiscal environment that supports long term growth, continuous improvement though innovation and collaboration, and that expands industry s ability and capability to competitively market its products to the world. Laycraft discussed the importance of trade to the future prosperity of the Canadian beef industry. The ability to compete requires investment both in opening export markets and domestically to ensure a competitive and innovative industry. Laycraft requested that resources be dedicated to bringing the Trans-Pacific Partnership (TPP) Agreement and the Comprehensive Economic and Trade Agreement (CETA) into effect in a manner that results in commercially meaningful beef exports. It is paramount that the TPP be approved and implemented as quickly as possible, he said, so that Canada can re-claim Japanese customers lost to Australian beef which already benefits from a Free Trade Agreement (FTA) in that market. With CETA, Laycraft urged continued progress in addressing technical barriers to Canadian beef in the European Union and then have the agreement come into effect. To further support trade, CCA asked that the Agriculture Market Access Secretariat (AMAS) be fully funded to carry out its important work to pave the way for Canadian agri-food exports. CCA was the original advocate for creation of the AMAS to deal with technical market access issues.

2 One of the key ways the government can facilitate a competitive Canadian agriculture sector is to help it innovate by investing in research. Industry/government funded research clusters have been one of the great success stories in Canada, Laycraft said, and he expressed strong support for continuing this exceptional approach to collaborative research. The Canadian beef industry is leading the world on sustainability work. On environmental sustainability, Laycraft encouraged government to continue to support ranchers conservation actions, ensuring funds are available for continuation and expansion of agri-environmental programs and the development of marketbased instruments. Investment in infrastructure is needed. A major water management project in Manitoba is long overdue to mitigate the impact of flooding of agriculture lands caused by diversion. Expanded port and border facilities to eliminate the bottlenecks that take place is also needed. Labour shortages are preventing more value-added processing. Laycraft cited the need for viable immigration programs as an integrated component of a national agricultural labour strategy. On risk management, Laycraft noted the CCA has long recommended that the federal government ensure there be sufficiently funded national business risk management programs, but also support some flexibility in government contributing to regional/provincial livestock insurance programs assuming the overall level of support is even across the country and the programs are market neutral. The CCA believes that the Western Livestock Price Insurance Program is a forward-looking, market-based, insurance-style program that allows producers to manage price risk. WLPIP should be made permanent. Laycraft noted the Canadian beef industry is one of the positive stories in the national economy and has the potential to grow with the right environment in place. Beef Trade 2015 Canadian beef exports were up 1.4 per cent in volume to 322,343 tonnes and 15 per cent in value to $2.23 billion in 2015, according to Statistics Canada s final trade data for the year. The increase was achieved despite several market restrictions following the February 2015 bovine spongiform encephalopathy (BSE) case and lower monthly volumes in the second quarter. A strong rebound in August as trade resumed supported the final volumes. This, along with a weaker loonie supporting export competitiveness internationally and domestic prices, resulted in a very different year in Canada versus the United States (U.S.) where exports were down 11 per cent in volume and 12 per cent in value for numerous reasons. The U.S. remains Canada s top market, accounting for 71 per cent of total beef exports. The major shift was in Mainland China (10%) which jumped to second place while Hong Kong (3.3%) dropped to fifth. Mexico (6%), Japan (4.4%) and the Middle East and North Africa (1.2%) round out the top six export destinations with all other markets accounting for less than 1 per cent. Exports to the U.S. were up 3.7 per cent in volume to 230,197 tonnes and 16 per cent in value to $1.57 billion despite larger protein production, disruptions at west coast ports for a portion of the year and stronger Greenback all contributing to large supplies. The projected increase in U.S. beef production and continued challenges with the U.S. dollar will pressure trade in a

3 Exports to Asia saw robust growth with direct market access for Canadian beef. Exports to Mainland China increased 381 per cent in volume and 534 per cent in value to 32,869 tonnes valued at $255 million in This was driven by the Chinese government s anti-smuggling campaign that saw more direct shipments. Exports to Hong Kong were cut in half (down 59% in volume and 56% in value) to 10,784 tonnes valued at $88 million. The increase to mainland China more than offset the decline to Hong Kong, resulting in a net growth to the region. Overall, China and Hong Kong represented 14 per cent of total exports up from 10 per cent in Exports to Japan were down 24 per cent in volume to 14,384 tonnes and 9 per cent in value to $93 million. Japanese beef imports have been negatively impacted by the devaluation of the yen and poor economic performance reducing both consumption and total beef imports. Imports Beef imports in 2015 were steady in volume and up 9 per cent in value at 203,983 tonnes valued at $1.6 billion. The U.S. remains the largest supplier with 59 per cent of market share despite an 8 per cent decline in volume. Australia maintained second place with 20 per cent of market share as volumes increased by 18.6 per cent to 41,569 tonnes in 2015 with continued large slaughter under persistent drought conditions. New Zealand was the third largest supplier with 12.6 per cent of market share with volumes rebounding 56 per cent from the lows in 2013 and Overall, non-nafta imports increased 14 per cent to 83,175 tonnes surpassing the annual quota level of 76,409 tonnes for the first time since Net Trade Balance Canada s net beef trade balance continues to improve from the 2012 lows and was up 4 per cent to 118,359 tonnes in While net trade volumes remain below the 10 year average, net values have surpassed the 10 year average over the last two years. In value, Canada shifted from being a net importer in 2012 (-$164 million) and 2013 (-$69 million); back to being a net exporter in 2014 ($1.9 billion) and 2015 ($634 million). VBP+ to provide assurances of sustainable beef production at the farm level Beef producers understand and have confidence in the on-farm practices and production systems they use to raise high quality Canadian beef in a sustainable manner. Beef customers and consumers have become less familiar with where food comes from but are demanding confirmation that cattle are raised in a humane, safe and environmentally friendly manner. Canada s beef cattle industry will provide the practical means to confirm sustainable production and instill confidence in customers and consumers through the new Verified Beef Production Plus (VBP+) program, an expansion of Canada s recognized on-farm food safety program. The new VBP+ program will provide that confirmation by using third party audits of outcomes-based sustainable production practices at the farm, ranch and feedlot. By adding modules for biosecurity, animal care and environmental stewardship to the existing on-farm food safety component, VBP+ will be the only program in the Canadian beef cattle industry to provide verification of all the aspects of sustainable beef production at the farm level. Producers participating in VBP+ will continue to enhance the Canadian Beef Advantage, demonstrating that Canadian beef products are high quality and safe, and are produced in systems that prioritize animal welfare and the environment, attributes that consumers are increasingly demanding. VBP+ s advantage is the development of a nationally standardized system for enrollment, training, and auditing the modules in on-farm food safety, biosecurity, animal care, and environmental stewardship. These auditable production indicators will be outcomes-based and, as such, producers will continue to control how they implement the practices on their own operations. This full spectrum approach to beef production enables VBP+ to address areas of animal health management (biosecurity), responsible use of animal health products and livestock handling (animal care) and biodiversity and managing the environment for the future (environmental stewardship) that are important to both producers and the public.

4 In addition to capturing the significant cumulative strengths of the Verified Beef Production (VBP) program, VBP+ is being developed to align with the sustainability indicator work of the Canadian Roundtable for Sustainable Beef, which the McDonald s Verified Sustainable Beef pilot project is also informing. VBP+ is designed to connect with the Beef InfoXchange System (BIXS) to capture the opportunity to identify cattle coming from a VBP+ operation throughout their lifetime. VBP+ is a producer-led, forward-looking program that continues the commitment of the Canadian Cattlemen s Association (CCA), on behalf of its members, to enable industry to anticipate and meet emerging and growing demands for all beef production systems throughout the Canadian beef value chain. Once launched, VBP+ will provide the transparency required to make sustainable beef production meaningful to consumers and this will lead to higher demand for Canadian beef in both domestic and international markets. VBP+ is the next evolution of the VBP program. The Canadian beef industry s HACCP based program, VBP was developed by beef producers in 2004 to provide consumers with assurances of proper on-farm practices. The VBP initiative itself grew from the Quality Starts Here program, an educational initiative started by the CCA and the genesis of the CCA policy on prudent drug use developed in BIXSco Inc. and Cargill Ltd. sign carcass data exchange deal Recently, Beef InfoXchange System (BIXS) database manager BIXSco Inc. signed a master agreement with Cargill Ltd. to enable a free exchange of carcass data from Alberta plants. The agreement encompasses data from the past three years and all future data collected going forward. This agreement is a crucial step in ensuring information flows up and down the cattle value chain, said Dennis Laycraft, Executive Vice President of the Canadian Cattlemen s Association. The addition of this detailed carcass data will complete the cycle of cattle production information sharing and help to showcase the quality of Canadian beef. To read the full release, click here:

5 BCRC Webinar: Antimicrobial use and resistance in beef cattle: what producers need to know CCA Action News Staff Contributors: Brady Stadnicki, Brenna Grant, 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: