CNS Canada — A deal to increase the volume and cuts of Canadian beef that are shipped to China is winning applause from the Canadian cattle sector, but isn’t likely to revolutionize the industry anytime soon.
Earlier this month, Agriculture Minister Gerry Ritz completed a trade mission to China, where he received assurances China would begin the process of eventually accepting Canadian bone-in beef from animals 30 months and younger (UTMs).
“The value potential is huge, it could be upwards of C$240 million,” said Robert Meijer, president of Canada Beef Inc., who accompanied Ritz on his trip.
While the deal will take years to fully implement, Meijer said it will be welcome news for producers at a cow-calf level.
“So when they pencil out their business plan, they’ll be able to look at these opportunities and the market potential and say ‘Perhaps I need to hold back those heifers. Perhaps I need to grow my calf crop and provide more animals on the market.'”
Paula Larson, chairperson of the Saskatchewan Cattle Association, runs a 250-head operation with her husband between Rosetown and Kindersley in west-central Saskatchewan and agrees the deal is a positive development that could open the door for cattle parts that traditionally wind up in the grinder.
“You get a tongue, say two to three pounds, and you give it a value that it never had before.”
At the same time, she said, producers aren’t going to feel the impact anytime soon “It’s not going to happen quickly. Those tariffs come off slowly, over 15 years.”
Breeding new animals and getting them to market isn’t something that happens overnight, she added.
“With the uptake and holdback of heifers for the livestock number to grow, it’s time-consuming, cattle aren’t a quick turnover.”
Meijer agreed, saying careful planning will be needed for the full benefits of the deal to be realized.
“We have to be in a position we’re putting the right types of meat into the right market at the right time, the highest value, that is a formula, we anchor against a very specific strategy, we’re not just selling beef, we’re branding it.”
The recent trade mission took him and others to cities and areas encompassing 150 million people. Canada isn’t expected to be able to feed everyone, he explained; rather, it’s more about maximizing prices for the industry and selling more of the carcass than normal.
Larson said it’s tough to know if the deal will really change things for producers such as herself, but bringing on new customers is always a good thing.
“We’re had hard blows over the past 10 years… added value is always good news.”
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.