February 2, 2005

 

 

Update on Canada beef imports to US, Mexico

 

Canadian beef imports fell dramatically during 2004 following restrictions on supplementary import permits for non-NAFTA beef beyond the 76,409 tons tariff rate quota in response to the BSE crisis. 

 

Also, the U.S. Beef Export Verification Program administered by the Agricultural Marketing Service of USDA made progress in ensuring that U.S. beef exports to Canada meet Canadian BSE import requirements.  As a result, U.S. beef exports to Canada were mostly confined to the last half of the year.

 

From January to November 2004, total Canadian beef imports fell more than 60% below the level for the same period a year ago.  All major suppliers to Canada¡¯s beef market noted significant reductions in their sales to Canada.

 

For 2005, Canadian beef imports are expected to advance modestly mostly as a result of increased imports from the United States.  The prevailing policy to keep non-NAFTA imports within the tariff rate quota is expected to continue limiting imports of offshore beef.

Exports: Canadian beef exports suffered a sharp decline immediately following the single case of BSE discovered in Alberta in May 2003.  However, since the U.S. action on August 8, 2003 to allow imports of certain Canadian boneless beef and beef products, Canadian beef exports to the United States have recovered almost to their pre-BSE levels.

 

Similarly, Mexico's lifting of the ban also advanced beef exports to the country beyond pre-BSE levels.  Prospects for 2005 beef exports chiefly rest on U.S. and Mexican markets although some smaller markets are accepting Canadian beef.  

 

Also, efforts to re-open some traditional export markets for Canadian beef in Asia, notably Japan, could further boost Canadian export levels for beef.

 

For 2005, post projects record exports of Canadian beef.  The fast pace of Canadian boxed beef exports during 2004 to U.S. and Mexico is expected to continue. 

 

In addition, if the U.S. Minimal Risk rule is implemented on March 7, 2005 Canadian beef from animals older than 30 months will become eligible for export to the United States where the demand outlook for U.S. manufacturing beef is strong. 

Presently, there are two stumbling blocks to year-round access for U.S. feeders: 

 

1)      Under current Canadian BSE import restrictions, only U.S. bovines for immediate slaughter and certain veal calves for feeding are permitted entry into Canada under BSE control measures.  Therefore, the year-round access for U.S. feeders is unlikely until the removal of U.S. and Canadian BSE control measures on (most) live cattle;

 

2)      Currently, there is some uncertainty as to whether U.S. feeder cattle imported into Canada will meet the eligibility requirements set out under the U.S. Minimal Risk Rule "premises of origin" identification requirements for those cattle destined to be exported back to the United States for slaughter. 

 

Canada is confident it can meet and certify ID and origin requirements for its domestic cattle because of its mandatory cattle identification (ID) program.  However, there may be some procedural issues to work out between the animal health regulators in both countries before the importation of U.S. feeder cattle can resume.