November 06, 2003



US Beef Exports Surged 17%; Largely Due To Shunning of Canadian Beef

U.S. beef exports soared 17% after world markets shunned Canadian beef due to a case of mad cow disease, says a Statistics Canada report.


Most of the demand of US beef came from Mexico, Japan and South Korea where Canadian and U.S. exporters traditionally compete, said the report released Wednesday. But industry officials suggested the situation for Canada is not as bleak as it might seem.


Re-establishing trade links will be easier since customers don't seem to have lost the taste for high-quality, grain-fed beef, said Ted Haney of the Canada Beef Export Federation.


"International consumers and distributors (could have) switched to lower- quality, grass-fed beef from the Southern Hemisphere or other competing proteins: pork, poultry, fish or seafood," said Haney.


"We feel as long as the shift has been within supply source . . . our ability to return to normal is actually easier."


Haney's members have lost an estimated $1.65 billion in sales since May 20 when bovine spongiform encephalopathy, or mad cow disease, was detected in an Alberta breeder cow.


The Statistics Canada economic report said US has taken up most of Canada's beef business.


Prior to the confirmed case of mad cow in Alberta, U.S. beef exports averaged $460 million Cdn a month. That monthly average jumped to $540 million Cdn in each of June, July and August.


Statistics Canada did not compile any numbers for 2002 and futures were not available from the U.S. Department of Agriculture.


The report also notes the U.S. has not imported more beef from other countries to fill any gaps created when Canadian beef was banned.


U.S. beef prices spiked immediately after Canada was shut out from the international marketplace and have remained high. That has created concerns among international importers, which could bolster chances for Canadian products, Haney said.


"In some cases, it's safe to say that international importers believe they've been subjected to predatory pricing," he said. "That has built up a certain discomfort that will result in very strong purchases of Canadian beef to rebalance the market."


Some countries, most notably the U.S. and Mexico, have been allowing some Canadian beef cuts from cattle under 30 months of age back into their countries since September, but live animals and meat from older cattle are still banned. 


Last Friday, the U.S. released a proposal that could open the border to young live animals early in 2004. Included in the proposal, which is open to public debate for 60 days, is the acknowledgement that beef prices will drop slightly once Canada re-enters the marketplace.


Haney said Mexico is particularly eager to resume major trade with Canada since it is now getting virtually all its beef from the U.S.


"Mexico is not comfortable with a perceived supply monopoly environment when the United States is the only choice for importing high-quality, grain-fed beef."


Neil Jahnke, president of the Canadian Cattlemen's Association, said it was natural that someone was going to fill the hole left on the international market. He continued to say that in fact he felt glad that presently it's the US who has taken over their market share instead of Australia or New Zealand. He too expresses confidence that eventually Canada will be able to wrest the Asian beef markets.

Video >

Follow Us