November 11, 2003

Canada Beef Pushes Swiftly Into US & Mexican Markets 
 

Canadian beef is pushing its way into U.S. and Mexican markets at a faster pace as compared to the same period in previous year, despite severe limitations on what type of meat can be exported, federal statistics show.

As of last Friday, Canada had shipped more than 55,000 tons of beef to the two countries since September, statistics gathered by the Canadian Food Inspection Agency show.

Weekly exports are between 7% and 40% above weekly volumes to the two countries last year, even though mad-cow related restrictions mean that exporters are now severely limited on the age and types of cuts they can export, said Ted Haney, president of Canada Beef Export Federation.

"It really is phenomenal," he said.

The United States and other countries closed their borders to Canadian beef after Canada found a single case of the brain-wasting mad cow disease on May 20, shutting off sales to countries which had previously taken 60% of Canadian cattle and beef.

But in early September, U.S. officials opened the border to trade in boneless meat from young animals thought to be of low risk of harboring the disease.

One month later, Mexico followed suit.

Last week, Canada shipped 6,637 tons of beef to U.S. buyers, bringing the total since September to 52,270 tons. Another 766 tons moved to Mexico, for total shipments there of 3,285 tons since October, the federal statistics show.

"Canadian companies are able to clear the market of boneless beef and some of these other variety meat products and they're doing so without accepting significant price discounting," Haney said.

He said shipments to the Philippines might be next on the list, as Canada has agreed to export protocols with the country.

Macau is also expected to approve export protocols in coming weeks, Haney said, which will open up trade into neighboring countries Hong Kong and China.

That will help exporters clear burdensome stocks of offal and other cuts not commonly consumed in Canada, Haney said.

"There's going to be a lot of Canadian tripe moving through Macau and the Philippines, I have no doubt about that," he said.

Haney said the brisk beef export pace and renewed optimism in the industry has lifted Canadian cattle prices.

In October, prices for fat steers averaged 79.07 Canadian cents per pound (60.36 U.S. cents), more than double the low of 37.8 Canadian cents per pound in July, according to industry market analysis firm Canfax.

But values are still down 25% from C$1.06 per pound before the trade bans in May, Canfax figures show.

The trade hopes young, live cattle will be allowed to move into U.S. feedlots and slaughter plants by spring, which would allow markets and demand to more fully recover, Haney said.

($1=$1.31 Canadian)