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Canada Beef

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  • 1. Trading Partnerships and the Canadian Cattle & Beef Industry AMEG PRESENTATION Mexico City, April 28, 2010 Ted Haney President Canada Beef Export Federation
  • 2. ▀ Canada Beef Export Federation Established in 1989 to expand and diversify export sales of Canadian beef in the global marketplace 2
  • 3. CBEF Membership represents approx. 95% of Canada’s cattle and beef industry Head Head Mexico Hong Kong Shanghai Office Mexico Hong Kong Shanghai Office Office Office Office Office Office Office Calgary, Calgary, Monterey, PRC Alberta Monterey, PRC Alberta Mexico Mexico Canada Canada Japan Office Japan Office Tokyo, Japan Tokyo, Japan Korea Office Korea Office Seoul, Korea Seoul, Korea CBEF Fast Facts • Established in 1989 • 7 offices world wide Taiwan Office Taiwan Office • 23 Export Members Taipei, Taiwan Taipei, Taiwan • 11 Affiliate Members • 11 Associate Members • 7 Government Members 3
  • 4. Market development programs – generate recognition and drive demand for Canadian beef 4
  • 5. Foster exporter-client relationships … 5
  • 6. Working in pursuit of market access … 6
  • 7. Current 2009-2010 fiscal year: Federation delivered over 500 individual export development projects Canadian beef and veal exporters have attributed 41% of their total outside USA to Federation programs and services. 7
  • 8. Canadian Beef & Veal Exports 1990 – 2002 - tonnes US Asia & Mexico Other 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Market share: 1990 2002 0.7% 6.9% 8
  • 9. The Canadian Beef Advantage 9 9
  • 10. Canadian beef industry - more than 80,000 farms and ranches raise beef cattle - 2008 income from cattle production - $6.6 billion 10
  • 11. Canadian Beef Herd Genetics ▀ Canada has 100% Bos Taurus Genetics 11 11
  • 12. Canadian Beef Herd Genetics ▀ Bos Indicus influence in southern USA ▀ Studies completed in Australia and USA found meat from Bos Indicus less tender than from Bos Taurus ▀ Canada only has Bos Taurus 12 12
  • 13. Specializing in grain finishing 13 13
  • 14. Dynamic Processing Sector •Focus on international competitiveness •Positioned to serve our clients’ needs – commodity boxed beef to valued-added, further processed products •Processing capacity of 4.4 million head per year 14
  • 15. ▀ Confidence of international clients in Canadian beef is facilitating our steady return to the marketplace ▀ Canada’s science-based food safety systems and measures considered among the best in the world 15
  • 16. Canadian Food Inspection Agency (CFIA) ▀ Empowered by Government of Canada under federal law to safeguard Canada’s food supply and animal health ▀ Monitors all establishments exporting beef and beef product ▀ Authorized for administration and enforcement of Canada’s Meat Inspection Act under federal law 16
  • 17. Canada’s Food Safety Systems •Govern every aspect of production from importation of livestock genetics & safety systems at the farm – to slaughter fabrication, packing and shipping 17
  • 18. Hazard Analysis and Critical Control Point (HACCP) system ▀ Each establishment – and each process of that individual establishment – is under supervision of CFIA ▀ CFIA employs over 7,000 highly-trained professionals, including veterinarians, research scientists and inspectors, who operated from 600 field offices across Canada. 18
  • 19. ▀ Canada’s food safety system includes disease control and prevention systems, which have been developed over many years in accordance with recommendations of the OIE. 19
  • 20. The Canadian Cattle Identification System Plays important role in containment and eradication of animal diseases through trace- back capabilities Enforced by federal law, requires all cattle permanently leaving herd of origin be tagged with RFID tag Canada first country in North America to have this system 20
  • 21. The Canadian Cattle Identification System • 2005 – database enhanced to enable registration and documentation of cattle birth dates • Provides effective and internationally-recognized Age-Verification Program 21
  • 22. Canada’s Beef Grading System ▀ Regulated by Federal law ▀ Canadian Beef Grading Agency accredited by CFIA to assign grades in accordance with national standards ▀ Canada A, Canada AA, Canada AAA and Prime grades reserved for high quality Canadian beef ▀ Each quality standard must be satisfied 22
  • 23. 23
  • 24. ▀ 2006 – Federation commissioned independent Beef Quality Perceptions Survey (BQPS) in key markets ▀ Determine importance of individual beef quality attributes to retail and food service leaders ▀ 734 participants in Japan, Korea, Taiwan, Hong Kong and Macao and Mexico were interviewed 24
  • 25. 94% agreed: Grading standards designed to consistently deliver beef with white/amber fat, bright red meat color and firm muscle texture would provide their company with a quality advantage in the marketplace THESE ARE THE ATTRIBUTES OF HIGH QUALITY CANADIAN BEEF Source: CBEF BQPA, BIC BQPA 25
  • 26. 2009 Domestic Production & Consumption Canada’s beef and dairy cow herd: 5.6 million head Beef production: estimated 1.5 million tonnes Domestic market Requires production from about 3 million cows – approx. 1 million tonnes Canadian market not large enough to absorb beef production from our 6-million-head national cow herd 26
  • 27. Deriving full value from international markets Our success in creating commercially viable access not only to Asia and Mexico but to Europe, Russia, Middle East and South America will determine eventual size of our industry difference between an industry maintaining 6 million cows – and one maintaining 3 million cows 27
  • 28. Beef Export Premiums ▀ Commercially-viable access to major markets in Asia and Mexico has the ability to add $85 per head in value for beef derived from Under-30- Month (U30M) cattle over what can be generated in Canada. ▀ Further, these markets have the ability to add $100 per head in value over what can be generated for these same products in the US. 28
  • 29. Increases in Fed Cattle Prices ▀ Expanded market access has direct impact on fed cattle prices ▀ Recent CANFAX study indicates: export market openings outside of US since 2004 have increased Canadian fed cattle prices by $270 per head increases in markets yet to open = $130 per head ▀ Total value received & coming of expanded market access outside of US: $400 PER HEAD 29
  • 30. 2015 Export Goal Forecasts 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 2000 2002 2004 2006 2008 2010 Markets Outside US Total Exports 30
  • 31. Lowered expectations for 2015: Our industry going to process 300,000 fewer tonnes of beef for export Meaning 750,000 fewer head of cattle will be processed in Canada These extra cattle will either be exported to US; or Canada’s cow herd drops by 825,000 head 31
  • 32. Canada is one of the top beef producing & exporting nations Top Beef Producing Nations 2008 Top Beef Exporting Nations 2008 USA 22.6% EU 27 15.0% Brazil 13.7% Brazil 22% 11.7% 20% China Australia Argentina 5.8% Canada 12% < Third Largest USA 11% India 5.2% India 8% Australia 4.0% Argentina 6% Mexico 3.1% New Zealand 7% Russia 3.1% Uruguay 5% Canada 2.4% < Tenth Largest EU 27 2% New Zealand 1.2% Mexico 1% Rest of the World 12.2% Rest of the World 7% 0% 5% 10% 15% 20% 25% 0% 5% 10% 15% 20% 25% % of Total Global Production % of Total Global Exports 32 Source: GIRA
  • 33. Canada is the largest grain-fed beef exporter in the world Top Grain- and Grass-Fed Beef Exporters 2008 2500 Grain-Fed Exports Grass-Fed Exports 2000 1,762 1500 1,298 940 1000 876 526 464 440 500 0 d a * n a a A in l ia a i d li z S a a a l t a l U a n tr n r e B tr e a s Z g u s C w u r A A A e N Key markets Key markets North America, Japan & South Korea EU, Russia, S.E. Asia, Africa & Middle East Note: *Assumes 30% of Australian exports Are fed-beef. Source GIRA 33
  • 34. Markets Open to Canadian Beef ▀ Pre-BSE – product exported to over 100 markets ▀ Currently – 72 markets effectively open to Canadian beef 34
  • 35. Comprehensive Market Access 16 Markets • Bahrain • Barbados • Bermuda • Cuba • Colombia • European Union (27) • Jordan • Macau • Mongolia • New Zealand • Panama • Philippines • Russia • St Pierre et Miquelon • Switzerland • USA 35
  • 36. Countries which Accept U30M Canadian Beef 19 Markets • Antigua & Barbuda • Russia • Cayman Islands • St. Kitts and Nevis • Dominican Republic • Saudi Arabia • Egypt • Taiwan • El Salvador • Thailand • Guatemala • Trinidad and Tobago • Honduras • Tunisia • Lebanon • United Arab Emirates • Macedonia • Vietnam • Mexico
  • 37. Markets that Accept only U21M ▀ Japan 37
  • 38. Commercial Risk Markets – No Formal Protocol 36 markets • Albania • Dutch Antilles • Angola • French Polynesia • Anguilla • Gabon • Georgia • Senegal • Armenia • Ghana • Surinam • Aruba • Greenland • St. Vincent & the • Azerbaijan • Grenada Grenadines • Br India Overseas • Guinea • Togo Ter. • Guyana • Turkmenistan • Br Virgin Islands • Iceland • Turks & Caicos Is. • Comoros Islands • Iran • US Outlying Is. • Cote d’Ivore • Kazakhstan • Uzbekistan • Dominica • Kyrgyzstan • Moldova • Mozambique • Nigeria • North Korea 38
  • 39. Major Markets Closed to Canadian Beef ▀ South Korea ▀ Mainland China 39
  • 40. CANADIAN BEEF & VEAL EXPORTS – Asia & Mexico 1990: 7,000 tonnes $24 million 2002: 133,000 tonnes $500 million 2009: 84,000 tonnes $322 million 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Asia & Mexico Estimated 40
  • 41. In closing …. 41