Despite Canadians’ appetite for steak, and many Albertans’ penchant for wearing a Stetson, a new study says Canada’s beef industry is in danger of becoming a side dish.
The $6-billion sector indirectly contributes more than $26 billion to the economy and represents 15% of all agricultural production. But a new report by the Canadian Agri-Food Policy Institute (CAPI) says it’s at a tipping point, and that Canada is in danger of becoming a net importer of beef.
The domestic industry supplies 75% of the beef Canadians eat, down from 87% in 2005. On the export side, the report cites an over-dependence on the U.S. market—destination for 85% of Canada’s beef and cattle exports—and a lack of push into newly opened markets like China and South Korea. It draws a comparison with our forest industry’s past over-dependence on the U.S. and how it changed course, growing Asian exports from $32 million to $1.5 billion between 2001 and 2011.
CAPI president and CEO David McInnes says the beef industry doesn’t have a plan to meet these challenges, based on the report’s consultations with more than 80 industry insiders. “Many stakeholders felt there wasn’t an overall strategy,” says McInnes, “and therefore no sense of where we’re going and no significant alignment among the various supply-chain players. And given the risks and opportunities, it helps to explain why the beef sector isn’t operating at its optimum.”
Travis Toews, board member and former president of the Canadian Cattlemen’s Association, was surprised at the report’s conclusions. While acknowledging some troubling trends such as shrinking herd size and increased imports from the U.S., Toews balks at proposals such as a new national industry body. “The report seemed to suggest there are market opportunities abroad that we weren’t fully utilizing,” says Toews. “We’ve worked hard with the government to have competitive market access in every beef-importing region, then we let the market decide where our product will land, selling to the highest bidder. And if that’s the U.S., then that’s where it’s being sold.”
Toews also says the U.S. import and export numbers are skewed due to beef’s being an “integrated industry” where processing capacity has been built in the most competitive jurisdictions on either side of the border. As for creating new customers, last year the industry combined its domestic and export market development agencies into one organization called Canada Beef Inc., aimed at finding and developing all market opportunities. “With Canada Beef now working with our processors, packers and exporters, we’ve got a nimble organization taking on that challenge,” says Toews.
Clearly there’s still work to be done, however. Over the past decade, while the U.S. boosted its beef exports outside North America by 51%, Canadian exports overseas fell 3.5%. “The status quo does include some innovation,” says McInnes. “But is it significant and deep enough? The feedback we heard is that there wasn’t enough understanding as to what our objective is.”