canada beef
TRANSCRIPT
AMEG PRESENTATION
Mexico City, April 28, 2010
Trading Partnerships
and the
Canadian Cattle & Beef Industry
Ted Haney
President
Canada Beef Export Federation
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▀ Canada Beef Export Federation
Established in 1989 to expand and diversify export
sales of Canadian beef in the global marketplace
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CBEF Membership represents approx. 95%
of Canada’s cattle and beef industry
Head Office
Calgary, Alberta Canada
Head Office
Calgary, Alberta Canada
Mexico Office
Monterey, Mexico
Mexico Office
Monterey, Mexico
Hong Kong Office
Hong Kong Office
Shanghai OfficePRC
Shanghai OfficePRC
Japan OfficeTokyo, Japan
Japan OfficeTokyo, Japan
Korea OfficeSeoul, Korea
Korea OfficeSeoul, Korea
Taiwan OfficeTaipei, Taiwan
Taiwan OfficeTaipei, Taiwan
CBEF Fast Facts• Established in 1989• 7 offices world wide• 23 Export Members• 11 Affiliate Members• 11 Associate Members• 7 Government Members
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Market development programs – generate recognition and drive demand for Canadian beef
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Foster exporter-client relationships …
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Working in pursuit of market access …
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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.
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Canadian Beef & Veal Exports 1990 – 2002 - tonnes
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
US Asia & Mexico Other
Market share: 1990 20020.7% 6.9%
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The Canadian Beef Advantage
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Canadian beef industry- more than 80,000 farms and ranches raise beef cattle- 2008 income from cattle production - $6.6 billion
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Canadian Beef Herd Genetics
▀ Canada has 100% Bos Taurus Genetics
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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
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Specializing in grain finishing
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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
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▀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
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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
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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
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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.
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▀ 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.
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The Canadian Cattle Identification System
Plays important role in containment and eradicationof 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
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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
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Canada’s Beef Grading System
▀▀ Regulated by Federal lawRegulated by Federal law
▀▀ Canadian Beef Grading Agency Canadian Beef Grading Agency accredited by CFIA to assign grades accredited by CFIA to assign grades in accordance with national in accordance with national standardsstandards
▀▀ Canada A, Canada AA, Canada Canada A, Canada AA, Canada AAA and Prime grades reserved for AAA and Prime grades reserved for high quality Canadian beefhigh quality Canadian beef
▀▀ Each quality standard must be Each quality standard must be satisfiedsatisfied
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▀ 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
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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 BQPASource: CBEF BQPA, BIC BQPA
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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
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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
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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.
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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
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2015 Export Goal Forecasts
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2000 2002 2004 2006 2008 2010
Markets Outside US Total Exports
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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
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Canada is one of the top beef producing &
exporting nations
12.2%
1.2%2.4%
3.1%
3.1%
4.0%
5.2%
5.8%
11.7%
13.7%
15.0%
22.6%
0% 5% 10% 15% 20% 25%
USA
EU 27
Brazil
China
Argentina
India
Australia
Mexico
Russia
Canada
New Zealand
Rest of the World
% of Total Global Production % of Total Global Exports
Top Beef Producing Nations 2008 Top Beef Exporting Nations 2008
Source: GIRA
< Tenth Largest
7%
1%
2%
5%
7%
6%
8%
11%
12%
20%
22%
0% 5% 10% 15% 20% 25%
Brazil
Australia
Canada
USA
India
Argentina
New Zealand
Uruguay
EU 27
Mexico
Rest of the World
< Third Largest
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Canada is the largest grain-fed beef exporter in
the world
876
464
1,762
1,298
526440
940
0
500
1000
1500
2000
2500
Canada
USA
Australia
Brazil
Australia*
New Zealand
Argentina
Grain-Fed Exports Grass-Fed Exports
Top Grain- and Grass-Fed Beef Exporters 2008
Key markets
North America, Japan & South Korea
Key marketsEU, Russia, S.E. Asia, Africa & Middle East
Note: *Assumes 30% of Australian exportsAre fed-beef. Source GIRA
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Markets Open to Canadian Beef
▀Pre-BSE – product exported to over 100 markets
▀Currently – 72 markets effectively open to Canadian beef
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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
• Antigua & Barbuda• Cayman Islands• Dominican Republic• Egypt• El Salvador• Guatemala• Honduras• Lebanon• Macedonia• Mexico
Countries which Accept U30M
Canadian Beef 19 Markets
• Russia• St. Kitts and Nevis• Saudi Arabia• Taiwan• Thailand• Trinidad and Tobago• Tunisia• United Arab Emirates• Vietnam
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Markets that Accept only U21M
▀Japan
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Commercial Risk Markets –
No Formal Protocol 36 markets
• Albania
• Angola• Anguilla
• Armenia
• Aruba• Azerbaijan
• Br India Overseas
Ter.• Br Virgin Islands
• Comoros Islands
• Cote d’Ivore• Dominica
• Dutch Antilles
• French Polynesia• Gabon
• Georgia
• Ghana • Greenland
• Grenada
• Guinea• Guyana
• Iceland
• Iran• Kazakhstan• Kyrgyzstan
• Moldova• Mozambique
• Nigeria
• North Korea
• Senegal
• Surinam
• St. Vincent & the
Grenadines
• Togo
• Turkmenistan
• Turks & Caicos Is.
• US Outlying Is.
• Uzbekistan
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Major Markets Closed to
Canadian Beef
▀South Korea
▀Mainland China
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CANADIAN BEEF & VEAL EXPORTS – Asia & Mexico
1990: 7,000 tonnes $24 million2002: 133,000 tonnes $500 million2009: 84,000 tonnes $322 million
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Asia & Mexico Estimated
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In closing ….