A new study released by the Canadian Agri-Food Policy Institute (CAPI) indicates that Canada's beef industry is at a tipping point, and it urges corrective action to deliver maximum benefits to producers and industry stakeholders.
"The data and interviews show our beef industry lacks a comprehensive strategy to address challenges and take advantages of the significant opportunities that the future offers,” CAPI President and CEO David McInnes said in a news release.
The study, “Canada’s Beef Food System,” shows that Canada is at risk of becoming a net importer of beef.
The cattle cycle is presently experiencing lower production numbers – but there is also no apparent strategy to regain valuable domestic market share.
On the export stage, the Canadian industry is extremely reliant on the United States, which accounts for 85 percent of Canada's beef and cattle trade.
By relying on Canadian cattle and beef supply, the American beef industry is expanding its exports and taking advantage of higher value and margins, according to the report.
“We either accept that we will remain a primary 'backfill' supplier of beef and cattle to the U.S. — with its consequences and benefits — or we need to make a conscious strategic decision about the markets where we can perform at our best,” McInnes added.
“This includes increasing the share of Canadian-beef in our own domestic market, taking fuller advantage of key high value foreign markets where we have or can develop competitive advantage, and deciding how we can better extract more value from the important U.S. market."
U.S. beef exports beyond Canada are up 280 percent on a value basis since 2005. Comparatively, Canadian exports beyond the United States are up 45 percent, according to the report.
Since 2002, Canada's exports to international markets other than the United States were down 3.5 percent, while the U.S. beef industry increased exports to the international market by 51 percent (excluding shipments to Canada).
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