Canada/China export deal holds opportunities for beef sector – and others

by SUSAN MANN

The Canadian government and beef industry took another step forward this week in regaining full access to the Chinese market for Canadian beef.

Federal Agriculture Minister Gerry Ritz announced in a June 17 press release China has formally agreed to work with Canadian officials to provide access for bone-in beef from animals younger than 30 months old and for live cattle. The agreement came after Ritz met on Monday with Chinese Agriculture Minister Han Changfu and Wei Chuanzhong, China’s Vice Minister of General Administration of Quality Supervision, Inspection and Quarantine.

Some of the beef going to China will likely come from Ontario. Beef Farmers of Ontario spokesperson LeaAnne Wuermli notes Cargill Meat Solutions’ Dunlop packing plant in Guelph holds a federal licensed, which allows it to export products.

Once access for bone-in beef from animals younger than 30 months is fully implemented, the industry estimates the Chinese market for Canadian beef will grow to $240 million annually, while the market for live cattle will total $150 million, the release says.

Officials for Agriculture and Agri-Food Canada didn’t get back to Better Farming in time for this posting with when that access will be fully implemented.

UPDATE: Wednesday June 18, 2014, 7:10 p.m.: Patrick Girard, Agriculture and Agri-Food Canada spokesman says by email a timeline for when the access will be fully in force hasn't been determined yet. He also says Ritz's meetings with Chinese officials resulted in Canada getting new market access for timothy hay. Canada hasn't previously exported this crop to China. END OF UPDATE

The Canadian Cattlemen’s Association says in its June 17 press release the agreement by China to work with Canada on beef access is the latest step in a staged process to gain full market access to the Chinese market for beef. That staged approach was announced in 2010 and as part of it China has already given Canada initial access for boneless beef from cattle under 30 months of age.

The association welcomes the news of this latest step in the process. Association president Dave Solverson says in its release China is an important market for Canadian beef and cattle, and “holds significant potential.”

Canadian beef exports to China have grown rapidly since 2012 due to rising demand from a growing middle class with an appetite for beef, the release says. Chinese demand for beef has grown well beyond what they are able to produce domestically.

Some forecasts the association has seen say China could double its global annual imports of beef before the end of this decade, the release says.

In addition to gaining access for the Canadian beef industry, Ritz signed two protocols with Vice Minister Wei. One was to secure access for timothy hay to China, which industry estimates to be worth $5 million over the next five years, and the other was to modernize the two countries’ live swine protocol to include recent animal health and disease control science-based approaches, the Agriculture and Agri-Food Canada release says. The protocol will boost Canada’s live swine competitiveness in China and result in sales of up to $11 million annually.

Canada Pork International president Jacques Pomerleau couldn’t be reached for comment. Canada Pork International is the export market development agency of the Canadian pork industry.

At the meeting with Chinese officials, Ritz also advanced British Columbia’s cherry export interests and obtained an agreement from China that it will expedite work to enable fresh Canadian blueberries to be sold into China. That new access is valued at about $65 million annually once its fully implemented.

Ontario Berry Growers Association executive director Kevin Schooley couldn’t be reached for comment.

Prof. Alfons Weersink, of the University of Guelph’s department of food, agricultural and resource economics, says “more potential demand is a good thing for Canadian farmers. Increasing this access to these markets hopefully leads to additional” access for other products within China but also to access for the same products in other countries. “It’s good news” but Weersink says he hasn’t done an analysis to determine what the extent of the access might be.

Ritz says in the Agriculture and Agri-Food Canada release that “the expanded market access we agreed to will ensure our agriculture producers and processors are competitive in the lucrative Chinese market.”

International Trade Minister Ed Fast says in the release China is Canada’s second largest single nation trading partner. Last month Canada announced it is opening four new trade offices to provide on-the-ground support and increased help for Canadian businesses exploring new opportunities in China.

Since 2006, agriculture and seafood exports to China have increase more than five fold to $5.6 billion annually. The top Canadian exports to China include canola, canola oil, soybeans, dried peas, wheat and pork. BF