Korea poised to accept Canadian beef

Monday, June 27, 2011

by BETTER FARMING STAFF

A spokesman for Canada’s beef industry anticipates Canadian producers could begin shipping beef to the lucrative South Korean market as early as this year.

“It’s not a done deal by any means,” warns Travis Toews, president of the Canadian Cattlemen’s Association, referring to a federal announcement on Monday that South Korea had agreed to publish a rule about importing Canadian beef and work towards reinstating the imports. In turn, Canada would suspend action it has initiated against South Korea at the World Trade Organization.

If South Korea does not move forward “in good faith and in a constructive manner,” Canada’s beef industry will ask the federal government to resume its WTO case, Toews says. “Hopefully it doesn’t come to that but we’re very prepared to give them that advice if our observations are such that South Korea is not dealing in good faith.”

The deal only addresses products from Canadian cattle under 30 months of age.

South Korea has banned Canadian beef imports since the BSE crisis erupted in 2003.

Toews says the industry had anticipated South Korea would lift the ban on Canadian beef after it permitted U.S. beef shipments two years ago.

But when the decision to allow U.S. beef imports triggered wide scale protest, the South Korean government decided to leave the ban on Canadian beef in place. That’s when the Canadian government filed action with the WTO, Toews says.

Toews says there are still many challenges ahead in regaining market access lost during the BSE crisis. “Our next highest priority is to get Japan access from the current under 21 month access that we have to date to a minimum under 30 month bone-in access,” he says. Loosening the under 30 month restrictions in Mexico, which before the crisis had been a major market for Canadian cattle over 30 months of age, is another goal. “And we have other gains we need to make in Taiwan.”

Last year, Mainland China agreed to lift its ban on Canadian beef products in stages. However, technical negotiations are proceeding very slowly, Toews says.

Prior to the BSE crisis in 2002, South Korea was the fourth largest consumer of Canadian beef products, buying 17,342 tonnes of beef exports. That year, Canadian beef exports earned more than $2 billion, of which South Korea accounted for nearly $60 million.

The Canada Beef Export Federation estimates that by the end of this year South Korea will buy more than $14 million of Canadian beef products and the Canadian export industry in total will earn $1.5 billion. Toews estimates that the South Korean market will generate about $30 million in sales within two years. “We think we can continue to expand that number.”

But having access to the Korean market goes beyond the dollar value. “Certain products that don’t bring a high value here in North American bring a real premium in South Korea,” he explains. The market has the ability to “add value to every fed steer and fed heifer that we process here in Canada.” He refers to a U.S. Meat Export Federation 2010 estimate that indicated the South Korean market’s demand for short ribs at times added up to $20 of value per head. “That’s on one product in one market,” Toews says. BF