Ontario grown beef program targets sales to Japan

Friday, June 19, 2015

by JIM ALGIE

Ontario-grown beef could account for as much as 14 per cent of an expected boost in Canada’s annual beef sales to Japan following launch of the Ontario Corn Fed Beef brand last month in Osaka, government and industry officials say.

On Wednesday and Thursday, a Japanese delegation toured Ontario feedlots and packing plants participating in the Corn Fed branding program established in 2001 by the Ontario Cattle Feeders’ Association. The tour introduced visiting Japanese retailers and distributors to protocols and procedures used by program participants, an association statement said.

Ontario Premier Kathleen Wynne, who met with participants, and Agriculture Minister Jeff Leal both welcomed the visit as a response to government expectations for long-term agricultural growth, the statement said. Leal said the Corn Fed program’s emphasis on quality and food safety should help ensure “that more Ontario beef is found on the plates of consumers internationally.”

“Consumers both in Ontario and abroad continually appreciate and recognize the safe, affordable and high-quality beef products our Ontario beef farmers take pride in producing,” Leal is quoted to say.

Now among the largest producer-owned, branded beef programs in Canada, Ontario Corn Fed Beef is available at more 360 retail stores across the province and is featured in restaurants through two major wholesalers. Corn Fed Beef labelling seeks to assure consumers of consistent, quality products.

It includes training for enrolled cattle feeders and requires annual health and feeding records, specified feed regimes, testing and farm inspections. Begun in 2001 with 29 producers and one beef processor, the program has grown since then and has helped raise the profile of premium, Ontario beef. In 2014, it yielded 298,760 certified cattle.

“The Premier has issued a challenge to grow Ontario agricultural exports,” Jim Clark, feeders’ association CEO, is quoted to say in the statement. “We’ve already seen incredible growth in our home province, and the partnerships we’ve made in Japan and beyond mean we are meeting this challenge while simultaneously increasing value for our domestic partners and our farmers.”

Wednesday’s tour followed the May 1 launch of Ontario Corn Fed Beef sales at 33 Kinsho stores in Osaka. Initial feedback has been “very positive” and creates the “expectation for significant and rapid growth,” the feeders’ association statement says.

Interviewed Thursday, John Baker, Ontario Corn Fed Beef brand manager, said Japan sales make a good fit for his program, particularly during the current short supply situation for cattle in Ontario. The Corn Fed program has specifically targeted Japanese BBQ cuts from the chuck that are under used in the Canadian marketplace, Baker said.

“Usually they end up in grind products here and undervalued as ground beef,” Baker said. “That’s why Japan is such a good market, such a good natural mix, because the cuts that they utilize are cuts we do not use here in particular in Ontario.”

The biggest challenge to launching its product in Japan was identifying the right Japanese partners, Baker said. Because beef imports from the United States and Australia supply as much as 60 per cent of beef consumed, Corn Fed needed partners with the right demand profile seeking to “differentiate themselves in the marketplace,” he said.

“It was finding the right customer that’s the right size that we can supply on a consistent basis but is looking for an opportunity to differentiate themselves,” Baker said.

The Ontario group’s move into Japan also follows continuing national trade talks seeking greater access for Canadian beef and other products to Japanese consumers. Figures included in Wednesday’s statement estimate 2014 beef exports from Canada to Japan at $103 million. Growth potential for the Ontario program is as much as $15 million, the statement said.

Baker confirmed that figure in Thursday’s interview, describing it as “a fairly conservative” estimate of potential new beef business with Japan. At the same time, trade issues form part of the competitive background Ontario beef will face in the Japanese marketplace.

The expanded sales effort for Ontario beef coincides with widespread speculation about a pending trade deal among member nations of the Trans-Pacific Partnership (TPP) which includes Canada and Japan. It also follows separate talks between the two countries about a bilateral trade deal which has yet to be concluded.

“TPP in our opinion is absolutely critical for Canada because it’s going to ensure our overall competitiveness in the marketplace,” Baker said. Recently, Australia concluded a free trade agreement with Japan that has already produced two tariff reductions.

As a result, Australia’s tariff rates on frozen and chilled beef are 10 per cent and eight percent lower, respectively, than those facing Ontario product, Baker said.

“That’s a significant competitive issue. TPP would likely negate that,” he added.

“We assume any negotiations would at least get us parallel to what Australia has,” Baker said. BF