Monday, February 24, 2014

Canadian beef stopped at the border is 'cool'

Long-time resident of the Pas, Manitoba and cattle producer Walter Koshel did not have an opinion on country-of-origin-labelling (COOL); however he does believe that this latest USA initiative is not in Canada's favour. Koshel has seen this before, and not solely originating from the United States, "It has hurt us. Thank goodness we have strong cattle producers in Canada," he explained.
Tyson Foods Inc. (a processing and marketing company) decision's to challenge COOL is just another example which irritates Canadian cattle producers. They contend that product labelling changes introduced by the U.S.A. - are prohibitive. Manitoba Beef Producer General Manager Cam Dahl is stymied that the U.S. would continue to stand by its decision.
"This started back in 2009 and we brought it to the attention of the World Trade Organization (WTO). The US response on May 23rd was to increase the restrictiveness if the labelling requirements and to require additional information to be provided on meat labels."
Dahl estimates that the current costs under COOL will rise significantly, "this will increase the cost of segregating Canadian cattle to an estimated $90 to $100 per head."
United States Consul and Principal Officer in the province of Manitoba Tim Cipullo, is circumspect about the WTO decision.
"The United States believes the new rules put it in compliance with the WTO requirements. Obviously, some in Canada disagree with that and are challenging the new rules. The WTO is going to rule on whether the new labelling rules are in compliance or not."
Cattle production numbers in Manitoba are 100 million head-of those 500 000 are calves-and represent more than 50 percent of the total exports, "Removing that big capital flowing from the United States is taking us out of the market," confirmed Dahl.
Tyson Food Inc. Public Relations Manager, Worth Sparkman understands what financial constraints COOL legislation can inflict on Canadian beef operations.
"Like many others in the North American beef industry, we're very disappointed by the changes made in the U.S. country of origin labelling rules. These new rules significantly increase costs because they require additional product codes, production breaks and product segregation, including a separate category for cattle shipped directly from Canada to U.S. beef plants without providing any incremental value to our customers."
Tyson Food Inc. has effectively discontinued the purchase of Canadian beef livestock since mid-October of 2013. Dahl is of the opinion that this process will require some time to be resolved and is pinning his hopes on the continued support from American processors; will give sway in this matter.
Rod Berezowecki is the Reeve of the RM of Kelsey and also a cattle producer in the region. COOL  is just another symptom which underlies a deeper problem, according to Berezowecki.  Sustaining the future growth of the cattle industry rests on the ability to attract younger generations of Canadians to cattle farming. This would mean that the recent WTO verdict in favor of Canada need to be respected and trade barriers be eliminated. When a major U.S. processing company such as Tyson Foods Inc. no longer wishes to export Canadian beef due to COOL-Canadian profit margins fail.
"A cattle producer in the valley or anywhere else in Canada...when he takes his cattle to market and receives three or four cents less on the dollar  that day, or that week or that hurts when you sell all of your product at one time for the whole year," explained Berezowecki.
"Then you find out that was the day you lost $5000 or $6000."

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