A Central Alberta farmer who chairs the Alberta Beef Producers says the Canadian beef industry is working diligently to force an end to country-of-origin meat labelling requirements by the United States.
But Doug Sawyer doesn’t expect the matter to be resolved for at least a year.
“It keeps twisting and turning,” he said of the issue, which he believes is motivated by protectionism. “It’s a hard snake to find the head of.”
Country-of-origin labelling (COOL) requirements were initiated by the U.S. in 2008. They stipulate that meat products sold there must indicate what country they came from, and that meat from other countries be packaged separately.
Because these requirements increase costs for U.S. processors, there’s an incentive for them to shun meat from other countries. This has resulted in a big drop-off in Canadian beef and pork exports to the U.S.
The World Trade Organization has ruled against the labeling requirements, which prompted American officials to amend the regulations. That’s led to another WTO review, and an appeal of a U.S. court ruling that denied an injunction against the latest version of COOL.
The Canadian government has even produced a list of U.S. products that could be subject to retaliatory tariffs: cattle, pigs, beef, pork, some fruits and vegetables, and chocolate.
The dispute came to a head last week when American food processing giant Tyson Foods said it had stopped buying slaughter cattle from Canada because of the costs related to the COOL requirements. Tyson is the third largest purchaser of Canadian cattle.
“It will take a bidder away on our finished cattle,” said Sawyer, adding that there may also be increased pressure to ship Canadian feeder cattle to the U.S. for finishing.
“They have to be in the U.S. for 60 days before they can slaughter them.”
Sawyer, who has a cow-calf operation near Pine Lake, said Tyson’s decision will impact more than Canadian feedlots.
“Anytime there’s an issue with our fed cattle, our cow-calf guys — like me — we hurt.”
A bright light is the recent announcement that the former Rancher’s Beef plant at Balzac is being sold by Sunterra Farms to Colorado investment company Vesta Holdings. The plant, which has been closed since 2007, could reopen next year with an emphasis on Alberta beef for the European market.
“They’re talking about 600, 700 head a day, which is significant,” said Sawyer.
Another positive is the pending Canada-EU Comprehensive Economic and Trade Agreement (CETA), which is expected to boost Canada’s annual beef exports to Europe by $600 million.
“That’s vitally important to us,” said Sawyer, pointing out that Europe is a mature market where consumers want the same primal beef cuts as Americans.
Sawyer thinks this expanded overseas market for Canadian beef should pressure U.S. legislators to settle the COOL issue — particularly since the American beef industry needs Canadian cattle to satisfy its needs.
“With the new European deal and our export deals looking very promising, they’re simply going to need our cattle.”
Sawyer noted that many Americans have sided with Canada on the issue. The American Association of Meat Processors, the American Meat Institute, the Canadian Pork Council, the National Cattlemen’s Beef Association, the National Pork Producers Council, the North American Meat Association and the Southwest Meat Association are all participating in the current court appeal.
“I’m optimistic that it will be resolved,” said Sawyer.
His concern is the time this will take.
“It’s cost us, as producers hundreds of millions of dollars every year.”
hrichards@reddeeeradvocate.com