* Canada beef trade surplus with US shrinking
* Most Canada exports go to US, but other markets pay more
By Rod Nickel
WINNIPEG, Manitoba, Sept 10 Canada's dependence
on cattle and beef sales to the United States leaves it at risk
of becoming a net importer of beef from the U.S. as it buys back
higher-value processed products, a report on the C$6-billion
($6.1 billion) industry said on Monday.
Canada, the No. 5 beef exporter, ships 85 percent of its
beef and cattle exports to the United States, racking up C$1.8
billion in 2011 sales. Much of those supplies, however, are
backfilling the U.S. market, allowing the American beef industry
to process more meat to take advantage of higher value and
margins, said the report by the Canadian Agri-Food Policy
"Today the mindset seems to be to produce cattle and beef
for the United States," said David McInnes, chief executive of
the policy organization, from Ottawa. "And they're getting the
value off it."
Canada shipped C$1.4 billion worth more beef to the United
States than it imported in 2002. But by 2011, that net trade
surplus fell to just C$42 million, as Canada sends to the United
States live cattle and beef, then imports back higher-value
At the same time, the Canadian beef industry is failing to
take advantage of new, lucrative export markets that have opened
to them after a blitz of political visits in recent years,
according to the report.
Canadian ranchers and beef processors have gained access to
South Korea, China and numerous smaller markets in the past few
years and should create a strategy for reaping the benefits by
adjusting production and processing to suit those higher-paying
countries, McInnes said.
"It's not like we're going to forego the United States for
pursuit of other markets abroad, it's how do we find the right
mix and align it from producers - the source of cattle - right
through to the retailer and exporter?"
Boosting exports, however, depends on having supplies, and
Canada's cow herd has shrunk by 20 percent since 2005.
The institute interviewed officials from a broad
cross-section of the Canadian industry, including beef
processors, government officials and ranchers.
"While recognizing that the U.S. will always be a key market
for Canada, we have also attained beef access in China, Korea
and other growing markets," said Agriculture Minister Gerry
Ritz, in a statement. "We will continue to work with the beef
industry as they develop a road map to ensure that they can take
advantage of new market access and opportunities."
Cargill Ltd spokeswoman Brigitte Burgoyne said
the company, one of Canada's biggest beef packers, is reviewing