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Cautious Optimism In Evidence At ABIC Conference

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“These are not normal times and consumer buying is being affected by the financial crisis”

Topics ranged from better cattle prices (maybe), to feeding cattle in Argentina (interesting), to how to market beef in Japan and Korea (hopeful), to Brazilian mega-beef packer JBS (potential), to climate change mythology (politically correct), and of course much discussion and philosophizing in between.

That’s what over 600 registered attendees listened to at the 6th annual Alberta Beef Industry Conference (ABIC) here in late February. The ABIC has become the premier annual cattle industry event in Alberta.

The conference started with a buzz when news circulated of the sudden departure of Jeff Kucharski as the CEO of the freshly incorporated Alberta Livestock and Meat Agency (ALMA). Kucharski was replaced on the conference agenda by Joe Mackowecki, the chair of ALMA. It was announced that Alberta Agriculture veteran Ken Moholitny would serve as the interim CEO of ALMA until a replacement is found.

In what has become a tradition at the ABIC conference a cattle market report was provided jointly by analysts from CanFax and its U. S. counterpart CattleFax. For hard-pressed producers there is both good news and bad news. Both Brett Stuart of CattleFax and Rob Leslie of CanFax said that the cow herd in both their countries will be down substantially. Cattle-on-feed numbers are also down and are expected to decrease more in the future.

Stuart said that the U. S. herd was down to 1950s levels and under normal market demand circumstances that should see increases in cattle prices all the way through the supply chain. He said that there are indications of that trend in the short term but that these are not normal times and consumer buying is being affected by the financial crisis. He said consumption may well be reduced or that consumers will look for cheaper meats.

Rob Leslie of CanFax said Canadian producers and feeders have seen improvements in the cost of production through a devalued loonie, cheaper barley and lower fuel costs. But he added that has been tempered by COOL, more regulations and an expected decline in beef demand, all of which are pressuring markets, increasing the basis and restricting the cattle and beef trade.

OVERSEAS ACCESS

Two speakers from Japan and Korea told attendees that progress on market access is being made, albeit slowly. Takeo Kudou of the Japan Food Corporation, the largest wholesale meat distributor in Japan, said it wants to resume marketing Canadian beef in his country. He said that there is some progress being made to extend the under-20-month rule to under 30 months, which should increase the supply of available Canadian beef for importation.

Cattle producer and lawyer David Pope asked if Canadian beef was tested for BSE would it be easier to import all types of Canadian beef into Japan. Kudou said yes. He also said that to his knowledge the Canadian government has never made a formal request to the Japanese government to export BSE-tested beef.

Bohee Lue, secretary-general of the Korea Meat Import Association, updated the conference on the beef trade situation with Korea. He said that U. S. beef was being imported into Korea in increasing quantities, but that Canadian beef access will be subject to more negotiation. Lue said that the Canadian age verification and traceability programs will help in the access negotiation process.

Ted Haney, President of the Canada Beef Export Federation, stated that number of BSE cases in Canada compared to the U. S. has been a problem in normalizing trade. He also said that the Canadian government position is that there will be no free trade agreement with Korea until the Canadian beef access issue is resolved.

SOUTH AMERICAN VIEWPOINT

Rodrigo Troncoso, CEO of the Argentine Cattle Feeders Association, provided the conference with a perspective on cattle feeding in his country. He said that he was amazed to see cattle being raised under such cold climactic conditions in Canada. He said that only sheep are raised under similar conditions in Argentina.

Toncos said that in his country beef has to pay an export tax but that the government subsidizes the feeding of corn and soymeal to cattle. Beef consumption in Argentina remains one of the highest in the world at 150 pounds per capita which is more than double consumption in North America.

Chandler Keys, a spokesman for JBS, the Brazilian world mega-packer, told the conference about the expansion of the company under the Batista family. Rick Paskal, chairman of the National Cattle Feeders Association, asked whether JBS had any plans to acquire processing facilities in Canada. Keys said that there are no immediate plans, but that the company was always prepared to look at opportunities.

The conference was closed with a session on weather forecasts and climate change by well-known climatologists Art Douglas and Tim Ball.

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