ANALYSIS - A long arctic winter and on-going labelling disputes mean Canada’s beef outlook is hard to call this year.
Canada’s cattle industry is coming out of consecutive challenging winters which, along with Country of Origin Labelling Laws (COOL), could constrain trading south of the border, Rabobank analysts have warned this week.
Rabobank’s quarterly beef outlook referred to labelling laws as ‘unnatural constraints’ which would remain in the balance until a World Trade Organisation ruling arrives.
For this reason, Rabobank said: “Combined with the severity of the winter, it is difficult to make any short-term judgements on the long-term direction of the market.”
Forage concerns have once more placed direct pressure on producers, with hay being widely used again this winter.
The previous winter brought snow as early as October which lasted through the entire winter period until April, said Environment Canada in its 2013 Prairie 2013 weather summary.
The summary added: “At times, March and April felt colder than January and February.
“Perhaps the cruellest day of many was the first day of spring on March 20, which started a period of 30+ days of below normal temperatures.”
More exceptionally cold weather hit the prairies again this January when the northern US and Canada saw temperatures plunge to below that of the North Pole.
The effect has tighter cattle supplies and a recent upturn in cull cow marketings, seeing prices of C$1.10/pound.
This is according to Edmonton based market analyst Herb Lock who senses Canada is running out of cattle as slaughter cows ‘ride high’ on the back of tight meat supplies.
As a result, beef output is expected to contract again in 2014 – dropping 1.4 per cent to 2.9 billion pounds.
This assessment appears in a Canadian Cattlemen’s Association review by President Martin Unrau, which hinted at exports improving through developments with Europe (CETA) and South Korea (FTA).
"The removal of longstanding barriers in the CETA deal will enable Canadian beef producers to benefit from new duty-free access for Canadian beef valued at nearly C$600 million,” said Mr Unrau.
“The deal, once finalized, provides Canada’s producers with another market to pursue and helps to increase the value of every animal produced in Canada.”
Last month, Beef Farmers of Ontario joined other producer organisations in welcoming the deal and the extra dollars and marketing opportunity it promises.
Association Vice President, Matt Bowman, said the agreement addresses the tariff disadvantage with the US, putting Canada on par as a retailer to South Korea.
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