Friday, February 24, 2017

More meat coming

There will be record-high supplies of meat and poultry in the United State – about 100 billion pounds - this year, predicts the U.S. Department of Agriculture, so prices will come down.

Fed steer prices are forecast to decline by seven per cent, hog prices by six per cent and broiler chicken prices are forecast to increase slightly.

“Domestic U.S. consumption can only grow so much given our projection of U.S. population and income growth,” said chief economist Robert Johansson.

“Furthermore, U.S. livestock can only eat so much feed, and alternative uses such as ethanol for the motor fuel pool are assumed to be relatively stable over the next 10 years. As a result, increases in beef, pork, poultry, dairy, feed and food grains, and oilseeds for the most part need to be sold abroad,” Johansson said.

Over the next 10 years, he says broiler exports will increase by about 20 percent, pork exports by about 22 percent and beef and veal exports by 37 percent.

This is despite Russia’s continued ban on imports of U.S. meat and relatively slow economic growth in a number of markets, he noted.

Broiler meat production is forecast to increase by two per cent to 41.53 billion pounds and turkey production by two per cent to a record 6.12 billion pounds.

Hensall fires veteran manager

Hensall District Cooperative Inc. has fired its general manager, Earl Wagner, who has worked for the farmer-members for 53 years.

Brad Chandler, who was commercial business manager before, has come back to take over immediately as general manager.

At the annual meeting at the end of November, then-president Keith Strang said conditions were “extremely volatile” during 2015 and 2016.

The profit of $11.4 million in 2015 was restated as a loss of $14.6 million.

Strang referenced the decline in value of the Canadian dollar vs. the U.S. currency and said 55 per cent of Hensall’s business is in U.S. dollars.

The coop also reported a profit of more than $21 million for 2016. It’s not clear what has happened since to prompt Wagner’s dismissal.

The new president of the board of directors is Steve Jansen. The coop has 560 employees and operates from 26 locations.

New PED outbreak

There has been an outbreak of Porcine Epidemic Diarrhea virus in a hog-finisher barn in Halidmand-Norfolk.

It’s the first case in Ontario since June 22 and shatters optimism that the disease has finally been brought under control.

One down, one to go

South Dakota’s senators defeated a bill that called for mandatory labelling of imported meats.

That leaves Wyoming which has yet to vote on a similar bill requiring County of Origin labels at retail.

The South Dakota vote was 21-13, with those opposed saying the state can’t do something the federal government can’t do. The United States lost its COOL labelling regulations when Canada and Mexico challenged it at the World Trade Organization.

Sen. Lance Russell, a Republican from Hot Springs, was prime sponsor of Senate Bill 135 on behalf of the South Dakota Stockgrowers.

Thursday, February 23, 2017

China is juicy export target

The Canadian Agri-Food Trade Alliance has issued a report drawing attention to tremendous export opportunities in China for Canadians.

As the Chinese economy continues to grow, there is increased demand for meat, processed foods, dining out and convenience foods – i.e. a typical Western diet.

Canadian exports to China have steadily increased, even during the economic crisis of 2008, and reached $6.2 billion in 2015.

Canola accounts for half of that, but Canada also sells China soybeans, pulses, pork, wheat, barley, beef genetics, processed foods, malt, seafoods, sugar (mainly as a food ingredient) and hides and skins.

China joined the World Trade Organization in 2001, but has not been very good at adhering to some of its standards, such as those relating to sanitary and phytosanitary standards.

Moreover, Chinese officials tend to relax or tighten import hurdles to match domestic supply and demand, making it difficult to predict when sales orders may soar or slump.

“Exporters from around the world have consistently raised concerns regarding China’s use of non-tariff barriers to manage imports and its failure to comply with international standards and science based decision making,” says the report.

“Canada experienced this when China placed import restrictions on Canadian beef following the discovery of BSE (mad cow’s disease) in Canada and on pork with the discovery of H1N1 (a strain of influenza).

“In both cases, China failed to acknowledge Canada’s internationally-recognized animal health status and to resume trade in a timely manner,” the report says.

“China also maintains a zero-tolerance policy on pathogens, such as salmonella, E-coli, and listeria, and on residues of veterinary drugs, metals, pesticides and other products.

“There is a risk that Canadian meat products may be rejected due to inconsistencies between Canadian and Chinese residue and microbiological standards,” the report says.

“China has also shown inconsistency in the application of sanitary and phytosanitary (SPS) and other measures between domestic and imported goods and across ports of entry.

“Customs administration is considered to be slow and overly onerous in China requiring that importers and exporters secure a host of permits, licenses and certificates.

“There are also concerns that China alters the administration requirements to temper the flow of imports where required. Canada also faces delays in custom clearance.

“As part of its FTA (free trade agreement) with China, New Zealand secured a commitment for 48-hour clearance of imported goods through customs and reports that, while not achieved in all cases, this requirement has improved customs flow.”

Australia also has a free-trade agreement with China.

United States trade analysts predict that if they could negotiate a free-trade agreement, its agricultural exports could increase by $3.9 billion a year. The report says that’s an indication of how important a deal could be for Canada.

However, it also says there are no signs that negotiations will begin any time soon.

Loblaws profits up 57 per cent

Loblaws profits increased from $128 million to $201 million for the fourth quarter.

Sales increased by only 2.3 per cent to $10.8 billion.

Just before the quarter began, Loblaws dinged suppliers with a retroactive reduction of payments on invoices, reducing their prices by one per cent. Sobeys, second to Loblaws in the Canadian grocery retail business, did the same.

Loblaws also forecast that it will increase capital spending from $1.2 to $1.3 billion this year.

Bullying and greed appear to be the order of the day in the food business. Just read the Globe and Mail report yesterday on how 3G Capital fired all the top executives and many other lower-level supervisors at Tim Horton's.

Beef industry gets ok to irradiate

Health Canada has approved irradiation of hamburger.

It’s a technology that beef farmers and meat packers have sought for decades.

The federal Atomic Energy Corp. also backed them with research demonstrating its effectiveness in killing bacteria and its safety for consumers.

Had it been used by meat packers and restaurant retailers, it would have prevented a number of sensational outbreaks of food poisoning that resulted in deaths and thousands of illnesses across North America.