The amount of frozen Canadian beef headed to Japan is about to drop, mainly due to a new tariff slapped on by the Japanese government because of the large amounts that country was importing.
“This past quarter, we exceeded [the formula set by the world trade organization regarding] all importers into Japan. That resulted in them snapping the tariff from 38-and-a-half per cent back to 50 per cent,” said Dennis Laycraft, executive vice-president of the Canadian Cattlemen’s Association.
How long the tariff will last is unknown. Countries like Mexico, Australia and Chile have bilateral trade deals with Japan, so their tariff is much lower.
The United States, however, is in the same boat as Canada.
“Right now Japan is the United States’ largest export customer,” Laycraft added. “For a little while, we were, but for right now, it’s Japan. So as these duties come into effect, if that brings U.S. cattle prices down, that will mean Canadian cattle prices will go down.”
It’s bad timing for cattle producers hoping to get top dollar out of their calves. The fall calf run is already upon us, according to seasoned cattlemen Bob Balog.
“I think you are going to see community pastures that have water problems, producers that have water problems,” he said. “Our combine season is here, we are combining our crops three to four weeks earlier than we normally do, and we are also going to start selling cattle, especially calves three to four weeks earlier than we normally do.”
It’s not just the drought situation in Alberta and Saskatchewan bringing calves to market early. A number of B.C. producers have been backed into a corner by wildfires.
“There is going to be cattle that are lost, we don’t know the numbers yet,” Balog added. “There will be cattle that are sold that shouldn’t be because the hay is going to be short, their grass is going to be short, and we pray that we can get along without a huge number of B.C. cattle coming to town.”
With so many factors working against producers, Laycraft said the best thing the Canadian cattle industry can do now is work at building its own bilateral trade deal with countries like Japan.
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