Canada builds value in quality, use of entire beef carcass
Calgary, Alberta – During the 2014 International Livestock, Canada’s cattle producers, Ministry of Agriculture officials and industry representatives gathered to discuss the challenges facing their beef markets.
Dennis Sun, Wyoming Livestock Roundup publisher, attended the event, gaining additional insight into Canada’s agriculture industry. Speakers at the event, he said, addressed similar topics to those we might see in the U.S.
One such speaker, Marty Carpenter, executive director of Canada Beef, Inc., looked at the importance of identifying markets around the world to best use the entire beef carcass.
“Finding the right markets for the right cuts is a very important component to ensuring value for us as an industry,” Carpenter commented during his July 9 presentation. “Canada approaches beef markets around the world, speaking to and working with clients to achieve strong values and build relationships.”
Global markets continue to play an ever-expanding role in Canada’s beef industry, Carpenter commented.
“The world is a big place, and we certainly need to be able to address the global markets,” he said. “The Canadian beef industry traded to over 71 countries around the world in 2013.”
As part of their trading strategy, Carpenter noted that they continue to build relationships with countries to provide the product others need.
“We really want to be aware of the possible marketplaces,” he added.
Carpenter identified several markets that the Canadian beef industry has found to be as particularly important.
“The single largest market for Canadian beef in the world is California,” he explained. “With over 14 million Hispanic consumers, it is a key market for us to be able to ensure value from all parts of the animal.”
Hispanic consumers, he said, appreciate the chop and shoulder clod cuts that they are unable to achieve value from in the Canadian marketplace. The volume of beef that Hispanic consumers eat is also larger than many others.
“The average Hispanic consumer will eat three times as much beef as the average Canadian consumer,” Carpenter said. “We want to chase those kind of customers.”
In Japan, he listed the chuck as being an important cut, adding that beef consumption, however, is not as high in Japan.
“The Japanese don’t always view beef as their principle protein,” Carpenter commented. “They eat about 13 kilos a year, but they eat double that in seafood.”
Understanding these trends can enable the industry to identify niche markets and increase value in the beef carcass.
Canada, Carpenter added, is an export-dependent nation, making market identification even more important.
“We export close to 45 percent of our beef production,” he said. “It is a very large amount of product, and we need to be able to access those markets and have the ability to maximize them.”
With a majority of markets for Canada in the U.S., Carpenter also noted that opportunities are growing in the Middle East and Asia.
“We need to be able to set the table and work with clients in those markets to make sure we are maximizing the opportunity to work with those consumers,” he said.
The Beef Export Demand Index, which incorporates amount of product plus value, grew by over six percent in 2013, with the majority of their product being fresh.
Canada exports over $1.3 billion in beef, making the export value very important.
Right cut, right market
Another strategy used to increase the value of their beef is in exporting offal.
“We need to maximize value and find markets that value those cuts,” Carpenter said. “I’m not sure the last time I saw a beef tongue in the Canadian marketplace, but in Japan, that is something that is in high demand.”
“It gets back to finding the right customer for the right cut,” he emphasized. “We really work off a number of key elements and focus on four pillars – brand differentiation; brand development and segmentation; product and image building; and return on investment and connectivity with stakeholders.”
In the increasingly competitive nature of the beef industry on a worldwide scale, Carpenter noted that a high quality product and production method is incredibly important.
Canadian Beef Advantage
“We need to address and identify opportunities quickly when working with clients,” Carpenter continued. “We need a technical edge to create interest and getting the conversation going. This really revolves around developing and understanding the Canadian Beef Advantage, or the CBA.”
The Canadian Beef Advantage creates a set of standards and processes that allow the industry to communicate the benefits of Canadian beef.
“One of the first things we like to ensure is that our clients know about our environment,” he said. “When you look around us, we can drive 100 miles in any direction to see beef production and agriculture in general.”
Canadian beef producers emphasize sustainability and the environment, as well.
“Our customers around the world really get a sense that this is a great place to raise high-quality beef,” he added. “It builds a solid base of confidence about what we have in Canada.”
An additional focus point in the Canadian Beef Advantage (CBA) is the quality of Canada’s beef.
“When we talk about the CBA, another of our foundational elements is our genetic base,” Marty Carpenter, executive director of Canada Beef, Inc., said. “Genetics build confidence that it is a high-quality, beef.”
As a leader in grain production, Canadian producers are able to build feed cattle a high-quality grain diet that provides marbling to provide a positive eating experience.
At the same time, they emphasize that their quality standards are identical to USDA standards.
“We like to emphasize the equivalency relative to USDA’s standards,” Carpenter said. “It gives them a reference point that we can build on.”