Our January / February 2019 issue by Meat Business Pro

January/February 2019

2019 OUTLOOK FOR CANADAâ&#x20AC;&#x2122;S MEAT SECTOR EXPLORING HALAL OPPORTUNITIES IS WIN-WIN STRATEGY RABOBANK: 2019 GLOBAL ANIMALPROTEIN OUTLOOK REPORT WHAT DOES THE CPTPP DEAL REALLY MEAN FOR CANADA? TWO IN FIVE FARMERS PLAN TO RETIRE IN THE NEXT 10 YEARS. WHO WILL FILL THEIR SHOES?

e g d e e h t n e t h ig a r St o f y o u r k n iv e s k ly ! e a s il y a n d q u ic

New! Air-operated models available, too.

More power. Y S A E ' P R More profi ts. A SH

Sa fety! COD E 19 06 2 ee l - O ptimal Food St s es nl ai St 0% od el 10 N ew Mand The world’s most productive

profitable trimmer system: Now available in more models than ever!

Rapid and efficient For no-hassle meat recovery, defatting and muscle even for a novice cutting, experience the ultimate in productivity andsame use as a steel bottom-line performance when you use the expanded No.1 feature pre00%™ Trimmers. lineup of 1 Quantum tensioned bars

TAINLESS STEEL • Improved product appearance •S Increased meat yields

Free of maintenance (no springs mounted)

• Minimized need for rework • Improved worker productivity Join other leading North American plants … and gain all these beneﬁts, too!

Visit bettcher.com/quantum for video demos and detailed specs!

Included with a stand for fixing at 90°C or 45°C

Contact the YES Group at 800-465-3536 or sales@yesgroup.ca to schedule an in-plant demonstration and custom financial impact analysis.

YES Group | Markham, Ontario

Hand protection

800-465-3536 | 905-470-1135 | yesgroup.ca Inverted hand-guard Better ®weight distribution From the makers of the Whizard Trimmer …

Available at the

Yes Group Inc.

meatbusiness.ca

January/February 2019

201 Don Park Road, Unit 1 Markham, Ontario L3R 1C2 Phone: 1-800-465-3536 or 905-470-1135 Fax: 905-470-8417 Email: sales@yesgroup.ca www.yesgroup.ca July/August 2017 CANADIAN MEAT BUSINESS

January/February 2019

5 6 10 12 16 17

Canadian farmers concerned about new food guide Farm Credit Canada: 2019 Outlook for Canadaâ&#x20AC;&#x2122;s Meat Sector Exploring Halal Opportunities is Win-Win Strategy By Ehsan Sairally

Beef Cattle Research Council (BCRC) 2018 Highlights and Deliverables McMaster University study suggests eating red meat and dairy lowers heart disease risk Rabobank: 2019 Global Animal Protein Outlook Report By Angus Gidley-Baird

20 22 24 26 28 30

Farm Credit Canada watching five top economic trends in 2019 What Does the CPTPP Deal Really Mean for Canada? Misleading Canada Food Prices 2019 Report Makes Assumptions of Red Meat Industry Pricing Methane Emissions from Livestock Have No Detectable Effect on the Climate More disruptive technologies coming in pork production Two in five farmers plan to retire in the next 10 years. Who will fill their shoes? By Marilyn Braun-Pollon

January/February 2019

4 meatbusiness.ca

January/February 2019

July/August 2017 CANADIAN MEAT BUSINESS 19

GUEST EDITORIAL

September/October 2017 Volume1816Number Number1 5 January/February 2019 January/February 2018Volume Volume 17 Number 1

January/February 2018 Volume 17 Number 1

PUBLISHER PUBLISHER Ray RayBlumenfeld Blumenfeld ray@meatbusiness.ca ray@meatbusiness.ca MANAGING MANAGINGEDITOR EDITOR Scott ScottTaylor Taylor publishing@meatbusiness.ca publishing@meatbusiness.ca DIGITAL DIGITALMEDIA MEDIAEDITOR EDITOR Cam CamPatterson Patterson cam@meatbusiness.ca cam@meatbusiness.ca CONTRIBUTING CONTRIBUTINGWRITERS WRITERS Lilian Schaer, J.P. Gervais, Alice Sinia, Chuck Scott Taylor, Chuck Jolley, Dan Kelly, Ronnie P. Ehsan Sairally, Angus Gidley-Baird, Scott Taylor, Chuck Jolley, Sean Moon, Marilyn Jolley, Sara SylvainPlace, Charlebois, Martha Roberts, Ronnie Cons, Amy Reid Marilyn Braun-Pollon

Braun-Pollon Phil Franz-Warkentin

P. Cons, Brian Perillat, Marilyn Braun-Pollon

CREATIVE CREATIVEDIRECTOR DIRECTOR Christian ChristianKent Kent

Canadian CanadianMeat MeatBusiness Businessisispublished published six sixtimes timesaayear yearby byWe WeCommunications CommunicationsWest WestInc. Inc.

CANADIANFOOD FARMERS CONCERNED CANADA 150 BRINGS EAST BETTER ABOUT NEW FOOD GUIDE AND WEST BETTER TOGETHER THROUGH DATA Canada is set to release a replacement for its decade-old food guide in 2019, and it looks like the document will likely be in line with writer Michael LITERALLY COMMUNICATION Pollan’s commonly-cited dietary prescription “Eat food. Not too much. ByMostly Lilian Schaer, Ag Innovation Ontario plants.” In honour of the country’s 150th birthday, Canada Beef and Fairmont Vast of data are being collected Canada’s farms through Butamounts the rumoured minimization of meatson and dairy has some food the Hotels and Resorts joined forces to celebrate how Canada’s cultural advent of precision agriculture technology thecause Internet of Things (IOT) producers concerned the updated guideand could a blow to their diversity hasofinfluenced the evolution our cuisine. industries and negative health effects toof boot. Many types tools, equipment and devices gather data on everything from

At a recent Canada Beef an Toronto’s Fairmont York highlighted crop yields event, to how many steps animal takes inaccusing a day.Royal However, much of Tom Kootstra, the chairman ofand Alberta Milk, is Health Canada the Asiandata influence in Canadian cuisine featuring the Royal York’s Executive Chef ofunfairly that is underutilized because it’s collected by systems that don’t or targeting animal-based proteins and prioritizing vegetarian options Robert Mill’s and Chef Clinton Zhu from Shanghai. Chef Mills’ commitment to can’t communicate with each other. for what he describes as “ideological reasons.” sustainability and sourcing local set the stage to showcase Canadian grown and The need for better farms through better data “Initially weredecision-making reluctant to hearon from industry … because of use the raised beef they and produce.

resulted in Ontario Precision Agri-Food (OPAF), of agricultural perceived bias that these groups would bring atopartnership the conversation. But I

The day they began with a farm tour,we bringing east Professional home organizations led by Ontario Agri-Food Technologies (OAFT) that’s think need to realize all come inand withwest ourtogether. biases and the obligation economist and author Mairlyn Smith guided a group of top culinary media and developing an open agri-food innovation platform to connect and share data. of Health Canada is to consider the science,” said Kootstra. influencers as they embarked on a full day of epicurean exploration, delving into The goal,Canada has faced according to lead accusations of director Dr. Karen Hand of Precision Strategic Health being influenced by industry the narrative of taste and terroir. Much like wine, the characteristics of Canadian groups when compiling Guide. One edition of theinguide Solutions, is getting data, Canada›s wherever itFood exists (both data repositories beef are shaped from a terroir effect.

published in the 1990s saw the generated recommended number meat and industry or government and data by countless of sensors) so itdairy can

afterimportant industry Ontario. complaints. At Sunnymead Farm, near Caledon, Alberta rancher Smith-Fraser beservings increased used to help advance food production issues Kelly like food safety, joined Will Sheard of Sunnymead and shared the stories of how they raise traceability and first-ever plant and food animal disease The country’s guide was surveillance. about more than just promoting Canadian beef. The andduring rancher pair offered World an insider’s perspective onrules the nutrition — itinformation wasfarmer created Second War and included For example, about thethe prevalence and control of insect pests similarities and differences in raising beef across the country. that discouraged people from eating foods needed for wartime export. like cutworms that damage soybean crops lies with many different people

While feeding andpromoted housing cattle can be quite differentand between two parts and organizations, including university andindustry, government researchers, crop Later versions the agriculture some these details ofadvisors, the country, the similarities are significant. “We do the very best we can for our input suppliers and farmers. in the current guide have been criticized by medical professionals, livestock and are continually advancing our methods with our animals’ and land’s like the suggestion that fruit all juice is acceptableabout serving of fruit orpest There is no single spot where of theaninformation a particular best interests in mind,” said Smith-Fraser. vegetables.

can be accessed in a robust, science-based system and used in decision-

We WeCommunications CommunicationsWest WestInc. Inc. 106-530 106-530Kenaston KenastonBoulevard Boulevard Winnipeg, Winnipeg,MB, MB,Canada CanadaR3N R3N1Z4 1Z4 Phone: Phone:204.985.9502 204.985.9502Fax: Fax:204.582.9800 204.582.9800 Toll TollFree: Free:1.800.344.7055 1.800.344.7055 E-mail: E-mail:publishing@meatbusiness.ca publishing@meatbusiness.ca Website: Website:www.meatbusiness.ca www.meatbusiness.ca Canadian CanadianMeat MeatBusiness Businesssubscriptions subscriptionsare are available availablefor for$28.00/year $28.00/yearor or$46.00/two $46.00/twoyears years and andincludes includesthe theannual annualBuyers BuyersGuide Guideissue. issue. ©2015 ©2019We WeCommunications CommunicationsWest WestInc. Inc.All Allrights rightsreserved. reserved. 8 The Thecontents contentsof ofthis thispublication publicationmay maynot notbe be reproduced reproducedby byany anymeans meansininwhole wholeor orininpart, part, without withoutprior priorwritten writtenconsent consentfrom fromthe thepublisher. publisher. Printed PrintedininCanada. Canada.ISSN ISSN1715-6726 1715-6726

Sheard summed it up. “People askguiding me whyprinciple, Iwill farm – and one of thethrough main reasons The updated document’s new established making and that’s where OPAF’s platform help,” Hand says. consultations the public and health but notoone-onis that 97 per centwith of farms are still family run.officials I feel blessed work with my dad Pilot projects are underway with Ontario’s grain, dairy and poultry producers oneday meetings with stakeholders, states that Canada and every and learn theindustry craft of raising good quality beef likeHealth my grandparents to identify their needs in areas like crop protection, sustainability and food recommends: “Regular intake of vegetables, fruit, whole grains and my great grandparents did.”

safety and how OPAFespecially can provide data-driven solutions to benefit farmers. protein-rich foods, plant-based sources of protein.”

Grass and grain-fed beef went head-to-head in a terroir tasting experience, before “We sit down with farmers, advisors, associations, government and Plant-based contain different forms iron than guests indulgedproteins in a gourmet picnic packed up of in dietary bento boxes with beef and researchers to find out what data they have, where they exist and if we were meats (non-heme versus heme) seasonal, regionally grown foods. and the two forms are absorbed into the

able to differently. connect them, what value or benefit that would offer participants – body

Back the Fairmont York, guests were treated tooraon Canada exclusive eitheratspecific to theRoyal commodity they are producing larger150 food-related While there are waysand to get adequate sources of ironbrisket from just plants, one maple Chef recipe demo of smoked and braised beef issueswhiskey such ascocktail food safety or impact on trade,” she explains. rancher worries Canadians couldwere be confused new rules. short rib. For the grand finale, guests treated toby anthe East meets West themed And OPAF’s efforts are gaining global recognition. Earlier this year, Internet “We where don’t want people be misleddifferent thinkingpreparations they’re getting dinner the Chef duotopresented of the beef,equivalent reflecting of Food and Farm 2020, a large project in the European Union exploring amount of nutrients as they would,” said Tom Lynch-Staunton, a rancher unique cultural influences. Dishes like Yonge Street Sirloin with Gremolata and the potential of IOT technologies of European food and farming, recognized and the government relations manager with Alberta Beef Producers. Mushroom, Oven Roasted Orange Beef Tri-tip with Shanghainese Sauce and OPAF as one of three global projects to collaborate with. Charred Roll with Pickled Asparagus of … thewe event, showcasing “Let’sSirloin say you’re eating lentils versus a were pieceallofpart beef know the iron “This is work goingofwill toCanada’s be face of data in Canada and the farmers and ranchers. inhard the lentils bechanging harder tothe absorb and youenablement won’t be getting essential

contributing globally,” says Tyler Whale of Ontario Agri-Food Technologies

nutrients.” “I am thrilled to be part of such a unique series of events connecting chefs and (OAFT). “We are creating a platform that is the base of something new, and paying tribute to high quality ingredients like Canadian beef,” saidrepresenting Chef Zhu. “Once Some may bethis concerned but an group althoughranchers we are piloting in Ontario, it willindustry be available nationwide to weplant-food take the time to get to is know wherethe ournew foodfocus comes and how it is crafted, producers praising onfrom environmental those who want to use it.” wesustainability can truly appreciate its beauty.” and animal welfare. OPAF partners include OAFT, University of Guelph, University of Waterloo,

applaud Health Canada for heeding the growing of evidence “In“We working with our global partners, we’re exploring how farbody the Canadian pantry Niagara College, Vineland Research and Innovation Centre, Livestock demonstrating that diets rich inExecutive plant-based foodsofare better forRelations human at has come,” said Joyce Parslow, Director Consumer Research Innovation Corporation, Ontario Fruit and Vegetable Growers and environmental health,”pushing said Pamela Tourigny, executive the Canada Beef. “To continue culinary boundaries, we’redirector workingof with Association, Grain Farmers of Ontario, Ontario Federation of Agriculture, Plant Foods Council, in a release. international chefs and pairing them with leading local chefs to demonstrate how Farm Credit Canada, Ontario Agri-Business Association, Bioindustrial Canadian ingredients have earned athe reputation on theinglobal stage. InInbuilding Health Canada plans releaseHorseshoe revisedFarm guide two phases. Innovation Canada, andtoGolden and Food Alliance. early these relationships, aim to inspirehealthy-eating Canadians to recommendations continue expandingfor their 2019, part one willwe contain general This project was funded by Growing Forward 2, a federal-provincial-territorial pantries, embracing global flavours in their daily cooking.” health professionals and policy makers and later in 2019, part two will initiative. The Agricultural Adaptation Council assists with GF2 delivery in Ontario. of foods for the general public.

of healthy eating patterns with recommended amounts and types Forconsist more information, visit canadabeef.ca. meatbusiness.ca meatbusiness.ca

September/October 2017 CANADIAN MEAT BUSINESS 55 January/February2018 2019 January/February 5

FARM CREDIT CANADA: 2019 OUTLOOK FOR CANADA’S MEAT SECTOR Hog sector profitability in 2019 will be mixed. Interest rates, limited growth in domestic production, slightly higher feed costs, and possible oversupply in the North American market suppress this outlook, while untapped potential in export markets and a lower Canadian dollar will support sector profits. Profitability in the cattle sector will also vary. While still expected to be profitable, cow-calf margins in 2019 will be lower than the most recent three-year average. Feedlot revenues will be challenged but margins should, on average, be positive. Hog prices to be pressured from large North American supply The expected variability in hog profits throughout the sector is a continuation of the challenges that emerged in the second half of 2018. U.S. trade tensions with Mexico and 2.9% growth in U.S. pork production hit Canadian producers hard, but the dispute that reduced U.S. exports to China was the main driver of the hog price collapse in mid-August. The market recovered 6

January/February 2019

slightly in late September when African Swine Fever (ASF) spread throughout China. Although domestic hog production is expected to remain at 2017-2018 levels, North American supplies will grow. USDA projections suggest U.S. hog production will rise by a whopping 5.3% in 2019. Expect this number to be revised downward in early in the year. Their forecasted average lean hog price of US$41-$44 per cwt. – a 7.0% decline from 2018 – is considerably more bearish than futures markets’ early 2019 projections of $62. Demand will drive North American cattle sector in 2019 Demand for beef upheld the Canadian cattle and beef

4 – 9. 5. 2019 Frankfurt am Main

DU: 18.12.2018

Live Canadian cattle prices throughout the year averaged C$143 per cwt. for fed steers in 2018 (Jan-Sept.), which resulted in a 2.8% fall in receipts from 2017 revenues. Prices are expected to average C$145 per cwt. in 2019, despite U.S. production expanding by more than 3.0% in response to continued growing demand. Canadian production isn’t expected to move from 2018 levels in the coming year. Despite a Canadian packer utilization rate that’s the highest since 2004, there aren’t enough cattle available to increase production. Cattle-on-feed in Canada as of November 2018 were estimated to be 10% higher than the five-year average.

Kanada/en

sectors in 2018. On both the domestic and global front, consumption grew. Higher incomes, different dietary preferences and more variety in meat selections have each spurred demand for proteins. U.S. beef exports broke records in 2018 and are expected to maintain growth in 2019. Canadian exports had the same success, and as of early December, were on track to break our own records.

How will this affect your bottom line? With the meat sectors expected lack of production growth and tight profit margins, 2019 will be a good year to seek efficiency gains by working to reduce operating costs relative to revenues. Proper evaluation of financial risks will be especially important on loans due for renewal in 2019, as periods of rising interest rates may require greater shares of revenues to cover interest payments. Watch your debt repayment capacity, given the slowdown in income – especially for operations with recent, significant investments. TRENDS TO WATCH IN 2019 China, China and more China China always plays a large role in global red meat markets, but the economic giant’s influence will be distinctive in 2019. If U.S.-China trade tensions remain unresolved in early 2019, the U.S. may choose to plant more corn and fewer soybeans, ultimately lowering feed costs for livestock operations. On the other hand, lifting tariffs and/or scaling back trade retaliation measures would mean stronger demand from China – and higher red meat and soy prices.

65540-013_IFFA_allg_SP_CanadianMeatBusiness_86x254 • ISO 39 • CMYK • js: 03.12.2018

Canadian cattle herd expansion has been challenged by several factors: the dry conditions on the Prairies that pushed up feed costs in 2018 meant fewer retained heifers and increased sales to feedlots at smaller weights. Feedlots, with fewer Canadian cattle available, imported more live cattle from the U.S. in 2018, a trend that’s expected to continue in 2019.

Meet the Best IFFA. One world-leading trade fair, one focus: meat. From hand-crafted to high-tech, this innovation platform presents the industry trends of the next 3 years. It is the meeting place for experts from industry, retail and the butchers’ trade – for the first time also in the new Hall 12! www.iffa.com info@canada.messefrankfurt.com

Prices might rise too, if China’s herd is further impacted by ASF in 2019. As of early January, estimates of fewer continued on page 8

January/February 2019

than 400,000 pigs – or well under 1.0% of China’s herd – had been culled, but some estimates suggest the count could be much higher. It’s hard to imagine the possible impact if that happens. To put things in perspective, total U.S. pork exports in 2018 amounted to 5.0% of the Chinese hog herd. It’s too early to tell if China will have trouble containing the disease in a production system still relying on small individual producers. The world’s largest pork market may have to increase imports this year, and potentially from nonU.S. suppliers.

A STRENGTHENING U.S. DOLLAR WILL HELP MAKE CANADIAN MEAT EXPORTS MORE COMPETITIVE. CANADA ALSO HOLDS A KEY TO GLOBAL MARKET ACCESS THE U.S. LACKS: RECENT TRADE INROADS VIA THE COMPREHENSIVE AND PROGRESSIVE TRANS-PACIFIC PARTNERSHIP (CPTPP).

January/February 2019

Feed cost increases should be muted • Western Canadian feed prices could climb in 2019, although it will likely be a moderate increase following a year when weather led to higher prices. Barley supplies will remain tight, but 2018 harvest delays resulted in additional supplies of feed grain. As a result, western Canadian livestock margins should profit from a feed grain advantage. That east-west spread will be more likely if eastern Canada must import corn to replace their crop infected with deoxynivalenol (DON). That will become clear with subsequent estimates of crop quality, although expected yields may be enough to meet domestic needs. Western beef feedlots may also prefer to import corn with continued tight barley supplies. Canadian meat producers can find access amid shifting trade flows Lower hog prices and steady gains in global pork demand are expected to drive U.S. exports nearly 8.0% higher in 2019, following 6.0% growth in 2018, despite reduced exports to China. A strengthening U.S. dollar will help make Canadian meat exports more competitive. Canada also holds a key to global market access the U.S. lacks: recent trade inroads via the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

Canada’s preferential market access to 495 million consumers (once all members ratify the deal) can help displace U.S. exports as Canadian beef exports face lower tariffs. Japan typically imports about 30.0% of their beef from the U.S. The reduced tariffs on pork should boost Canadian exports to CPTPP members which imported C$1.39 billion worth of pork products in 2017. The new Canada-U.S.-Mexico Agreement, or CUSMA, deal could be implemented in 2019. It replaces NAFTA with the same access granted for animal and meat exports. Mechanisms to resolve trade disputes were also preserved; these have been helpful for livestock sectors in the past. New grading schemes introduced in the deal will further harmonize the North American cattle supply chain. Weaker loonie will help offset pressures on net farm income The loonie declined steadily in 2018. We forecast it to average US$0.75 for 2019 – a good news story for livestock producers and meat processors. Helping to depress the Canadian dollar this year: • Challenged 2019 oil prices, as production increases and demand slows. •

corn supplies, and possible shifts in feeding costs.

•

Expectations of a weaker global economy in 2019, driven in part by uncertainty around China’s ability to sustain its debt-fuelled economic expansion without triggering inflation. Chinese debt is a growing risk to monitor.

For more information about the 2019 outlooks for other sectors, visit fcc.ca/AgEconomics

“FCC is competitive and understands our business.” René Proulx, FCPA, FCA President and Chief Executive Officer Exceldor coopérative Food products processor

Rate increases on both sides of the border. Enjoying its second-longest economic expansion period ever, the U.S. will break the record if that growth extends into summer. Watch for the Federal Reserve to hike interest rates possibly three times in 2019. Here at home, the Bank of Canada expects inflation to hit its 2.0% mid-point target, with an economy near full-capacity. Financial markets currently expect no more than two overnight rate increases of 25 bps this year, with the first hike coming in the second half of the year.

On the radar • Food retail pricing trends - a large supply of red meat proteins in North America in 2019 should continue to make beef and pork competitive at the retail level. Food retailers may seek to pass on higher costs for labour and energy to consumers this year and this could lift food inflation and slow demand growth.

The food business is unique Your financing should be too Grow with a lender who understands Canadian food. With over 100,000 customers, Farm Credit Canada can help build your business success story.

fccfinancing.ca

• Evolution in the concentration levels of the vomitoxin DON in the Ontario January/February 2019

t been global ng lots protein at the

d found wn on that uit or s of

es ur n, and ethanol tovers n. lity of

archers om al

.S. y the ed at in an 10 eaten

ercent

EXPLORING HALAL OPPORTUNITIES IS WIN-WIN STRATEGY By Ehsan Sairally, President - Halal Product Development Services

The scope and sphere of the food manufacturing/processing sector continues to adjust to dynamic changes in the marketplace. Various issues are coming together to shape food buying habits including demography, culture, ethnicity, religion, healthy lifestyles and environmental concerns. Consumers are not only interested in what they eat. They are interested in where food comes from and how it’s processed and manufactured. Suppliers are taking notice of this complex scenario and the new doors and avenues that need to be explored. A case in point is the opportunities presented by the growing halal market Halal is both a global and a regional market at the same time. The halal cuisine concept is gaining awareness and is ready to be explored on regional and international levels. The demand for healthy, natural and nutritious food is definitely on the priority list for global and regional consumers. Halal fits right into the equation of this demanding market. Halal is not a new food concept. It has been around for over 1400 years and encompasses cuisines from Africa, Asia, Europe, North-America, India and Russia. The rich history of the halal food concept is steadily finding its way into the mainstream market in North America. It is no longer just an ethnic niche market. Halal foods by their very nature have universal appeal not only with meat products but with other food categories as well. Benefits offered by halal foods: • Satisfies growing base of informed consumers with large purchasing power • Provides variety & choice • Eco and environment friendly • Fair treatment of animals • Natural and healthy quality ingredients • Faith based opportunities • Increased consumer confidence • Optimized and increased production • Deliver value and transparency • Clean label and healthy alternative • Minimum investment and minimum adjustment Sectors that can mutually enhanced halal food business: • Airlines • Hotels and restaurants • Catering and special functions • Halal travel and tourism • University and school system

2019 10 CANADIAN MEAT BUSINESS January/February r/October 2017 27

• • • • • •

Hospitals Beauty healthy products Pharmaceutical products Industrial canteens Franchise operations Nutraceutical and sports products

THE CURRENT ESTIMATED GLOBAL HALAL MARKET IS NOW OVER $1 TRILLION. IT IS AN ESTABLISHED AND GROWING MARKET. BY 2025 HALAL CONSUMERS WILL ACCOUNT FOR OVER 30 PERCENT OF THE GLOBAL MARKET.

The transition to halal production can be realized with minimum investment and minimum adjustment to existing GMP and HACCP procedures. Companies who are already engaged in halal production know the unlimited potential of this lucrative market. To navigate this market, halal compliance may only require minor changes to existing manufacturing and processing protocols.

As the halal concept continues gaining momentum throughout the world, non-halal consumers are increasingly being attracted. The reason is that halal food are regulatory compliant, safely produced and packaged, and consist of high quality natural ingredients. In addition they are cost efficient to produce. The current estimated global halal market is now over $1 trillion. It is an established and growing market. By 2025 halal consumers will account for over 30 percent of the global market. Halal opportunities are not just food related. They extend to pharmaceutical products, cosmetics, nutritional supplements, sports beverages as well as tourism & travel. As more and more companies are seriously looking at entering the halal market, they are finding the transition can be made with minimal changes to their existing manufacturing procedures. Many companies are already halal compliant, they may just require certification to enter the market. The halal market is growing... and worth exploring For more information regarding halal certification, contact, Halal Product Development Services (HPDS) by email at ehsan@ halalproductservices.com. HPDS is a member of the World Halal Council (WHC) and Association of American Halal Certifiers (AAHC).

January/February 2019

BEEF CATTLE RESEARCH COUNCIL (BCRC) 2018 HIGHLIGHTS AND DELIVERABLES The Beef Cattle Research Council (BCRC) is Canada’s industry-led funding agency for beef, cattle and forage research. Their mandate is to: • determine and communicate the Canadian beef cattle industry’s research and development priorities, and • administer the Canadian Beef Cattle Check-Off funds that have been assigned by producers to research. The BCRC invites and funds projects and initiatives that have the greatest potential to benefit the sustainability and competitiveness of Canada’s beef industry. The BCRC is led by a committee of beef producers who proportionally represent each province’s research allocation of the Canadian Beef Cattle Check-Off. 2018 has been a transition year for the BCRC in terms of both funding and program administration. An increase in the Canadian Beef Cattle Check-Off from $1 to $2.50 per head in most provinces and revised allocations to research has grown the BCRC’s research budget from approximately 15 cents to approximately 75 cents per head. In addition, the Beef Science Cluster II, under Agriculture and Agri-Food Canada’s AgriInnovation Program, wrapped up March 31, 2018 and the Beef Science Cluster III program, under the Canadian Agricultural Partnership (CAP), has begun.

Canada’s Beef Cattle Industry Science Clusters The Science Clusters are a partnership with Agriculture and Agri-Food Canada that combines their strengths (including funding levels) and the BCRC’s strengths (including understanding of industry’s priorities) to make wise joint-investments in a variety of research programs with the greatest potential to advance the industry. The first Beef Cattle Industry Science Cluster directed $10.5 million to 32 research projects between 2009 and 2013. Joint industry and government commitments to the second Cluster (April 1, 2013 – March 31, 2018) totaled $20 million, including $14 million in funding from AAFC, $1 million in provincial government investments, and $5 million in funding from the research allocation of the Canadian Beef Cattle Check-Off and provincial beef industry groups. Funding was directed to 26 research projects. Beef Science Cluster II Outcomes Research supported through the Cluster is developing solutions to issues of concern to Canada’s beef industry, governments, regulators, consumers and the public. Results include: • A factual understanding of the Canadian beef industry’s environmental footprint. In 2011, producing each kg of Canadian beef required 29% less breeding stock, 27% fewer slaughter cattle and 24% less land, used 17% less water, and produced 15% less greenhouse gases than in 1981. continued on page 14

January/February 2019

CONVEYOR BELTS SPIRAL, TURN-CURVE & STRAIGHT RUNNING Get The Best Performing Conveyor Belt for Your Specific Requirements

Omni-Grid

Weld

PosiDrive Spiral™

ExactaStack™

Simplifies System Operation

ExactaDriveTM Components

.75", 1", & 1.5" pitch

Unique cage design is an ideal solution for:

Drop-in replacement belts and parts for self-stacking spirals

Patented, precision welded steel belts that run smoother, stronger, longer

• • • •

High Tension Spirals Heavy Product Loads Greasy Product Applications Product Movement

Omni-Flex®

The Omni-Flex 3 x 1 is strong and lightweight, ideal for conveying pans, trays and large products ®

• Available in all widths, tier heights, and mesh configurations for spliced-in sections and complete belt replacements • No system drive modifications required • Available with plastic Advantage overlay • Expert technical support and full turnkey installation • Made in the USA for fast deliveries and cost savings

Cleatrac®

Tightest product transfers in the industry, true-tracking and durable

360

• World’s only patented, lotension grid-style belt • 360° buttonless welds eliminate cracking commonly found with traditional bridge welds • Coining process reduces break-in wear and increases belt life • Integral guard edges with smooth, rounded finish

CB5 Baking Band® Consistent heat transfer, breathable, true tracking and long belt life

FACTORY SERVICE Comprehensive maintenance services for spiral conveyors and baking bands

1 -8 6 6 -2 0 4 -1 4 1 4

Ashworth is the only conveyor belt company that engineers, manufactures, and services both metal and plastic belting for spiral, turn-curve and straight running conveyors, providing customers with the best solution. Companies around the world depend on Ashworth’s quality, reliable customer service, and innovative solutions to maximize throughput and minimize life-cycle costs.

w w w. a s h w o r t h . c o m

1 - 8 0 0 - 6 8 2 - 4 5 9 413

January/February 2019

• • •

Optimal combinations of annual forage crops, agronomic management and grazing practices that improve forage productivity while providing economical and nutritionally appropriate winter feed for the cow herd. Cost-effective, practical ways to manage the pain associated with castration in beef calves. The adoption by producers of pain control for castration has increased significantly in recent years. A report on the changes in Canadian beef quality and consumer satisfaction over time. Attributes of quality and satisfaction have remained stable or slightly improved over the past 5 years.

THE BCRC INVITES AND FUNDS PROJECTS AND INITIATIVES THAT HAVE THE GREATEST POTENTIAL TO BENEFIT THE SUSTAINABILITY AND COMPETITIVENESS OF CANADA’S BEEF INDUSTRY. THE BCRC IS LED BY A COMMITTEE OF BEEF PRODUCERS WHO PROPORTIONALLY REPRESENT EACH PROVINCE’S RESEARCH ALLOCATION OF THE CANADIAN BEEF CATTLE CHECK-OFF. • An understanding of the occurrence and severity of beef carcass defects to inform prevention strategies. Total losses due to carcass quality defects are approximately $200 million/year. Some defects, like bruises and horns, are becoming less common while others, like excess weight, fat, tag, liver health and injection site lesions require further investigation of nutritional and health management strategies to reduce losses. • New feed grain and forage varieties with superior yield and quality, including ten barley varieties approved for registration, and several lines of native plant materials, legumes, grasses and triticale with potential for commercialization. • Dry chilling methods to cost-effectively control microbiological growth on carcasses in small abattoirs. • The establishment of a veterinary and producer surveillance network to gather information on the prevalence of production limiting diseases and evaluate the adoption of and producer attitudes towards various management practices such as antimicrobial use, animal welfare practices and biosecurity practices. • Detailed metagenomic analysis of microbiological samples collected throughout cattle environments, soils, wetlands, rivers, municipal water, retail beef, human patients and sewage samples found no link

January/February 2019

between the use of antimicrobials in beef cattle and antimicrobial resistance in humans.

Beef Science Cluster III in Progress Funding for the third Cluster was announced by AAFC in July 2018. Covering the period to March 31, 2023, $21 million will be directed to 26 research projects. The funding includes $14 million from AAFC, $5 million in funding from the research allocation of the Canadian Beef Cattle Check-Off and $1.5 million in inkind contributions from industry in the form of cattle, equipment, and materials. This Cluster will work to grow beef exports and supply growing global beef demand by supporting research and technology transfer that advances Canadian beef and forage production while enhancing industry competitiveness and the public’s trust in responsible production. Examples of Cluster III project objectives include: • determine how camera-based computerized carcass grading systems can optimize fabrication and direct beef products to the most suitable market to support market growth and trade; • measure and identify opportunities for further improvements in carcass and beef quality to support value-added product development; • expand production-limiting disease surveillance across Canada to anticipate, mitigate and respond to emerging disease threats; • enhance environmental sustainability and address climate change by evaluating carbon sequestration and biodiversity in Canada’s grasslands and identify strategies to increase the beef industry’s contribution; • reinforce public trust and support transport regulation development by determining optimal rest intervals and durations for cattle in transit • support consumer confidence and demand by improving understanding of bacteria and cattle interactions to improve food safety, reduce the risk of E. coli O157:H7, and reduce the need for antimicrobials to treat bovine respiratory disease and digestive upsets; and • strengthen awareness and adoption of research results via the BCRC’s innovative knowledge translation and transfer team. Details on all 26 Cluster III projects are available on BeefResearch.ca. Leveraging the Increased Canadian Beef Cattle Check-Off The increased Canadian Beef Cattle Check-Off enables the BCRC to continue to play an integral role

in achieving several of the industry goals identified in the National Beef Strategy by maintaining existing programming and expanding in the following ways: Priority Research Projects: Increased funding will be allocated to research aimed at achieving specific outcomes related to beef quality, food safety, feed grain production, forage production and utilization, improved feed efficiency at both cow-calf and feedlot levels, and production-related priorities in the areas of animal health and welfare and antimicrobial resistance and use. The council launched a call for letters of intent in June 2018. Funding decisions on proposed projects will be made in February 2019. Summaries will be available on BeefResearch.ca. The increased Canadian Beef Cattle Check-Off enables the BCRC to continue to play an integral role in achieving several of the industry goals identified in the National Beef Strategy by maintaining existing programming and expanding in the following ways: Priority Research Projects: Increased funding will be allocated to research aimed at achieving specific outcomes related to beef quality, food safety, feed grain production, forage production and utilization, improved feed efficiency at both cow-calf and feedlot levels, and production-related priorities in the areas of animal health and welfare and antimicrobial resistance and use. The council launched a call for letters of intent in June 2018. Funding decisions on proposed projects will be made in February 2019. Summaries will be available on BeefResearch.ca.

Knowledge and Technology Transfer: The BCRC continues to advance the implementation of its Knowledge Dissemination and Technology Transfer Strategy to drive broad and timely uptake of research results. Focus has been placed on developing and utilizing a Canadian Beef Technology Transfer Network to support the regionally limited, underfunded, and fragmented nature of beef extension across Canada. The BCRC is working to develop collaborative extension projects that bring together the expertise and resources of various groups in order to develop excellent extension resources together. Investments are also being made in economic-based decision-making tools and resources to help producers evaluate the relevance of adopting particular innovations on their operations. Advancement of the Verified Beef Production Plus program: In addition to funding research, the BCRC is responsible for the delivery of the Verified Beef Production Plus (VBP+) program, which verifies on-farm practices related to food safety, animal care, biosecurity, and environment. Ongoing national industry investment will ensure the consistent delivery of the VBP+ program as it becomes a core pillar in verifying sustainable beef production in partnership with endTo learn more about BCRC initiatives and take advantage of our extension resources, including articles, videos, webinars, and calculators, visit www.beefresearch.ca. More information on the Canadian Beef Cattle Check-Off can be found at www.cdnbeefcheckoff.ca/

January/February 2019

MCMASTER UNIVERSITY STUDY SUGGESTS EATING RED MEAT AND DAIRY LOWERS HEART DISEASE RISK People who eat red meat and cheese are likely to live longer, healthier lives, according to a major study which actually suggests eating around twice as much as health officials currently advise. Researchers from McMaster University in Canada questioned more than 218,000 people about their food consumption across 52 countries. They found that people who eat higher levels of dairy and red meat reduced their chances of early death by 25% and of having a fatal heart attack by 22%.

NATIONAL HEALTH SERVICES GUIDELINES SUGGEST THAT DAIRY SHOULD MAKE UP NO MORE THAN 8% OF AN ADULT’S DAILY INTAKE AND RED AND PROCESSED MEAT PER DAY SHOULD BE CUT DOWN TO 70G OR LESS (COOKED WEIGHT) TO “HELP REDUCE YOUR RISK OF BOWEL CANCER”. National Health Services guidelines suggest that dairy should make up no more than 8% of an adult’s daily intake and red and processed meat per day should be cut down to 70g or less (cooked weight) to “help reduce your risk of bowel cancer”. But the global study by McMaster University in Canada linked higher levels of meat and dairy intake with a lower risk of early death. The researchers found that people who eat three portions of dairy and 120g of unprocessed red meat per day had the best health. Dr. Andrew Mente, presenting the findings at the European Society of Cardiology conference in Munich, said the saturated fat contained in meat and dairy appears to protect the heart. He also noted those eating more fat were likely to be eating less carbohydrates, much of which was likely to be processed, and sugary. 16

January/February 2019

“This certainly challenges the conventional wisdom to limit whole-fat dairy intake,” Dr. Mente stated, “People should aim for a diet which was varied and full of unprocessed foods.” The global findings did not include white meat, such as turkey and chicken, but Dr. Mente said separate analysis suggested it would have similar benefits as red meat, in protecting against early death. Lead researcher Professor Salim Yusuf said: “Our results show that dairy products and meat are beneficial for heart health and longevity. This differs from current dietary advice.” Commenting on the study, Professor Jeremy Pearson, associate medical director at the British Heart Foundation, said: “Eating well means looking at your diet as a whole, rather than focusing too much on individual elements. Meat and dairy can contribute to a healthy, balanced diet as long as they’re eaten in moderation along with plenty of fruits and vegetables, pulses, wholegrains and nuts.

NSF INTERNATIONAL FOCUSES ON CANADIAN FOOD INDUSTRY WITH NEW WEBSITE FOR SERVICES IN CANADA Global public health organization showcases services for Canada’s growing and fast-changing food industry

RABOBANK: 2019 GLOBAL ANIMAL PROTEIN OUTLOOK REPORT NSF International in Canada recently launched a new website - www.nsfcanada.ca - to give Canada’s growing and complex food and beverage industry easy access to the global public health organization’s expertise and services in Canada. The website combines information on the depth, experience and capabilities of the NSF International Canadian office with access to NSF International’s global services dedicated to food safety By Angus Gidley-Baird, Rabobank Senior Analyst and quality. Evolving regulations across countries and increasing

accredited International Association for Continuing Education and Training (IACET) site. Topics include HACCP, food safety and quality, GFSI benchmarked standards, regulations (including FSMA), food science, food packaging, food microbiology and ISO standards. Training modalities include eLearning, on-site, customized and open enrolment.

Additionally, the website includes information about management system registrations for the food, automotive, environmental, information security, medical devices, aerospace and chemical industries, as well as for Ontario recently put programs. our heads together to identify drinking water

Thecomplexities global animal protein from associated with a team globalized foodRabobank supply network present challenges for NSF International clients in Visit the new Canadian website at and www.nsfcanada.ca to reviewbe the food what we think this year would look like for animal protein production what might Canada and around the world. The new Canadian website safety services capabilities video, find a list of Canadian food experts, learn some of the key drivers in the market. We estimate that the events totalandanimal proteinsubmit production about upcoming global news releases, a question offers expertise and services to help companies navigate YesGroup_CanadianMeatBusiness-Qtr-pg.pdf 1 2014-05-16 1:20:17 PMor read FAQ.past two years. will these grow, but notincluding by thecertification volumesand weauditing, have seen inanthe challenges, consulting, technical services, training and education, food and label compliance, packaging, product and Rabobank expects global animal proteinand production process development. (beef, pork, poultry and seafood) to expand by just under 1 million tonnesCanadian in 2019 –website well below the information fiveNSF International’s provides the following services: year on average growth rate of 5mt. Pork and wild-catch seafood are expected to seeThird-party the largest declines in Certification & auditing: food safety audits and although certifications, aredown integral growth, the which slowing ofcomponents beef growthofis selection Accurateto also supplier material. Poultry,and on regulatory the other compliance. hand, is expected audits are the first step toward successful verification see stronger growth than in 2018. of a company’s food safety system, providing improved brand protection and customer confidence. Certifications Brazil willaudits increase its growth acrossand pork, poultry and and are available for animal produce in the beef.agriculture The growth outlook forcertification North America is also industry, GFSI and management system registration. relatively strong driven by record levels of pork and

poultry production for the USteam andapproach continued growth Consulting: A full-service providing technical and insight a wide range in beef, whileresources, Canadianexpertise and Mexican beef for production of see foodasafety qualityChina services. might slightand decline. willNSF see International a substantial provides finished product inspection testing for food, decline in production, driven by the impacts of African packaging and non-food testing for rapid analysis and swine fever.to protect the brand, technical support services insight from on-site temporary or permanent technical staffing

African swine fever global trade will be two major placements, and and various types of consulting. influencers on global protein markets nextfor year. Technical services: A one-stop solution foodThe product sheer size of theand Chinese pig population – over 700 compliance formulation, from concept to finished product, and labelitcompliance, packaging, million pigs –including and thefood importance plays in providing product and process development, and shelf-life a protein source to the Chinese population meanand any product evaluation. disruption in this market will have ripple effects across Training and education: Training for the global food the globe.

and beverage industry across the supply chain as continued on an page 18 meatbusiness.ca

January/February 17 September/October 2019 2017 CANADIAN MEAT BUSINESS 23

While China is controlling the virus through slaughter, internal trade limitations and quarantines, it is predominantly a case of larger supply of pork on the market seeing pig prices fall. Although in some areas of southern China where the pig population is lower and human population higher we have seen prices rise. We expect that midway through next year there will be a reduced volume of pork in China – the quantum as yet is unknown. As a result there will be a greater reliance by China on imports of pork, and other proteins to meet this protein gap. This will create a rising tide to lift all boats and will be felt across all protein classes. Higher production implies that global trade needs to increase, but the shift to a protectionist philosophy and US dollar strength will restrict trade. The US-China trade war has reshaped pork and seafood trade in 2018, and created volatility in feed prices. These two countries are major players in global animal protein trade, so a bilateral disagreement is going to have far wider implications.

RABOBANK EXPECTS GLOBAL ANIMAL PROTEIN PRODUCTION (BEEF, PORK, POULTRY AND SEAFOOD) TO EXPAND BY JUST UNDER 1 MILLION TONNES IN 2019 – WELL BELOW THE FIVE-YEAR AVERAGE GROWTH RATE OF 5MT.

The key points for the main global animal-protein producing regions are: North America We expect strong growth in production, with increases across all species, led by pork. Despite a full year of productivity challenges and record supplies of competing protein, a strong year of growth in the US broiler industry in 2019 is expected. Several new complexes will be completed in the coming months, and the resulting increase in chicken production is expected to further strain domestic markets. Exports will increase too, while small, total growth in beef exports will lead export growth. Europe Poultry production is growing, but pork and beef are stable. European exports will grow, and biosecurity will become even more important. Due to ASF, China will increase pork imports in 2019, presenting an opportunity for EU pork exports to increase significantly. 18

January/February 2019

China Biosecurity is the top issue for the Chinese animal protein sector, and pork production is down materially as a result. Imports are expected to rise. Pork demand is expected to decline, given rising prices and consumer concerns. Rabobank expect a 3% to 5% decline in pork consumption, subject to price growth and disease development. Brazil Production is growing across all species of the Brazilian animal protein complex. Local economic conditions influence local demand and could go either way. Brazilian poultry exports are expected to recover in 2019, offsetting an estimated decline of around 7% in 2018. Saudi Arabia and China should remain the main destinations for Brazilian poultry. South-East Asia Poultry production in 2019 will reach 9.3m tonnes cwt, up 1.3% on 2018, driven by higher exports from Thailand and ongoing intensification in Vietnam. At the same time, cost pressures are rising, challenging local production and imports. Australia & New Zealand Beef and sheepmeat production in Australia & New Zealand will decline. The ongoing strong global demand for sheepmeat and limited supply availability will support strong prices through 2019. While further upside beyond 2018 records will be limited, prices will remain firm, given strong demand in key global markets such as the Middle East, China, and the US. What to expect in 2019? Trade protectionism, biosecurity, and tariffs will continue to impact trade in 2019, even as trade deals such as CPTPP, USMCA, and IA-CEPA have been forged. Nontariff barriers (NTBs) are arguably more significant, with biosecurity and production standards all playing a part in shaping trade flows –it could be argued that NTBs are increasingly being used as a barrier to trade in animal protein. As new export opportunities are dwindling, investments in production and in distribution in target markets could play a more important role in 2019. Weakening currencies can cause significant headwinds in importing countries. Conversely, weaker currencies also make exports more competitive. We see Brazil, Argentina, Thailand, Australia, and New Zealand benefiting from weaker currencies in 2019. For more information, visit www.rabobank.com

Join the 109,000

Canadian small businesses that are set up for success! AS A CFIB MEMBER BENEFIT FROM: RESOURCES

Free expert advice, tools and templates.

SAVINGS

Partnership programs can save you $5,000+/year on essential business services.

ADVOCACY

Driving change on government policies that impact your business.

Join today! 1-888-234-2232

January/February 2019

FARM CREDIT CANADA WATCHING FIVE TOP ECONOMIC TRENDS IN 2019 Farm Credit Canada’s (FCC) provides timely and relevant economic insights to Canada’s agriculture industry and FCC chief agricultural economist J.P. Gervais shares five key economic trends in agriculture to watch in 2019. “Agriculture is an exciting and dynamic industry driven by passion and possibilities,” Gervais says. “While the following five trends are on FCC’s radar, there are many other trends helping to shape this year’s outlooks for various sectors within Canada’s agriculture and agrifood industry. We encourage those in the industry to follow the trends that are most helpful in protecting and improving their business’s bottom line.”

1. Net cash income plateauing Price volatility, higher input costs and weather-related challenges in many parts of the country over the past year took a toll on Canadian net cash income in 2018. Final calculations will likely show it decreased, and it’s forecast to plateau in 2019. Overall, the long-term outlook for Canadian agriculture remains positive, since consumer demand for food at home and abroad is still robust and Canadian agriculture and agri-food sectors have shown resilience in the face of adversity, according to Gervais. “We are likely to see some fast-changing circumstances, including those that are both beneficial or potentially negative to Canadian agriculture,” Gervais says. “However, I am confident that Canadian producers, manufacturers and agri-food operators can quickly adjust to this dynamic operating environment.”

2. Ripples in the flow of trade Canada already has some well-established trade agreements in key markets, including the CanadaEuropean Trade Agreement, The Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the yet-to-be-ratified Canada-United StatesMexico trade agreement, also referred to as the new North American Free Trade Agreement. However, geopolitical tensions resulting in tariffs and other trade barriers will likely continue to disrupt 20

January/February 2019

traditional trade relationships and could possibly open new markets at the same time, according to Gervais. “While the markets generally don’t react well to trade uncertainty, it also opens the door to opportunities for new trade relationships,” he says. “Disruptions can pave the way for new trade flows, which could be positive. But global trade tensions also have the potential to slow growth in the world economy. They can upset the status quo, and potentially impact the demand for Canadian ag commodities and food, and that’s never comfortable.” Despite the volatility of the international trade environment, Canadian agriculture is well-positioned for export growth in 2019 and beyond, Gervais says. 3. Global supply and demand fundamentals shifting Different trends in agriculture are building world supplies of agricultural commodities, but large productivity gains bear special mention. Global production growth in recent years has helped replenish stocks and better equip the markets to absorb potential weather-related supply shocks. With world demand for food still robust, higher production has been needed to meet the pace of increase. This is having lasting repercussions on prices and revenues for Canadian farmers in a range of sectors, and this trend is expected to continue in 2019. “Producers who want to see what’s coming should actively monitor global weather patterns, and production updates as the South American crop year wraps up,” Gervais says. “And keep an eye on China and the U.S. China’s large influence on global agricultural markets and the U.S. supply of commodities will have important impacts on 2019 prices.”

4. TighterDF: profit margins mean taking I don’t think being on the island calculated hasrisks really impacted us negatively one It is difficult much precision waytooranticipate the other. with We’ve traveled a lot, the domestic of various met asupply lot of other farmerscommodities and livestock in 2019. With little chance of realofgrowth producers in other parts Canada,inand we all seem to have the same issues commodity prices this year and possibly and same concerns. higher farm input costs, Canadian farmers will need CMB: to properly evaluate outlook I understand thatthe your farm for profitability along with the associated risks. was the first in Atlantic Canada to be Risk management an even more involved inwill the become TESA program. significantDF: component of success. Yes, I think we were the first farm east of Ontario as far as I understand. “Canadian need find ways of I’mproducers not sure why the to eastern reducing associations costs while wouldn’t increasing productivity have previously from theirnominated existing operations, whether anybody because there are that means increasing the per acre many farms here onyield PEI doing everyor getting more a as litre milk,” bit asbutterfat much as from we are toof attain a high level of sustainability. Anyway, Gervais says. we were very surprised when the PEI Cattleman’s “Adding value to ourAssociation agriculturalnominated productsour is anotherfarm. avenue to grow farm revenues, as consumers to look healthythe CMB:continue And then you werefor attending and convenient food products,” Canadian Beef conferenceheinsays. Calgary and you won. “Investments in innovation and technology will go a long way in ensuring Canadian DF: Yeah! That was a very nice moment agriculture forremains us. But competitive.” I don’t like to use the word win actually. However, being 5. Welcome to the for golden age of protein recognized our commitment was “Canadian producers both animal and a real honour. of If you want to know the protein truth, it was a pretty humbling plant-based stand to gain buyers experience. As I said to CBC when they both at home and abroad as markets around me after the conference, the worldphoned are embracing a wide variety Iofwas just floored, really couldn’t believe it. protein products,” Gervais says. “This trend will continue in So 2019 plant CMB: nowand thatbeyond, you haveas been and animal proteins serve recognized, do youdifferent think thatsegments will drawmarket.” more attention and garner more of the global nominations out of Atlantic Canada forward? 2018 wasgoing tough on those involved in protein production, as consumption continues DF:even Absolutely. We’ve gotten a lot to grow. of good press highlighting the island cattle industry. I’m positive you’ll see more farms our neck of the woods “A lot happened lastinyear to impact nominated next year. And producers’ bottom lines,” GervaisI have says.to give Canadian Cattleman’s Association “If there’sthe a silver lining to the cloud of recognition forover choosing a farm last from uncertainty that hung the sector Prince Edward Island. We are small year, it’s that this coming year may be the players in the national industry start of something bigger andbeef better.”

and I think it was a real credit to their organization to recognize us. They For these insights and more, visit the FCC Ag Economics all the nominees royally and it blog post attreated fcc.ca/AgEconomics was a real class act. It was a wonderful experience.

meatbusiness.ca

January/February 2019

September/October 2017 CANADIAN MEAT BUSINESS 17

THE BEST DEFENSE IS WHAT DOES THE CPTPP A STRONG OFFENSE DEAL REALLY MEAN FOR PROMOTING THE HEALTH BENEFITS OF MEAT AND POULTRY CANADA? By Ronnie P. Cons

Red meat is can oftenexpect wronglytoportrayed asforeign being unhealthy. Even chicken has shelves been getting attacked Canadians see more dairy products on store under a newby some in the media that as unhealthy ortake not environmentally friendly. trade agreement began to effect at the end of December, while the country’s beef and pork producers are expected to make major inroads into new markets. Vegan, fish and other non-meat diets have been proposed as healthier alternatives. The of this onslaught of negative The Comprehensive andresult Progressive Agreement for meat messages has influenced many families to cut back on Trans-Pacific Partnership (CPTPP) was completed their meat and poultry purchases. Perceptions may reality but earlier in 2018 following the 2016 and agreement which had truth trumps misinformation. Parents other consumers to be reworked after the U.S. pulled out. want what is best for their health and that of their families. They are also aware that a lot of false information is out there and as such, openratified to scientific that canincluding correct their The deal hasare been in sixfacts countries, misconceptions. Canada, Australia, Japan, Mexico, New Zealand and

Singapore. will befor added to the partnership This providesVietnam an opportunity retail meat departments to implement an instore ‘Healthy Facts’ nutritional January 14, with Brunei, Chile,Meat Malaysia and Peru to campaign to set thegovernments record straightratify and convince follow once their CPTPP. their

customers that meat and poultry are actually good for one’s health and that they should increase rather than decrease While Canada of already free trade agreements with their purchases it. The had campaign outlined below can have Chile, and Peru, CPTPP represents the first a directMexico impact on sales:

liver, 625 grams of cooked beef or an astounding 2.4 kg of spinach. “Japan’s one of the biggest markets in the world – a Iron found we’ve in vegetables is harder absorb than iron the market been trying to to get access tothe since found meat as itTrudeau,” is attachedColin to fibre which inhibits its daysinof Pierre Robertson, a former absorption. Canadian diplomat, told CTV News Channel recently.

2. Eat Meat for a Healthier Brain! Being deficienttoinGlobal the micronutrients found in meat have been According Affairs Canada, CPTPP is expected linked with low IQ, autism, depression and dementia says to lead to an annual increase of $1.8 billion in Canadian Dr. Charlotte Neumann, a paediatrician at the University of exports to Japan. That figure includes an additional California, as quoted in the article ‘Brain food- clever eating’.

$639 million in pork exports after 10 years, as well as

Zinc is crucial for learning and memory. Vitamin B12 beef exports nearly doubling after 15. Japan is also preserves the sheaths that protect nerves.

expected to welcome significant increases in wood,

3.metal Boostand Yourchemical Immunityproducts with Meat!from Canada. Due to its antioxidant powers, zinc is involved in creating antibodies to fight free radicals that increase our risk for Overall, Canadian pork exports are expected to such arrangements with Australia, New Zealand and the chronic diseases. Start by displaying instore posters promoting the nutritional increase by more than 10 per cent and beef exports by five Asian nations. value of meat. They should be innovative, eye catching and 4. Power Your Muscle Growth with Meat! about 9.5 cent. Sugar andrepair leather exporters be designed to specifically contradict any meat myths. The The protein inper meat helps build and body tissues. will also commentsanalysis claims should all be literature based research see significant access to new markets. A federal the deal willquoting provide Canada Muscles are made of protein. That is why athletes who are papers or MDs for maximum effect. Various posters should with a net positive economic impact, largely because building muscle strength increase their meat consumption. be made each with a brief but powerful covering Canadian exports to Australia areimportant expected increase many of -the countries in CPTPP havemessage higher tariffs than The protein and zinc found in meat are forto muscle one theme. by about $690 million per year, or nearly 12 per cent Canada on average. This means the loss of government growth and repair. Posters can thethose following healthy tariff-free meat fact access to of their current value. Transportation equipment and revenue by convey allowing countries 5. Meat is the Complete Protein! messages: machinery for about half of that figure. the Canadian market will be more than offset by gains Meat contains account all of the nine essential amino acids that your 1. Let’sby IRON out the and Truthconsumers. on Meat! On cannot the other hand, exports to Mexico, Chileleucine, and Peru made producers body make by itself. Say ‘hello’ to histidine, “You would need to eat a massive amount of spinach to isoleucine, methionine, phenylalanine, tryptophan, may fall lycine, because more countries now have access to equal (the iron content) in a steak,” says Christopher Golden, threonine, and valine. That is why meat is called a complete the tariff-free status Canada already enjoyed. The overall impact to Canada’s GDP has been an ecologist and epidemiologist at Harvard University in protein. estimated $4.2 billion per More than threein the Cambridge,at Massachusetts. (Asyear. quoted by nature.com 6.Canadian Eat Meat for a Healthy Heart! dairy producers have criticized the deal for quarters of the estimated net annual savings is article ‘Brain food- clever eating’.) Meat contains lots of the B vitamins needed for the market opening up 3.25 per cent of Canada’s dairy expected to come from Japan. For a woman to receive her recommended daily intake of 18 production of hormones, red blood cells and for the proper to CPTPP-signatory countries at the same time U.S. mg of iron, she would need just 300 grams of cooked bovine functioning of your nervous system.

access to the market rises to 3.59 per cent under the

Say ‘hello’ to niacin, folicpact. acid, thiamine, biotin, panthothenic CUSMA free-trade acid, vitamin B12 and vitamin B6. They are all found in meat.

The linetariff-free that ‘the best is apermitted good offense’ does CPTPP not The dairydefense imports through only apply to sports. It also applies to countering negative are expected to account for about $135 million per year meat health myths. Implementing an instore ‘Healthy Meat in foreign product entering market. New Facts’ nutritional campaign to setthe theCanadian record straight on meat Zealand cheese could be one product showing up and poultry. It is a good way to go on the offensive by usingmore often onyour Canadian shelves. education customers and increasing your sales.. Ronnie P. Cons is CEO of C&C Packing Inc., a leading Canadian distributor of meat and poultry. He can reached atare RCons@CCpacking.com. Total imports to be Canada expected to rise by nearly

$7 billion per year. That increase will largely be driven by vehicles and chemical products from Japan, as well as clothing, textiles and leather products from Vietnam. 22 CANADIAN MEAT BUSINESS September/October January/February 2017 2019 22

meatbusiness.ca

the Canadian Federation of Independent Business (CFIB), I figured I needed to share with our government six ways FAST FACTS small business owners (and their income) are different from • employees. SIX PACIFIC NATIONS WELCOMED IN

TRADE ONrisks DEC. 30,to 1.REVISED Risk. Business owners RULES take on huge in order AS THE CPTPP ENTERED earn a living, and when they do, theFORCE. entire family is involved. Many business owners empty their savings, re• THE TRADE DEAL’S START BROUGHT mortgage their homes and borrow from friends, family WITH IT AtoSLEW TARIFF and banks get their OF business going.CUTS Once it does, they often THE rely onSIX familyCURRENTLY members not only for support, AMONG but to actively contribute to the business’s PARTICIPATING NATIONS OF success. This is particularly true on Canadian farms, where each family AUSTRALIA, CANADA, JAPAN, member plays a vital role, often from a young age. If the MEXICO, NEW ZEALAND AND business fails, and many do, the whole family is often set back for years. THE COUNTRIES SINGAPORE. TARIFF 2.ENACTED Getting paid 90% last. A OF smallPLANNED business owner gets paid AFTER everyone else, including employees, suppliers, CUTS ON DAY ONE, ACCORDING TO and of course, governments. I’ve heard thousands of AN ANALYSIS BY HSBC. stories of business owners taking home next to nothing in tough timesINCLUDES in order to ensure theyOTHER could pay and • THE DEAL FIVE hang onto their valued employees and their business. NATIONS. VIETNAM IS EXPECTED 3.TO Working hours. Any TRADE agri-business ownerON will tell you ENACT THE DEAL that the nine-to-five doesn’t apply to the farm. More than JANUARY 14, 2019. BRUNEI, CHILE, 40 per cent of Canada’s small business owners work 50 MALAYSIA PERU MUST STILL hours or moreAND per week – compared to only six per cent DOMESTICALLY RATIFY THE DEAL of employees.

IT TAKES EFFECT IN those THOSE 4.BEFORE Benefits. Many employees—particularly in government—enjoy health, dental and other benefits COUNTRIES. ALTOGETHER, THE of their employers. Again, the business owner 11courtesy STATES REPRESENT 13% OF depends on the success of the business to fund any THE WORLD›S GROSS DOMESTIC benefits they or their own family may need.

The deal Inforces pricing shifts ondata a number me trade differently. fact, Statistics Canada shows of that industries, as new markets open up in some employers are about four times more likely to becountries earning and in others. fewthan examples: lesstighten than $40,000 than Amore $250,000. • Japan’s auto industry may benefit from Canada’s To fight these latest proposals, CFIB is a proud member pledge to eliminate its tariffs on imported passenger of the Coalition for Small Business Tax Fairness, a unified cars within five years, but its farmers worry cheaper voice of 50 organizations representing hundreds of agricultural imports from New Zealand and Australia thousands of businesses from all sectors of the economy. could harm the domestic market, according to the The Coalition recently sent Finance Minister Bill Morneau Japan Times. a letter asking the government to take the proposals off • Mexico will open its market to fish and fish products the table and instead meet with the business community from abroad. In the past, the country had a 20% to address the shortcomings in tax policy affecting private tariff on such products but will eliminate those corporations. completely over time. A similar story applies to still time you to avocados have your say. on There’s products like for kiwifruit, andConsultations wine, according the proposal remain open until October 2nd, 2017. Contact to the New Zealand Government. local MP and let them whatthe themost realityfrom is forthe • your Vietnam and Peru standknow to gain Canadian small business owners. deal, according to Quartz. The U.S. stands to lose Here’s about $2 billion in income, as products like the wheat hoping the federal government recognizes important and beef become between more expensive to of export from the differences the income business owners U.S., and according to analyses by thethese Peterson Institute employees and abandons proposals that will forharm International Economics and Australia’s SBS our entrepreneurs and our economy. news. This column was first published in the Huffington Post on August 25, 2017.

The examples above scratch the surface of a broad Dan Kelly is President of the Canadian Federation of shift in the rules that affect at least (CFIB). 15 different Independent Business In this capacity, Dan economic sectors, isaccording to Canada’s CPTPP the lead spokesman and advocate for the views of CFIB’s 109,000 small-and medium-sized website, and may alter where companies choose member to businesses across Canada, including 7,200 agriprocure their raw materials or place new facilities. business members. Follow Dan on Twitter @CFIB and learn more about CFIB at www.cfib.ca.

With files from The Canadian Press, Reuters and CTV

PRODUCT ACCORDING TO REUTERS.

5. Paperwork and red tape. Think you have struggles with the Canada Revenue Agency or other government departments? Consider the massive number of rules, regulations and agencies a small Robertson said Canada may benefit further from the business has to deal that with.comes Want towith startreaching a bicycle a “first-mover advantage” repair shop in Winnipeg? You will need to register new market before other countries do. with up to 44 different agencies before you start. A Halifax dentist needs up to 45 permits to earn “The big advantage for us is that the United States is a living.

not part of this,” he said. 6. Retirement. is a big While access government “It gives CanadianThis farmers a one. preferred to this workers have gold-plated pensions often starting at big market.”

age 55, and many employed Canadians have RRSPs, the small business owner Need employer-matched to Know is counting on the value of the business—including With a trade war between the U.S. and China ongoing, any investments owned by the corporation—for his or a new North American trade deal awaiting ratification her retirement. Succession planning is already major and various bilateral deals on the global trade horizon, issue for small business owners, especially when it the CPTPP may be the first wave of a storm set to hit comes to the agri-business community. When it is sourcing networks in lucrative 2019. to sell to a third party than it easier and more is to pass your business down to the next generation, The deal affects the more than $13 dollars of it threatens livelihood andtrillion very existence ofglobal GDP, 11 countries and 500 million people, according Canada’s family farms, something is seriously wrong.to

the Government of Canada.

Sadly, there are lots of Canadians (and, it appears, many politicians) who believe that hanging out a shingle to say you’re in business is a licence to print money. I represent 109,000 entrepreneurs across every sector, who tell meatbusiness.ca

January/February 2019

September/October 2017 CANADIAN MEAT BUSINESS 21

MISLEADING CANADA FOOD PRICES 2019 REPORT MAKES ASSUMPTIONS OF RED MEAT INDUSTRY PRICING The Canada Food Price Report for 2019, released in December, makes assumptions that the cost of meat is set to fall because Canadians are adopting plant-based diets. In fact, the beef demand index is strong, only showing a decrease of 2% demand in 2018, but maintaining levels not seen since the late ’80s. Statistics Canada data shows that meat consumption by With a new food guide forthcoming and media reports stating red meat recommendations would go down Canadians has decreased steadily between 2004-2015 and not suddenly because of any specific dietary trends. – CMC met with the Minister of Health in April who provided re-assurance that updated Food Guide would not tell Canadians to decrease their meat consumption, “The report is misleading and makes assumptions as it is an essential part of a healthy, balanced diet. that meat prices in Canada could go down because of demand and new market entries, when in fact many According to an Ipsos poll conducted in September 2017 factors need to be considered,” says Chris White, of 1,000-plus Canadians, 72% of respondents reported President of the Canadian Meat Council (CMC). “The eating three or less servings of meat a week. global spike in meat prices in 2013-14 drove worldwide Encouragingly, 3 out of 4 respondents understand the meat production expansion. Increased supply has important role that red meat plays in getting essential allowed prices to begin to decline across the world nutrients for health. These findings are consistent with including in Canada.” Health Canada data which reported of the 21 meals available in a week, 3 to 4 included a serving of red meat. Market pressures, such as feed prices and other factors, can also affect the price of animals, and this trickles “Meat has benefits when added to diets that are largely down to the retail price of meat. Despite recent price plant-based by helping the body absorb nutrients, like decreases in beef by 4.2% over last October, prices iron and zinc,” said Mary Ann Binnie, a nutrition expert throughout 2018 were higher than the 5-year average, with prices also being pressured by higher domestic beef with CMC. supply, as opposed to a decrease in demand. “The synergies of eating red meat and veggies together cannot be underestimated.” It’s simply a case of increased supply reducing the price. The Canadian Food Price Report 2019 shows the About Canadian Meat Council: prices of foods since 1986, and meat rose significantly For nearly a century, the CMC has represented Canada’s federally from 2012 to 2016, so the small recent decrease in registered meat packers, meat processors and equipment price is also likely due to a market correction, and not suppliers. CMC provides evidence-based advocacy on behalf of its directly linked to new market entries. members and works to secure and improve Canada’s global meat “While some Canadians are exploring new protein options, they also understand moderation which applies to all aspects of life. Families are eating red meat well within Canada’s Food Guide recommendations, and more importantly, they understand the benefits of the essential nutrients that red meat provides” added White. 24

January/February 2019

competitiveness and, promote a balanced diet, which includes highquality and nutritious Canadian meat. The Canadian red meat industry represents over 20 Billion dollars to the Canadian economy and supports 288,000 jobs across Canada.

YOUR

STAKE IN THE INDUSTRY ATLANTA, GA USA

FEB. 12 - 14, 2019

Join us for the 2019 IPPE. From production to processing to packaging, IPPE meets your business needs. See it at IPPE first and connect with more than 30,000 industry professionals in feed, meat, poultry and more at one powerhouse of a show in February!

REGIST at IPPE ER NOW XPO.OR USE PRO G MO COD

E MeatA for yo $250 Am ur chance to win 1 erican E xpress g a ift card!

January/February 2019

METHANE EMISSIONS FROM LIVESTOCK HAVE NO DETECTABLE EFFECT ON THE CLIMATE Agrobiologist and scientific researcher Dr. Albrecht Glatzle, author of over 100 scientific papers and two textbooks, has published research that shows “there is no scientific evidence, whatsoever, that domestic livestock could represent a risk for the Earth’s climate” and the “warming potential of anthropogenic GHG [greenhouse gas] emissions has been exaggerated.” Dr. Glatzle wrote in his Abstract from the Domestic Livestock and Its Alleged Role in Climate Change:

However, so far, these fatal errors inexorably propagated through the scientific literature.

“Our key conclusion is there is no need for anthropogenic emissions of greenhouse gases (GHGs), and even less so for livestock-born emissions, to explain climate change. Climate has always been changing, and even the present warming is most likely driven by natural factors.

Finally, we could not find a clear domestic livestock fingerprint, neither in the geographical methane distribution nor in the historical evolution of mean atmospheric methane concentration.”

The warming potential of anthropogenic GHG emissions has been exaggerated, and the beneficial impacts of manmade CO2 emissions for nature, agriculture, and global food security have been systematically suppressed, ignored, or at least downplayed by the IPCC (Intergovernmental Panel on Climate Change) and other UN (United Nations) agencies. Furthermore, we expose important methodological deficiencies in IPCC and FAO (Food Agriculture Organization) instructions and applications for the quantification of the manmade part of non-CO2-GHG emissions from agro-ecosystems. 26

January/February 2019

Key Points: 1. “In order to get the effective manmade part of the emissions from managed ecosystems, one has to subtract the baseline emissions of the respective native ecosystems or of the pre-climate-changemanaged ecosystems from those of today’s agroecosystems. Omitting this correction leads to a systematic overestimation of farm-born non-CO2 GHG emissions. Scientific publications generally do not take this consideration into account, as farm-born CH4 and N2O emissions are consistently interpreted at a 100% level as an additional anthropogenic GHG source, just like fossil fuelborn CO2. As the mentioned IPCC guidelines are taken for the ultimate reference, this severe

bottom-up calculations. Even in recent studies, methodological deficiency propagated through the just the emissions per animal are measured and scientific literature.” multiplied by the number of animals. Ecosystemic “Dung patches concentrate the nitrogen ingested interactions and baselines over time and space from places scattered across the pasture. Nichols are generally ignored. Although quite a number of et al. found no significant differences between publications, such as the excellent most recent emission factors from the patches and the rest FCRN report (Food Climate Research Network), of the pasture, which means the same amount do discuss extensively ecosystemic sequestration of nitrous oxide is emitted whether or not the potentials and natural sources of GHGs, they herbage passes livestock’s intestines. However, the do not account for baseline emissions from the IPCC and FAO do consider mistakenly all nitrous respective native ecosystems when assessing oxide leaking from manure as livestock-born and manmade emissions of non-CO2 GHGs from therefore manmade.” managed ecosystems. This implies a systematic “Between 1990 and 2005, the world cattle overestimation of the warming potential, particularly population rose by more than 100 million when assuming considerable climate sensitivity to head (according to FAO statistics). During this time, atmospheric methane concentration stabilized GHG emissions.” Proposed 30,000-square-foot beef abattoir would be B.C.’s largest such facility completely. These empirical observations show in Cloverdale 7. “We could not find a domestic livestock fingerprint, thatBylivestock not aArch significant neither in the geographical methane distribution Amy Reid,isPeace News player in the global methane budget. This appreciation has been nor in the historical evolution of the atmospheric so as to not emit odours. And while there is an operational A federally licensed beef processing facility is in the works corroborated by Schwietzke et al. who suggested methane concentration. Consequently, in 6,000-square-foot abattoir on the property now, it’s can in Surrey, BC. that methane emissions from fossil fuel industry and and the media, the climate onlyscience, process apolitics, limited number of cattle. “There’s a new building coming forward, a new abattoir, I natural geological seepage have been 60–110% impact of anthropogenic GHG emissions has Chris Les is general manager of Meadow Valley Meats, think that’s the French pronunciation of slaughterhouse,” greater than previously thought.” been systematically overstated. Livestock-born the company behind the project. Meadow Valley Meats is said Councillor Mike Starchuk. “So Surrey will have a “When to the global distribution ofwill average GHGa Canadian emissions have mostlyAgency been interpreted seeking Food Inspection license for newerlooking facility with a better capacity so people have methane concentrations as measured ENVISAT the isolated proposed from abattoir, to become a federally registered the ability to not have to ship an animal to by Alberta to have their ecosystemic context, meat establishment and expandsignificance the operation. within This would it processed. The applications gone through the (Environmental Satellite) and have the geographical ignoring their negligible the allow the meat products to be transported beyond B.C.’s Agricultural and Food Sustainability Advisory Committee.” distribution of domestic animal density, global balance. There is no scientific evidence, boundaries. The facility is proposed on a relationship 25-acre property within the respectively no discernible between whatsoever, that domestic livestock could represent “Our is on trying to bring a more efficient, sustainable Agricultural Landfound.” Reserve at 5175 184th St. The planned both criteria was a focus risk for the Earth’s climate.” local product to the market, realizing we can do that now 30,000-square foot abattoir in Cloverdale would process up “Although the most recent estimates of yearly 8. “Even LA Chefs Column, in spite of assuming a in a very limited sense,” said Les. “I caution people when to 100 head of cattle per day. livestock-born global methane emissions came out major global impact ofplant, methane, came talking to them andwarming they say, ‘What a big that’s going According to a city report, that would make it larger than 11% higher than earlier estimates, we still cannot to the conclusion: ‘When methane is put into to go allow you to go mainstream.’ Well, yes, if you look a any other processing facility in B.C.. But it would still be see any discernible livestock fingerprint in the in the contextrather of B.C.,than but this is still a very niche plant all have broader a reductive context, we small by industry standards, compared to the largest meat andto we’ll serve a niche cattle industry(‘cows’) for producers and for change.’” the global methane distribution.” stop blaming for climate processing plants in Alberta that process 3,000 heads of market. It’s certainly not going to be a monstrosity of a plant Thecattle ideaper of day. a considerable livestock contribution but it’ll be a big upgrade from the site currently.” to the methane budget relies on theoretical The global proposed facility would be fully enclosed and designed For more information, visit climatechangedispatch.com

NEW SURREY SLAUGHTERHOUSE ‘WOULD OPEN DOOR’ TO NEW BEEF MARKETS

Continued on page 32

meatbusiness.ca

January/February 2019

September/October 2017 CANADIAN MEAT BUSINESS 31

REPORT FROM 2019 BANFF PORK SEMINAR - ELLEN GODDARD, UNIVERSITY OF ALBERTA

MORE DISRUPTIVE TECHNOLOGIES COMING IN PORK PRODUCTION Think Uber. Airbnb. Cellular meat. Insect and plant-based alternatives to meat. Disruptive technologies. It’s a term coined by analysts to describe innovation-driven market disruption in today’s fast-paced world and it’s one that the pork industry will hear more of ahead and should be working to understand says a researcher on the frontlines of market analysis. “We hear a lot about disruption and disruptive technologies in agriculture,” Ellen Goddard of the University of Alberta told her audience at the 2019 Banff Pork Seminar in Banff, Alta. “Although a lot is said about disruption and disruptive technologies, the meaning behind these terms is not always the same,” she says. “We have a tendency to confuse surprising things in our work environment with disruption and although we may feel ‘disrupted’ it isn’t always the result of someone or something disrupting our markets. Sometimes we are disrupting theirs.” The term “disruptive technologies”, originally coined in 1995, has become a commonplace term. The process 28

January/February 2019

of disruptive innovation has been summarized in a recent article as a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses. Specifically, as incumbents focus on improving their products and services for their most demanding and usually most profitable customers, they exceed the needs of some segments and ignore the needs of others. Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality, frequently at a lower price. Incumbents chasing higher profitability in more-demanding segments, tend not to respond vigorously. Entrants then move upmarket, delivering the performance that incumbents’ mainstream customers require, while preserving the advantages that drove their early success. When mainstream customers start adopting the entrants’ offerings in volume, disruption has occurred.

A couple of key concepts arise here, says Goddard. Disruptive innovation usually arise due to a focus on ‘mainstream’ consumers leaving certain segments undersupplied and is usually initiated by a low cost entrant that eventually grows to satisfy all consumers in the market rather than just the underserved initial target. Examples are Uber and AirBNB. Not all new entrants need to be responded to, and it will not always work to have the established organization purchase the new entrant since sometimes the resulting organization is dysfunctional. It is often through unsatisfied consumers (cost or product attributes) that the disruption occurs.

DISRUPTIVE INNOVATION USUALLY ARISE DUE TO A FOCUS ON ‘MAINSTREAM’ CONSUMERS LEAVING CERTAIN SEGMENTS UNDERSUPPLIED AND IS USUALLY INITIATED BY A LOW COST ENTRANT THAT EVENTUALLY GROWS TO SATISFY ALL CONSUMERS IN THE MARKET RATHER THAN JUST THE UNDERSERVED INITIAL TARGET. EXAMPLES ARE UBER AND AIRBNB.

What does this have to do with farming and pork production? The term disruption is used regularly in the context of a variety of new technologies that are can and are being used in agriculture and food production. Ones identified include 3D printing, robots, drones, sensors, artificial intelligence, augmented reality, virtual reality and block-chain. While all of these are new technologies and all may change the practice of agriculture, not all are true disruptive technologies, says Goddard. Beyond actual information technology we have the various uses of genetic technologies, including newer gene drives and gene editing. We can also include other developments such as cellular meat, refined plant based meats and insect meat products, all of which can and are impacting traditional livestock markets. Are all of these classic disruptive innovations or are some normal competition for traditional livestock products? “The reason this is an important question is that the response required from traditional firms or sectors could be entirely different,” says Goddard. “Regardless, the role of the consumer in these innovations is critical. Consumers may not only be looking for low cost alternatives, they are also looking for product quality attributes, ethical attributes (animals, environment, labour), health and convenience in their purchasing. And some of the innovations are aimed squarely at these perceived undersupplied attributes

requested by today’s consumers.” Bottom line for pork It is certain that the development of new technologies that can be used in agriculture is speeding up and it may be difficult to keep on top of everything that is going on. Using new technologies may require different kinds of investments. The use of new housing for pigs is certainly something that requires significant investment, for example, but may result in the twin outcomes of higher animal welfare and higher animal health. So are these developments truly disruptive technologies? Possibly not from the formal definition of disruptive technologies, nor will they disrupt the pig production sector out of existence. But are they disruptive to farmers in the pork production sector? The answer is likely yes. Somewhat more disruptive to the pig production sector could be the development of substitute products in the protein space. Cost is not the core attribute of these products to date and so their disruptive abilities are likely limited. However, there is a core of consumers unsatisfied with their knowledge of current pig production practices that might be ripe for some substitute products that appear to provide the attributes of most concern. Animal welfare and environmental footprint characteristics to name two. Will these products disrupt the entire pig production sector? Not likely given the approach to integrating the new products into an entire spectrum of protein products. There is likely a need to continue to develop higher standards for attributes of social concern within conventional livestock production, but there will likely always be room for both animal based products and plant based products in the protein space. Genetic technologies are still generating some concerns within the livestock industries, with some CEOs identifying potential consumer resistance as a barrier to adoption. However, it is not clear that the public is uniformly opposed to the use of genetic technologies. What there is is more angst about is the use of genetic technologies without openness and transparency about if and why the genetic technologies are used. “Our research shows that the potential disruptive capacity of the use of genetic technologies can be reduced if the public understands the trade-offs inherent in their use,” says Goddard. “Not everyone will be satisfied with the use of any genetic technologies and maybe the development of substitute products provides avenues to alleviate some public concerns and shift the concerned consumers to other products. It is possible what is perceived as a disruptive technology could actually reduce some public impediments to technology adoption.”

January/February 2019

TWO IN FIVE FARMERS PLAN TO RETIRE IN THE NEXT 10 YEARS. WHO WILL FILL THEIR SHOES? By Marilyn Braun-Pollon, Canadian Federation of Independent Business

Farmers dedicate most of their life to their business and we all know they experience their fair share of ups and downs, but they press ahead because they believe in the farm and want it to succeed. Handing over their business means letting someone else take care of what they built over decades of sweat and tears. It means accepting they no longer make key decisions for its future and letting go of the reins. Two in five (41%) farmers in Canada will be faced with this very challenge within the next 10 years, according to new research by the Canadian Federation of Independent Business. Another one in four (24%) don’t yet know when they will exit their business, adding further to the questions around agricultural successions. Farmers rely on the value of their farm for retirement. Yet, if they want their children or a member of their family to take over, current tax rules stipulate they will have to pay more taxes if they sell their business to a family member than a complete stranger. These tax rules are discouraging for a number of business owners. Plus, their children have to be interested in running the show. Labour shortages, paper work, and a growing tax burden are just a few of the many challenges entrepreneurs are up against. In fact, 69 per cent of farmers say they question whether their children should take over the business or start their own given the current burden of red tape. There is still the option of selling the business to an outside party, but even then, finding someone who will look after their life’s work as well as they do isn’t easy. There’s a lot of talk about how important it is to keep head offices in Canada and empower businesses to remain local in order to revitalize their communities, so is there a way we can help Canadian farmers find successors to take over their business? Yes. It is perfectly possible to make it easier to pass on or sell the farm. Governments can help by amending the Income Tax Act so that selling a business to a family member can be just as advantageous as selling to an outside party. They could also immediately reinstate indexation for the Lifetime Capital Gains Exemption (LCGE) limit so 30

January/February 2019

it doesn’t lose its value over time, as it is currently being held at $1 million for farmers. Finally, they can improve the climate for farming to encourage younger generations to venture into the exciting world of agriculture. Of course, farmers looking to retire also have a role to play. They have to start planning early, even if it’s hard to think about leaving. It may not be a top priority compared to all the other small and large emergencies that are a regular part of running a business, but one of the keys to success is to have a formal written succession plan and a variety of exit strategies to prepare for the unexpected. A formal plan determines, among other things, a business’s value ahead of time and removes the emotional aspect of negotiations at the time of the transaction. Many CFIB members have told us that a plan helped them know where they were going and gave them peace of mind. It’s also reassuring for family, employees and clients alike to know there are plans set out for the future. The more carefully the transition is planned, the higher the chances of success. And a successful handover means jobs will be kept—and more could even be created. To help ensure Canadian agriculture flourishes, we must focus on the next generation of farmers and put in the necessary effort to ensure successful transitions. Marilyn Braun-Pollon is the Vice-President of Prairie and Agri-business for the Canadian Federation of Independent Business (CFIB). CFIB has 110,000 small and medium-sized member businesses (7,200 agri-business members) across Canada.

201 Don Park Road Unit 1, Markham, Ontario, L3R 1C2 Phone: 905-470-1135 1-800-465-3536 Fax: 905-470-8417 Website: www.yesgroup.ca email: sales@yesgroup.ca

Remco and The Yes Group Protecting your Customers

Remco products are colour-coded to help divide the production cycle into different zones. By identifying these zones as different cleaning areas, the movement of bacteria around the production area can be blocked. Our products were developed with the Hazard Analysis Critical Control Point (HACCP) in mind. No matter what colour-coding plan is implemented, Remco Products from The Yes Group provides significant added value at no additional cost. From scoops to squeegees, from brushes to shovels, we have the products and the colours to enhance any professional quality assurance program.

January/February 2019 September/October 2018

31 31

January/February 2019

36 CANADIAN MEAT BUSINESS September/October 2017

meatbusiness.ca