Our January Issue

THE BEEF, PORK & POULTRY INDUSTRY DIGITAL MAGAZINE

January 2024

LIVESTOCK AND POULTRY: WORLD MARKETS AND TRADE

Mark Zuckerberg Ventures into Beef Production FCC: Top Economic Charts to Monitor in 2024 Ongoing U.K. Ban on Canadian Beef Unfair, Unjustified CoBank: Forces That Will Shape the U.S. Rural Economy in 2024 McDonald’s Canada Grows its Investment in Young Leaders of the Beef Industry New Year, Same Problems

meatbusinesspro.com

$7.99

https://www.yesgroup.ca 2

MEATBUSINESSPRO January 2024

meatbusinesspro.com

January 2024

5 6 10 14

Mark Zuckerberg Ventures into Beef Production

16 18 20 22 24

Mexico Extends Tariff Exemption on Pork, Beef, Poultry Imports Through 2024

Livestock and Poultry: World Markets and Trade

FPC Announces New Board Chair and Appointments

FCC: Top Economic Charts to Monitor in 2024

CoBank: Forces That Will Shape the U.S. Rural Economy in 2024

Ongoing U.K. Ban on Canadian Beef Unfair, Unjustified

McDonald’s Canada Grows its Investment in Young Leaders of the Beef Industry

New Year, Same Problems

https://www.reiser.com

4

MEATBUSINESSPRO January 2024

meatbusinesspro.com

THE BEEF, PORK & POULTRY INDUSTRY DIGITAL MAGAZINE

January 2024 Volume 25 Number 1 PUBLISHER Ray Blumenfeld ray@meatbusinesspro.ca MANAGING EDITOR Scott Taylor publishing@meatbusinesspro.ca DIGITAL MEDIA EDITOR Cam Patterson cam@meatbusinesspro.ca

MARK ZUCKERBERG VENTURES INTO BEEF PRODUCTION

CONTRIBUTING WRITERS Jack Roberts, Ralph Goodale, Jim Eadie, Bradlee Whidden, Cam Patterson CREATIVE DIRECTOR

Best known for launching social networks like Facebook and Instagram, Mark Zuckerberg has unveiled an unexpected addition to his vast portfolio - a venture into the world of cattle ranching.

Patrick Cairns

Meat Business Pro is published 12 times a year by We Communications West Inc.

The billionaire recently disclosed his foray into cattle farming at Ko'olau Ranch on Kauai, aiming to cultivate top-tier beef quality.

In an Instagram post, Zuckerberg shared his vision: “Started raising cattle at Ko'olau Ranch on Kauai, and my goal is to create some of the highest quality beef in the world. The cattle are Wagyu and Angus, and they'll grow up eating macadamia meal and drinking beer that we grow and produce here on the ranch. We want the whole process to be local and vertically integrated.

COMMUNICATIONS WEST INC.

We Communications West Inc. 106-530 Kenaston Boulevard Winnipeg, MB, Canada R3N 1Z4 Phone: 204.985.9502 Fax: 204.582.9800 Toll Free: 1.800.344.7055 E-mail: publishing@meatbusiness.ca Website: www.meatbusinesspro.com Meat Business Pro subscriptions are available for $28.00/year or $46.00/two years and includes the annual Buyers Guide issue. ©2020 We Communications West Inc. All rights reserved.

The contents of this publication may not be reproduced by any means in whole or in part, without prior written consent from the publisher.

“Each cow eats 5,000-10,000 pounds of food each year, so that's a lot of acres of macadamia trees. My daughters help plant the mac trees and take care of our different animals. We're still early in the journey and its fun improving on it every season. Of all my projects, this is the most delicious.”

This agricultural initiative places Zuckerberg in stark contrast to billionaire rival Bill Gates, the mind behind Microsoft and an active investor in environmentally conscious ventures. Gates has advocated for a shift away from natural meat consumption, championing the adoption of synthetic beef as a means to combat climate change. In a recent interview, Gates argued, "I do think all rich countries should move to 100% synthetic beef. You can get used to the taste difference, and the claim is they're going to make it taste even better over time."

Printed in Canada. ISSN 1715-6726

meatbusinesspro.com

January 2024 MEATBUSINESSPRO

5

LIVESTOCK AND POULTRY: WORLD MARKETS AND TRADE The United States Department of Agriculture (USDA) has provided this report which includes data on U.S. and global trade, production, consumption, and stocks as well as analysis of developments affecting world trade in livestock and poultry.

Contraction in the Canadian herd is forecast to continue with cattle inventories dropping to the lowest level in the past 35 years. EU production continues to be confronted with high input prices and a complexity of regulations, which combined are pressuring profit margins and disincentivizing investment.

Global exports in 2024 are forecast up 1% to 11.9 million tons due as greater shipments from Brazil, Australia, and Argentina more than offset lower exports from the United States, Canada, and the EU. Brazil and Australia will both see a significant portion of increased production moved to foreign markets where demand is relatively firm. The world’s two leading exporters will capture increased market share, particularly in those countries such as the United States where beef production is expected to decline.

BEEF AND VEAL

South American competitors Paraguay and Uruguay are also forecast to make gains.

Global production in 2024 is forecast virtually unchanged at 59.1 million tons as increases in Brazil, China, and India are offset by declines in the United States, Argentina, Canada, and the EU. Brazil production is expected to rise 3% to a record 10.8 million tons as economic recovery supports domestic demand.

China production is higher due to a marginal increase in cow inventory while India production is driven by rising slaughter to meet increasing international and domestic demand. Argentina production is forecast lower as slaughter returns to levels closer to recent history after drought-induced liquidation in 2023.

6

MEATBUSINESSPRO January 2024

meatbusinesspro.com

PORK Global production in 2024 is forecast virtually unchanged year over year at 115.5 million tons as lower production in the EU and China is mostly offset by larger production in Brazil, Vietnam, and the United States.

EU pork production is forecast 2% lower year over year to 21.2 million tons. The EU sow herd continued to decline in 2023 and is forecast at 10.3 million head in 2024, down 1%. Feed prices have moderated and sector profitability improved in 2023.

Although China demand is forecast to wane in 2024, global demand will be supported by small gains by several markets.

U.S. production and exports: U.S. beef production is forecast down 6% on tighter cattle inventories. The decline in production coupled with increased supplies in Australia will spur growth in imports and a decrease in exports. Imports are forecast at 1.7 million tons, a level only achieved in 2004. Exports are forecast 6% lower to 1.3 million tons, constrained by lower domestic production and price competitive supplies from other key suppliers (Australia and Brazil).

However, weak domestic demand and the lack of new export markets to replace China are expected to lead to industry restructuring in 2024 as producers seek to align production with lower total demand. China production is forecast 1% lower as weak domestic demand has led to large industry losses through most of 2023, encouraging producers to reduce production.

Continued on page 8

VEMAG

REPLACEMENT PARTS

meatbusinesspro.com

https://www.dhenryandsons.com

January 2024 MEATBUSINESSPRO

7

CHICKEN Global production is forecast 1% higher in 2024 to a record 103.3 million tons. Production gains by the United States and Brazil as well as increases by many medium-sized producing countries will more than offset a decline in China.

Brazil production is forecast 5% higher year over year as hog prices reflect growth in a number of export markets, including Mexico, Singapore, and the Dominican Republic and input costs are expected to decline, leading to improved producer margins. Vietnam production is forecast to increase 5% to 3.7 million tons on recovering domestic demand as a result of economic recovery following COVID-19 and efficiency gains from industry investment and consolidation.

Global exports are forecast to increase 2% to 10.4 million tons in 2024 as Brazil exports continue to gain market share from EU and U.S. pork products, particularly in Japan, and Mexico. United Kingdom exports are forecast to increase 9% as lower input prices and higher pig prices are expected to lead to greater supplies available for export to the EU and China.

Brazil surpassed China to become the world’s second largest producer in 2022 and continues to solidify its position. Brazil’s record high forecast is supported by strong foreign demand and moderating production costs, particularly lower feed prices. A reduction in feed costs is expected to buoy production gains globally along with the assumption of Highly Pathogenic Avian Influenza (HPAI) recovery in impacted countries such as Argentina, Chile, EU, Turkey, and South Africa.

Global pork imports are forecast to increase by 1% in 2024 with increases from Hong Kong, China, and Japan more than offsetting lower imports from Taiwan and the United Kingdom.

U.S. production and exports: U.S. production is forecast 2% higher in 2024 to 12.7 million tons on a strong increase to pigs per litter and falling feed costs. U.S. exports are forecast to increase 3% in 2024 on strong demand from Canada, the Philippines, and South Korea as well as gaining market share from the EU in China and Australia.

8

MEATBUSINESSPRO January 2024

China production is forecast 3% lower to 13.9 million tons on declines for both white and yellow broilers. White broiler production is expected to be weakened by HPAIrelated import restrictions negatively impacting genetics while yellow broiler will wane on the closure of live poultry markets.

meatbusinesspro.com

U.S. production and exports: U.S. production is expected to rise 1% to a record 21.4 million tons in 2024 on a modest decline in feed prices. Increased production will support a modest boost in exports which are forecast 1% higher to nearly 3.4 million tons, largely due to greater shipments to key markets Mexico and Canada.

NSF INTERNATIONAL FOCUSES ON CANADIAN FOOD INDUSTRY WITH NEW World Beef Consumption: Ranked by Country WEBSITE FOR SERVICES IN CANADA

Global public health organization showcases services for Canada’s growing and fast-changing food industry 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 Global areexperience forecast 3% in 2024 record on exports the depth, andhigher capabilities of to theaNSF 14.0International million tonsCanadian followingoffice relatively stagnant with access to growth NSF global dedicated to foodwhich safety tradeInternational’s in 2023. Despite a services slowing global economy and robust quality. consumption growth, chicken demand stymies

will remain as consumers many countries seek Evolvingfirm regulations across in countries and increasing relatively lower-cost animal with protein. complexities associated a globalized food supply network present challenges for NSF International clients in and around the world.

Thewill new Canadian website The Canada world’s leading exporter, Brazil, capture much of offersdue expertise and services to help companies navigate the gain to its price competitiveness and extensive these challenges, including certification and exporters. auditing, market access compared to most other major consulting, technical services, training and education, Brazil’s HPAI outbreaks have been limited to wild and food and label compliance, packaging, and product and backyard cases which are generally not subject to process development. restrictions by trading partners.

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 drinking water programs.

Visit the new Canadian website at www.nsfcanada.ca to review the food safety services capabilities video, find a list of Canadian food experts, learn about upcoming events and global news releases, a question YesGroup_CanadianMeatBusiness-Qtr-pg.pdf 1 submit 2014-05-16 1:20:17 PMor read an FAQ.

NSF International’s Canadian website provides information on the following services:

Turkey, the United States, Thailand, and the United Certification auditing: Third-party food safety audits Kingdom will also&benefit from firm global demand while andtrade certifications, are lifting integralofcomponents of Chile’s recovers which from the HPAI-related supplier selection and regulatory compliance.

Accurate restrictions. EU exports are forecast stagnant due to audits are the first step toward successful verification ongoing HPAI-related trade restrictions.

of a company’s food safety system, providing improved brand protection and customer confidence. Certifications and audits are available for animal and produce in the agriculture industry, GFSI certification and management system registration.

Consulting: A full-service team approach providing technical resources, expertise and insight for a wide range of food safety and quality services. NSF International provides finished product inspection testing for food, packaging and non-food testing for rapid analysis and insight to protect the brand, technical support services from on-site temporary or permanent technical staffing placements, and various types of consulting.

Technical services: A one-stop solution for food product compliance and formulation, from concept to finished product, including food and label compliance, packaging, product and process development, and shelf-life and product evaluation.

Training and education: Training for the global food and beverage industry across the supply chain as an meatbusiness.ca

meatbusinesspro.com

https://www.yesgroup.ca

September/October 2017 CANADIAN MEAT BUSINESS 23 January 2024 MEATBUSINESSPRO

9

FCC: TOP ECONOMIC CHARTS TO MONITOR IN 2024 Farm Credit Canada (FCC) has released following report as we start the new year amid elevated inflation and major headwinds facing the economy. Here are their top charts to help make sense of the economic environment for farm operations, agribusinesses and food processors.

ECONOMY: CONSUMPTION SLOWDOWN, INFLATION DOWNTREND AND INTEREST RATE IMPLICATIONS A second consecutive year of weak growth is in the cards as the impacts of earlier interest rate increases are felt more acutely throughout the Canadian economy in 2024.

Consumption spending, which accounts for nearly 60% of GDP, should see a marked deceleration as households struggle under the weight of record high debt servicing (Figure 1), elevated shelter costs and a more challenging labour market.

The economic slowdown will reinforce the downtrend in inflation, causing long bond yields, and ultimately longerterm rates on fixed rate loans, to drop further in 2024. In contrast, short yields should be anchored by the Bank of Canada’s decision to keep its overnight rate unchanged for another few months. But once the central bank is convinced that the inflation downtrend is sustainable, which we’re expecting to happen around mid-year, look for it to start cutting its overnight rate to boost a flagging economy.

10

MEATBUSINESSPRO January 2024

Canadian consumers under pressure CROPS: CANOLA CRUSHING SET A FIRST QUARTER RECORD Canada’s canola crushers set a record in the first quarter of the 2023/24 marketing year as new capacity came online (Figure 2). Canadian canola crush expansion was initially slated to add 4.5 million metric tonnes in 2024 however, rising construction costs, higher interest rates, and tight canola supplies the last several years have led to delays in projects. Increased canola crush may help swing acres to the crop, although the soybean to corn futures ratio will still be the global bellwether to understand trends in seeded acres. U.S. producers will have incentives to plant more soybeans at the expense of corn acres if the ratio stays at today’s level.

Canola crush in first quarter of marketing year (Aug-SepOct)

meatbusinesspro.com

North American heifer and cow slaughter near decade high CATTLE: NORTH AMERICAN CATTLE HERD CONTINUES TO SHRINK The North American beef herd is going to be smaller on January 1, 2024, compared to a year earlier. Even strong prices have not been able to stem herd reductions as producers have dealt with droughts in 2 out of the last 3 summers, with heifers and cows accounting for 51% of slaughter in 2023 (Figure 3). Provided 2024 provides bountiful rain for hay and pasture, rebuilding the herd will be a multiyear process as when looking back through time the high prices during 2015 and 2016 only resulted in herds staying flat.

Farm Credit Canada (FCC) has released following report as we start the new year amid elevated inflation and major headwinds facing the economy.

Here are their top charts to help make sense of the economic environment for farm operations, agribusinesses and food processors.

Canadian pork production will be under pressure again in 2024

HOGS: CANADIAN SLAUGHTER CAPACITY IN 2024 The USDA is expecting Canadian pork production to decline a further -1.2% in 2024 as the world faces a current oversupply of pork. Producers around the world continue to be pressured on margins leading to herd reductions, including the world’s largest producer, China. Canadian producers are going to face tight margins until at least the summer although there has been increased demand for pork domestically as consumers are shifting consumption patterns to lower priced protein options.

meatbusinesspro.com

January 2024 MEATBUSINESSPRO

11

DAIRY: LOWER FEED COSTS TO PROVIDE BOOST TO PROFITABILITY With input costs stabilizing, dairy margins in 2024 should improve compared to the last few years with current estimates comparable to margins in 2019. Feed availability and pricing – which have been extremely volatile in the last three years – will be the ultimate determinant of profitability. A bountiful U.S. crop in 2023 sent corn futures tumbling to a three-year low. With corn being the marketmaker in other feed grain markets, this put downward pressure on feed wheat and feed barley costs as well, even in western Canada where drought limited production. A +/- 10% change in purchased feed costs can swing overall profitability by +/- 40%. To get a sense where the price of corn is headed in 2024, producers will want to keep an eye on corn production estimates from South America and on prospective plantings of corn in the US this upcoming growing season.

prices relative to the price of phosphate is also expected to improve despite more upside potential for global phosphate prices in 2024. We will continue to monitor fertilizer affordability as spring planting approaches.

Fertilizer affordability index FARM EQUIPMENT: HIGH BORROWING COSTS EXPECTED TO WEIGH ON SALES The farm equipment industry has faced supply chain issues for several years which impacted delivery of equipment from manufacturers. Reduced deliveries coupled with strong demand for farm equipment reduced inventory levels of both new and used farm equipment in 2022 and into 2023.

Dairy feed cost index declined in latter half of 2023 as US corn prices retreated CROP INPUTS: FERTILIZER AFFORDABILITY TO IMPROVE Declining crop prices and elevated farm input prices notably fertilizer have been on the minds of Canadian farmers. Our fertilizer affordability index is a top chart to monitor. The ratio between fertilizer and crop prices is an indication for fertilizer affordability, calculated by the price of fertilizer divided by the crop price. It highlights the relationship between fertilizer prices and crop prices, or simply inputs and outputs.

Our fertilizer affordability index based upon the major crop rotations has improved for both canola-wheat and corn-soybeans due to weaker global fertilizer prices relative to crop prices. The lower the ratio, the more affordable fertilizer becomes relative to the crop. Overall, the fertilizer affordability trends indicate optimistic 2024-25 crop profitability. Nitrogen has shown improved affordability across most major crop commodities. Spring wheat and canola prices have held up the most relative to nitrogen prices contrasted to corn. The ratio of commodity

12

MEATBUSINESSPRO January 2024

Supply chain issues are largely behind us and deliveries from manufacturers continue to arrive. As such, inventory levels are expected to increase in 2024. Rising inventory levels of new equipment will spill over to the used equipment market.

Inflationary pressures on new equipment prices along with higher borrowing costs are expected to slow farm equipment sales. Elevated interest rates have resulted in more caution as producers delay purchase decisions until interest rates stabilize or fall. Operations place a large focus on the cost per acre of equipment in relation to overall total costs on the farm.

Farm equipment sales are projected to slow in 2024

For more information about Farm Credit Canada, visit https://www.fcc-fac.ca/ meatbusinesspro.com

https://www.beaconmetals.com

meatbusinesspro.com

January 2024 MEATBUSINESSPRO

13

ONGOING U.K. BAN ON CANADIAN BEEF UNFAIR, UNJUSTIFIED

By Ralph Goodale The United Kingdom is Canada’s third largest trading partner. Two-way trade between our two countries is worth about $43 billion annually.

This relationship was previously governed by our Comprehensive Economic and Trade Agreement (CETA) with the European Union. But when Britain exited the EU in 2020, it also left CETA. To facilitate ongoing Canada/U.K. trade while a replacement bilateral deal could be negotiated, a Trade Continuity Agreement (TCA) was put in place early in 2021.

One of the first trade deals successfully concluded by the U.K. after Brexit, the TCA with Canada is a good basic arrangement, providing mutual market access that is 98 per cent tariff free. It will continue in effect until a new bilateral agreement is finalized, probably this year.

Meanwhile, a temporary, post-Brexit measure that the U.K. requested for its cheese exports, ended on Dec. 31.

British cheese exporters enjoyed privileged access to the Canadian market because the U.K. was part of the EU. Instead of terminating those privileges immediately upon Brexit, Canada agreed to a transitional period running to the end of 2023.

The British would naturally like that special access to the Canadian cheese market to continue, as if they were still part of the EU. But they’re not. Exercising their authority as a sovereign state, the British decided to Brexit and, when they did, they left their special cheese quota in Brussels.

That is not Canada’s fault, and Canadians should not be asked to provide new quota to make up for what the British themselves left behind.

A saving grace can be found in the U.K.’s application for membership in the Comprehensive and Progressive TransPacific Partnership (the CPTPP). Canada is a founding member of that partnership, and we were the first to publicly support Britain’s bid to join.

The U.K. will be able to access tariff rate quotas for cheese into Canada, once they officially become a CPTPP member.

They signed on to the principles of the CPTPP last summer.

They and the 11 other countries originally in the deal (including Canada) are now going through their various ratification procedures to welcome the U.K. onboard. And speaking of the CPTPP, not only does “membership have its privileges,” it also has its responsibilities.

14

MEATBUSINESSPRO January 2024

meatbusinesspro.com

Every country has its trade sensitivities — they often relate to agriculture. As between Canada and the United Kingdom, we should encourage our respective producers, processors, consumers, scientists and regulators to engage in ongoing dialogue with one another — to better understand each other.

We should also agree that we will not gratuitously trash each other’s food quality and safety systems. In each of our countries, those systems are fundamentally sound.

Canada has an impeccable reputation for quality and safety. Our standards are every bit as good as the best in the world.

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

The rules of the CPTPP say unequivocally that any border measures that affect trade flows between member countries must be rooted in sound science. They cannot be arbitrary. They cannot be hidden, non-tariff trade barriers. They must be justified on the basis of proven scientific principles.

Our satisfied customers include the most discriminating markets on earth.

Specifically with respect to beef, Canada’s most significant This is directly relevant to the U.K.’s long-standing food safety/animal health problem in recent memory ban against Canadian beef.

That ban has no scientific began 30 years ago when a case of BSE (mad cow disease) Proposed 30,000-square-foot beef abattoir in Cloverdale would be B.C.’s largest such facility justification whatsoever. It’s an arbitrary non-tariff trade was discovered in animals imported, ironically, from the By Amy Reid, Peace Arch News barrier, contrary to the rules of both the CPTPP and the United Kingdom. so as to not emit odours. And while there is an operational A federally licensed beef processing facility is in the works World Trade Organization. in Surrey, BC. “There’s exports a new building coming forward, a new of abattoir, I It’s also unfair. Britain thousands of tonnes think that’s the French pronunciation of slaughterhouse,” beef into Canada, hardlyMike a morsel Canadian saidbut Councillor Starchuk.of “So Surrey will beef have a gets into the U.K. A negotiated needs to bewill found, newer facility with a remedy better capacity so people have the ability to not have to ship an animal to Alberta to or this issue will ultimately end up in dispute settlementhave it processed. The applications have gone through the litigation.

Agricultural and Food Sustainability Advisory Committee.”

6,000-square-foot abattoir on the property now, it’s can only process a limited number of cattle.

Chris Les is general manager of Meadow Valley Meats, the company behind the project. Meadow Valley Meats is seeking a Canadian Food Inspection Agency license for the proposed abattoir, to become a federally registered meat establishment and expand the operation. This would allow the meat products to be transported beyond B.C.’s That British-borne disaster cost the Canadian beef industry boundaries.

The facility is proposed on a 25-acre property within the literally billions of dollars. a consequence, there is no “Our focus is on trying to bring aAs more efficient, sustainable Agricultural Land Reserve at 5175 184th St. The planned local product to the market,embrace realizing wethe can highest do that now 30,000-square foot abattoir in Cloverdale would process up doubt that Canadians food safety, in a very limited sense,” said Les. “I caution people when to 100 head of cattle per day. quality and animal husbandry practices. talking to them and they say, ‘What a big plant, that’s going According to a city report, that would make it larger than to go allow you to go mainstream.’ Well, yes, if you look any other processing facility in B.C.. But it would still be in the context of B.C., but this is still a very niche plant small by industry standards, compared to the largest meat Ralph Goodale, is the former Member of Parliament we’ll serve a niche industry for producers and for the processing plants in Alberta that process 3,000 heads of forandRegina and federal cabinet minister, and is currently market. It’s certainly not going to be a monstrosity of a plant cattle per day.

Canada’s commissioner incurrently.” the United Kingdom. but it’ll be high a big upgrade from the site The proposed facility would be fully enclosed and designed Continued on page 32

https://www.tcextrade.com

meatbusiness.ca

meatbusinesspro.com

September/October 2017 CANADIAN MEAT BUSINESS 31

January 2024 MEATBUSINESSPRO

15

MEXICO EXTENDS TARIFF EXEMPTION ON PORK, BEEF, POULTRY IMPORTS THROUGH 2024

By Jim Eadie, SwineWeb The Mexican government has recently announced a decree extending the zero-duty access for certain food imports, including pork, beef, and poultry, from eligible suppliers until the end of 2024. This move aims to address inflation and maintain economic stability, marking the second full-year extension to the initial suspension of import duties implemented in May 2022.

Despite Brazil’s success in capturing market share, a temporary suspension on Brazilian pork imports was imposed in November 2023. This decision followed a court ruling highlighting procedural deficiencies in Brazil’s adherence to Mexico’s sanitary requirements. While this suspension temporarily impacted market dynamics, Erin Borror notes that U.S. pork maintained and even increased its share.

The decision to extend tariff exemptions comes in response to economic challenges and the need to support the import-dependent food industry. The U.S. Meat Export Federation (USMEF) highlights that the suspension, initially introduced to combat inflation, was first extended through 2023 and now continues through the entirety of 2024.

Borror emphasizes that the majority of U.S. pork exports to Mexico are chilled, making it challenging for Brazil to compete directly. Consequently, the U.S. pork’s share of total exports to Mexico surged to 84%, showcasing the resilience and competitiveness of the U.S. pork industry despite external market pressures.

While the United States and Canada benefit from dutyfree access for pork to Mexico through existing trade agreements, the extension of this privilege to other countries has influenced market dynamics. Erin Borror, USMEF’s Vice President of Economic Analysis, points out that the main beneficiaries have been the European Union and Brazil. Brazil, in particular, significantly increased its shipments to Mexico, surpassing 5,000 metric tons per month after commencing shipments in February 2023.

16

MEATBUSINESSPRO January 2024

The extension of tariff exemptions on pork, beef, and poultry imports in Mexico through 2024 provides stability for the food industry amidst economic uncertainties.

While challenges arise from market competition, the U.S. pork industry has demonstrated resilience, maintaining a significant share in the Mexican market. The evolving dynamics underscore the importance of adaptability in the global trade landscape.

For more information, visit https://www.swineweb.com/

meatbusinesspro.com

meatbusinesspro.com

https://www.cfib.ca January 2024 MEATBUSINESSPRO

17

FPC ANNOUNCES NEW BOARD CHAIR AND APPOINTMENTS Following its recent meeting of the Board of Directors, Food Producers of Canada (FPC) announced the appointment of Mr. Irv Teper, CEO and Co-Founder of Concord Premium Meats, and Managing Director of Premium Brands Holdings LP, as Chair of the Board of Directors of Food Producers of Canada (FPC).

"The appointment of Mr. Teper to Chairman comes as the Canadian food and beverage processing industry continues to face compounding cost increases and ongoing challenges. His appointment marks the contribution of FPC to the growth and sustainability of the broader Canadian food manufacturing industry.

Mr. Teper's decades of business leadership combined with previous years of service as treasurer, FPC, positions him well to lead our board and organization through our next phase of growth and industry representation. FPC remains committed to advocating for food-based businesses through collaborative initiatives with all Canadian food value chain stakeholders,” stated Denise Allen, President & CEO, FPC. FPC announced the following new board members and appointments: Mr. John Allard, General Manager, Laminacorr, Treasurer, FPC, Mr. Mahendra Bungaroo, Chief Financial Officer and Chief Administrative Officer, Upper Crust, Mr. Jamie Falcao, Vice President, Reuven International, and Mr. Darren McFadgen, Owner, Operator McFadgen's Bakery.

18

MEATBUSINESSPRO January 2024

• Mr. John Allard, General Manager, Laminacorr.

Having held senior positions at Delta Daily Foods, Fleury Michon America, and Lanthier Bakery, John brings extensive experience across food manufacturing.

• Mr. Mahendra Bungaroo, CFO & CAO, Upper Crust is an accomplished finance executive who brings expertise in finance, supply chain management in food manufacturing, and expertise in both retail & wholesale distribution.

meatbusinesspro.com

DF: I don’t think being on the island has really impacted us negatively one way or the other. We’ve traveled a lot, met a lot of other farmers and livestock producers in other parts of Canada, and we all seem to have the same issues and same concerns.

CMB: I understand that your farm was the first in Atlantic Canada to be involved in the TESA program.

DF: Yes, I think we were the first farm east of Ontario as far as I understand.

• Mr. Jamie Falcao, Vice President, Reuven I’m not sure why the eastern International, brings over thirty-five years associations wouldn’t have previously of experience in allanybody aspectsbecause of the there poultry nominated are businessmany with farms a specific knowledge base here on PEI doing every within supply-managed bit as much as weindustries. are as to attain a high level of sustainability. Anyway, we were very surprised when the PEI Cattleman’s Association nominated our farm.

CMB: And then you were attending the Canadian Beef conference in Calgary and you won.

DF: Yeah! That was a very nice moment for us. But I don’t like to use the word win actually. However, being recognized for our commitment was • Mr. Darren McFadgen, owner, operator a real honour. If you want to know McFadgen's Bakery, is aapretty third-generation the truth, it was humbling family bakery business serving both local experience. As I said to CBC when they businesses and me Canadian retailers. phoned after thenational conference, I was just floored, really couldn’t believe it.

CMB: So now that you have been recognized, do you think that will draw more attention and garner more nominations out of Atlantic Canada going forward?

DF: Absolutely. We’ve gotten a lot of good press highlighting the island cattle industry. I’m positive you’ll see more farms in our neck of the woods nominated next year. And I have to give the Canadian Cattleman’s Association recognition for choosing a farm from Prince Edward Island. We are small About Food Producers of Canada players in the national beef industry Food Producers Canada (FPC) is acredit national and I of think it was a real to their business association supporting Canadian-owned organization to recognize us. They and operated food manufacturing companies that add treated all the nominees royally and it value to farmgate output and sell to retail and food was a real class act. It was a wonderful service markets domestically and internationally. FPC experience.

is dedicated to supporting the growth of a vibrant and safe Canadian agri-food sector and the wellbeing of Canadian consumers. For more information visit, https://foodproducersofcanada.

https://www.yesgroiup.ca meatbusiness.ca meatbusinesspro.com

September/October 2017 CANADIAN MEAT BUSINESS 17 January 2024 MEATBUSINESSPRO

19

COBANK: FORCES THAT WILL SHAPE THE U.S. RURAL ECONOMY IN 2024 The U.S. economy has remained remarkably steady despite an unrelenting series of shocks over the last three years. America’s economic resilience was again on display throughout 2023, as the Federal Reserve continued the most aggressive round of interest rate hikes the country has seen in more than 40 years.

Steadfast consumer spending has fueled the economy through much of the recent adversity. However, lingering high prices are expected to take a bigger toll on the economy in 2024, according to a comprehensive year-ahead outlook report from CoBank’s Knowledge Exchange.

The CoBank 2024 outlook report examines several key factors that will shape agriculture and market sectors that serve rural communities throughout the U.S.

GLOBAL ECONOMY: GROWTH RATES WILL FALL IN THE ERA OF DEGLOBALIZATION “By conventional measures, the U.S. economy is doing quite well,” said Rob Fox, director of CoBank’s Knowledge Exchange. “But consumers are increasingly feeling the pinch of higher prices for food, housing and other essential goods. People have anchored mental expectations about what prices should be and those anchors take a long time to move. Consumers are beginning to realize some prices aren’t going back to where they were three years ago and changing their purchasing behaviors to reduce spending. That will create stronger headwinds for the U.S. economy in 2024.”

20

MEATBUSINESSPRO January 2024

The decades-long era of free trade agreements was a rousing success for global economies. Since 1990, global trade has increased more than 400% and global GDP has increased by 500%. During the heyday of free trade (2000-2018), global GDP grew at an average of 5.4% annually. But those days are over as the ideological pendulum has swung towards economic protectionism and political isolationism. Global growth in 2023 is estimated at around 2.5% and the consensus is for a continued slowdown in 2024. China’s economic growth rate has leveled off considerably. Business plans must account for the reality of permanently slower global economic growth moving forward.

meatbusinesspro.com

U.S. GOVERNMENT: VITAL FUNDING BILLS AWAIT DYSFUNCTIONAL CONGRESS

U.S. ECONOMY: CONSUMER SENTIMENT MORE IMPORTANT THAN ECONOMIC DATA

The difficulties of governing with slim majorities in both the House and Senate are in clear focus as 2024 draws near. While the House was ultimately able to pass a Continuing Resolution (CR) three days before a shutdown deadline, none of the 12 annual appropriations bills have been enacted. Until Congress can complete its work appropriating discretionary funding, little progress can be made on other major legislation like the Farm Bill. For rural America, there was a silver lining in the CR as it extended the current Farm Bill through Sept. 30, 2024. However, many reasons favor completing the new Farm Bill sooner rather than later. Cooperation will become increasingly difficult as the next election cycle begins.

Key indicators point to the strength of the U.S. economy. Headline inflation has plummeted to 3.1%, the unemployment rate remains below 4% and inflation-adjusted wages are growing. However, large swaths of U.S. consumers remain anxious about their financial situations given high grocery prices, skyrocketing mortgage rates and other inflationary pressures. While grocery inflation is currently running at about 2%, the price of food at home has risen by 25% in the past three years. Consumer spending makes up almost 70% of the economy and consumers who are worried or angry will hold back on discretionary spending. Inflation-adjusted retail spending has fallen in 10 of the past 12 months, a trend that could carry into 2024.

U.S. AGRICULTURAL ECONOMY: HIGH COSTS SPELL LACKLUSTER PROFITABILITY FOR FARM INCOMES Higher interest rates, a strong U.S. dollar and resiliency of the U.S. economy have weighed heavily on agricultural commodity prices. But the biggest problem for farm margins heading into 2024 is the elevated cost of production. While fertilizer prices have fallen, other costs of production remain stubbornly high. However, ag commodities will benefit from more upside price risk than down in 2024. Global grain and oilseed stock inventories are tight by historic measures and the northern hemisphere will likely have a strong El Nino weather pattern during the growing season for the first time since 2015. The dollar should continue its recent decline and global demand should return to its long-

meatbusinesspro.com

January 2024 MEATBUSINESSPRO

21

POWER & ENERGY: GLOBAL DISCORD UNDERSCORES NEED FOR ENERGY SECURITY Global conflicts and geopolitical discord spanning the Middle East and Eastern Europe create significant uncertainty for commodity markets and energy prices.

Complicating matters further, global suppliers are reconciling the prospect of an accelerated energy transition with the realities of today’s fossil fueldependent economies. Nevertheless, oil prices have fallen by 5% in the fourth quarter as the economy slows and inventories rise. But it is unlikely the current market calm will persist. The World Bank asserted that if conflict-driven market disruptions escalate, oil prices could potentially blow past $150 per barrel in 2024.

ANIMAL PROTEIN: INPUT COSTS TEMPER EXPANSION PLANS, PRODUCTION GROWTH Profitability for the U.S. livestock sector should improve modestly in 2024, as lower feed costs and steadfast domestic demand offset weak global export conditions.

Beef packers will continue to struggle with shrinking supplies of available cattle. Tighter cattle numbers, flat pork supplies and dampened broiler availability would normally be seen as supportive to margins, but all segments have been fighting rising costs of production. With expansion plans on hold due to the high-cost environment, the industry’s focus on efficiency and technology is expected to intensify and risk management will remain paramount. U.S. animal protein will remain competitive in global markets but open access to markets remains critical.

COMMUNICATIONS: DESPITE TAILWINDS, BROADBAND BUILDOUTS FACE OBSTACLES The broadband market will continue to be a bright spot for the U.S. economy in 2024. The amount of public and private investment flowing into the industry is unprecedented as the era of digitization continues.

However, telecom operators face several obstacles to executing their network buildout plans on time and on budget. The challenges include navigating the tight labor market, tightening credit conditions and managing through the permitting process, which has proven to be a bottleneck for fiber builds. The combination of low unemployment and a significant amount of network build work scheduled for 2024 means many contractors are already booked 6 to 12 months out.

About CoBank CoBank is a cooperative bank serving vital industries across rural America. For more information, visit https://www.cobank.com/

22

MEATBUSINESSPRO January 2024

meatbusinesspro.com

MCDONALD’S CANADA GROWS ITS INVESTMENT IN YOUNG LEADERS OF THE BEEF INDUSTRY The Canadian Cattle Association (CCA) has announced McDonald’s Canada as a Platinum Partner of its Canadian Cattle Young Leaders (CYL) Program.

McDonald’s Canada has been a generous Foundation Partner of the program since 2017. This elevated partnership marks an exciting milestone, as McDonald’s Canada becomes the very first Platinum Partner of the Canadian CYL Program.

McDonald’s Canada is a long-time supporter of Canadian cattle farmers and ranchers and the sustainable practices used to raise high-quality Canadian beef. This partnership not only invests in the development of our young people, but also supports the overall beef sector in Canada.

“The future success of Canada’s beef industry is built on the investment we make in our next generation of leaders,” said Nathan Phinney, CCA President. “We are grateful to McDonald’s Canada for growing their investment in our young leaders and helping us to take our program to new heights.”

McDonald’s Canada’s support of the Canadian CYL Program exceeds just their financial contributions.

This support has ranged from participating as mentors to our young leaders, collaborating on workshops and tours, and helping select program participants by engaging in the judging process. We look forward to our continued collaboration to support the future of the Canadian beef industry.

“At the root of McDonald’s Canada’s purpose is our ambition to continue serving guests the burgers they know and love, while continuing to help advance agricultural practices and support the next generation of Canadian farmers,” said Ashwin Ramesh, Head of Sustainability & Impact Strategy at McDonald’s Canada.

“Our investment in the Canadian Cattle Young Leaders Program is one way we’re contributing to the future of farming by helping to empower tomorrow’s generation of beef farmers, ranchers, and other young industry professionals, alongside our long-term partners at the Canadian Cattle Association.”

For more information on McDonald’s Canada, visit mcdonalds.ca.

For more information on Canadian Cattle Young Leaders (CYL), visit www.canadiancattleyoungleaders

meatbusinesspro.com

January 2024 MEATBUSINESSPRO

23

NEW YEAR, SAME PROBLEMS Challenges for farmers need to be taken seriously.

While 2023 is over, the cost pressures on agribusinesses persist unabated. Farmers continue to grapple with high interest rates, inflation, labour shortages, high energy costs, lower consumer demand... stop me if you’ve heard this all before. The familiar list of challenges goes on and on while the federal government continues its habit of lingering complacency.

Last year, the agriculture sector consistently ranked lowest in optimism according to the Canadian Federation of Independent Business's (CFIB) business barometer®, reflecting a lack of confidence in both short- and long-term economic prospects. As one farmer from Ontario put it “With the higher interest rates and fuel costs our input cost has gone up. The price of our products have not gone up at the same rate. For us to survive something positive has to happen.”

Farmers work long hours, and beyond the industrywide impact we often look at, financial difficulties can hit hard on a personal level for many. A recent study found that the agriculture industry has an elevated risk of suicide, with over half (57%) meeting the criteria for anxiety and a third (34%) meeting the criteria for depression. The idea that so many people performing such a vital function in our society would experience these feelings is a sad one. So while we try and support the agriculture industry by making it easier to do business, let’s also appreciate the work of farmers in 2024. For this year to truly be a better year, it is necessary that governments start taking Canadian farmers concerns very seriously.

In a recent preliminary CFIB survey, eight out of 10 farmers said reducing red tape for agri-business should be a top priority for the federal government in 2024.

Other top priorities included reducing the tax burden (75%) and ensuring supply chains work effectively (60%). These priorities are part of a strategic framework that governments of all stripes in Canada should use to fortify agri-business against storms in 2024, both literally and figuratively.

24

MEATBUSINESSPRO January 2024

meatbusinesspro.com

Shipments in transit before the tariffs took effect were supposed to be exempt but only a small share of agri-businesses were actually refunded for these shipments. Instead of actually supporting farmers by directly compensating them from the money raised by the tariffs, the government is using the money for an On-Farm Climate Action Fund, something only 7% of farmers said they used and was helpful. The government had two years already to mitigate the unintended negative consequences of this decision which is why they should not let farmers down for a third year.

Not helping matters is the carbon tax on propane and natural gas for drying grain and regulating temperature in barns and greenhouses. Last year, Bill C-234, which would exempt these uses from the carbon tax, was passed by the House of Commons. With seven out of ten Canadian agri-businesses labeling this measure as helpful and almost half (44%) saying it would cut down their energy costs by at least 11%, this was a promising first step that CFIB supported strongly and wholeheartedly.

A dry winter could also lead to drought, particularly in western Canada. The federal government can take some proactive measures, including cutting red tape and streamlining the rollout of business risk management programs like AgriInsurance. These programs can provide producers with financial protection from natural disaster events and would go a long way to mitigate these risks.

Solving these problems will ease the cost of doing business and lighten the stress for farmers in 2024.

Unfortunately, the Senate hung farmers out to dry, and voted to amend the bill to remove the exemption for barns and greenhouses, stripping the bill of much of its intended purpose.

Notably, the government has already deemed home heating oil worthy of an exemption, and we contend that farmers, those who put food on our tables, are equally deserving of such consideration.

In addition to energy taxation, tariffs continue to raise farmers’ input costs. In response to the Russian invasion of Ukraine almost two years ago, Canada levied a 35% tariff on Russian fertilizer. It would be unfair to expect Canadian farmers to absorb this cost with such little time to react to the sudden price hike. Well over half (59%) of agri-business owners said these tariffs had a negative impact on their business.

Not a member? JOIN CFIB today for more help and information Bradlee Whidden is a Policy Analyst for the Canadian Federation of Independent Business (CFIB). CFIB is Canada’s largest association of small and mediumsized businesses with 97,000 members (6,000 agribusiness members) across every industry and region.

CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.

meatbusinesspro.com

January 2024 MEATBUSINESSPRO

25

https://www.yesgroup.ca

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.

26

MEATBUSINESSPRO January 2024

September/October 2018

meatbusinesspro.com meatbusinesspro.com 31