The Risks Of Relying On Foreign Markets

CANADA - An associate professor with the University of Manitoba says that the Canadian beef industrys reliance on foreign markets to buy and process beef is a potential weakness, writes Bruce Cochrane.
calendar icon 3 February 2010
clock icon 2 minute read

A report which appears in the Review of Agricultural Economics suggests relying on foreign markets for the processing and sale of Canadian beef is risky.

"Managing a Border Threat: BSE and COOL" appears in the fall 2009 Review of Agricultural Economics.

The case study contains information gathered from several industry and government sources and examines the effects of the 2003 border closure due to BSE and the 2009 introduction of US Mandatory Country of Origin Labelling (COOL) on Canada's beef industry.

Dr Jared Carlberg, an associate professor with University of Manitoba's Faculty of Agricultural and Food Sciences, says though different the two incidents demonstrate the risks associated with relying on foreign markets for the processing and sale of Canadian beef.

Clip-Dr Jared Carlberg-University of Manitoba:

BSE was something that occurred in one cataclysmic event that was devastating for many in the industry.

COOL was something for which the industry had many many months even years to prepare for so there are important differences between the two.

The thing that sort of ties them together is that they both identify this extreme reliance of our cattle and beef industries upon foreign markets both to process our cattle and to buy our beef.

Some I think would argue that this indicates that that reliance of our beef and cattle markets upon export destinations is potentially a weakness but it's one to which there is no quick or easy fix.

Certainly nobody is advocating that we reduce the size of our cattle industry so that we could only support what Canadians demand for beef but the two events BSE and Country of Origin Labelling are two circumstances that certainly do identify that potential weakness and the reliance of our beef industry upon factors which are largely beyond their control.

Dr Carlberg says the case study shows relying on foreign markets is risky and failing to be ready for a crisis is potentially costly.

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