Getting beef on Russian dinner tables is quietly becoming a priority for local ranchers.
Area cowboys have been representing the nation all over the world, for the past few years, lobbying foreign governments and import companies to slice into Canada's meaty cattle industry. Russia is looking particularly bullish.
A little more than a week ago, Russia OKed a trade deal with Cargill Meat Solutions, a leading slaughterer and processor of Canadian beef, to ship a number of products from Cargill's plant in Guelph.
Although this taps into the eastern Canadian beef supply, this area should see direct benefit from that deal said Roland Baumann of Vanderhoof, one of the leading voices among Canada's ranchers in the development of international markets.
"Russia has been exceptionally good for us," he told The Citizen.
"This year over last has been just amazing and having Guelph approved just builds on that relationship."
Baumann and local ranchers Larry Garrett and Mark Grafton went to Japan and China this past year to present Canadian beef in those countries, and came back with optimism for those markets. Baumann also went to a major trade show in France. He has been on several international missions in recent years.
He said this deal with Cargill is not as a direct result of that dialogue, but a major contract with a Canadian beef company will only mean upward momentum for the industry as a whole.
"That increases value nationally," he said. "The whole intent is to shorten the supply, so prices can go up for the producer. We need a bit more value out of our cattle because we are still in the pinch.
"Our costs have gone up so much in the last couple of years that we need some return on that. We are just closing in on the point of breaking even again, but breaking even is no way to sustain an industry. No one wants to do a business that only breaks even."
Baumann said it was important in marketing any commodity to focus on your best chances for a sale, and Russia's demonstrated appetite for our product, combined with its untapped potential was reason for the federal government and industry agencies to invest the $250,000 to $350,000 a year necessary to run a trade office in Russia.
"We are reaching the point that we can't do much more from here, we need to be inside Russia with Russians working with us to do more direct contact with the importers," he said.
"Our [beef industry] studies tell us that we got $16 back for ever dollar we spent in Russia during 2009 and it was $19 to $1 in 2010, so that is massive return on investment in a growth market. You compare that to our involvement in the United States where we only get back about $3.40 for every dollar."
According to the federal government, exports of Canadian beef to Russia amounted to about $20 million this past year.
Ottawa also announced that the Canadian Food Inspection Agency will be hiring a permanent veterinarian in Moscow to help mitigate future trade disruptions for beef and pork markets.
Since the BSE crisis almost 10 years ago, the Canadian beef industry has vowed to reduce its massive exportation dependence on the United States. The goal is to reduce the nation's exports there to 30 per cent of the national total, another 30 per cent to other nations, and 30 per cent for Canada's internal beef consumers.
Russian sizzle for Canadian steak
"The growth has taken off unexpectedly fast," said local beef producer and lobbyist Roland Baumann.
- Prior to 2008, Canadian beef was largely unwelcome in Russia due to past BSE disease incidents;
- Canadian government negotiated hard with Russia in 2009 to open their borders, due to safety measures implemented by Canadian beef industry. Russia agreed and slowly began business with Canadian cattle industry;
- Russia bought 4,800 tonnes of Canadian beef in 2009;
- Industry analysts estimated then that Russia would be buying 11,000 tonnes by 2020;
- In 2010, by October (November and December totals still being calculated) Russia had bought 8,000 tonnes of Canadian beef;
- February of 2011 Russia signs an import deal with Cargill Meats for even more Canadian beef.
