Meat + Poultry - April 2005 - 16

International News & Trends
Brazil competes in Canadian chicken market
Canada has allowed imports of Brazilian chicken since it approved the poultry meat inspection system of Brazil
in July 2002. Until that time, Canada
sourced virtually all of its chicken imports from the United States. Because
Canadian imports of chicken are
regulated under a tariff rate quota, it
was feared that U.S. chicken exporters
would face formidable competition
from cheap Brazilian chicken in the
restricted-access Canadian market.

In the first full year of Brazilian access to the Canadian chicken market,
imports from Brazil accounted for 4.7
percent of total Canadian chicken imports, and the United States accounted
for the remaining 95.3 percent. By
2004, Brazilian product accounted for
22 percent of the total.
According to International Trade
Canada, the department responsible
for administering Canada's poultry
T.R.Q., Canadian demand for Brazilian chicken was for
frozen wings and frozen boneless breasts
for the foodservice
industry. The development marked the
first time U.S. chicken
exporters have had serious competition for
the Canadian chicken
import market.
Canadian imports of U.S. chicken
in 2004 reached their highest level
on record at 67,137 tonnes worth
$160 million. With the exception of
2003, the quantity of U.S. chicken
exports to Canada has registered a
year-over-year increase every year for
at least the past decade. Under a special import provision, I.T.C. can issue
supplementary import permits (for
amounts in addition to the T.R.Q.), if
the department determines there is a
shortage in Canada for a particular cut
or type of chicken.

The development marked
the first time U.S. chicken
exporters have had serious
competition for the Canadian
chicken import market.
Under its implementation of the
World Trade Organization Agreement on Agriculture in 1995, Canada
eliminated its quantitative import
restrictions on poultry and eggs and
imposed T.R.Q.s. However, the W.T.O.
access formula would have resulted in
access levels that, in certain instances,
were below the levels stipulated in the
North American Free Trade Agreement. As a result, Canada announced
it would apply the higher of either the
W.T.O. access level or the NAFTA
formula level for poultry and poultry
products.
Currently, the Canadian W.T.O. access level for chicken is 39,844 metric
tonnes, according to the U.S. Dept.
of Agriculture's Foreign Agricultural
Service. The NAFTA formula level
(based on 7.5 percent of the previous
year's chicken production in Canada),
and the T.R.Q. level in effect for 2005
is 69,700 tonnes (subject to revision
on the publication of the chicken level
production in 2004). Canada does not
apply the T.R.Q. to meat from spent
fowl. Currently, almost all Canadian
imports of spent fowl originate in the
United States.
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During 2004, British Columbia's
poultry industry suffered an outbreak
of avian influenza resulting in the depopulation of up to 80 percent of its
provincial poultry flock. Subsequently,
issuances of supplementary imports allowed B.C. poultry processors and purveyors to import record levels of U.S.
chicken to cover the supply shortfall.
During 2004, the A.I. outbreak in
British Columbia disrupted the Canadian poultry market. Chicken shortages
in B.C. were filled partially by increased
imports of U.S. chicken and chicken
production from other Canadian provinces. Since chicken supplies in the
United States were also relatively tight
that year, shortfalls in the important Ontario and Quebec foodservice markets
for wings and boneless breasts created
demand for cheap Brazilian chicken.
At this early juncture in 2005, anecdotal evidence suggests weaker demand for Brazilian chicken in the Canadian market through the first half of
the year. In several provinces, recently
implemented smoking bans in bars,
pubs, taverns, legions and nightclubs
have had a negative impact on food
and liquor sales during the 2004-2005
winter period. In addition, the absence
of a National Hockey League season
due to a labor dispute has severely
impacted regular attendance at Canadian sports bars and other venues that
traditionally serve finger foods such as
chicken wings.

Egypt opens market to age-verified U.S. beef
U.S. Agriculture Secretary Mike
Johanns announced this past month
that Egypt is resuming imports of U.S.
beef and beef products from animals
less than 30 months of age. "We are
pleased at the reopening of another
important market for U.S. beef exports
and anticipate exports will quickly
return to pre-bovine spongiform
encephalopathy trade levels," said Johanns. "The U.S. Dept. of Agriculture
will continue to focus on our efforts to

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open additional markets by promoting the use of science-based regulations in the global trade in beef."
The agreement requires age
and origin requirements under the
U.S.D.A. Agricultural Marketing
Service Beef Export Verification
program. In 2003, Egyptian purchases of U.S. beef and beef products
amounted to $30 million, with liver
accounting for nearly 65 percent, or
$19 million of total sales.
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Meat + Poultry - April 2005

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