Should Canadian Pork and Beef Be Supply Managed? – Kevin Grier

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When an industry struggles financially, it becomes necessary to re-evaluate how business is done.  The beef industry has struggled since the discovery of BSE in 2003 and the pork industry has felt the financial pain from the H1N1 pandemic.  One solution being circulated in the coffee shops across the country is to make either of these industry’s supply managed.  At first glance, many people look at the financial stability of the Canadian dairy and chicken industries and conclude that “this could be us.”

I asked Kevin Grier, Senior Market Analyst, George Morris Center, to comment on the potential of this actually happening based on some of their initial research.

Should Canadian Pork and Beef Be Supply Managed? – Kevin Grier
[audio:http://realagriculture.com/wp-content/uploads/2009/11/Kevin-Grier-making-beef-and-pork-supply-managed.mp3]

In my opinion neither the pork or the beef business in Canada will ever become supply managed for many of the same reasons that Kevin discusses in the interview.  Never mind that I don’t think you would ever get the domestic stakeholders to buy in, but the bigger obstacle is getting this sort of massive change past the WTO.  Canada will be under growing pressure to absolve its dairy and chicken quotas in the future so adding to the list of supply managed industries is slim at best in today’s environment.

 

Shaun Haney

Shaun grew up on a family seed farm in Southern Alberta. Haney Farms produces, conditions and retails wheat, barley, canola and corn seed. Shaun Haney is the founder of RealAgriculture.com. @shaunhaney

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One Comment

JoshA

I understand the complexity of the implementation of a supply managed system, but something must be done, and it does not have to be a replica scenario of the milk and feather industries.

Ignoring the hugely relevant result currently of impossible lows in both the pork and beef industries, the problem with the current marketing process is the volatility, and without some restrictions (ie quota), people buy or keep when the price is down, wait for the price to go back up due to a supply shortage, then they flood the market again and wonder why the price dropped!

Admittedly BSE in 2003 and the droughts in recent years are the major reasons for the fall of the Canadian cattle industry, but we cannot expect it to return to a profitable & stable situation unless there is a serious change implemented.

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