Exports are so important to the Canadian beef industry, and early 2020 was shaping up to be a record year for global demand. Then, COVID-19 happened.
Statistics Canada recently released the January to March numbers for Canadian beef exports, and as Brenna Grant, manager of research services for CanFax, explains, there is evidence of COVID-19 having an impact on numbers, but the full brunt won’t be seen until the next report tallying up April to June figures.
Canadian beef processing really took a hit in late April and into May, and that lower production is going to have an impact on export numbers, she says, we just don’t know yet to what extent.
Looking at the first quarter of 2020, though, total volume was down 8 per cent while value shrunk 7 per cent, compared to a year ago. When you look at the numbers in a broader context, however, the trade volumes are still above the 5-year average. So while there certainly was an impact from the economic shutdown, unemployment, and decreased restaurant demand in international markets, the industry headed into this pandemic in a very strong position.
For example, exports were up 11 per cent to Japan and that’s going head-to-head with U.S. getting the same preferred access as Canada. Product to the EU was up 60 per cent on small volumes, and up 14 per cent into the Middle East and North Africa.
Exports into South Korea softened during the early part of the year, but Grant says that they’ve handled COVID-19 really well, and it’s had a smaller impact on their domestic market, so demand could stay firm going forward.
It’s not all positive, as U.S. exports are down 8 per cent compared to a year ago, and Grant says that sales to Japan softened in April and May, for sure.
Exports to mainland China are down 51 per cent, but it should be kept in context that in the first half of 2019 exports were up 300 per cent compared to 2018, she says. That’s in part because China was the first to have a COVID-19 outbreak and imported a considerable amount of beef ahead of the Chinese New Year, filling freezers and cold storage. Grant says that as the country works through that stock, demand will come back online, however, beef isn’t the go-to make-at-home protein there, so the pace at which demand recovers hinges on the re-opening of the economy.
Canada could see some positive beef demand come online from China later in the year simply because of reduced volumes coming in from other importing countries, such as Australia.