Canadian Cattlemen’s Association

1. Canadian Cattlemen’s Association Travis Toews President June 2010

2. 2010 Outlook Lower production – Reduced inventories in NA and globally competing meats Export demand to rebound (beef & pork) Domestic demand – stronger ends, slower middles Steady to larger fed marketings (more fed cattle slaughtered in CDA) Steady to lower feeder cattle exports (Relative cost of gain ) Exchange Rates AUS $ & Cow Prices Canadian dollar steady Reduced North American beef and cattle supplies should provide support for prices, but will depend on the economy Excess capacity in North American feedlot and packing sectors

3. Jan ‘10 Beef cow inventories ↓ 3.8% to 4.33 million head Total inventories ↓ 1.3%

4. Replacement heifer numbers are down 3.8%

5. U.S. cattle herd also contracting – down 1% to 31.3 million beef cows

8. Major Competitor Currencies

10. Beef and Veal Imports: the US is the world’s largest importer

11. Long Term Outlook still Positive

12. 5 Trade Actions • WTO against US COOL • WTO against Korea • Multiple missions to countries that have not reopened fully or at all. • Engagement in FTA talks to ensure beef is treated fairly.( Columbia and EU) • More aggressive International Market Access intervention -Prime Ministerial involvement -FTA negotiations -Doha negotiations

13. United States Countryof Origin Labeling • 2002 Farm Bill • Final Rule – March 2009 • Applies only to retail, not food service • CCA is actively participating in the WTO Challenge • BIC building demand for Canadian beef in USA

14. Trade Access Federal Gov Travel we’ve had improvements in access; • Colombia • Panama • Hong Kong • Russia Our top priorities – (WTO Case) S. Korea • Japan, Taiwan , Mexico, China & the EU

15. Agricultural Market Access Secretariat • Establishing an export focused culture across both industry and government, ensuring collaboration • Promotion of exports through food safety and animal health systems • Investing in international trade negotiation capabilities • Creating a supportive regulatory environment to trade • Developing international partnerships

16. Cattle Exports - Fed cattle 24% ’09 - Feeder cattle 55% ‘09

17. Federal Budget - SRM Removal Costs • $25 M compensate the cost of collecting and disposing of SRM • Need Canadian and U.S. regulatory costs harmonized • 58 kg of disposable SRM material per OTM animal in a Canadian federal facility versus 0.45 kg in a U.S. facility. • This $ will hopefully allow CAN to outbid US keeping processing in Canada.

18. Government of Canada estimates vs. actual costs Estimated Government costs to Industry of SRM Feed ban (June 1, 2006) Average and Operating Cost per head of UTM cattle at Federal Plants Full SRM Feed ban UTM Average = $ 1.50 / head Average and Operating Cost per head of OTM cattle at Federal Plants Full SRM Feed ban OTM Average = $ 7.44 / head 2009 Industry survey results UTM Average = $4.52 / head OTM Average = $31.70 / head

19. Beef InfoXchange System (BIXS) is: A voluntary national cattle and beef information exchange system based on RFID. Data or information flows into and out of the database across the chain linked to the animal’s RFID tag identifier. It will complement, through plat forming/hosting options, many other programs securely, including existing genetic improvement, EU and branded beef initiatives.

20. Beef Cattle Industry Science Cluster The 2009 National Beef Research Review found that research resources were not being used efficiently. • Phase 1 - $6M Federal Gov Funding Announced • Industry’s Beef Cattle Research Council, administer ~$10 million in pooled industry (National Check-off) and federal government research funds • Industry funds leveraged at 85 federal: 15 BCRC

22. Traceability Principles A. The scope of traceability for beef cattle: i. Shall not impede or delay commerce ii. Costs of the system must not result in the industry becoming non competitive iii. The technology must be capable of reading ID at a rate which accommodates normal commerce iv. Tolerance ranges for readability must be acceptable to the industry standards v. Producer information must remain confidential B. That the CCA supports the CCIA definition of premise ID for the beef cattle industry as the home quarter or headquarters of the registered operator C. The CCA defines tracking movement of beef cattle as only those points of movement in the life of an animal where a change of premise takes place and that at these points data is submitted upon the arrival of the animal That the CCA supports the principle of age verification and will strongly encourage producers to voluntarily participate in the program

23. BRM Programs • Cattle Price Insurance • Agri Stability - Recommendations • - Ref Margin calculation • - Negative margin coverage • - Viability test • Agri Recovery – Recent drought program

24. Key issues for the future Environmental regulations Clean water Clean air GHG emissions penalties Carbon life cycles Animal welfare and transportation Stocking density Hauling distances OIE standards Public lands debates Recreation vs. commerce Public access vs. stewardship Inter-generational transfer -tax deferral Capital gains (deduction) Access to debt financing

26. Questions? Plan to attend.... Join us at the CCA Semi-Annual meeting August 10th-13th Please visit the new ‘www.cattle.ca’ to sign-up for e-news.