Reports on Special Business Projects
Analysis of the beef supply chain

Acknowledgments

The authors of this study thank Agriculture and Agri-Food Canada (AAFC) for their collaboration and continuous feedback throughout the study. They also thank the Agriculture Division, International Accounts and Trade Division (IATD), Retail and Service Industries Division (RSID) and Industry Accounts Division (IAD) at Statistics Canada for their help providing data.

Executive summary

The Centre for Special Business Projects (CSBP) at Statistics Canada produced this report for Agriculture and Agri-Food Canada (AAFC) as part of a study to detail Canada’s beef supply chain. The study aims to identify the key nodes and flows in the beef supply chain, develop indicators of inputs and resources at various stages of the supply chain, and present statistics to provide a better understanding of Canada’s beef supply chain. This report is accompanied by a dashboard which provides data visualizations for the beef supply chain.

The aspects of the beef supply chain studied pertain to production, processing, and distribution, as well as international and interprovincial trade that occurs at various points in the supply chain. In addition to this, the financial structure of beef farms and the level of employment in the industry are also included in the study. The primary sources of data for this study are those available at Statistics Canada.

In the primary production stage, from 2010-2019 the average annual increase in quantity of imported livestock to Canada was 42% and the average annual increase in monetary value of livestock imports was 59%. Virtually all livestock imports came from the US and the majority of livestock imports were transported by road.

According to the 2016 Census of Agriculture, the majority of beef cows were raised in Alberta and Saskatchewan. The price farmers received for cattle and calves increased by 72% from 2007 to 2019. The average net worth of beef ranchers and farmers increased 25% from 2013 to 2017, while their average net cash farm income (revenue - expenses) increased by 31% to $44,872 over the same time period.

Relative to other provinces, Alberta reported the highest average revenue ($3.0 million) and expenses ($2.9 million) in 2018 within the beef cattle ranching and farming industry. Approximately 5% of employees in agricultural industries worked in the beef and feedlot industries, for a total of 14,267 employees in 2018. The number of temporary foreign workers in the cattle and ranch farming sector increased by 31% from 2016 to 2018 to a total of 1,548.

In terms of meat processing, from 2010 to 2019 the price of cattle for slaughter increased 62%. In 2018, the estimated output of farm production was 3.7 million cattle, of which approximately 3.2 million cattle were slaughtered for meat production.

Among beef products imported to Canada for distribution in 2019, fresh and chilled beef products were most highly imported in 2019 (69 million kilograms), and also contributed the most value ($668 million). Similarly, Canada’s beef products exports, fresh and chilled beef, peaked in 2019 (308 million kilograms), and also contributed the most value in terms of exports in 2019 ($2.3 billion). The majority of beef imports to Canada and exports from Canada were by road, and the US was Canada’s major trading partner for both imports and exports of beef products.

Price indices were assessed to provide information on what type of price changes were observed at different stages of the supply chain. The Consumer Price Index (CPI) indicated that the retail price of fresh and frozen beef increased 57% between 2010 and 2019.

Introduction

The COVID-19 pandemic has led to a health crisis, as well as an economic crisis which has been experienced by many sectors including the meat sector. According to the Canadian Cattlemen’s Association (CCA), in 2020 “the impacts [of the novel virus] to the Canadian beef industry [were] expected to be immediate and drastic” (CTV News 2020). It was postulated that physical distancing measures implemented to mitigate the spread of the virus would have adverse effects on meat processing and the supply of beef in retail stores. Since the onset of the pandemic, the importance of having a better understanding of available data to monitor beef supply chains has been emphasised by stakeholders in the meat sector.

Supply-side disruptions, including labour shortages and disruptions to transportation networks and cross-border supply chains have affected food supply chains. These disruptions were coupled with demand-side shocks, which were exhibited by a shift in consumption patterns from food service operations to retail stores which have put additional stress on food supply chains (Hobbs 2020).

These disruptions have renewed the attention on supply chains, their organization, geographic dispersion, interdependencies, and a potential bottleneck. In turn, this has highlighted data gaps and the fragmentation of information on food supply chains. A number of studies were launched to fill these information gaps including one by the OECD. The study highlighted that the processing sector has been particularly disrupted by labour shortages and shutdowns, as clusters of COVID-19 were found in processing plants across various countries. Several meat processing plants were forced to shut down or reduce capacity. The impact of this disruption can be seen in Canada, as slaughter of cattle decreased 31.1% in April 2020 compared to the same period in 2019 (Patrice & Lamboni 2020). The movement of products along the food supply chain have also been affected by bottlenecks in transportation and logistics. These supply-side disruptions coupled with lower consumer demand for restaurants and soaring demand for food in retail stores has disconnected supply and demand for certain products creating simultaneous surpluses for producers and shortages for consumers, while for other products demand has declined leading to an oversupply (OECD 2020).

This paper is a first step in addressing these information gaps and in developing statistical products aimed at providing a comprehensive understanding of supply chains. This analysis focuses specifically on the beef supply chain. This is important as Canada is one of the largest exporter of beef in the world, and exported $4.4 billion of red meat and cattle in 2019. Canada exports 47% of domestically produced cattle and beef, primarily to the United States (Canadian Cattlemen’s Association 2020). The purpose of this report is to identify key nodes and flows in the beef supply chain, develop key indicators of inputs and resources at various stages of the supply chain, and present statistics to understand Canada’s beef supply chains.

Previous disruptions in the Canadian beef sector

In Canada, major shocks to the beef industry were felt during the 2003 Mad Cow Disease (BSE) outbreak due to border closures to live animals. Between the second and third quarters in 2003, Canadian cattle prices fell 47%, feeder prices fell 20% and cull cow prices fell 64%. The 2003 BSE outbreak brought unprecedented difficulties mainly because packing plant shackle space was limited and there was nowhere for cull cattle to be slaughtered.

In 2011, there was a case of BSE which infected a dairy cow, and another case in 2015 infecting a beef cow. As a result of the 2015 case, several countries suspended imports of Canadian beef including China, Taiwan, Peru, Belarus, and South Korea (Johnson 2015). Prior to the ban in 2015, China was the fifth-largest importer of Alberta beef, accounting for $39 million of the province’s $1.43 billion in annual beef exports (Edmonton Journal 2015), while approximately $12 million of Canada’s $2 billion in total annual beef exports went to Taiwan, making it Canada’s seventh largest beef market (Global News 2016). As many of these countries lifted their ban on Canadian beef in 2016, Mexico also lifted its 10-year-long ban on some Canadian cattle imports which was expected to be worth $250 million to Canadian cattle ranchers. Mexico was among dozens of countries that suspended beef trade with Canada after the first BSE case was detected in 2003.

More recently, in June 2019, China announced a ban on beef and pork imports from Canada “after customs inspectors detected residue from a restricted feed additive in a batch of Canadian pork products” (Financial Post 2019). The ban was lifted in November 2019. The cost of the ban to Canadian farmers amounted to nearly $100 million (CTV News 2019).

Due to COVID-19, similar shocks were experienced again including border closures, along with limited hook space in packing plants, and uncertainty about consumer reactions (Rude 2020).

Supply chain information

Against the backdrop described in the previous section, decision makers lack a comprehensive and detailed information system of the entire supply chains, which can provide an understanding of vulnerabilities, bottlenecks and full ramification of impacts nationally and in various regions. Hence, the first step in this analysis is a stylized representation of the entire beef supply chain, including nodes and flows.

Figure 1 displays the beef supply chain. Employing inputs such as land, feed, animal husbandry, and capital and equipment, the beef supply chain starts with the primary production stage. At this stage, calves are born and weaned (cow/calf operation), then raised on a forage diet to gain weight and muscle (backgrounding) before entering the feedlots where cattle are fattened up or finished with the objective of adding more muscle and intramuscular fat. A significant amount of value is added in this finishing and feedlot phase (Drouillard 2018). Finished cattle are sent to slaughterhouses. The slaughter by-products, carcasses and offal (such as livers, brains, hearts, kidneys and tongues) are exported or sent to a processing facility for further processing.

In the processing phase, domestic meats may be mixed with imported primary processed meats for further processing at a secondary processing facility. Custom meat cuts are prepared (smoking or curing meat) and finally packaged for distribution at a secondary processing facility or at a butchery. Packaged meat from the processing phase and imported processed beef products are distributed for consumption either via wholesalers/retailers, or food service operations.

Imports and exports of cattle occur at various stages of the supply chain. Livestock imports go through the primary production phase, while primary processed beef imports go through secondary processing before distribution. Processed beef imports are brought in for direct distribution and consumption. A portion of finished cattle, slaughtered cattle and secondary processed beef products are exported from Canada. For the supply chain to operate properly, labour inputs are needed at every stage in order to carry out the necessary production and processing tasks. Transportation of goods occurs between stages among the entities participating in the supply chain.

Figure 1. Structure of supply chain

Description for Figure 1

Structure of beef supply chain. This diagram shows that the supply chain starts with inputs and livestock imports being brought in and used in the production phase. After going through the production process, finished cattle either go to slaughterhouses or get exported. After slaughter, the by-product is either sent to the processing phase or get exported. In the processing phase, imported beef products are brought in and may be mixed with domestic meat. Following the processing phase, the processed beef products are either sent to distribution or get exported. Some imported beef products are also brought into Canada for direct distribution and consumption.

Note: Livestock exports exist but were not displayed in this diagram.

Data sources

The data presented in the following tables come from Statistics Canada’s Linkable File Environment (LFE), the Census of Agriculture 2016, custom tabulations based on Statistics Canada programs, and published Statistics Canada tables (New Dissemination Model tables) which include survey and administrative data. The LFE links data from the Business Register (BR) to other administrative data sources, such as tax data, and is thus a rich source that provides information for different industries. The custom tabulations produced for this report are explained within the analysis accompanying the tables. Given that the methodology of the many data sources may differ, similar statistical measures in the tables may report different values. These discrepancies, as well as data limitations, will be discussed as they arise in the narrative. Below, the tables of the different aspects of the beef supply chain are organized to follow the structure in Figure 1: primary production, processing, and distribution.

The key indicators of price and quantity of products are identified at each stage of the supply chain. Due to the use of varied data sources, however, the units of measurement for the indicators can vary because consistent indicators across stages may not be available.

Inputs

Data on the inputs of beef cow supply chains including land, feed, animal husbandry, and capital and equipment used for the production and processing of cattle is scattered or in some cases incomplete at Statistics Canada.

However, Table 1 displays the operating expenses for beef ranchers and farmers from 2015 to 2018. Although this is not a perfect indicator of input costs, some information can be derived from farm operating expenses. In 2018, beef ranchers and farmers’ operating expenses totalled nearly $13.4 billion. Approximately 65% of those operating expenses were derived from livestock expenses ($8.6 billion), which included livestock purchases, feed, supplements, veterinary fees, medications and breeding fees. General expenses ($3.2 billion) such as salaries and wages, rent, insurance, utility payments, taxes and repairs and maintenance made up approximately 25% of total operating expenses. General expenses increased 6% from 2015 to 2018.



Primary production

In the beef supply chain, the primary production stage includes cow/calf operations, backgrounding and finishing and feedlots. Cattle auctions occur at various points within the primary production stage. At auctions, calves and cows from different breeds and farms are auctioned off, and can be bought from farms or ranches. Knowing the auction prices of calves and cows is important for knowing the value of the livestock at the beginning of the beef supply chain, and to better understand the price markups of beef as they progress through the supply chain. Auction data on beef cows does not exist at Statistics Canada.

Tables 2 and 3 present the key indicators of quantity and value for imported livestock in Canada respectively. Imports were determined based on Harmonized System (HS) Codes, a classification system that is used to classify traded goods for the purposes of customs. Livestock imports were captured by HS code 0102, which includes both pure-bred and non-pure-bred bovines, buffalos and cattle. This code, however, does not specify if live animals were imported for beef or dairy operations.

Table 2 presents the quantity of imported live bovine animals and cattle to Canada. These animals go through cow/calf operations, backgrounding and finishing. From 2010 to 2016, a downward trend in imported livestock can be observed as quantity decreased from nearly 56 thousand kilograms in 2010 to 32 thousand kilograms in 2016. However, the increase since 2016 has resulted in an average increase in quantity each year of 42% between 2010 and 2019, with quantities totalling 275,065 kilograms in 2019.



Table 3 displays that the value of livestock imports increased from $19 million in 2010 to $267 million in 2019, representing a 59% annual average increase. Significant increases in both the quantity and value of imports were exhibited from 2016 to 2017, and from 2018 to 2019.



Table 4 displays the mode of transportation through which livestock was imported to Canada. In 2019, 100% of all livestock imported into Canada was transported via road.



Table 5 presents the country of origin for imported livestock over the same period, illustrating that all imported livestock to Canada came from the US, along with some re-imports back into Canada between 2010 and 2019.



The following tables provide information on backgrounded and finished cattle for slaughter. Table 6 presents the number of farms reporting beef cows in the Census of Agriculture (CEAG), which collects data for all farms every five years (Statistics Canada 2016b). The number of farms reporting beef cows from 1996 to 2016 decreased across all ten provinces. By 2016, there were only half as many beef cow producing farms (53,837) as there were in 1996 (103,673) in Canada. A move away from individual smaller farms and into larger centralized locations such as in Saskatchewan (12,428) and Alberta (17,022) explains the decline in number of beef cow farms over the years.



Table 7 displays the number of beef cows reported in the CEAG. From all agricultural operations enumerated in the 2016 Census, 3,732,555 beef cows were reported nationally, with the majority coming from Alberta (1,576,354) and Saskatchewan (1,093,496). These two provinces accounted for about two thirds of beef cow herd in Canada. 



Table 8 presents the counts of cattle on beef operations from the Livestock Survey, a biannual survey that provides inventories of livestock animals on Canadian farms (Statistics Canada 2020b). The reference period for the survey estimates are January 1st and July 1st of each year. Table 8 presents a key indicator of quantity of livestock in Canada. On January 1st, 2020 a total of 9.3 million cattle were reported on beef operations and on July 1st, 2020, the same total reported was 10.4 million. The majority of reported beef cattle were on cow-calf operations where calves are born and weaned.



Table 9 shows the supply and disposition of cattle from the Livestock Survey, which collects data for two occasions, January 1st and July 1st. The supply and disposition table integrates survey and administrative data to display the flow of cattle in Canada. In 2019, Canada’s total supply of cattle was 15.4 million between January to June and 14.5 million between July to December. During the same reference period, Canada’s total disposition of cattle was 3.1 million between January to June and 3.2 million between July to December.

The data on inventories of cattle are collected at a specific point in time and cannot be aggregated annually. In 2019, the beginning inventory of cattle was 11.5 million on January 1st and 12.3 million on July 1st. The ending inventory of cattle was 12.3 million on July 1st and 11.3 million on January 1st, 2020. Since most calves are born during the January to June period, and have higher mortality rates than cattle, the number of deaths and condemnations is higher for this period than the July to December period.



Table 10 displays the Farm Product Price Index (FPPI) of cattle and calves, which represents the price farmers received for cattle and calves. The FPPI increased 72% nationally from 2007 to 2019. British Columbia displayed the largest price increase over that period (103%), while Quebec exhibited the lowest price increase (31%). The price farmers received for cattle and calves increased substantially in 2015 across all provinces.



Information on the financial structure of beef farmers is presented in Tables 11 to 14.

Table 11 presents the financial structure of beef cattle ranchers and farmers from the biennial Farm Financial Survey. Prior to 2013, farms with a gross farm revenue equal to or greater than $10,000 were included in the survey. However, from 2013 onwards the lower boundary for inclusion changed to include only farms with a gross farm revenue of $25,000 or above (Statistics Canada 2020d). This change in eligibility criteria to participate in the survey could have contributed to the decrease in number of farms surveyed in 2013 and 2015. Due to the change in the lower bound of gross farm revenue in 2013, the growth rate was computed from 2013 to 2017 in Table 11. Table shows that the number of farms surveyed for the 2013-2017 period increased by 22%. During this period beef ranchers and farmers’ net worth (assets - liabilities) increased 25%, and their net cash farm income (revenue - expenses) increased by 31%.



Tables 12 and 13 report statistics from the annual Agriculture Taxation Data Program, which provides detailed estimates of farm revenues and expenses based on unincorporated and incorporated tax filer records (Statistics Canada 2020a).

Table 12 shows the operating revenues of beef cattle ranchers and farmers. Total operating revenues decreased 5% from 2015 to 2018 while revenue derived from cattle products decreased 9%. In 2018, nearly 80% of beef cattle ranchers and farmers’ total operating revenues ($14.2 billion) came from cattle products ($11.1 billion). Other revenues ($2 billion) such as program payments, insurance proceeds, custom work and machine rentals made up 14% of beef cattle ranchers and farmers’ total operating revenues, and increased 17% from 2015 to 2018.



Table 13 displays farm net operating income (operating revenue – operating expenses) for beef cattle ranching and farming between 2015 and 2018. Farm net operating income was $889 million in 2018, a 50% decrease from 2015. Taking depreciation of property and capital into consideration, beef ranchers and farmers’ net operating income was $42 million in 2018, a 95% decrease from 2015. A possible factor contributing to a decrease of this magnitude could be attributed to record high cattle prices in 2015 caused by low supplies of cattle in Canada and high demand from developing countries coupled with a depreciating Canadian dollar relative to the US dollar, thereby resulting in high Canadian cattle and beef prices from 2014 to 2015 (Statistics Canada 2016a).



Table 14 presents the average total revenue, expenses and net revenue of beef ranchers and farmers by province using administrative T2 tax data from the Linkable File Environment (LFE). Of all active businesses in the beef ranching and farming industry (53,848), only businesses who reported positive revenue (4,903) and positive expenses (4,937) were taking into consideration. Alberta reported the highest average total revenue ($3.0 million) and expenses ($2.9 million) in 2018. British Columbia reported the largest average net revenue ($193,578), while Prince Edward Island’s average net revenue suggested that the beef ranching and farming industry was in a deficit (-$9,641). Data was not available for the Northwest Territories.



To fully understand the primary production sector of the beef supply chain, it is worthwhile to also examine employment in the industry. Tables 15 to 17 present statistics on employment in the beef and feedlots industry.

Table 15 presents the number of employees in the beef and feedlot industry. In 2018, a total of 268,779 employees reported working in agricultural industries,^Note of which approximately 5% worked in beef and feedlot industries (14,267). To contextualize this number, beef and feedlot industries (4,152) made up 10% of agricultural operations with at least one employee (39,223) in 2018.



Table 16 presents the number of jobs filled by temporary foreign workers in the cattle and ranch farming industry based on Statistics Canada survey data and administrative data. It is worth noting that this data was only available for the 4-digit NAICS codes 1121, which combines dairy and beef cattle together. In 2018, 54,734 temporary foreign workers were reported working in all agricultural industries, while 1,548 temporary foreign workers were reported in the cattle ranching farming industry, a 31% increase from 2016. Furthermore, in 2018, of the 3,846 agricultural operations with at least one temporary foreign worker reported, 501 were cattle and ranch farms.



Table 17 presents the average number of employees in the beef ranching and farming industries using the Business Register and Payroll Deduction (PD7) form that all businesses with employees are required to fill. The average was taken of active businesses with one or more employee (3,072 businesses). Newfoundland and Labrador, Alberta and British Columbia had the largest average number of employees (four), followed by Quebec and Ontario (three). It is worth noting that the sample size in the Atlantic Provinces and the Territories were smaller relative to the other provinces. It is possible that this could have skewed the data on average number of employees that is reported in the table below. Data was not available for the Northwest Territories and Yukon.



Processing

After primary production, finished cattle are slaughtered and proceed to the processing stage of the value chain where secondary processing and butchery occur.

Table 18 displays the cold dressed weight and total edible offal of cattle and calves from the Livestock Survey. The cold dressed weight is the weight of the carcass after being partially butchered (removing internal organs), and the edible offal are the internal organs or other parts of the carcass that have been butchered or skinned. Compared to 2014, the average cold dressed weight of cattle (387 kg) and calves (151 kg) increased approximately 5% in 2019. Similarly, the total edible offal weight of cattle (38,825 tonnes) increased 17% from 2014 to 2019, while offal of calves (995 tonnes) decreased 14% from 2014 to 2019.



Tables 19 and 20 present the key indicators of price and quantity respectively for slaughtered cattle.

Table 19 presents the price of cattle for slaughter from the Farm Product Price Survey which collects prices received by farmers for agricultural commodities produced and sold (Statistics Canada 2020e). The live weight price of cattle is typically presented in dollars per hundredweight ($/100lbs), however to compare with livestock statistics such as those displayed in Table 18, the price of cattle for slaughter in Table 19 is presented here in dollars per kilogram. In 2019, the price of cattle for slaughter increased 62% from 2010. The price of cattle was highest in 2015 ($32.68/kg) due to low supplies of cattle in Canada and high demand for cattle from developing countries coupled with a depreciating Canadian dollar relative to the US dollar leading to record high Canadian cattle prices in 2015 (Statistics Canada 2016a).



Table 20 shows the number of cattle and calves processed for meat production based on the Livestock Survey and administrative data. In 2018, the estimated output of farm production was 3.7 million cattle, of which approximately 3.2 million cattle were slaughtered for meat production, nearly 550,000 livestock animals were exported, while a smaller proportion were imported for slaughter (14,000). Livestock imports for slaughter increased 315% and 341% for cattle and calves respectively, from 2014 to 2018.



Distribution

Meat from the processing stage and imported processed beef products are either distributed for consumption (either via wholesalers/retailers, or food services) or exported.

There is no specific count of operators in this segment of the supply chain because there is no specialized distribution for beef. Processed meat that reaches the domestic market goes to generic food retail stores or through the food services industry (ex. restaurants).

Table 21 displays the stocks of frozen and chilled meats collected from the Quarterly Stocks of Frozen and Chilled Meat Survey (Statistics Canada 2020g). In 2019, 143,999 tonnes of beef were processed, of which 80% was boneless beef. Although bone-in beef contributed a smaller proportion of frozen and chilled beef stocks, it exhibited the largest increase from 2010 to 2019 (136%). Since 2010, the total stock of frozen and chilled beef has increased 75%, while the stock of frozen and chilled veal has decreased 39%. Fancy beef and veal are categories which includes tails, headmeat, weasand meat, gullets, neck trim and blood plasma.^Note Since 2010, the stock of fancy beef and fancy veal declined by 7% and 43% respectively.



Table 22 displays the stocks of imported beef and veal to Canada from the Quarterly Stocks of Frozen and Chilled Meat Survey. Stocks of beef and veal imports have increased from 2010 to 2019. In 2019, the majority of imports were boneless beef (43,585 tonnes), which increased 145% from 2010 to 2019. Veal imports increased 341% from 2010 to 2019, to 1,945 tonnes.



Table 23 displays the interprovincial and international trade of cattle and calves. In 2016, Saskatchewan was the largest interprovincial exporter ($1 billion), exporting approximately 70% of its livestock to Alberta, who was the largest importer of livestock ($1.1 billion) of all the provinces. Alberta was the largest international exporter of livestock ($600 million), and British Columbia imported the most ($24 million) livestock internationally, relative to the other provinces. Alberta reported the largest supply ($4.7 billion) and demand ($4.6 billion) of cattle and calves in 2016.

Table 24 highlights the interprovincial and international trade of processed fresh and frozen beef products. In 2016, Alberta was the largest interprovincial exporter ($2.4 billion), exporting slightly more beef products to Quebec (36%) than they retained within their own province (33%). As a result, Quebec was the largest interprovincial importer ($1.0 billion). Alberta also reported the largest international exports of beef ($1.6 billion), while Ontario reported the largest amount of international beef imports ($790 million). Ontario reported the largest supply of fresh and frozen beef between interprovincial and international imports ($2.6 billion) while Alberta reported the highest total demand for fresh and frozen beef ($4.8 billion) in 2016. The large amount of livestock exported out of Saskatchewan, as displayed in Table 25, can explain Saskatchewan’s low level of trade flow relative to other provinces.

 

Statistics on imports of beef products to Canada are presented in Tables 25 to 28. Tables 25 and 26 present the key indicators of quantity and value of imported beef products to Canada respectively. Table 25 presents the quantity of imported beef products. In 2019, fresh and chilled beef products were the commodities most imported (69 million kilograms) followed by frozen beef products (48 million kilograms). The stock of fresh and chilled beef imports (23%), edible offal (19%) and frozen meat (1%) all decreased from 2010 and 2019, suggesting that Canada is becoming less reliant on these imports. Imports of cured meat, however, increased 289%.



Table 26, presents the value of imported beef products to Canada, and indicates that the majority (67%) of imported beef products were fresh or chilled meat which had the highest value in 2019 ($668 million), though its value of imports only increased 17% from 2010 to 2019. Frozen beef products ($286 million) made up 29% of beef imports. Both frozen beef products and edible offal increased in value by approximately 67% from 2010 to 2019. Cured bovine imports to Canada increased in value by 247% from 2010 to 2019.



Table 27 displays the mode of transportation used for the imports of beef products into Canada. The majority of imports were by road (79%) in 2019. Imports transported via water in 2019 (18%) increased, compared to 2010 (13%).



Table 28 displays the countries from which Canada imports beef products. The United States has consistently been the top country from which Canada imports beef, although the percentage of imports has decreased from 81% to 66% between 2010 and 2019. This decrease can likely be attributed to Canada diversifying to include imports from many other countries since 2010.



Statistics on exports of beef products from Canada are presented in Tables 29 to 32. Table 29 shows the quantity of beef exports from Canada over the period between 2010 and 2019. Exports of frozen beef products (53%) and edible offal (36%) increased from 2010 to 2019, while exports of fresh and chilled beef (4%), and cured meat (23%) decreased.



Table 30 displays the value of Canadian beef exports. In 2019, the majority of the value obtained from beef exports came from fresh and chilled beef ($2.3 billion). Since 2010, the value of fresh and chilled beef (112%), frozen beef (172%) and edible offal (136%) increased significantly.



Table 31 displays the mode of transportation used to export beef products from Canada. The majority of exports were transported by road (75%), followed by water (24%) in 2019. From 2010 to 2019, road transportation decreased while transportation via water increased.



Table 32 displays the countries that receive Canadian beef exports. The majority of beef exports went to the US (72%) in 2019, which remained relatively the same since 2010.



Prices

Given that the value of a product increases as it proceeds through the stages of a supply chain, it would be ideal if the value of a product at each stage of the beef supply chain were collected by the entity involved in that stage in order to capture the price markup at different stages of the supply chain. Due to limited data available for beef products, this was not feasible for the beef supply chain. However, price indices are collected at different stages of production and distribution of a good at Statistics Canada, and can provide some information on the prices of beef products.

The following tables display both cattle and beef prices reaching record highs in 2015. This was attributed to Canadian beef cow herds contracting resulting in record low levels of supply since 1991. A similar contracting in cow herds were also experienced in the US. Due to low supply, for the first half of 2015 slaughter was down in both Canada (13.5%) and the US (7%) resulting in slaughter remaining low for the year. During the same time period, demand for beef from developing countries was increasing, while global beef production was stagnating, and competing meat markets such as the US were expanding slower than expected. Along with these supply and demand factors, the depreciating Canadian dollar relative to the US dollar also contributed to higher Canadian cattle and beef prices from March 2014 to March 2015 (Statistics Canada 2016a).

Table 33 presents the Raw Materials Price Index (RMPI) for cattle and calves. The RMPI measures the price changes for raw materials purchased for further processing by manufacturers operating in Canada (Statistics Canada 2020h). This includes all charges incurred to bring a commodity to the establishment gate. Table 33 shows that while the price of cattle and calves increased 51% from 2010 to 2019, after reaching a peak in 2015 there was a large decline up to 2019.



Table 34 presents the Industrial Product Price Index (IPPI) for beef products. The IPPI measures price changes for major commodities sold by manufacturers operating in Canada. The prices covered by the IPPI refer to what the producer receives rather than what a purchaser pays (Statistics Canada 2020f). The IPPI excludes all indirect taxes, such as sales taxes and tariffs. Fresh and frozen ground beef increased the most (93%) from 2010 to 2019. Fresh and frozen cuts of beef (41%) and fresh and frozen veal (40%) increased the same amount, while fresh and frozen carcasses and half-carcasses of beef and veal increased 31%. The notable peak in beef product prices can be seen in 2015.



Table 35 displays the Wholesale Services Price Index (WSPI) for live animal merchant wholesalers. This index decreased 50% from 2013 to 2019 (Statistics Canada 2020j). It is worth mentioning that live animal merchant wholesales (NAICS 41111) include many animals, not just cattle, thus the results cannot be considered to be directly attributable to changes in the beef supply chain.



The Retail Services Price Index (RSPI) measures the price movements of services provided by retailers, and provides information on inflation, real output and productivity of the retail sector. The RSPI for the meat markets is not displayed due to confidentiality requirements.

Table 36 presents the average retail estimates of fresh and frozen beef per kilogram from the Retail Commodity Survey (which produces sales estimates of various commodities) and administrative scanner data (Statistics Canada 2020i). In 2019, the average estimates for fresh and frozen beef were highest in Quebec ($16.83/kg) followed by Alberta ($15.87/kg). Table 36 also displays estimates for 2020 based on data collected from January to March. The 2020 trends suggest that Quebec ($17.11/kg) will continue to have the highest sales of fresh and frozen beef, followed by British Columbia ($16.59/kg).



Table 37 displays the average prices of beef products from the Consumer Price Index. Prime rib roast remained the highest priced beef product at $32.65/kg, while ground beef ($11.41/kg) had the lowest price. This table illustrates how retail prices of beef products increased from 2010 to 2015, due to the supply and demand factors mentioned above, and then declined or stabilized in the subsequent years.



Table 38 displays the Consumer Price Index of fresh and frozen beef. The CPI represents the change in prices as experienced by Canadian consumers (Statistics Canada 2020c). It is obtained by comparing over time the cost of a fixed basket of goods and services purchased by consumers. The basket contains goods and services of unchanging or equivalent quantity and quality, thus the index reflects only pure price change.

From 2002 to 2019, the price of fresh and frozen beef increased 84%, which was higher than the 50% increase seen for all food products and the 34% increase seen in the price of a general basket of goods and services. However, since 2010 the price of fresh and frozen beef specifically has only increased 57%.

The Northwest Territories reported a 111% increase in the prices of fresh and frozen beef since 2002, the highest of all the provinces and territories reported. Newfoundland reported the lowest price increase at 64% since 2002.



Conclusion

This report used Statistics Canada data to present statistics on the beef supply chain. Data was available on stages of the supply chain relating to production, processing, distribution, as well as on interprovincial and international trade.

In terms of beef production, Alberta and Saskatchewan reported the largest number of beef cows, based on the 2016 Census of Agriculture. Beef and feedlot industries made up 10% of all agricultural operations with at least one employee in 2018, and 14,267 employees reported working in beef and feedlot industries. Approximately 3% of temporary foreign workers in agricultural industries reported working in cattle and ranch farming (1,548) in 2018, and 501 agricultural operations with at least one temporary foreign worker reported some cattle and ranch farming.

With regards to financial structure, beef cattle ranchers and farmers’ net worth increased 25% from 2013 to 2017, and their net cash farm income increased by 31%. Their operating revenues derived from cattle products decreased 5% from 2015 to 2018, while their operating expenses remained relatively stable from 2015-2018. Beef cattle ranchers and farmer’s operating revenues totalled $13.3 billion in 2018, of which 65% were derived from livestock expenses. Beef cattle ranchers and farmers’ farm net operating income (operating revenue – operating expenses) decreased 50% from 2015 to 2018. Alberta reported the highest average revenue ($3.0 million) and expenses ($2.9 million) in 2018 in the beef cattle ranching and farming industry.

In the meat processing sector, in 2018, 3.2 million cattle were slaughtered and the average price of cattle for slaughter was $24.13/kg.

In terms of trade, on an annual basis, the quantity (42%) and value (59%) of livestock imports to Canada increased during the 2010-2019 period. Fresh and chilled beef was the product most imported to Canada, and exported from Canada, as well as the product whose value was the highest. From 2010 to 2019, however, stocks of fresh and chilled beef imports decreased 23%, while fresh and chilled beef exports decreased 4%. The quantity (289%) and value (247%) of cured meat imports to Canada increased substantially from 2010 to 2019.

In terms of exports from Canada, the value of fresh and chilled beef (112%), frozen beef (172%) and edible offal (136%) all increased significantly from 2010 to 2019. Road transportation was used for the majority of imports and exports of livestock and beef products. The US was Canada’s major trading partner for imports and exports.

Price indices were also included to provide information on the prices observed at different stages of the supply chain. The Raw Materials Price Index for cattle and calves increased 51% from 2010 to 2019, while the Industrial Product Price Index of fresh and frozen cut of beef increased 41% and fresh and frozen ground beef increased 93% during the same period. The Wholesale Services Price Index for live animal merchant wholesalers decreased by 50% from 2013 to 2019. The Consumer Price Index of fresh and frozen beef increased 57% from 2010 to 2019.

References

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CTV News. (2019). “China to resume importing beef and pork from Canada”. Available at: https://www.ctvnews.ca/politics/china-to-resume-importing-beef-and-pork-from-canada-1.4671186.

CTV News. (2020). “COVID-19 to have 'immediate and drastic' impact on Canadian meat supply: industry group”. Available at: https://www.ctvnews.ca/health/coronavirus/covid-19-to-have-immediate-and-drastic-impact-on-canadian-meat-supply-industry-group-1.4894557.

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