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Canada Poultry and Products Annual 2006

17 September 2006

By the USDA, Foreign Agricultural Service - This article provides the poultry industry data from the USDA FAS Poultry and Products Annual 2006 report for Canada. A link to the full report is also provided. The full report includes all the tabular data which we have ommited from this article.

Report Highlights:

This report summarizes recent developments in the Canadian broiler chicken and turkey sectors and highlights production and trade forecasts for the remainder of 2006 and for 2007. Factors that influence the Canadian market for U.S. exports of chicken and turkey are discussed.

Executive Summary

Canadian broiler chicken production is expected to register a fractional production decline during 2006 as the industry adjusts to record storage stocks. However, for 2007, total Canadian chicken output is forecast to increase about 1% above the 2006 level and reach a record 980,000 metric tons.

GOC issuances of special import permits to keep Canadian poultry processors competitive in the domestic market and active in the export market has resulted, in recent years, in total Canadian chicken imports running about one-third higher than the TRQ.

Since Canada recognized the poultry meat inspection system of Brazil in August 2002, the South American supplier has captured about 22% of total Canadian imports of chicken parts, the largest import segment for chicken, and a segment that was formerly dominated by U.S. product.

Because USDA does not permit imports of Brazilian chicken, the Canadian Food Inspection Agency has strict import control procedures to ensure that Brazilian chicken in Canada does not enter the United States.

Despite the suspension of the Doha Round world trade negotiations, Canada’s supplymanaged poultry industry remains concerned that any future trade agreement preserves Canada's ability to set production and prices and manage the total volume of imports.

The Canadian Food Inspection Agency has established an Avian Influenza Advisory Committee that includes members of industry, academia and the animal health community, to assist in the development of policies and strategies avian influenza prevention and preparedness.

Domestic consumption of turkey in Canada remains flat. Increased Canadian exports of turkey have provided the only spurt to production and have accounted for all of the growth in Canadian turkey output over the five-year period 2002-2006.

After Russia and Mexico, Canada is the third most important export market for U.S. poultry meat. In 2005, U.S. poultry meat exports to Canada reached $307 million, about 7% below the record $332 million during 2004 when U.S. poultry exports to Canada increased sharply to help offset the avian influenza-related production shortfall in British Columbia. However, for 2006, the value of U.S. poultry meat exports to Canada is on pace to set a new record.

Section I. Broiler Chicken: Production

Canadian broiler chicken production in 2006 is expected to be fractionally below (-0.7%) the record level of 977,355 metric tons produced during 2005. The situation is indicative of slightly smaller production targets by the provincial chicken boards in an effort to alleviate record high storage stocks that were 12.8% higher on July 1, 2006 than they were a year earlier. As a result, chicken output during 2006 is estimated to reach about 970,000 metric tons.

For 2007, present prospects point toward a modest increase in Canadian production to meet increased domestic and export demand. Total Canadian chicken output is forecast to increase about 1% above the 2006 and reach a record 980,000 metric tons.

Trade: Total Imports

Canada controls imports of chicken under a tariff rate quota (TRQ). The minimum access level (into Canada) under the WTO is 39,844 metric tons but Canada applies the higher access level of the NAFTA, which is equal to 7.5% of the previous year's domestic chicken production as reported by Statistics Canada. For 2006, the global chicken TRQ is 73,292 metric tons. Also, Canada regularly issues supplementary import permits when there are product shortages. Special import permits are also issued to Canadian poultry processors whose finished manufactured products are intended for re-export or compete in the Canadian marketplace with similar, imported processed products that receive zero-tariff treatment under the NAFTA. As a result of these supplementary imports, total chicken imports in recent years have been running about one-third higher than the TRQ.

Imports from the United States

Total U.S. chicken exports to Canada in 2005 declined moderately to 77,371 from the record level of 80,343 metric tons during 2004. That year, the GOC issued special supplementary import permits to importers and British Columbia processors to import additional U.S. chicken (mostly whole birds) to help alleviate the supply shortfall situation in that province due to an avian influenza outbreak. Based on performance during the first half of 2006, U.S. chicken exports to Canada are on pace to register an important increase over the 2005 level (see table, page 6).

Competition from Brazil

Canada recognized the poultry meat inspection system of Brazil in August 2002 (see CA2088), but initially very little Brazilian product was imported. However, as shown on the following table, Brazil currently accounts for about 22% of total Canadian imports of chicken parts, the largest import segment for chicken.

Control Measures on Brazilian Poultry

Since USDA does not permit imports of Brazilian chicken, the Canadian Food Inspection Agency has strict import procedures to ensure that Brazilian chicken in Canada does not enter the United States. Under CFIA regulations, poultry meat imported from Brazil may not be exported to the United States and may not be used in the manufacture of meat products exported to the United States.

Canadian poultry slaughter and processing establishments that import poultry meat from Brazil are not eligible to export poultry meat products to the United States. All poultry meat and meat products present in the non-eligible establishments must not enter Canadian establishments that have full export status for the United States. All Canadian establishments (including storages) must maintain inventory records regarding origin of all meat present on their premises and the destination of meat shipped from the premises.

Canadian registered storages that receive poultry meat from Brazil may continue to be participants in the export of poultry meat and meat products to the United States provided the poultry meat imported from Brazil is stored segregated from poultry meat and meat products for export to the United States.

Fully packaged poultry meat imported from Brazil is required to be stored separately stacked and clearly identified, with respect to it’s origin and export restrictions and must not come into contact with fully packaged poultry meat and meat products eligible to be exported to the United States. CFIA inspectors monitor the control procedures to ensure that the storage of non-eligible meat products is being done in the prescribed manner.

To read the full report, including tables, click here (PDF)

List of Articles in this series

To view our complete list of 2006 Poultry and Products Annual reports, please click here

September 2006



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