Our January issue

January 2021

2021 TOP ECONOMIC TRENDS: RED MEAT EXPORT RISK AND OPPORTUNITIES Fast-food Boom Drives Rebound in Meat Sales for American Packers BCRC: What’s Been Done and What’s Next?

TrustBix’s Beef Producer Focus Group CRSB Goes Virtual for Semi-Annual Meeting AgPal: Helping Agri-businesses Find Valuable Resources Excessive Red Tape and Unfair Tax Rules

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Fast-food Boom Drives Rebound in Meat Sales for American Packers 2021 Top Economic Trends: Red Meat Export Risk and Opportunities

CoBank: Surging Feed Prices Will Challenge Recovery

BCRC: What’s Been Done and What’s Next?

TrustBix’s Beef Producer Focus Group

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Funding to Improve Food Safety in Ontario’s Licensed Meat Plants CRSB Goes Virtual for SemiAnnual Meeting

AgPal: Helping Agribusinesses Find Valuable Resources

Global Online Food Delivery Market to Hit $151.5B in 2021

Excessive Red Tape and Unfair Tax Rules

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January 2021 Volume 21 Number 3

PUBLISHER Ray Blumenfeld ray@meatbusiness.ca MANAGING EDITOR Scott Taylor publishing@meatbusiness.ca DIGITAL MEDIA EDITOR Cam Patterson cam@meatbusiness.ca CONTRIBUTING WRITERS Martha Roberts, Andrea Brocklebank, Virginia Labbie, Isis Almeida, Michael Hirtzer, Jastra Kranjec CREATIVE DIRECTOR Patrick Cairns

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FAST-FOOD BOOM DRIVES REBOUND IN MEAT SALES FOR AMERICAN PACKERS By Isis Almeida and Michael Hirtzer, Bloomberg News American meatpackers are benefiting from one bright spot in the restaurant industry during the pandemic: fast-food sales.

With most restaurants closed or operating at reduced capacity, customers have flocked to places including McDonald’s and Burger King, where they can simply drive through to grab food. That’s helped Cargill Inc.’s protein sales to food-services business to return to near normal, while Sanderson Farms Inc. is encouraged by the chicken-sandwich rivalry among quick-service restaurants, or QSR. Americans used to spend more than half of their food budget eating out before the virus struck, locking down cities from New York to Los Angeles and shuttering restaurants. Consumer behavior shifted, and businesses adapted to more online sales and increased delivery options.

“Our food-services business is pretty close to being back to where it was,” said Jon Nash, head of North America protein for Cargill, the third-largest U.S. beef producer. “The only places where we continue to see things being impacted is more fine dining, but the QSR space has been very strong.”

The turnaround boosted the meat industry, which was initially roiled by lower sales to restaurants. Companies have also come under fire this year for the way they handled the coronavirus crisis after processing plants became hot spots.

Meatpackers faced scrutiny amid investigations and lawsuits involving pricefixing allegations, especially in the chicken industry. Same-store sales at fast-food restaurants in November rose 1.1 per cent from a year earlier after plunging more than 20 per cent in April, according to a MillerPulse index. Figures may improve more in 2021, with McDonald’s planning faux-meat burgers and a new crispy chicken sandwich early next year, competing with Chick-fil-A Inc. and Popeyes Louisiana Kitchen Inc. “We are encouraged by reports of a chicken sandwich war in 2021,” Joe Sanderson, chief executive officer of Sanderson Farms, the third-largest U.S. chicken producer, said Dec. 17 on an investor call, alluding to a major fast-food restaurant building inventory ahead of a sandwich rollout. Chicken-breast prices in November climbed to US$3.41 a pound, the highest in more than five years, according to U.S. Department of Agriculture data.

The rebound in fast-food demand has focused on lunch and dinner. Breakfast sales are still suffering because people aren’t traveling to work or taking children to school in the same way as they did prior to the pandemic, Cargill’s Nash said.

Even with a second wave of the coronavirus, Nash said he was upbeat. “I’m pretty optimistic,” he said. “We are going to continue to see pretty robust demand.”

While U.S. drive-thru shops performed strongly in the virus economy, a bigger recovery in the food-services sector will be tied to a vaccine and the economy returning to normal, Nash and Sanderson said.

“I don’t think any of that’s going to happen until the vaccine is widely distributed, and people start going out to eat again,” Sanderson said. “The vaccine is an important determinant,” Nash said. “As that goes, we will see people willing to travel more, eat out more and let loose more and have some fun. It’s been a tough time for many many people around the world.”

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2021 TOP ECONOMIC TRENDS: RED MEAT EXPORT RISK AND OPPORTUNITIES

By Martha Roberts, Economics Editor, Farm Credit Canada COVID-19’s role in changing the world’s supply chains in 2020 can’t be overstated. Testing supply chains everywhere, COVID-19 exposures slowed or shuttered global manufacturing. Consumers consumed differently.

The virus and its consequences, like food service shutdowns, turned shoppers into online aficionados as hobbies, home improvements, in-home dining and grocery hoarding assumed new importance.

At the same time, COVID fed into a growing swell of “buying local” in 2020, a shift prompted earlier by consumers’ interest in the sources of food supplies.

Canadian small businesses have taken the brunt of the economic hit during COVID’s slowdowns and lockdowns, and everywhere, the plea to keep hometown businesses alive has helped support this revolution towards local food.

But other better-known forces also disrupted them.

Geopolitical tensions shifted trade balances and important trade relationships while climate change continued to wreak havoc in global agricultural production. The Black Sea region’s extreme dryness and major storms in the U.S. counted among 2020’s examples, reworking the story from Europe and Australia in 2019.

Therefore, Canadian producers have two opportunities: meeting the needs of domestic consumers who want to source their food locally and, as one of the largest food exporters in the world, meeting the needs of major food importers.

The incremental impacts of climate change over the short term are hard to decipher and harder to forecast for a single year. With that caveat in mind, we believe these three forces will continue to dominate headlines this year as they further shift the world’s supply chains.

How they’ll alter risks and opportunities for Canadian production and exports of red meat in 2021 is the subject of this post.

CONSUMPTION AND PRODUCTION – OR HOW EXPORTS ARE MADE

CANADA WILL SEE MORE DOMESTIC AND GLOBAL RED MEAT BUYERS IN 2021 Many countries can’t produce enough to meet their domestic consumption needs. Japan, for instance, has a large population and tiny land resources. China has much more land but a massive population. As a net exporter of food, Canada produces more beef and pork than we eat. That means opportunities for Canada as a trusted, reliable supplier of high-quality red meat in 2021.

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The bubbles in the figures below highlight some of the best global opportunities for Canada. Even as different levels of global supply chains look to source more meat locally, both wealthy and developing countries still rely on imports. The location of each bubble in the charts is based on their supply and demand factors in 2019.

Because those factors will change in 2021, the bubbles’ locations will also change.

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THE BEST DEFEN A STRONG OFFE

China assumed an unusual dominance in 2019 as the world’s largest beef importer. Unlike the U.S., which also imports beef, China produces little. Their consumption needs must almost exclusively be found in imports.

Should GDP growth there be enough to spur red meat PROMOTING THE HEALTH BENEFITS consumption, Canada has a real opportunity to supply

By Ronnie P. Cons the world’s largest market.

WILL CHINA REDUCE ITS PORK IMPORTS IN 2021?

In 2019, China was a net importer of pork, although not by much (Figure 1). The world’s largest consumer of pork, their own production has usually been sufficient to meet most of their consumption needs. But African Swine Fever, responsible for millions of pigs culled, has boosted their pork imports since 2018. In 2020, they were on track to rebuild their hog/pig herd to pre-ASF levels. A resurgence of COVID and/or ASF that disrupts manufacturing has the greatest potential to hamper those efforts. Should China’s rebuilding efforts succeed however, its bubble will shift downward in the chart, weakening Canada’s opportunity this year.

The ability of the global economy to rebound in 2021 can shift the location of these bubbles. Higher income countries aren’t likely to see consumption shift lower, as food demand in each is quite inelastic relative to income. In lower-wealth countries, it’s different.

COVID’s bite out of their GDP will drive reduced consumption of the more expensive red meats. GDP growth would expand the meat demand of these net importing countries.

WHILE THE E.U. AND U.S. MEET THEIR OWN NEEDS, CHINA’S DEMAND FOR BEEF GROWS

Red meat is often wrongly portrayed as being unhealthy.

Canadaincurrently exports just under half of our beef some the media as unhealthy or not environmentally fr production, and that’s unlikely to change much in 2021. But our other own ability to deliberately shift the as liver, 62 Vegan, fish and non-meat diets have been proposed location of others’ bubbles this year will depend on spinach healthier alternatives. The result of this onslaught of negative the effects of North American climate change and meat messages has influenced many families to cut back on Iron fou their meateffects and poultry purchases.

Perceptions may reality butis found in COVID's on our manufacturing.

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Dr. Cha for Canadian producers, but the most difficult aspect This provides an opportunity for retail meat departments ofimplement climate change is that it’s almost impossible to know Californ to an instore ‘Healthy Meat Facts’ nutritional where and appear globally.

Canada’s beef and Zinc is campaign to when set theit’ll record straight and convince their customers that meat areprices actually hog production mayand seepoultry higher forgood feedfor in one’s 2021. preserv health and that they should increase rather than decrease their purchases of it. The campaign outlined below can have WHY IT MATTERS a direct impact on sales: Start by supply displaying instore promoting theCanadian nutritional Global chains areposters still signaling that value of meat. They should be innovative, eye catching and exports are important. High-income economies (e.g., be designed to specifically contradict any meat myths. The Japan, Korea, theallU.S. and the based E.U.) illustrate the comments should be literature quoting research opportunities for wealth to drive imports of Canadian papers or MDs for maximum effect. Various posters should be made -Still, eachChina, with a given brief but message exports. itspowerful size, is just as — covering if not one theme. more — important.

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Foodservice equal (the ironin content) a steak,”a says Golden, may reopen 2021, in boosting largeChristopher component an ecologist and epidemiologist at Harvard University in of demand. Plus, the evidence of Canadians’ high Cambridge, Massachusetts. (As quoted by nature.com in the savings coupled low interest rates will also drive article ‘Brain food-with clever eating’.) consumption higher – a much needed corrective to For a woman to receive her recommended daily intake of 18 2020’s lows. mg of iron, she would need just 300 grams of cooked bovine For more information, visit https://www.fcc-fac.ca/en.html

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COBANK: SURGING FEED PRICES WILL CHALLENGE RECOVERY Livestock producers will face more feed cost inflation next year than they have in a decade, challenging their ability to recover from a difficult, volatile 2020 The U.S. animal protein sector is expected to face a 12% increase in feed costs in 2021, which will mark the highest year-over-year inflation since 2011. With corn futures above $4 per bushel and soybean meal futures around $350 per ton, cattle feeders, hog producers and chicken producers will pay higher prices for feed than they have in many years, according to a new report from CoBank’s Knowledge Exchange division.

The higher feed costs come at a challenging time, as meat and poultry industry margins have been pressured by weak prices in 2020 due to COVID-19.

Average producer margins for cattle, hogs and broilers fell into negative territory this year after the pandemic disrupted foodservice demand and drove widespread meat plant slowdowns and shutdowns.

“Most producers lost money during the year, but that’s been in the midst of some of the most extreme volatility in global food demand anyone has ever seen,” said Will Sawyer, lead animal protein economist with CoBank. “Industry margins are far better today than they were in the spring, but there will be tighter windows of opportunity for the livestock and poultry sectors to profit in 2021.”

The shortage of animal protein in China has drawn massive trade flows towards the world’s most populous country. Since China lost more than half of its hog herd beginning in late 2018, it has been the largest importer globally of beef and pork, and nearly surpassed Japan in poultry imports. While China’s protein imports are expected to decline a modest 3% in 2021, CoBank economists anticipate those imports will fall more sharply in the years to follow.

For most of the last decade, feed costs have generally been a tailwind for U.S. meat and poultry producers and have been lower than the year before for six of the last eight years. In 2021, U.S. hog producers are expected to face the highest level of feed cost inflation at 14%, closely followed by cattle feeders at 13%, and chicken producers at 11%. The impact of feed costs varies by species for several reasons, such as life cycle, feed ration, and components of other feed costs.

While feed costs will be more of a burden for the animal protein industry than in previous years, meat and poultry supply growth is expected to slow in 2021.

USDA forecasts 0.8% overall growth for U.S. beef, pork, and chicken production in the coming year, the slowest rate of supply growth since 2014. That leaves reason for some level of optimism that higher feed costs can be offset by higher prices.

Much of the increase in feed prices is being driven by Chinese demand for grain as it rebuilds its hog herd and overall animal protein supply after African Swine Fever (ASF) ravaged its herd the last couple of years. The USDA forecasts China’s corn imports to more than triple in the 2020-21 crop year, with much of that increase coming from the U.S. 8 8

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“While animal protein and poultry producers face a higher cost structure in 2021, margin opportunity will increasingly come from revenue rather than cost,” said Sawyer. “And fortunately, there are positive signs that producers and processors may benefit from higher beef, pork, and poultry prices to cushion higher feed costs.”

Sawyer points to the emergence of COVID-19 vaccines as a positive first step towards the eventual normalization of food and animal protein consumption patterns, including the return of foodservice industry demand. Additionally, changes by major meat and poultry processors greatly reduce the probability of a repeat experience seen in April and May 2020.

CoBank estimates U.S. meat and poultry companies have invested more than $2.5 billion this year in direct COVID-19 expenses to ensure safe working conditions and reduced risk of plant shutdowns. With plants operating at a more normal level, absenteeism levels improving, and far fewer workers falling ill, the financial impact of COVID-19 looks to be far less in the coming year than what the industry has endured in 2020.

Read the full report, Surging Feed Prices to Test U.S. Animal Protein’s Recovery

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CoBank is a $148 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

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BCRC: WHAT’S BEEN DONE AND WHAT’S NEXT?

By Andrea Brocklebank, Executive Director, BCRC

The Beef Cattle Research Council (BCRC) is Canada’s industry-led funding agency for beef, cattle and forage research. Its mandate is to determine research and development priorities for the Canadian beef cattle industry and to administer the Canadian Beef CattleRC: The Beef Cattle Research Council (BCRC) is Canada’s industry-led funding agency for beef, cattle and forage research. Its mandate is to determine research and development priorities for the Canadian beef cattle industry and to administer the Canadian Beef Cattle Check-Off funds allocated to research. The BCRC is led by a 14-member Council, comprised of 13 producers and one member at large, who proportionally represent each province’s research allocation of the Canadian Beef Cattle Check-Off. The BCRC is completing its third year of a 10 year plan presented with the increase in Canadian Beef Cattle Check-Off in 2018/19. The allocation of checkoff funding to beef research increased to be in line with the National Strategy recommendations – acknowledging historic under funding of research and the need to address many significant priorities.

BCRC continues to operate within a 10-year plan in an effort to manage multi-year research funding contracts (3 to 10 years in length). This plan is built on the assumption that provincial allocations of the national check-off to research will remain unchanged moving forward.

IMPACTS OF COVID-19 ON BCRC Since March 2020, the BCRC has been working closely with industry and government to assess the impacts of the COVID-19 pandemic on research at facilities across the country. The impacts vary greatly across the provinces and depend on factors including project requirements, as well as local pandemic situations.

Most of the ongoing research projects continued with minimal interruption. Some of the projects which were scheduled to start as early as April 2020 were delayed, however all projects are scheduled to continue. The second wave of the pandemic during the fall could result in further delays although the overall impact is undetermined at time of writing. BCRC continues to work with its funding partners, including AAFC to evaluate if there will be any program and/or budget implications for 2020/21 or 2021/22, but to date the impact has been minimal on the research program.

Specific to the pandemic, BCRC funded COVID-19 related research initiatives including investigating technology to support the remote delivery of inspection services, research to determine the risk of COVID-19 infection due to changing airflows in processing facilities as COVID-19 physical barriers are put in place, and economic analysis to support the development of eastern cattle price insurance indices. BCRC extension programming has continued to operate without interruption.

Overall, the impact of COVID-19 on the BCRC budget and operations has been manageable, given the flexibility in allocating industry funding across years, the existing online platforms for resource and program management and the ability of BCRC staff to work remotely as required. Larger than expected funding deferrals did occur in 2019/20 due to delayed project start-ups. Most of these projects are set to start up spring of 2021.

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BEEF SCIENCE CLUSTER III IN YEAR THREE OF FIVE

NATIONAL BEEF STRATEGY RENEWED The BCRC is a key partner in renewing and achieving the goals of Canada’s five-year National Beef Strategy.

Research and/or technology transfer outcomes are relevant under each of the four pillars of the 2020-2024 Strategy; productivity, competitiveness, beef demand, and connectivity.

Building on the five-year goals identified in the National Beef Strategy, industry identified a suite of ambitious ten-year goals to address continually improving practices, reducing carbon footprint and enhancing natural environments. The ten-year goals address animal health and welfare, greenhouse gas and carbon sequestration, land use and biodiversity, water, beef quality and food safety, human health and safety, and technology. These goals will direct key BCRC programming and priorities through the next 5-year Research & Extension Strategy, which will be published in June 2021. Visit beefstrategy.com for more information on the National Beef Strategy.

The Science Clusters are a partnership with Agriculture and Agri-Food Canada (AAFC) that combines their strengths with the BCRC’s to make joint-investments in a variety of research programs with the greatest potential to advance the industry.

Projects funded under the current Beef Science Cluster III under the Canadian Agricultural Partnership (CAP) run from April 1, 2018 to March 31, 2023. The third Cluster is a $21.7 million program, with AAFC contributing $14.1 million and BCRC and industry partners contributing a total of $7.6 million over the five years.

A summary of each project is available on BeefResearch.ca.

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PRIORITY RESEARCH PROJECTS UNDERWAY In addition to the projects within the third Science Cluster, BCRC funds research projects aimed at achieving specific goals of high priority to the beef industry. During 2020, 17 research projects funded by BCRC were initiated, and are scheduled to be complete in two to four years. A study is also underway to estimate the economic impact of the Canadian cattle industry.

A summary of each project is available on BeefResearch.ca.

PROOF OF CONCEPT INFORMS RESEARCH INVESTMENT BCRC continues to allocate funding to short-term (six months to one year) proof of concept based (POC) research to help inform whether a concept is worth pursuing as a larger, more defined research investment in that area. Three POC projects are now complete.

One explored whether using “good” bacteria could be used to prevent spoilage in meat, while another studied whether prebiotics and probiotics can help avoid respiratory disease and antimicrobial treatment.

The third tested whether seeding high legume forages between the rows of corn plants would reduce the need for fertilizer and supplementation for cows grazing corn. Researchers were faced with a drought and yields fell short but it was shown that intercropping legumes and corn is possible. The BCRC has committed funding to a second project to test different agronomic practices (e.g. wider row spacing) and evaluate animal performance when grazing corn/legume pastures. In 2020, four additional POC projects were initiated.

KNOWLEDGE AND TECHNOLOGY TRANSFER (KTT) The KTT project funded under the Cluster program focusses on enhancing technology transfer in the Canadian beef industry through various tools including: articles and regular social media activity; fact sheets on various research priority areas; interactive decision-making tools; videos; articles for Canadian Cattlemen’s the beef magazine; webinars; blog posts; infographics and radio clips.

In addition to the KTT project funded under the Cluster, BCRC funds technology transfer and production economics initiatives managed by external groups including researchers as well as provincial and other beef organizations. One example is the Forage U-Pick tool.

While it is difficult to measure or quantify the adoption of innovative knowledge, especially in the short term, BCRC’s technology transfer efforts appear to be successful due to consistently positive feedback from producers and other stakeholders, increasing website traffic, increasing subscribers and followers, and increasing levels of redistribution of BCRC resources by other publications and organizations. .

Visit BeefResearch.ca to access or download the BCRC resources

BEEF MENTORSHIP PROGRAM ENGAGES APPLIED RESEARCHERS BCRC supports a Beef Researcher Mentorship Program to facilitate greater engagement of upcoming and new applied researchers with Canada’s beef industry.

The 2020/21 mentees, mentored by beef producers and other industry experts, include Dr. Alexander Koiter, Dr. Christine Liu, Dr. Jonathan Bennett, Dr. Marcos Cordeiro, and Dr. Monika Gorzelak.

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TRUSTBIX’S BEEF PRODUCER FOCUS GROUP: GATHERING INSIGHTS FOR SUCCESSFUL 2021 PLANNING TrustBIX and Viresco Solutions recently co-hosted their first Beef Producer Focus Group. The Focus Group aimed to create strategies and actions to address the industry’s increasing demand for farm-level sustainability insights, existing initiatives, and ideas on how to bring more value for producers participating in these programs.

PLANS AND EXPECTATIONS The participants included Alberta cow-calf and feedlot producers. They took part in recent sustainability initiatives, including a survey and a farm-level assessment using the Cool Farm Tool (CFT) sustainability calculator to quantify their operations greenhouse gas emissions and water and energy use.

THE DESIRED OUTCOMES FROM THIS FOCUS GROUP INCLUDED: • Gathering insights about what value producers see in tracking sustainability on their operation.

• Confirming or refuting general perceptions (i.e., are producers looking for more guidance related to quantifying sustainability on their farms).

• Understanding what would motivate a producer to do a Cool Farm Tool assessment on a regular (annual) basis, and whether they would apply the results from the assessments to improve the sustainability of their operation.

In addition, TrustBIX was looking to future Strategic Sourcing Programs development and new ways to bring value to their BIX user-base continually.

HOW IT WENT The Focus Group took place on the tail-end of an 18-month project undertaken by Viresco Solutions and Alberta Beef Producers (ABP) that involved modifying 14 14

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the Cool Farm Alliance’s widely adopted global sustainability calculator, the Cool Farm Tool, for the North American environment. The adaptations required covered language modifications, versioning updates, methodology changes, and testing.

Alberta Beef Producers hired a Lakeland College student, Mikayla Flint, to conduct Alpha testing of the modified CFT’s beef module through farmlevel sustainability assessments with Alberta beef producers who were willing to volunteer their time and production data (secured and anonymized). In return, they got a sustainability assessment of their farm that includes emissions results, total weight added, daily live weight gain, and emissions per pound of live weight added (in a given period, typically, a year). In addition, all participants will be shown how their operation benchmarked in comparison to other participating operations.

The two-hour Focus Group opened with identifying the market forces that have stimulated demand for using sustainability calculators as tools for quantifying farm-level sustainability metrics. These market forces include large agri-food brands and retailers using the calculators to report and verify sustainability claims and demonstrate commitment and progress towards International Sustainability Targets. Reasons for agri-food brands and retailers to pursue net-zero emissions include pressure from investors, media, international greenhouse gas commitments, consumer demand, and corporate social responsibility.

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The format for the remainder of the two hours was an open-floor discussion based on the results of a pre-focus group questionnaire centred around the participants’ experiences with the CFT assessment, existing beef marketing programs, and input relating to how the industry can better align all stakeholder interests while increasing the value of verified beef attributes.

Moving into 2021, TrustBIX and Viresco will be working with the Cool Farm Alliance to complete the CFT’s beef module modifications for the North American environment, including additional Beta tests with Canadian beef producers. TrustBIX will be integrating with the Cool Farm Tool and updating their BIX user dashboards to reflect producer CFT assessment data and benchmarking capabilities.

CLOSING THE EVENT

For more information, visit https://blog.trustbix.com/

The last few minutes of the Focus Group were dedicated to TrustBIX demonstrating a high-fidelity mock-up of a future BIX producer dashboard that is integrated with the CFT. This dashboard also has benchmarking capabilities based on BIX programs and sustainability and production data.

SOME OF THE KEY TAKEAWAYS FROM THE FOCUS GROUP ARE THE FOLLOWING: • The CFT (and other sustainability calculators) provide producers with an opportunity to demonstrate farm-level production impacts and a commitment to continuous improvement.

• Producers want the ability to benchmark the sustainability of their operations, animal performance, and profitability (score in comparison to others).

• Tools (such as the CFT) that allow better transparency into beef production provide the ability to demonstrate the positive contribution that beef productions have on climate change issues.

• Messaging on how GHG’s are quantified is extremely important (i.e., Why forage decomposing on the ground is not the same as a cow digesting the forage).

• The carbon dioxide emissions reductions have little to no value for the producer, but lots of value for large Agri-Food retailers. If the economy is changing to establish a value for that carbon, it is valuable for the producer to be conscious of the steps taken to reduce emissions.

• There needs to be a direct value or direct incentive attached to it (new assessments), or producers do not have the time or resources to dedicate towards additional reporting / administrative (sustainability) activities.

• Science-backed tools to show how numbers (emissions) are being quantified are needed to create valid arguments for the decrease in taxation (carbon credits, the threat of global meat taxes). The more tools we have to tangibly demonstrate (beef production’s) real impact, the better.

• There needs to be a focus on net carbon emissions (farm-level carbon sequestration activities considered). meatbusinesspro.com

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FUNDING TO IMPROVE FOOD SAFETY IN ONTARIO’S LICENSED MEAT PLANTS Investment will protect and enhance animal welfare, biosecurity and food supply chain The governments of Canada and Ontario are investing up to $1.8 million to improve food safety, animal welfare and biosecurity at provincial abattoirs. Nearly 50 projects are being supported to help modernize meat plants and ensure they continue to produce highquality, Ontario meat products.

“These investments help strengthen our crucial agrifood supply chain and its ability to continue to bring safe, nutritious food items to the tables of Ontario families. We’re committed to working with our meat processors and the entire agri-food sector to help the sector meet the market and business challenges they face”, stated Ernie Hardeman, Ontario Minister of Agriculture, Food and Rural Affairs

Marie-Claude Bibeau, federal Minister of Agriculture and Agri-Food said, “Workers in our meat plants, and throughout the food sector, have stepped up to the many challenges they have faced during this pandemic.

Our Government is making the investments to support and protect them. Through this funding, we are helping Ontario meat businesses implement the best public health guidance, and retrofitting their operations for safety. We are deeply grateful for the work these men and women are doing to provide high-quality food for Canadians.”

This targeted effort builds on other actions by the governments to support these businesses and the capacity of the agri-food supply chain, particularly during challenges faced because of COVID-19.

The projects being funded in this intake include: • Enhancements to ventilation, refrigeration and process controls; ADDITIONAL INVESTMENTS INCLUDE

• Replacing interior surfaces with non-porous materials; • Upgrades to equipment and structures to enhance on-site animal handling and housing.

This investment under the Canadian Agricultural Partnership (the Partnership) will support local jobs, improve competitiveness, help protect Ontario’s food supply chain and uphold the province’s high safety standards for locally produced foods.

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• Committing $25.5 million to help minimize COVID19 exposure risks in the workplace and support the province's food supply chain through the Agri-food Prevention and Control Innovation Program.

• Helping agri-food sectors cover the incremental costs associated with the mandatory 14-day isolation period through $50 million in federal funding for the Mandatory Isolation Support Program for Temporary Foreign Workers (TFW).

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• Investing up to $77.5 million through the federal Emergency Processing Fund to help companies implement changes to safeguard the health and safety of workers due to the impacts of COVID-19.

• Increasing funding for the Ontario Risk Management Program by $50 million starting in 2020 to help farmers enrolled in the program deal with the severe market challenges resulting from COVID-19.

QUICK FACTS • More information about this targeted intake can be found online or by calling 1-877-424-1300.

• The Partnership is a five-year, $3 billion investment which includes $1 billion for federal activities and programs, and $2 billion in cost-shared programs delivered by provinces and territories on a 60-40 basis.

NEW SURREY SLAUGHTERHOUSE ‘WOULD OPEN DOOR’ TO NEW BEEF MARKETS

• Increasing the amounts farmers can receive in AgriStability interim payments to 75 per cent of their estimated final payment to help with cash flow.

• The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) delivers cost-share funding under the Partnership to food processors and other businesses (animal health, commercialization and primary agrifood businesses).

• Building a Canada-Ontario AgriRecovery program for hog and cattle farmers to help cover increased costs of feeding market-ready animals due to COVID-19 related Proposed 30,000-square-foot beef abattoir in Cloverdale would be B.C.’s largest such facility processing delays.

• There are 115 provincially licensed abattoirs in

By Amy Reid, Peace Arch News Ontario.

• Enhancing the AgriInsurance coverage include so as to not emit odours. And while there is an operational A federally licensed beef processingto facility is in the works abattoir on the property now, it’s can in Surrey, labour shortages due BC. to COVID-19 during the 2020 •6,000-square-foot The Ontario agri-food sector supports more than only process a limited number of cattle.

“There’s a new building coming forward, a new abattoir, I growing season.

837,000 jobs in Ontario and contributes more than Chris Les is general manager of Meadow Valley Meats, think that’s the French pronunciation of slaughterhouse,” $47.5 billion each toMeadow the province’s the company behind theyear project.

Valley Meatseconomy. is said Councillor Mike Starchuk. “So Surrey will have a seeking a Canadian Food Inspection Agency license for facility with a better so peopleon will have • Launching annewer online toolkit withcapacity information the proposed abattoir, to become a federally registered the ability to not have to ship an animal to Alberta to have prevention, accommodations, wages, social, health meat establishment and expand the operation. This would it processed. The applications have gone through the and wellness assessments, andSustainability social supports are allow the meat products to be transported beyond B.C.’s Agricultural and Food Advisory that Committee.” boundaries. available to farmers and their workers.

The facility is proposed on a 25-acre property within the Agricultural Land Reserve at 5175 184th St. The planned 30,000-square foot abattoir in Cloverdale would process up 2018, both the federal and provincial to 100 head of cattle per day.

Since June governments have committed cost-share support to According to a city report, that would make it larger than approximately any 4,200 theBut Partnership otherprojects processingthrough facility in B.C.. it would still be by industry standards, compared tobusinesses the largest meat to help eligiblesmall Ontario farmers, processors, processing plants in Alberta that process 3,000 heads of and sector organizations cattle per day. innovate and grow.

The proposed facility would be fully enclosed and designed

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“Our focus is on trying to bring a more efficient, sustainable local product to the market, realizing we can do that now in a very limited sense,” said Les. “I caution people when talking to them and they say, ‘What a big plant, that’s going to go allow you to go mainstream.’ Well, yes, if you look in the context of B.C., but this is still a very niche plant and we’ll serve a niche industry for producers and for the market. It’s certainly not going to be a monstrosity of a plant but it’ll be a big upgrade from the site currently.”

Continued on page 32

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TUESDAY APRIL 20, 2021 CRSB GOES VIRTUAL FOR SEMI-ANNUAL MEETING Save the date for the Canadian Roundtable for Sustainable Beef’s (CRSB) Semi-Annual Meeting.

Typically, the CRSB gathers twice a year for committee and Council meetings and for great discussion and fellowship to help advance their sustainability work in Canada.

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With continued uncertainty due to the COVID-19 pandemic and travel restrictions, the CRSB has made the difficult decision to hold this event virtually.

Details to come soon. Stay tuned to their website and social channels.

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https://www.cfib.ca 100TH ISSUE | March/April 20192020 CANADIAN MEAT BUSINESS 1919 November

AGPAL: HELPING AGRI-BUSINESSES FIND VALUABLE RESOURCES AgPal is a web-based discovery tool developed

by Agriculture and Agri-Food Canada (AAFC) to help farmers and others in the agriculture and agri-business sector find the federal, provincial, and territorial agricultural information that specifically applies to them.

Canadian farmers and agri-businesses told us about the challenges they face when looking for information about the various types of assistance, market intelligence and research offered by the different levels of government for the agriculture sector.

AgPal was designed to put all of that information at your fingertips; we want to become the one-stop shop for Canadian farmers and agri-businesses looking for information about agricultural resources, programs, services, market intelligence and research.

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PARTNERS AgPal includes information gathered from the following sources: • • • • • • • • • • • • • •

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Agriculture and Agri-Food Canada Alberta British Columbia Manitoba New Brunswick Newfoundland & Labrador Northwest Territories Nova Scotia Nunavut Ontario Prince Edward Island Quebec Saskatchewan Yukon

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OTHER GOVERNMENT ORGANIZATIONS • •

DF: I don’t think being on the island has really impacted us negatively one wayCanada or the other.

We’ve traveled a lot, Atlantic Opportunities met a lot of other farmers and livestock Agency (ACOA) producers in other parts of Canada, and Canada Economic Development we all seem to have the same issues for Quebec Regions and same concerns.

• Canada Revenue Agency CMB: I understand that your farm • Canadian Agricultural Human was the first in Atlantic Canada to be Resources Council involved in the TESA program.

• Canadian Dairy Commission DF: Yes, I think we were the first farm • Canadian Farm Learning Centre east of Ontario as far as I understand.

• Canadian Food Inspection Agency I’m not sure why the eastern (Foodassociations Labelling) wouldn’t have previously • Canadian Northern Economic nominated anybody because there are Development Agency many farms here on PEI doing every bit as much as weOntario are as to attain a • Community Futures high level of sustainability.

• Export Development CanadaAnyway, wereCanada very surprised when the PEI • Farmwe Credit Cattleman’s Association nominated our • Farm Management Canada farm.

• Federal Economic Development Agency CMB: And then you were attending the or Southern Ontario Canadian Beef conference in Calgary Federal Economic Development for and you won.

Northern Ontario DF: Yeah! That was a very nice moment • Global Affairs Canada for us. But I don’t like to use the • Greener Pastures Ranching Ltd. Schools word win actually. However, being • Health Canada (Pest Management recognized for our commitment was Regulatory Agency programs) a real honour.

If you want to know • Indigenous Services the truth, it was a Canada pretty humbling • Innovation, Science andtoEconomic experience.

As I said CBC when they phoned meCanada after the conference, I was Development just floored, really couldn’t believe it.

• National Research Council • Natural Science and CMB: So now thatEngineering you have been recognized, doCanada you think that will Research Council draw more attentionRidgetown and garner more • University of Guelph, Campus nominations out of Atlantic Canada • Western Economic Diversification Canada going forward?

DF: Absolutely. We’ve a lot PARTICIPATING INgotten AGPAL of good press highlighting the island cattle industry.

I’m positive you’ll see If your organization provides services to more farms in our neck of the woods agricultural clients in Canada, we would nominated next year. And I have to give like to talk to you about including your the Canadian Cattleman’s Association information in AgPal. We offeraafarm variety recognition for choosing from of participation options for governments, Prince Edward Island. We are small associations, educational institutions, players in the national beef industry and I think it was a real credit to their non-profit and community-based organization to recognize us. They organizations. treated all the nominees royally and it To learn more, was a visit agpal-agriguichet@canada.ca real class act. It was a wonderful experience.

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GLOBAL ONLINE FOOD DELIVERY MARKET TO

By Jastra Kranjec, StockApps HIT $151.5B IN 2021 The COVID-19 lockdown shut down restaurants and dining rooms across the world, causing huge revenue losses for the businesses in this market. As the pandemic persists, many of them turned to food delivery services as the only way to keep their business afloat.

According to data presented by Stock Apps, the global online food delivery market is expected to hit $151.5B in revenue and 1.6B users in 2021, a 10% jump yearover-year.

In 2017, the revenue in the online food delivery segment amounted to $76.2B, revealed the Statista survey. By the end of 2019, this figure rose to $107.4B, a 41% jump in two years.

However, the COVID-19 outbreak caused a surge in the number of online food orders, as people turned to food delivery services in limited or no-dining options.

Statistics show that the global online food delivery market’s revenue jumped by 27% year-over-year, reaching $136.4B in 2020. The increasing trend is set to continue in the following years, with the figure rising to $182.3B by 2024.

Statista data revealed the platform-to-consumer delivery revenues jumped by 32% YoY to $70.7B in 2020. In the next three years, this figure is forecast to touch almost $97B.

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Many restaurants also added delivery during the pandemic, and plan to continue investing in the service.

In 2019, revenues of the global restaurant-to-consumer delivery segment amounted to $53.6B. This figure jumped by 22.5% to $65.7B in 2020. The increasing trend is set to continue in the following years, with revenues rising to $85.5B by 2024.

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THE NUMBER OF USERS JUMPED

BY ALMOST 25% IN 2020 Besides a substantial revenue increase, the COVID-19 also triggered a significant jump in the number of people using online food delivery services. In 2019, the number of users amounted to 1.17B. Statistics show this figure jumped by 25% YoY, reaching 1.46B in 2020.

In the next three years, the number of people using online food delivery services is set to reach almost two billion globally.

Analyzed by geography, China represents the world’s largest online food delivery market with $51.5B in revenue in 2020, a 28% jump amid the COVID-19 outbreak. Statistics show the Chinese market’s revenues are expected to rise to almost $57B in 2021.

Statistics show the number of users in the platform-toconsumer segment surged by 30% amid the coronavirus outbreak, rising from 539 million in 2019 to 704.7 million in 2020. In 2021, this figure is expected to increase to 791 million.

The restaurant-to-consumer segment hit 760 million users in 2020, a 20% increase year-over-year. Statista data indicate the number of people ordering food from restaurants online is expected to reach over 821 million in 2021.

The United States ranked as the second-largest market with $28.4B in revenue in 2021, almost a 30% increase in two years. The Indian online food delivery market, as the third-largest globally, is set to reach $11.6B value this year. The United Kingdom and Brazil follow with $6.5B and $3.8B, respectively.

Statistics show the combined revenues of the five biggest online food delivery markets are expected to hit $107.3B in 2021, a 40% increase in two years.

For more information, visit stockapps.com

ABOUT THE AUTHOR Jastra Kranjec is an editor, writer, and PR specialist with years of experience in the news, research, and report writing. Over the years, she has worked in different fields of journalism and public relations, including politics, economy, and financial markets.

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EXCESSIVE RED TAPE AND UNFAIR TAX RULES HOLDING BACK TRANSITION OF SMALL BUSINESSES

By Virginia Labbie AND FAMILY FARMS We all know a healthy and vibrant agriculture sector is key to Canada’s future success. We all certainly know that the ability to grow high quality food is imperative to our society. The pandemic shone a light on our food system and while there have been many challenges, farmers and the food supply chain persevered through much uncertainty and difficulties.

Given the agriculture sector is a key component to Canada’s economic recovery, we need to start thinking about this sector from a long-term perspective. How do we encourage the next generation of farmers or small business owners to take over the family business? The question isn’t a new one. There has been a push for many years to get farmers and small businesses to think about succession.

However, we must start removing the hurdles facing farmers as they prepare to transfer the business to the next generation. There are many issues that are holding that next generation back such as excessive red tape and the unfair tax system.

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As I wrote in the last column, the burden of overregulation and excessive red tape needs to be a priority and a key area for reduction by all levels of government.

What should be really concerning to policy makers is some new preliminary survey data on red tape from the Canadian Federation of Independent Business (CFIB). Given the burden of regulation, two-thirds of agri-business owners (66%) said they would not advise their children to start a business. This should be a wake-up call to governments of all political stripes. We are making it so difficult for business owners to thrive that many may not even encourage their children to take over the farm or family business. And while some governments are doing a better job than others in reducing unnecessary red tape, there is still a lot of work to be done so farmers can continue to provide safe, high quality food for Canadians.

The other area that needs urgent attention is the unfair tax rules. We know farmers rely on the value of their farm for retirement. Yet if they want their children or a member of their family to take over, current tax rules stipulate they will have to pay more taxes if they sell their business to a family member than to a complete stranger. Currently, when a business owner sells their business to a third party—someone unrelated to them—the proceeds from that sale are considered a capital gain, meaning that they would have access to the Lifetime Capital Gains Exemption (LCGE), reducing the amount on which they are taxed. However, if they were to sell the business to a family member, the income gets taxed like a dividend. As a result, the owner would be hit with a higher tax rate, often costing them tens of thousands of dollars of extra taxes. This perverse

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tax measure may serve to discourage business owners from selling their business to their children.

Selling a business to one’s children does not guarantee its success in the future but does help ensure that the company and its jobs remain in the local community in which it was founded. So why put parents in the position of jeopardizing their own retirement in order to ensure their children have a shot at continuing their business legacy?

Political will is needed to change this policy.

In November, Member of Parliament for BrandonSouris, Larry Maguire, introduced Bill C-208, An Act to Amend the Income Tax Act (transfer of small business or family farm or fishing corporation). In the last federal election, the Liberals and other opposition parties identified this as a problem. There is a real opportunity for all political parties to work together on this important issue and pass Bill C-208. There should be common ground here and this would be just good government policy to encourage the successful transition of the family farm or local small business CFIB will be calling on all political parties to support this bill as it heads into third reading in February 2021. It’s a sensible solution to an unnecessary problem burdening too many small business families.

Political will is needed to change this policy. In November, Member of Parliament for Brandon-Souris, Larry Maguire, introduced Bill C-208, An Act to Amend the Income Tax Act (transfer of small business or family farm or fishing corporation). In the last federal election, the Liberals and other opposition parties identified this as a problem. There is a real opportunity for all political parties to work together on this important issue and pass Bill C-208. There should be common ground here and this would be just good government policy to encourage the successful transition of the family farm or local small business.

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If you agree, reach out to your local Member of Parliament to encourage them to support Bill C-208.

The timing couldn’t be better for this Bill. Canada’s aging population carries many important implications and the lives of entrepreneurs are not excluded from this. In fact, nearly three quarters of entrepreneurs plan to exit their business within the next 10 years, including 41% in the agriculture sector. Many of those owners will be retiring and are counting on the sale of their business to fund their golden years. The economic implications of this shift cannot be overstated: $1.5 trillion in business assets will be sold or transferred over the next decade. Our communities will be much better off when family members can more easily take over the business.

Virginia Labbie is the Senior Policy Analyst, Agri-business for the Canadian Federation of Independent Business (CFIB). CFIB has 110,000 small and medium-sized member businesses (7,200 agri-business members) across Canada.

To find out more about how to support local business go to www.smallbusinesseveryday.ca.

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