P.E.I.'s beef producers and lone processing plant concerned about Trump tariff threat

People in Prince Edward Island's beef industry have told American politicians face to face that they are worried about Donald Trump's impending tariff on imports from Canada.

The U.S. president-elect is promising to slap a 25 per cent tariff on all goods entering the U.S. from Canada and Mexico on Jan. 20, his first day in office, unless the countries curb the flow of drugs and migrants across their borders.

Russ Mallard was part of a Canadian delegation who went to Washington in December to express Canadian concerns to Republican members of the Senate and chair of the agriculture committee for the House of Representatives.

"We had a chance to express our concerns about how it would affect not only our industries here, but also their industries there and their consumers there, with the possibility of high prices," said Mallard, president of Atlantic Beef Products, based in Albany, P.E.I., as well as chair of the Canadian Meat Council.

He said the American legislators were familiar with the concerns about the proposed tariff, since they have been hearing the same thing from some of their own constituents.

'Possibility of job losses'

A Statistics Canada report recorded just 7,100 beef cattle being reared on Prince Edward Island in January 2024. That's about 1.5 per cent of Canada's total beef production, at 11.9 million head, with Alberta being the largest producer at 44 million cattle. Herds are at record lows in both Canada and the U.S.

Mallard said about 35 per cent of all the beef produced in Canada is exported to the U.S., where Canadian beef, pork and other meats often undergo further processing. 

If tariffs are put in place, he said Canadian meats will cost more for U.S. processors to buy, and may even become unavailable south of the border. That will mean American consumers will end up paying more for their meat — a message he and others tried to drive home in Washington.

That could mean falling prices for beef producers in Canada, and that wouldn't be good news for beef producers.— Russ Mallard

"Value adding that happens in the U.S. now with Canadian products as a raw material may become less available. Therefore, [there is the] possibility of job losses in the U.S. from these value-adding companies," Mallard said.

If U.S. companies reject Canadian beef as too expensive, that beef will stay in Canada. New markets will have to be found for it, or Canadian production will have to be cut back because the Canadian market will be flooded. 

"It may cause the beef prices to come down at the consumer level for a short period of time," Mallard said.

He said that short-term grocery bill break would eventually disappear as farmers cut back production.  

"It'll cause hardship for beef producers, because perhaps production levels get cut back here in Canada. Cattle back up into the farms in the countryside, and then you end up with too many cattle around for the size of the market," said Mallard. 

"That could mean falling prices for beef producers in Canada, and that wouldn't be good news for beef producers."

Trump a 'hard guy to predict'

Beef farmers on P.E.I. also are keeping a close eye on the situation south of the border.

"It's a concern, no doubt about it," said Dennis Hogan, chair of the P.E.I. Cattle Producers Association. 

"Anybody who's brought in high-priced feeders this fall… you hope when they're ready for market, that that market is still high, and this tariff could certainly have an impact on that." 

Hogan said all he can do is lobby against the tariff and hope his concerns are heard. 

"We're used to rough waters," he said. "It's a risk just to be in the beef industry. The market is up and down."

The P.E.I. government has been trying to grow the cattle industry on the Island. But the current prices to purchase animals are high, and now there is the tariff threat.

"We'll definitely be watching, for sure," Hogan said. "Trump, as we've come to learn, he's a hard guy to predict." 

"Nobody knows what's going to happen on Jan. 20," said Mallard. "Over the next three, four months we'll just have to deal with it." 

If the tariff does go ahead, the P.E.I. groups say they plan to return to Washington in April to again express their concerns.

The beef industry can be slower to adapt to market changes, since it takes almost two and a half years to grow a beef animal to maturity, compared to about eight weeks for a chicken.