Amid historically high cattle prices, Canadian producers say Ottawa risks undermining the country’s herd rebuilding efforts if Mercosur trade negotiations result in expanded South American beef access, as the sector remains economically vulnerable.
Debate surrounding the South American trade bloc consisting primarily of Brazil, Argentina, Paraguay and Uruguay has intensified in recent weeks. The National Cattle Feeders Association and the Canadian Cattle Association (CCA) argue that additional low-cost imports could disrupt domestic cattle markets just as producers are only beginning to rebuild herds after years of contraction.
CCA President Tyler Fulton says the industry is operating under one of the tightest supply environments seen in decades while simultaneously trying to attract a new generation of ranchers back into the business.
“It's extremely vulnerable,” Fulton says. “We are at a pivotal point in several decades. First of all, starting in with the tightest cattle supply in North America in, I believe, four decades.”
After years of poor margins and instability tied to drought and the lingering economic effects of the bovine spongiform encephalopathy (BSE) crisis, the cattle sector has only recently begun showing early signs of recovery. Fulton says those pressures contributed to fewer younger producers returning to family ranches over the last two decades.
“There wasn't a lot of opportunity to earn your living as a rancher because margins were so poor.”
Strong prices are now encouraging producers to slowly retain breeding cattle and rebuild herds, but the industry fears expanded South American market access could reverse that momentum before fully recovering.
“If we were to see, for example, the government open up market access to South America into the Canadian market, I think it sends the exact opposite signal,” says Fulton. “I think our market prices would really eliminate margins that those new producers in particular need to get on their feet.”
Fulton notes beef cow inventory rose 2.5% in 2025, while replacement heifer inventory increased 5% – the first significant signs of expansion in years.
At the same time, Canada continues importing historically large volumes of beef products while remaining one of the world’s major beef-exporting nations.
“We imported more beef into Canada last year in 2025 than we have in 30 years,” Fulton says. “So of all the beef that's consumed in Canada, 30 percent of it was imported into Canada, even though we as an industry produce far more than we actually consume in the country.”
Canada exports roughly half of the beef and live cattle it produces annually while importing significant volumes of beef, particularly lean trimmings used in ground beef production. The CCA is not opposed to trade itself, but is skeptical of low-cost imports that could alter the domestic market.
“We are an industry that is very trade reliant,” Fulton stresses. “What we're concerned about is overexposure. If we see a significant quantity of South American product moving into Canada, it would fundamentally change the market dynamics and signals to disincentivize growth and maintaining the family ranches and herds across all of Canada.”
Much of the industry’s concern centres on Brazil, one of the world’s largest beef exporters and among the lowest-cost global producers. Fulton warns Canada could become an especially attractive export destination if tariff conditions become more favourable.
“If we were in a scenario where Canada had the lowest tariff rate of any of their export countries, we would be flooded with that South American product,” Fulton explains. “When you have significant abrupt changes in supply, prices will collapse and producers will go out of business, as opposed to really grow their herds.”
Beyond economics, the cattle sector is also concerned about animal health oversight and disease management standards within Mercosur nations.
“Our biggest catastrophic threat is a foot-and-mouth disease outbreak,” Fulton says. “We don't have confidence that their system is going to protect from that disease being introduced in Canada.”
Fulton says the issue is not necessarily whether South American beef is unsafe but whether reporting systems and disease control standards are equivalent to what the CCA is expecting. He points to previous delays involving Brazilian BSE reporting as an example of why the organization lacks confidence in some international oversight systems.
Environmental and sustainability standards have also become a major part of the debate, as Canadian producers increasingly market beef as a premium product built around traceability, food safety and stewardship practices.
“Canadian production systems are held up as having phenomenal outcomes with biodiversity and greenhouse gas emissions that are, in some cases, a third of what they are in some of the South American countries,” Fulton says.
The country’s largest export destination for beef and live cattle remains the U.S., which is the lens the CCA is watching the negotiations through.
“More than 70 percent of the beef and live cattle that is exported from Canada is destined for the U.S.,” Fulton says. “It would be foolish for us to introduce a new flow that puts at risk our biggest export market.”
As negotiations accelerate, the industry remains frustrated by what it views as limited transparency from Ottawa.
“We're concerned with the speed with which the negotiations are happening and the lack of information that's being shared back to impacted industries like beef,” Fulton says.
While opposing expanded Mercosur beef access, the CCA continues supporting broader trade growth in Pacific export markets. South Korea, Indonesia, Vietnam and the Philippines have been identified to better align with Canada’s emphasis on science-based trade rules, traceability and premium grain-fed beef production.
Ultimately, Fulton says the Canadian cattle sector does not oppose imports outright but believes future trade agreements must prioritize transparency, sustainability and long-term domestic stability.
“We don't struggle with the concept of importing beef,” he says. “But we need to do it in a transparent and sustainable way that quite simply doesn't imperil or threaten domestic production.”
As negotiations begin to finalize in Ottawa, many producers are watching closely to see whether federal policy will reinforce confidence in the sector or introduce new uncertainty in a critical moment for expansion.
