Cattle eat at a feedlot operated by the Otavio Lage group in Goianesia, Goias state, Brazil, last year.Eraldo Peres/The Associated Press
Ranchers across Western Canada fear they will fall victim to Ottawa’s upcoming trade deal with South American countries should it result in unfettered imports of cheap beef.
This week, Minister of International Trade Maninder Sidhu met with chief negotiators from Argentina, Bolivia, Brazil, Paraguay and Uruguay, a common market dubbed the Mercosur, in Toronto to discuss a potential deal.
Talks initially started in 2018, were delayed during the height of the pandemic and relaunched in October, 2025. The aim is to have a deal finalized by the end of the year.
If signed, the Canada-Mercosur deal would grant Canadian exporters of a range of goods tariff-free access to a US$3-trillion economy with a population of 282 million at a moment when Ottawa is trying to diversify trade from the U.S. And it would offer the Mercosur nations access to Canada’s economy of about US$2.2-trillion.
But the deal could be “catastrophic” for Canadian ranchers, said Tyler Fulton, president of Canadian Cattle Association.
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Beef is an economic and political heavyweight in the two largest economies in the Mercosur – Brazil and Argentina – and these exporters want free access to the Canadian market, numerous Canadian stakeholders told The Globe and Mail.
“We have to decide whether we want to support the beef industry in the future,” Mr. Fulton said. “Or if we want to undermine it and effectively incentivize beef production in South America.”
Argentina and Brazil are permitted to import a small amount of beef tariff free. Imports above this threshold are subject to a 26.5-per-cent tariff.
This means Canadian producers can stay competitive with trading partners who he said have access to cheaper labour and can capitalize on lower food safety standards and fewer environmental protections, Mr. Fulton said.
And it has been especially helpful in the past few years as Mercosur beef imports have risen 238 per cent from 12,000 tonnes in 2021 to more than 40,000 tonnes in 2025.
If this tariff was removed it would hurt prices for ranchers, Mr. Fulton said. This would have long lasting effects. Ranchers – benefiting from high prices right now – are at last able to rebuild a national herd that fell to near record low levels owing to years of low beef prices, high grain costs and droughts.
The concern is not – however – that prime cuts will be replaced by cheap South American imports, said Mike von Massow, a professor of agricultural and resource economics at the University of Guelph.
Brazil and Argentina’s beef production is different to the North American model. Canada finishes cattle in feedlots on grain, which leads to a higher fat content, which is better for prime cuts. South America’s cows are fed grass, and therefore specialize in exports of lean trimmings, such as beef ground used in hamburgers.
Increased imports of this product will be bad news for Canadian packers, Prof. von Massow said.
Brazil and Argentina are investing billions into areas such as beef genetics and food quality.MAURO PIMENTEL/AFP/Getty Images
A slaughterhouse’s profit margin is determined by how much of the carcass it can sell. Lean trimmings are often the ground-up parts of the carcass consumers won’t buy. Should South American imports depress the price for these lean trimmings, slaughterhouses will offer ranchers a lower price for their cattle, he said.
However, Brazil and Argentina might soon start to compete with Canada on prime cuts, too, said Kyle Larkin, president of the Canadian Meat Council, which represents processors, packers and suppliers. Both countries are investing billions into areas such as beef genetics and food quality.
“In five years time, we’re going to be in a really sticky point,” Mr. Larkin said.
Ottawa therefore needs to draw a “hard red line” on any imports from these countries of prime cuts, he said. It also cannot permit more than 10,000 to 15,000 tonnes of tariff-free imports of the lean trimmings. This rate will have “minimal impacts” he said, citing an economic study conducted by the Canadian Cattle Association, which represents about 60,000 beef farms and feedlots.
The Canadian Meat Council is also calling for tighter food safety oversight. The last time the Canadian Food Inspection Agency audited a Brazilian plant was 2018, and the last time it audited an Argentinian plant was 2015, he said.
But Canadian ranchers are unlikely to get the protection they want, said Eric Miller, trade consultant who has acted as an external adviser to the Ministry of International Trade on these negotiations.
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Beef is the most competitive sector in Argentina and a key source of the nation’s foreign exchange, he said. It carries a similar weight in Brazil. These powerful stakeholders are unlikely to settle for anything short of free access, he said. Ottawa is also unlikely to walk away at a time when it is seeking to diversify trade.
However, the Canadian beef industry is not without its own political clout, noted Mr. Miller. Beef is Alberta’s top agricultural export, and a legacy industry for the province. Ottawa is unlikely to take lightly a threat to a province flirting with separation.
Mr. Miller expects that should the agreement start to hurt the cattle industry, Ottawa would respond with protectionist measures, such as a safeguarding mechanism which addresses the impact of a surge of imports and can result in tariffs. Other non-tariff trade barriers such as food safety concerns can also come into play.
“We cannot ignore the political sensitivities of relatively strong pressure being put on the margins of cattlemen in Alberta, and its relationship to the broader political context.”