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Peterosa exports target Mexico

Prior to 1985, Roger Peters of Red Deer raised Hereford cattle and was heavily involved in the Alberta Hereford Association, an involvement which would lead to a new career as a cattle exporter.

“In the mid-1980s, the Alberta government invited a number of purebred beef cattle producers to go on a trade mission to the cattle expo in Mexico. I had no idea what the Mexican cattle industry looked like,” remembers Peters.

“We all helped to staff the Canadian booth and it was there that I met a Mexican rancher who suggested that Alberta cattle couldn’t live in Mexico. He had imported some Canadian cattle which apparently died on his ranch.”

Curious about such a statement, Peters offered to go to the man’s ranch to see what kind of environment the cattle were raised under.

“It is common in Mexico that the owners of the ranch to do not live on the ranch but rather in a city. This owner made the trek to the ranch once a month, but admitted he hadn’t seen his foreman for about three months. The cattle he had imported from Alberta were Simmentals and many of them died calving,” says Peters.

“Without proper management, these cattle didn’t have much of a chance for survival.”

Peters saw an opportunity to not only send Canadian cattle genetics to Mexico but to teach the Mexicans how to manage these cattle. He teamed up with Gary Smith and under the name of Prairie West Livestock spent the next four years marketing all breeds of dairy and beef cattle to Mexico.

The company was successful, but in 1989, the partners decided to go on their own ways. Peters bought out Smith and changed the name of the company to Peterosa Exports.

Peters immersed himself into the customs and language of Mexico. He became fluent in Spanish and lived in that country for about seven years.

“I traveled the country extensively to understand what type of cattle would work in various areas. In the north, there are extremely dry conditions while the southern part of the country is more of a tropical condition,” explains Peters.

“The ranchers in the north want purebred cattle and focus on selling herd sires to commercial cattle producers. The ranchers in the south of Mexico are mainly commercial producers looking for herd sires for their Brahma cows.”

Peters says like cattle producers all over the world, some are willing to pay $2,000 for a bred heifer while others will pay much more for the right animal.

Prior to BSE, Peterosa Exports shipped many more bulls to Mexico than females. Post BSE, the market demand for females is much higher.

“The border closure was much more than a hiccup for the Canadian export business. One day I had a multi-million dollar a year company, and the next day it was worth nothing,” shrugs Peters.

“I moved back to Canada and worked in the oil and the construction industries while waiting for the border to re-open for live cattle.”

Once that happened, Peterosa Exports was back in business. Peters spends about six months of the year traveling to both Canadian and American farms and ranches sorting cattle for the Mexican market. It’s too hot to transport cattle in June, July and August, so the busiest time for shipping is from October until April.

Mexican fed cattle and calf prices are pretty much on par with Canada, and  Mexico is in the process of rebuilding their cattle numbers.

“While the North American beef cattle numbers are probably down ten percent, the Mexican cow numbers are closer to 25 percent lower. The drought that hit parts of the U.S. a few years ago, also heavily impacted northern Mexico,” explains Peters.

“I think we have a good five-year window for the rebuilding process.”

Part of the reason for the drop in the bull market is that Mexico instituted a program for ranchers to buy locally. It’s called the Betterment of Cattle program, and the government subsidizes local bull purchases by 50 percent. But with a purchase limit of $2,000 per bull, Peters thinks the program benefits the poorer producers and penalizes the better producers.

Angus, Charolais and Simmental cattle are in high demand in Mexico and the Mexican ranchers are crossing Simmental bulls on Angus females.

Statistics last year showed that Mexicans exported 786,000 calves to the U.S.

“The Mexicans don’t have many feedlots in order to finish their own calves. The Americans like these calves with weaning weights in that 300 pound range with a 500 pound frame. These cattle are tough and they go into Oklahoma and Nebraska for grazing winter wheat and fall rye,” explains Peters.

“Then the Mexicans buy back the beef for their growing domestic market.”

“There is a feedlot with its own packing plant being built in Mexico that would equal one of the bigger operations in southern Alberta. But, the Mexicans are afraid it will take more control of the marketplace in the long run.”

It’s an interesting market to work in. Peters says there is more paperwork involved than in Canada and the Mexicans are sticklers on perfection.

In 2013, Peterosa Exports shipped almost 400 head of purebred beef cattle down to Mexico and Peters believes that number will double in 2014.

“One of my regular customers has 1,000 head of commercial cattle and there’s the odd 2,500 cow herd. But most of the ranchers have anywhere from 100 to 300 cows,” says Peters.

“While the market for North American beef bulls has dropped considerably, there is still a market for better bulls. I recently bought a bull for $8,000, one for $16,000 and one for $25,000 for Mexican customers.”

“I deal in higher priced cattle. My customer base over the years has come to understand that buying better genetics is rewarded by better performance cattle and more pounds of gain.”

After 30 years of traveling North America and Mexico Peters still makes regular ranch calls to sort cattle in Alberta, Saskatchewan, Manitoba and Ontario. He also buys cattle out of Montana, Minnesota, Wisconsin, Iowa, Colorado, Kansas, Texas and Oklahoma. 

In the fall of 2013, Peterosa sourced and shipped 207 head of registered Brown Swiss heifers and three registered Brown Swiss bulls for Mexico. Finding that many Brown Swiss cattle was not an easy feat. Peters found them in Ontario, Wisconsin, Iowa, Minnesota and Colorado.

Times have changed somewhat. Years ago, Peters was comfortable driving through the many Mexican states visiting customers. Today, he flies into Mexico and relies on local ranchers to chauffer him around.

 “There are some trouble areas in Mexico. I’ve lost Mexican friends that have been kidnapped and killed. It’s like anywhere in the world – if you’re looking for trouble you will find it.”

Peters says the country is trying to clean up their Brucellosis and TB problems. While northern Mexico can export live cattle into the U.S., those in the southern part of the country cannot.

As a member and a director of the Canadian Beef Breeds Council, Peters was alerted about a possible sale into Vietnam. This Vietnamese businessman owns eight small packing plants in Vietnam and is checking out the possibility of importing fed cattle from Canada to that country.

“Currently, this fellow is buying cattle from Australia and Canada just can’t compete on price,” says Peters. “But we can knock them out of the park on quality.”

“The fellow has come to Canada and toured some of the Alberta feedlots and been very impressed with the cattle.”

“We’re still talking. No one has shipped fed cattle into this type of operation before and we don’t know how it would work.”

Meanwhile, Peters sells a high number of dairy cattle. By mid-April of this year, he had already sold more than 300 Holsteins to Mexico as milk cows.

“I source a lot of the dairy cattle out of the U.S., but purchase most of the beef cattle out of Canada,” Peters assures us.

“Right now, I have an order for some big, tall Canadian Angus bulls with a frame seven.”

Peters says he has no interest in retiring. Traveling around North America and Mexico to look for good cattle is something he plans to do for a long time yet. The good calf prices have just made it a lot more fun.

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