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Who’s Is Making Money On Beef?

They are still not giving beef away in my local grocery stores, or pork for that matter, and yet the producers in both these sectors seem to have a chronic struggle to make a profit. What’s wrong with this picture?

If it is not the rancher, then who is making money in the beef industry? Are cattle feeders lining their pockets? Is the packer getting rich? Or is it just the retailer who is laughing all the way to the bank? (And the same questions apply to the pork industry.)

I would certainly like to hear what livestock producers think about the profit structure of the beef industry from producer through to retailer. Is this just a pricing, or a share-the-wealth issue, or is it because the Canadian dollar remains so high, that Canadian beef and pork, simply become uncompetitive?

Send me your thoughts, by mail or email or fax. My contact information is at the right of this page, under the cartoon.

And in the last issue, I asked producers what they thought about plans for a mandatory and expanded beef traceability system to be implemented across Canada in 2011, and also whether it was time we had country-of-origin labelling in Canada. Following is what readers had to say on those topics.

Keep those cards and letters coming in folks.

Lee Hart Editor

DARCY PENNER ALBERTA

As a livestock producer for the last 30 plus years, of both hogs and cattle, I see no real value to the concept of continual tracking. I agree with Ed Curry — prove the cost benefit before implementing yet one more hoop to jump through. As to Canadian COOL, I am beginning to think the average consumer needs to be able to easily identify where the products they buy come from. If the consumer knew that meat products they purchased from out of country had less quality and tracking control than the domestic products, it might influence their purchasing decisions.

CLIFF SWAN BRETON, ALBERTA

Country-of-origin labelling is an idea that should have been implemented the day after the U. S. brought in their COOL rules. In fact it is such a good idea that we should demand that everything going into the U. S. be marked as having originated in Canada. This includes oil and natural gas exports too. Every barrel of oil should be pumped into a steel drum, stamped MADE IN CANADA and then rolled across the 49th parallel. Natural gas would be a bit tougher but I’m sure it could be done. A side benefit would be an increase in steel sales, which would help get the ironworker unions on our side.

It is about time we quit bending over backwards to please the Yanks.

PATRICK KUNZ KUNZ FARMS BIESEKER ALBERTA

Regarding your column on traceability in Grainews, there is no question that it is coming. We currently do have full traceability on the cattle that we custom feed on retained ownership (rancher/ farmer keeps interest in the cattle). Here’s a very brief overview of how it works:

Clients keep their cows on record in an on-line database (developed by our vet).

Calves are then “subscribed” to our account so we have access to the data and can input data onto those records.

Clients can see in real time if we are handling their cattle through their account.

Calves are brought to a finishing weight and sold to Cargill.

Cargill sends back individual carcass data which is imported into the database.

Cows are rated on their calves performance.

Replacements are pulled of the best performing cows.

This is full traceability from birth till death.

We are also linked with CCIA for age verification purposes.

This is a very brief and simple overview only. We currently have 1,639 head for a dozen clients on feed on this program. Clients this year have brought us anywhere from 19 to 632 steers and heifers. This is the third year in production for us under this regime. We keep our own cows in the program as well.

AND IN OTHER MATTERS:

Editor’s Note — In the Jan. 11, 2010 issue of Grainews rancher/columnist Christoph Weder said it was time producers made some noise at the retail level, to encourage retailers to use Canadian beef. Here is what reader Debbie Adcock of Camrose, Alta. had to say:

Hi Cristoph,

I read your latest article in Grainews about making a little noise, so I did.

Just thought I would forward the reply I got back from Superstore when I emailed them to get your take on it. I had voiced my concern that for a Canadian company who supposedly likes to present a rosy relationship with local farmers, that they aren’t following through when it comes to beef. How do we as cattle farmers deal with this? I find it hard to believe that Canada can’t fill the demand.

Regards,

Debbie Adcock Camrose, Alta.

Dear Mrs. Adcock,

Thank you for your email.

I would like to assure you that we are absolutely committed to supporting Canadian farmers and manufacturers. In fact, it is our primary goal to carry meat from local farmers. Our new President’s Choice Free From Beef, is indeed sourced from Montana. The animals are raised in the Black Creek river valley without the use of antibiotics and hormones. The challenge is that at the current time there are no existing suppliers of antibiotic and hormone free beef in Canada that can meet our President’s Choice requirements and provide adequate supply of beef. However, it is definitely our intention to bring on Canadian supply as the program expands.

Please do not hesitate to contact us with any future questions or concerns.

Kindest regards,

Raj Rakhra

Senior Customer Relations Representative

Loblaw Companies Limited

GRANT MOFFAT AWARDS

Three young Manitoba beef producers have received cash awards to be used to help them begin building their own beef herds.

Nicholas Bray, a 16-year-old producer from Eddystone; Rachael Verwey, a 13-year-old producer from Portage la Prairie and Laura Tolton, a 14-year-old producer from Carberry, were the 2009 recipients of the Grant Moffat Herdbuilder Awards, worth up to $2,000 each.

With their award money, Bray selected a Black Angus heifer, Verwey selected a Charolais heifer and Tolton purchased a Black Angus heifer. These heifers were selected at fall, purebred sales in Manitoba.

Through the awards program, set up in memory of Grant Moffat of Forrest Manitoba, youth submit written applications and the committee reviews them to select the Juniors they feel will benefit the most from this award. Annually over 20 and up to 40 applicants have been received. For the past three years, up to $2,000 has been awarded to each of three Junior members to purchase a purebred female to start their herd. To date 9 juniors from across the province have benefited from the program.

The award is named in memory of Moffat who went missing August 18, 2006, at the age of 55. The Grant Moffat fund was set up with generous donations from cattleman, friends and relatives across the Canada to offer a reward for tips leading to his whereabouts. After a year, a committee handling the funds made the decision to channel the money to Manitoba Youth for the purpose of starting their own purebred cattle herds.

Grant Moffat, Holmsyde Cha-rolais, Forrest, Man., was a Charolais breeder, photographer, writer, youth enthusiast, judge, sales manager, fitter, editor and accountant. He was a special person that everyone could learn something from.

Grant spent many hours helping youth start in the livestock business. The Grand Moffat Herdbuilder award was set up to continue this initiative.

THE FIGHT STARTED

My wife was hinting about what she wanted for our upcoming anniversary.

She said, “I want something shiny that goes from 0 to 180 in about three seconds.”

I bought her a bathroom scale. And then the fight started .

FOX HEADS MCPA

The Manitoba Cattle Producers Association (MCPA) Board has elected Jay Fox as their President.

“I’m quite honoured to have been elected by my peers to represent the Manitoba Cattle Producers Association,” says Fox. “We recognize the difficult situation Manitoba’s cattle producers are in, and there are several projects that we are working on to make things a little bit easier for them.”

Fox is a fourth generation cow/ calf operator from Eddystone. He was elected to MCPA’s Board of Directors in 2005, to represent District 12. Fox was named Vice-President in 2008 and will now begin his first term as President.

Fox takes over from outgoing president, Joe Bouchard, who announced his resignation in October, due to increasing family and business commitments.

Bouchard will remain active with the MCPA in a lesser capacity and plans to assist Fox and the rest of the Board during this transition period.

“I am honoured to have been able to serve the cattle industry as President of the Manitoba Cattle Producers Association this past year,” says Bouchard. “While I am sad to be stepping down, I am confident in Jay Fox’s ability to lead the Association and I look forward to seeing the Board continue to move the industry forward.”

Bouchard was elected to the Board in 2005, and was Vice-President in 2006 and 2007 and President in 2008.

TAX BREAK AVAILABLE

The federal government has announced that more Alberta livestock producers affected by drought will be eligible for a federal tax deferral.

The tax deferral allows eligible producers in designated areas to defer income tax on the sale of breeding livestock for one year to help replenish breeding stock in the following year. In the case of consecutive years of drought designation, producers may defer sale income to the first year in which the area is no longer designated.

Producers who reduced their breeding herds by at least 15 per cent are eligible. Thirty per cent of income from net sales can be deferred if the herd has been reduced by at least 15 per cent, but less than 30 per cent. Where the herd has been reduced by 30 per cent or more, 90 per cent of income from net sales can be deferred.

Eligible producers will be able to request this deferral when filing their 2009 income tax returns. Livestock producers are advised to contact their local Canada Revenue Agency Tax Services Office for details on the income tax provisions. Additional designations are a result of the continuous assessment of the drought situation throughout the fall. For more information on the extent of the drought or programs to assist farmers, see the AAFC Drought Watch site at http://www.agr.gc.ca/drought.

NEW FEED MIXER

The new Kuhn Knight-brand RC Series TMR mixers (photo at right) are well suited for large beef feedlots and dairy operations that need a machine to handle tough conditions. These mixers have been redesigned and tested for the demanding applications. Heavy-duty drives provide the ability to mix the heaviest feedstuffs and make these machines ideal for extreme-use situations.

RC mixers provide fast and thorough mixing, while still combining ingredients gently to minimize feed breakdown. Low horsepower requirements mean these machines are economical to operate. Available in trailer, truck, and stationary models ranging in capacity from 500 to 950 cubic feet, RC mixers can be adapted to handle roughage or small grains. For complete machine specifications and additional details, visit www.KuhnNorthAmerica.com.

About the author

Field Editor

Lee Hart

Lee Hart is editor of Cattleman’s Corner based in Calgary.

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