Volume 2 Issue 3 | February 1, 2010

In This Issue ...

 

NCO study nears completion


Canadian Beef Cattle CheckoffCanada’s beef cattle industry hardly looks the same today as it did a decade ago. BSE, severe weather, a robust loonie, economic ups and downs and, more recently, the global recession, have reshaped the industry in ways few could have predicted.

As industry moved to adapt to the changing landscape it became prudent to take a fresh look at the economic benefits of the National Check-Off (NCO), which last underwent evaluation in the early 1990s.

Initiated in 2008 and due to be completed in April, the study, Evaluating the Economic Benefits from the Canadian Beef Check-Off, marks the first new analysis of the effectiveness of NCO-funded expenditures on producers’ economic well-being in a decade.

Relevant, current analysis will help pinpoint the most beneficial use of NCO funds -- those producer dollars used to access matching funds from other sources to supplement national industry research, promotion and market development budgets. 

The NCO provides the core industry funding for the Beef Cattle Research Council responsible for industry-led research and development; the Beef Information Centre tasked with market development in Canada and the United States (U.S.); and the Canada Beef Export Federation which develops export markets in Mexico, Asia, and more recently Russia and the Middle East.

The study will address key questions including the extent to which check-off funded investment has effected the industry’s competitiveness and demand for Canadian beef; producer return on investment; and optimal allocation of funds.

Marlin Beever, chairman of the Canadian Beef Cattle Research, Market Development and Promotion Agency, also known as the NCO agency, felt the study was timely given the many changes and external pressures that have occurred in Canada’s beef cattle industry during the past decade.

There are other benefits to the study too, he noted. The study will bring Canada in line with other major beef producing countries which routinely conduct check-off reviews and effectiveness studies.

As well, the study will provide the means to measure how Canada stacks up globally compared to competitors the U.S., Australia and New Zealand, as well as to other agricultural commodities.

Once completed, key findings from the study will be publicly released and the full study will be available on the Canadian Cattlemen’s Association (CCA) website.

 
The New Young Ranchers Round Table a huge success in Denver


Canada had the opportunity to participate in the International Livestock Congress USA held in Denver during the National Western Stock Show Jan. 10-16. This year the Five Nations Beef Alliance introduced an additional event to the program featuring a Young Ranchers Round Table held at the Canadian Consulate.

The CCA, Alberta Beef Producers, Saskatchewan Cattlemen’s Association, in conjunction with the Canadian Consulate in Denver, sponsored three young cattle producers between the ages of 27 and 32 as representatives of the Canadian cattle industry.

Jess Parsonage of Saskatchewan and Adam Moseson and Jill Harvie, both of Alberta, had the chance to build strong relationships with future industry leaders from alliance countries including Australia, the U.S., Mexico and Argentina. The representatives presented the importance of Canada’s working relationship with other national beef cattle organizations to ensure consumer beef demand increases in the world over the long term.

The round table viewed a video from Harvie, a cattle producer in Canada and CCA staffer, explaining why raising quality cattle and feeding the world is important to her. You can view her video here.

The Five Nations Young Ranchers Round Table adopted a project to complete a YouTube video from all five nations exhibiting clips of the participants on their own ranches or farms promoting why they have a passion for being a part of feeding the world a high nutrient protein.

Other participating groups during the ILC –USA week included students from Montana State University and Lakeland College and the new Young Producer’s Council under the National Cattlemen’s Beef Association (NCBA).

 

BIXS not impacted by extension of bar code tag deadline


In the last issue of Action News, we told you about the Canadian Food Inspection Agency’s (CFIA) decision not to enforce the Jan. 1 deadline to delist bar code tags for the time being.

The decision disrupted Canadian Cattle Identification Agency (CCIA) plans to have all cattle tagged with an industry approved radio frequency identification (RFID) tag by Jan. 1.

CCIA approved RFID tags are a key platform of the Beef InfoXchange System or BIXS, but Larry Thomas, program coordinator for the CCA, doesn’t anticipate any issues arising from the CFIA decision.

“We anticipate early adopters taking part in BIXS will already be using CCIA-RFID tags in younger market cattle. We expect BIXS participants will be uploading individual animal data from calves/cattle born over the past year or two,” he said.

Thomas noted that official bar code tags have not been for sale for years and producers can only purchase RFID tags. As such, bar code tags will be found primarily in older animals coming to market. And while BIXS can accommodate cow and bull records, it will deal primarily with younger animals that producers will have already tagged with CCIA-RFID ear tags.

“Value-chain data flow on older animals is not as critical as value chain data on younger animals -- the progeny of those older animals,” he said.

Age verification is a required element for participation in BIXS. Thomas said the expectation is for all cattle enrolled in BIXS to have had their age verified via CCIA and therein have all ID referenced through a sanctioned CCIA-RFID tag.

BIXS is a national, voluntary web-based database designed to capture and exchange data linked to an individual animal’s RFID tag. The CCA spearheaded the development of BIXS as part of the Canadian Beef Advantage (CBA) program, the branding of Canadian beef for domestic and international markets.


CCIA gets funding boost to help Saskatchewan producers with age verification, traceability
On Jan. 19, the federal government and the province of Saskatchewan announced they are providing more than $1 million to the CCIA. The funding will help Saskatchewan livestock producers with age verification and other traceability initiatives and help CCIA open a satellite office in Saskatoon.

“This investment is another step towards reaching our goal of a national traceability system for livestock by 2011,” stated Saskatoon-Humboldt MP Brad Trost, who made the announcement on behalf of federal agriculture minister Gerry Ritz.


The CCA on national traceability
The CCA views traceability as a tool that will benefit the entire value chain by enabling industry to respond and recover quickly from an animal health incident. The CCA encourages producers to participate in traceability however it believes a mandatory program must be approached in a manner that does not increase the costs to the beef cattle industry, does not disrupt the speed of commerce and leads to increased market value and access.

 

The rationale for an OTM compensation program


Recently the CCA, the Dairy Farmers of Canada, the Canadian Federation of Agriculture and the Quebec Beef Producers Federation came together to request that a payment of $31.70 be made to abattoirs for every head of over thirty month (OTM) cattle slaughtered in Canada. The request was made because government regulation in Canada now makes it so expensive to kill older cattle that OTM cattle are increasingly leaving Canada for slaughter and more and more beef is being imported into the Canadian market.

The figure $31.70 is the average cost differential to process an OTM animal in Canada versus the U.S., due to the different approaches the two countries take in disposing of Specified Risk Materials (SRM). The payment to the Canadian abattoirs will compensate for the government regulations in order to keep these cattle in Canada, so that Canadians can eat beef produced under Canadian regulations.

Clearly, keeping slaughtering operations in Canada is beneficial for cattle producers. Yet the proposal supported by these cattle and farmer organizations is running into opposition from those who shrug and say it is unpopular to deliver money to abattoirs. We believe inaction on this matter is recklessly short-sighted. Many Canadian slaughter facilities have gone out of business or suspended operations since costly new regulations came into place in 2007. Countless small abattoirs have simply stopped processing the OTM animals. At least two further major facilities in Eastern Canada are in peril without this assistance.

Domestic slaughter and trade data demonstrate how the ground is shifting. In 2008, approximately 21 per cent of Canada’s OTM cull cattle were shipped to the U.S. for slaughter. In 2009, the U.S. portion jumped to nearly 26 per cent. When those cows leave, Canadian beef processors and food manufacturers increase their beef imports from Australia, New Zealand and South America to make processed beef products such as burger patties and deli meats. It is not surprising, then, that Canada’s beef imports from Australia, New Zealand and South America grew to 50,000 tonnes in 2009, up from 30,000 tonnes in 2008.

We believe that without receiving the proposed compensation, an even higher portion of Canadian OTM cattle will go to the U.S. in 2010 and Canadian beef imports will flirt with the 76,409 tonne import quota limit. We also predict that Canadian beef processors will petition the Canadian government to resume issuing the supplemental import permits hated so much by Canadian cattle producers.

By the way, the practice of relying on slaughtering OTM cattle in the U.S. and importing processing beef under supplemental permits was significant back in the years prior to 2003. So much so, that when the border closed in 2003, Canada didn’t have the capacity to process our own cattle. We should remember that fact and that our pre-2003 practice attracted considerable negative attention from U.S. cattle groups back then. If our OTM shipments continue to rise, we can certainly expect a reaction south of the border that could again threaten this access after our slaughter capacity is depleted.

So we have to gaze a year or two into the future and get beyond the perceived problem with paying abattoirs $31.70 for every OTM animal slaughtered in Canada. This is the right path for Canadian cattle producers and it is the right path for Canadian consumers.

Simply put, the reason the proposal asks that the payment be given to packers is because the objective is to keep the slaughter of cattle in Canada. If the payment is directed at cattle producers and they still send the cows to the U.S., then the objective will not be met.

About 700 federal and provincially inspected abattoirs across Canada would be eligible for the proposed payment. The majority of them are small operators, processing only a handful of animals per week, but these tend to be in small communities where their loss is felt the greatest. Many of these smaller operators have refused to handle OTM cattle since 2007 because of the cost – we hope this payment will restore this service in remote rural communities.

The estimated program payout is between $17 million and $19 million for 2010. The figure is based in part on the assumption that Canada will cull approximately 700,000 OTM cattle this year. Without this payment, let’s assume that approximately 250,000 to 300,000 head of OTM will leave Canada for slaughter. With the payment, we hope that 550,000 to 600,000 OTM would be slaughtered in Canada and thus be eligible for the payment.

Lastly, the proposal will benefit producers in the short term because Canadian packers are expected to pay more for OTM cattle. With the $31.70 per head payment, Canadian abattoirs will have an incentive to bid a higher price to acquire OTM cattle. If the Canadian abattoirs do not bid more for the cattle than U.S. facilities, the OTM cattle will continue to go to the U.S., thus the Canadian abattoir will not receive the $31.70. In other words, if the Canadian packer does not pay more for the OTM cattle, they won’t get either the cattle or the payment. The long-term benefit is that Canada will retain its capacity to slaughter OTM cattle here at home. Furthermore, there is a benefit to the Canadian consumer to retain the capacity to slaughter cattle in Canada and reduce the need for imported beef.

 

Cattle cycles, trends explored in new publication from Canfax Research Services


The Canadian beef industry is a cyclical and seasonal, commodity-based industry characterized by high volumes, low margins and intensive capital requirements. Producers often use the predictability of these cycles and seasonality to their advantage by expanding, selling or maintaining their herd size to correspond with the supply and demand fundamentals of the cycle.

While the duration of cattle cycle can be affected by outside forces such as drought, disease or significant economic events, a typical cattle cycle runs from 10 to 12 years. A cycle generally consists of five years of expansion, three years of liquidation, and two years of consolidation. Building on the successful Cattle Cycle books started in 1981 by Charles Gracey; Canfax Research Services has updated and expanded that publication to include discussion on overall industry trends and changing market dynamics. The 2009 edition titled “Trends, Cycles and Seasonality in the Cattle Industry,” analyzes data from 1960 to 2008 and includes discussion around cattle cycles, why they do or do not occur, historical cycles and trends as well as cycle indicators.

“Trends, Cycles and Seasonality in the Cattle Industry” is now available for $15/book (including GST and shipping). To order the 2009 edition go to www.canfax.ca for an order form or click here.

 

CJDI Part VII


This is the final installment of our discussion on Johne’s Disease or JD. In this issue, we conclude our review of the risk factors of JD and how to reduce them in the following areas: pre-weaning, weaned calves, bred heifers and young bulls, adult cows and bulls and herd replacements.

Pre-weaning
Risk factors are increased if producers spread manure at the start of or during the grazing season; regularly see feed or water contaminated with manure and manure contaminated udders; and allow direct contact with suspect JD cases. Risk factors are reduced by having well-drained pastures.

Weaned Calves
Risk factors for JD are heightened if producers regularly see feed or water contaminated with manure; used shared feed, water, pasture or corrals for weaned calves and cows; have manure contamination on feeding equipment; keep calves in areas with stored manure or compost piles.

Bred Heifers and Young Bulls
Risk factors are increased if producers keep replacements together with mature cattle; regularly see feed or water contaminated with manure; use shared feed, water or pasture for replacement and mature cattle; and keep replacements in areas with stored manure or compost piles.

Adult Cows and Bulls
Risk factors increase if producers regularly see feed or water contaminated with manure. Culling suspect adults and their offspring reduces risk.

Herd Replacements in previous 12 months
Risk factors increase if producers retain home-raised replacements from suspect dams; or obtain replacements from herds with unknown JD status. Risk factors are reduced if producers retain home-raised replacements only from non-suspect dams, and obtain replacements from a closed or low risk herd.

For more information, visit the CJDI page on the CAHC website.

 
CCA Action News

Staff Contributors: Jill Harvie, Larry Thomas, John Masswohl, Brenna Grant
Written, edited and compiled by: Gina Teel



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