Volume 2 Issue 8 • April 12, 2010

In This Issue ...

 

Study shows NCO benefits producers


The National Check-off (NCO) is seemingly a bit of a mystery to producers, as many are unclear on what the NCO is and what it funds. A new study evaluating the economic benefits of the NCO serves a dual purpose by separating fact from fiction to provide a clear picture of the NCO in addition to quantifying its benefit to producers.

The new and independent study, Evaluating the Economic Benefits from the Canadian Beef Check-off, is the first comprehensive look at the effectiveness of NCO-funded expenditures on producers’ economic well-being in a decade.

“The NCO Agency wanted to provide a comprehensive independent evaluation that will be a benchmark for future check-off effectiveness studies and will also hopefully assist cattle producers with future check-off planning,” said Marlin Beever, chairman of the NCO Agency.

For the record, the NCO is the mandatory $1 per head levy collected from beef cattle producers when they market their cattle. It funds research and marketing programs, providing revenue for the Beef Cattle Research Council responsible for the industry’s national research program; the Beef Information Centre (BIC) which handles domestic and U.S. marketing; and the Canada Beef Export Federation (CBEF) which develops export markets in Mexico, Asia and more recently, Russia and the Middle East.

The goal of the NCO is twofold – to increase sales of domestic and export beef and to find better and more efficient methods of producing beef and beef cattle. In addition to providing core funding for research and marketing, the NCO is leveraged to attract on average, $6 for every $1 of producer check-off funds in supplementary funding from other sources. The NCO does not provide any funding to the Canadian Cattlemen’s Association (CCA) which is funded separately through provincial organizations.

The just-released study shows that Canadian beef cattle producers’ funding of research and marketing activities has delivered strong return on investment. For instance, the study found that on average, from 2005 to 2008, every check-off dollar invested in national research and marketing activities earned back $9 for Canadian cattle producers.

Other key findings from the study include: Canada’s beef cattle check-off return on investment of 9:1 is higher than Australia’s (5:1) and the United States’ (5.5:1). (The U.S. return is focused on domestic promotion and did not consider foreign marketing activities).

The study was initiated by the Canadian Beef Cattle Research, Market Development and Promotion Agency, also known as the NCO Agency, to obtain relevant, current analysis of the effectiveness of NCO-funded expenditures.

Beever noted the study brings Canada in line with other major beef-producing countries which routinely conduct check-off reviews and effectiveness studies. As well, the study addressed key questions including producer return on investment, impact on industry competitiveness and demand for Canadian beef, and optimal allocation of funds.

Further analysis looked specifically at the two areas funded by the NCO: research and marketing.

Research delivered an average return of $46 in producer benefits for every check-off dollar invested, while marketing delivered an average return of $7.55 in producer benefits for every check-off dollar invested.

Study researcher and author Dr. John Cranfield, University of Guelph, said these benefit-cost ratios clearly confirm that beef cattle producers have gained net economic benefits from investing check-off dollars in research and marketing activities. Benefit-cost ratios indicate how much has been earned at a market (or broad industry level) for what was spent.

“As well, by 2008, the return to the average dollar invested slightly exceeded the return to the average dollar invested prior to the BSE-crisis,” Cranfield said.

The study also found that despite positive benefits, there has been under-investment in both research and marketing activities for the Canadian beef cattle industry. The extent of this under-investment has been larger for research activities than for marketing activities.

While the study was underway, the Government of Alberta announced that it was amending legislation to make the check-off refundable effective April 1, 2010. Alberta accounts for over 65 per cent of beef production in Canada. Given the sizable number of Alberta cattle marketings, the NCO Agency requested that analysis be included on the potential impact.

Alberta is the only province in Canada that has not exempted the NCO from being refunded. National check-offs are non-refundable in Australia, New Zealand and the U.S.

The study reports that for every $1 NCO refund in Alberta, Canadian beef cattle producers will lose $11 in economic benefits; keeping in mind the NCO is leveraged six to one to obtain supplementary funding to cover program costs. Less check-off means less leveraging in obtaining matching funds from other sources.

The NCO Agency has undertaken a communications plan to ensure cattle producers who pay the check-off receive the information provided by the study and are aware of the value from their investment in research and marketing. The study is available at www.cattle.ca/nco-agency.

 
Canada’s Beef Science Cluster: What it is and why we need it


The Honourable Gerry Ritz, Minister of Agriculture and Agri-Food Canada, officially announced Phase I of the Beef Science Cluster on March 23 at the CCA’s Annual Meeting in Ottawa.

The Beef Science Cluster is a four-year partnership between the Beef Cattle Research Council (BCRC) and Agriculture and Agri-Food Canada (AAFC). The Cluster is a way for Canada’s agriculture industry and the Federal Government to invest in priorities and activities that provide the greatest and most immediate benefit to Canada’s cattle and beef producers.

How has research benefitted the beef industry? In the late 1800’s it took three to five years for forage-finished cattle to reach market weight and condition. Applied research, development and technology transfer by scientists and progressive cattle and beef producers have improved Canada’s production efficiencies and beef quality to the point that Canada has become one of the world’s leading producers of high quality beef.

Why do we need more research? There are three main reasons. The first is to keep Canada’s cattle and beef competitive with other beef producing countries as well as other livestock industries. The second is to support marketing efforts. Consumers choosing between beef, poultry, pork, fish, wild meat and tofu base their choices on personal preferences, price, and public perceptions. These perceptions are not always accurate, because most consumers have no first-hand knowledge about how cattle are raised. The efforts of the NCO funded marketing organizations (BIC and CBEF) to promote Canadian beef to domestic and international customers will benefit from research that quantifies the cattle health and welfare, environmental stewardship, food safety, nutritional value, and other attributes of the Canadian Beef Advantage.

The third reason we need more research is to swiftly and effectively deal with emerging challenges (e.g.: animal health, food safety and environment issues). Industry directed research to develop effective, science-based solutions will help industry avoid unnecessary regulation and maintain industry competitiveness.

What does the Beef Science Cluster cost you? Producer contributions to the Beef Science Cluster come from the 5 cents to 10 cents of the NCO dollar that is allocated to the Beef Cattle Research Council. Every industry research dollar is matched by approximately $6 in government research funds.

The Beef Science Cluster has two main research priorities: The first is to improve production efficiencies: Approximately two-thirds of cluster funding is directed towards research to reduce the cost of producing high quality cattle and beef in Canada. This research will focus on improved forage and feed production, increased feed efficiency, reduced impact of animal health and welfare issues, and improved utilization of SRM. The second, to improve beef demand: One-third of cluster funding is directed toward improving beef demand and quality so that domestic and international consumers choose Canadian beef, more often. This research will focus on improved food safety interventions and improved beef eating quality. For more information, visit http://www.cattle.ca/learn-about-the-bcrc/.

 

Canada’s Beef Producers Thank Canadian Forces


Whatever your view of Canada’s mission in Afghanistan, we can all be proud of our Canadian Forces serving overseas. One way for Canada’s beef producers to express their gratitude is to Sponsor a Steak for a Returning Soldier.

When the first troop rotation came back from Afghanistan in 2007, the CCA picked up the tab for 1,700 steaks served to the returning troops of the Royal Canadian Regiment and their families at CFB Petawawa. Harvey Dann of Alert Agri Distributors is working to repeat that event and take the idea clear across the country. 

Dann has been running ads in the Canadian Cattlemen magazine and some of the provincial cattle association monthlies. He is asking for donations to repeat the 2007 Petawawa BBQ at all of the major Canadian Forces Bases across Canada. The next two events have been scheduled for June 20 at CFB Shilo in Manitoba, and July 1 Canada Day at CFB Edmonton. BBQ’s are also planned for Val Cartier, Gagetown and Petawawa.

If you are considering donating to this important project, you can be confident that Dann is a well known friend of the CCA’s. The CCA is endorsing Dann’s initiative and will participate in the events. Interested parties can send donations to:

 

The CCA appoints new Canfax Senior Analyst/Manager


Brian Perillat will be joining the Canfax team as Senior Analyst/Manager on April 12. Perillat obtained a Master Degree in Agricultural Economics from the University of Saskatchewan in 2001. He has since been employed as a livestock production economist with Alberta Agriculture Food and Rural Development and most recently as a farm management consultant with Meyers Norris Penny.

Raised on a mixed farming operation in Saskatchewan, Perillat is passionate about the cattle industry and continues to raise purebred beef cattle on his family farm.

 
CCA Action News

Staff Contributors: Reynold Bergen, John Masswohl, Tracy Herbert
Written, edited and compiled by: Gina Teel and Tracy Herbert



To sign up for CCA's "Action News":
Visit www.cattle.ca and click on "Sign-up for Action News".

For more information, contact:

CCA Communications at feedback@cattle.ca or visit our website at www.cattle.ca

The Canadian Cattlemen's Association is the national voice for nearly 90,000 Canadian beef cattle producers

Head office:
Ste. 310, 6715 8th Street NE, Calgary, AB   T2E 7H7
Phone: 403.275.8558   Fax: 403.274.5686

Ottawa office:
1207, 350 Sparks Street, Ottawa, ON   K1R 7S8
Phone: 613.233.9375   Fax: 613.233.2860