Winnipeg Free Press - PRINT EDITION

Our beef industry needs better cut

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What's known as the fall calf run is starting a little earlier than usual in Manitoba this year as ranchers move to take some of the grazing pressure off pastures that by now badly need rain.

For most cattle producers in this province, their stake in the steak business ends at the local auction mart. Spring calves are weaned from their mothers and sold either direct to the feedlot operators in Alberta or the United States, or through a network of auctions at which buyers assemble truckloads.

While the animals nowadays are tagged to track their passage through the system from birth to the slaughterhouse, the only time that's put to use is when tracing the origins of a food-safety or animal-health problem. Typically, none of the information about how that calf was raised travels forward and no information on how the animal graded is passed back.

In fact, it's hard for producers to meet market demands because industry and consumers don't always want the same thing.

At a time when consumers are demonstrating they want something different by increasingly buying less beef, the industry remains focused on pumping out as much of it as it can at the lowest cost possible.

And rather than focusing on developing high-value export and domestic markets willing to pay a premium for beef produced according to consumer preferences, Canada's beef industry seems content to backfill the U.S. market while that country exports its own beef to the premium markets.

Canada's beef sector is gradually going bust in the process.

That's the gist of the latest report from the Canadian Agricultural Policy Institute, a think-tank created by the federal government in 2004 to focus on mid- to long-term issues in agriculture.

"Canada's beef sector has a choice," says CAPI president David McInnes in a release. "Remain primarily a commodity beef player or strive to be more of a value-added supplier driven by consumer demand."

Some of the industry's old-timers such as Charlie Gracey, the former executive vice-president of the Canadian Cattlemen's Association, have been saying much the same for years. The country's expanding beef production after grain export subsidies were eliminated in the mid-1990s did not coincide with a marketing strategy that looked beyond the United States.

As a result, 85 per cent of the cattle and beef exported from Canada still goes south. Meanwhile the U.S. is recording triple-digit export growth to parts of the world, such as Asia, where demand for beef is growing.

Even worse, "after processing south of the border, higher-value beef is then exported back to Canada," McInnes says. "In 2011, our exports of beef to the U.S. averaged $3.74 a kilogram, whereas average beef imports from the U.S. were $6.55 a kilogram."

The result? Canada is at risk of becoming a net importer of beef from the U.S. Our national herd size has dropped 20 per cent since 2005 and consumer demand for beef in this country has dropped 10 per cent in the past decade.

"A new strategy, centred around collaboration, is needed," McInnes says, starting with sharing information throughout the value chain.

"From producers to retailers, each beef supply chain needs to better utilize and share information on beef performance, grade and yield, market characteristics and consumer preferences.

"Consumer expectations are rising. People want to know more about the origin of the beef they eat, what the cattle were fed and whether antibiotics were used, among other concerns. Canada's reputation for safety, care and quality is salable and we need to fully exploit these aspects," McInnes says.

Canada's food safety system is far from perfect, as illustrated by the unfolding E. coli outbreak at one of Canada's largest processing plants, but it remains among the best in the world. There is a corps of producers here who are not only knowledgeable, but marketable as part of the beef story. Those pastoral scenes you see from the roadside of cattle contentedly grazing in the open air and sunshine aren't just there for show. They play an integral role in converting the sun's energy into usable protein for humans.

The ingredients for a made-in-Canada export success story are there. What's needed is a recipe for making it happen.

Laura Rance is editor of the Manitoba Co-operator. She can be reached at 204-792-4382 or by email: laura@fbcpublishing.com .

Republished from the Winnipeg Free Press print edition September 29, 2012 B6

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