Steer federal cattle cash here

Sadly, because the industry is overly concentrated in Alberta and Ontario, Manitoba producers have been hit harder than their peers with even higher costs to get their animals across the country (or into the U.S.) to market, and even lower prices for their animals due to stress and bruising once they get there.

These challenges are not going to go away. They're going to get worse. Though oil prices have fallen in recent months, energy analysts predict ever-increasing transportation costs in the years ahead. And while food commodities have also declined in value during the current recession, long-range forecasts of the United Nations and many others predict food prices will skyrocket during the next generation.

So what should Manitoba cattle producers do? We believe the answer to the problems plaguing Manitoba's cattle industry is also the answer to the challenges facing our country's cattle industry. We need to invest in a new model of infrastructure for the industry that positions it to take advantage of future trends rather than be penalized by them.

The answer is for governments to join private industry in investing in regional, federally inspected beef packing plants. We need plants that can cut down on costs and emissions from long-distance hauling while making products that meet domestic as well as fast-growing international demand.

As the chairman of the Manitoba Cattle Enhancement Council, I was pleased to see the recent federal budget included money for agriculture in general and for increasing slaughter capacity specifically.

Our council recently drafted a discussion paper for industry stakeholders that examines how our provincial cattle industry could begin to thrive again with the addition of new local plants and a smart focus on premium products for domestic and international markets. We believe this is an intelligent solution to what could otherwise be a continued decline in the cattle industry here in Manitoba and across the country.

It makes sense to invest in new slaughter capacity in Manitoba because forces are pushing both the supply and demand sides of the business. Producers need local options to remain (or become) profitable. With plants closer to home, they will pay less to get their animals to market. And the plants will be able to reduce costs and gain better quality control by buying directly from producers.

We also believe that creating an environment with more competition among Canada's beef packers will lead to more competitive pricing for producers selling their animals and more product choice for consumers.

And consumer choice is important, because it is helping to drive demand for locally produced quality food products. People want to serve good, nutritious food to their families. More and more, Canadians are seeking food products that can also promise enhanced food safety. Local industry can fill that need more easily than distant plants because they have a better handle on where the cattle are raised and local vets know best about potential exposure to biohazards or disease.

Though local consumers are essential, the real growth in demand for quality food products is coming from Asia. Rapid economic development in China, Korea, Taiwan and elsewhere is creating the biggest middle-class boom in human history. With that is coming demand for better nutrition and better food.

The MCEC has already invested in Keystone Processors Ltd., a new beef plant taking shape right now on Marion Street in Winnipeg. We are also looking at two more potential plants to bring new federally inspected slaughtering capacity to Manitoba. Each business plan calls for investment in innovative systems, such as incorporating complete gate-to-plate traceability or reducing plant effluent.

Most importantly, the plants we're looking at are targeting areas with growing demand, such as consumers seeking premium, locally raised products, natural beef, kosher and halal beef, and Asian markets.

These plants will be a positive addition to our national industry, which today is almost entirely focused on churning out massive quantities of commodity beef to the North American market.

But what about those big plants in Alberta, you ask? They're not even at capacity themselves, so why should we invest in new plants here in Manitoba?

People who adhere to this line of thinking conveniently forget that Alberta's plants are suffering from a chronic labour shortage and a lack of cattle. They aren't at capacity because they've lost workers to the oilpatch and cattle are heading south of the border, where environmental regulations aren't as strong.

Building Manitoba plants will answer the calls of producers, entrepreneurs and consumers. There is an ample supply of Manitoba-raised cattle to feed the plants we're proposing, plenty of demand from producers for local capacity, and considerable consumer demand for their products. By following this path, we'll be reshaping an industry, making it right-sized for the markets we target and tapping into future growth here at home and around the world.

Private industry is stepping forward already and MCEC's investment is on behalf of cattle producers in this province. Our single biggest challenge is finding sufficient additional investment in the current credit crisis. That is why we are urging the federal government to support Manitoba's cattle industry this year.

Bill Uruski is former Manitoba minister of agriculture and now chairs the Manitoba Cattle Enhancement Council.

www.mancec.com

Republished from the Winnipeg Free Press print edition February 28, 2009 A17