Alberta beef industry in strong position at moment, says ABP chair

By Tim Kalinowski

The Alberta cattle industry is in a relatively stable position at the moment, despite the potential for seismic shifts in Canadian cattle export market if NAFTA ultimately does not get renewed, says Alberta Beef Producers chair Charlie Christie.

“We are concerned about NAFTA, and we are very happy 11 nations have now signed the TPP,” states Christie. “They key there is to get Canada to be one of the first six nations to ratify it so it comes into effect more quickly.

“With NAFTA, we are lobbying with our U.S. Producers, who are also in favour of NAFTA, and our Mexican counterparts. Most of that takes place through the CCA, but we have members who are representing us in that organization; so we are involved.”

Ongoing market volatility in the Futures Market also does not appear to be dragging down Alberta beef too much at the moment, adds Christie.

“If you get caught in one of those price swings then obviously it’s concerning to you, but more and more of our cattle are contracted and priced long before they hit market,” he states. “It’s actually becoming harder and harder to get a true spot price. (The analysts) are forever struggling with price reporting on the actual cash trade because there is so little of it.”

Christie acknowledges barley prices might be a bit of a concern to some, however.

“The only kind of cloud over the feeding industry is the barley prices are going up pretty quickly, and that cuts into our cost of gain.

“But, at the end of the day, it is the cost of doing business, and the market is going to stay fairly strong in the short term as we head into the growing season and taper off toward the end of summer. And then get strong again in the fall on the fat end.

“As far as calf prices will go in the fall, that one is always a bit of a question mark, and I don’t have a crystal ball.”

Outside of these market concerns, the big thing Christie has been pounding home to Alberta producers is awareness of the rising national check-off rate to $2.50 per animal as of April 1, more than double the previous rate of $1.00 per animal. Christie reminds producers why they voted for the increase in the first place.

“It is going to be raised to $2.50 as of April 1,” Christie confirms. “What that increase was for, was the National Beef Strategy took a look at what it was going to take to stay competitive through research and marketing. They decided in order to reach these objectives they were going to need another $1.50 per animal.

“In Alberta we took that to all our fall meetings, and was approved at all those meeting to go ahead with that increase. Out of that $2.50 about five per cent goes to issues management; so when stuff hits the press. About 35 per cent goes to the Beef Cattle Research Council, which is tasked with the national research picture. And then about 60 per cent will go to Canada Beef, which is our marketing arm all over the world.”

The Alberta Beef Producers also recently reached a formal agreement with the Alberta Cattle Feeders Association about sharing the provincial check-off in a way which will eventually allow the Minister of Agriculture to once again make that check-off non-refundable in the near future, something ABP members having been asking for for some time. Again, Christie explains:

“About 80 per cent of the check-off  (refund) is being pulled back by about 10 per cent of the refund requesters,” states Christie. “If that $2.00 becomes non-refundable, the Cattle Feeders Association would get about $0.25, the Alberta Beef Producers would get about the same as now at about $1.30. The dealer rebates are staying the same at about five cents. And $0.40 would be going to the Alberta Beef Industry Development Fund, for research development, marketing and industry collaboration—those efforts the Beef Producers and Cattle Feeders would like to work on together, or other organizations which want to come and apply for some of those funds.

“With the money going back to producers, there would be a once in a year declaration a producer could send in and say I want my $0.25 actually to go to the Industry Development Fund if they didn’t want it to go back to the Cattle Feeders.”

By making the check-off non-refundable, the ABP feels it will not have to advocate for an increase in the provincial check-off rate in the near future.

“We didn’t feel we needed to raise our check-off,” he says. “We felt we needed to hang onto what we are collecting. The majority of our industry is forward-thinking, and they understand and see the benefits of these check-offs. We need to continue to move our production system forward and stay competitive with the rest of the world.”

The Alberta Beef Producers is working on the wording of the plebiscite which will be put before members of the ABP and ACFA to ratify on the issue of the non-refundable provincial check-off, and ABP will present a voting system in due course.

“The Cattle Feeders and the Alberta Beef Producers have been working hard the last two years to forge this partnership, and it went before both our AGMs and passed,” says Christie. “So that’s positive, but the scary part is if people think, ‘Good, we should do this,’ but don’t get out and vote for it. We are working on that plebiscite now, and we want to make sure we can figure out how people can vote and get a true picture of what the industry wants.”