COLUMN - Rationing

by Joe Bouchard

Grab a cup of coffee and get yourself comfortable. I know what I’ve written here is long and may look like a strenuous read, but our industry is at a crossroads and has been for quite some time. Regardless of who you are, your age and where you “fit” in the industry, the decisions we make today will shape the future of our industry tomorrow.


Got that coffee yet? Okay, here we go.

We have to start working together.
The more we look at how other industries organize themselves, the more obvious it becomes that the cattle industry is one huge, dysfunctional family.
That needs to change. We all need each other and have to start working together. We need the purebred breeder to provide top quality stock so that we have a good commercial industry; the commercial guy has to provide a product that the feedlots can feed efficiently and that ultimately the consumers want to buy. We need the packing industry because they turn our cattle into food. I know a lot of people are mad a that packers but without a processing industry we’d be in a tough spot. Some think that the packers are making huge profits but I tend to disagree. When was the last time you made a pile of money doing something but then got out of it? Tyson in Alberta did just that this past summer and the fact that JBS - the most aggressive beef company in the world - were not interested in buying the Tyson plant should send a strong message to our government. Right now the packers in Canada are running at 60 - 70%. They are on an uneven playing field to their counterparts in the U.S. who can do the same job for $100 a head less.

We should be processing more here in Canada and sending beef out in a box, strengthening our feedlot sector and adding money to the entire industry. That won’t happen until we can do the same thing for the same price as the U.S.
There are many links in this long chain and we can’t see any of them broken.

How we are working together.
As an association we have worked hard these past few years to develop good working relationships with all levels of government, other farm organizations and stakeholder groups. We may not always agree but try to understand where they are coming from and hope they do the same for us. At times we have to compromise, but it also means we occasionally have to draw a line in the sand.

There is room for all commodity groups to exist and prosper but one system may work well for one but not the other. We respect that, but it needs to work both ways. The only way the beef industry can exist is through increased trade and we are pressing the government to help us make that happen. We feel this is a balanced, fair approach.
If an organization has a problem with a balanced, fair approach then it must mean they are in favour of the opposite - unbalanced and unfair. It is our job to make sure cattle producers don’t get the raw end of a deal.

Who do you want speaking for you?
There always will be someone willing to stand up and speak on your behalf. The question is: are they delivering the message you want the world to hear?
Governments do not take seriously an industry that does not have its act together. If the cattle industry begins fighting amongst itself the only direction it will move is backward. Some producers and farm organizations stand up and say they have the answer to “fix” the cattle industry but it only fragments the industry more.

There are some who believe we should go back to just supplying the Manitoba market. I have a real problem with this logic because in order to do that we’d have to reduce our provincial herd by 90%. So for every 500 head operation that stays, there would be 90, 50-head operations that would exit the industry. I don’t have to tell you what that would do the rural economy.

Other countries want our beef. Why wouldn’t we send it there if we can make a good return on it?

A return to “the good old days” is not an option because the world has changed so much. And besides, ask any old timer and he’ll tell you beef farmers worked hard for nothing and they were all poor. There was no money to spend until we began trading. Cattlemen were the poor cousins in farming compared to everyone else. And if you still think supplying only the Manitoba market is a good idea - think square balers! Because that’s exactly what we’ll be using again.

Promoting a pie-in-the-sky idea or complaining with no solutions, is like riding in the back seat of a car and grabbing at the steering wheel. Trust the person with the most experience on the road and the map to do the driving.

How we speak on your behalf.
Every Director on the MCPA Board is an active cattle producer with the cow-calf and feedlot sectors both represented around the Board table. We have varied interests and areas of expertise from every part of the province (elected by you). In my opinion, there is no better group out there to protect your interests. Being industry specific, the MCPA can focus on important details to our industry that others might overlook or deem irrelevant.

We all attend monthly Board meetings and some Directors spend 10+ days a month away from their farms and families at government/stakeholder meetings, trying to make a difference. We take every decision seriously - and why wouldn’t we since every position we defend affects our personal bottom lines and the future of our farms.

Change is inevitable.
If we want to live in the past, there will be absolutely no future.
We have a lot to look forward to in the beef business. Demand for beef worldwide is increasing. We have trade agreements in place but if we can’t provide the product or enough of what the foreign consumer demands—meat from cattle proven to be under 30 months of age—those deals don’t mean much. The recent Hong Kong deal is based on age verified beef. It will mean that as producers we might need to change or adjust how we do things.

To maximize the return on our calves we have to use every tool at our disposal. Age Verification and Premise ID is one of those tools. These are the keys to opening up other markets to make us less reliant on the U.S. This fall when I marketed my calves I phoned all the major buyers in the area (15) and everyone of them asked the following: Are the calves vaccinated and age verified with a premise ID. There is a market for these calves but the feedlots and packers are having a hard time finding enough to fill their orders. If they make money, they can pass it down but if it costs them money, they will pass it down to cover their added expense.

Here in Manitoba we have to be ready for ALMA. If we are not, there is an excellent chance our calves will be discounted. (a full explanation is on page 2).

Handling change.
To help with Age Verification the MCPA is investigating the possibility of getting field reps to help producers. We are also trying to keep everyone aware of the changes coming to the industry through our free publication, Cattle Country.

Does the beef industry have a future here in Manitoba?
Absolutely.
Agriculture in Manitoba is what drives this province. Farm families make up only 2% of the population (which we are reminded of every time we ask for something) but we generate a whopping 28.5% of the revenue brought into this province. To put that in perspective, the energy industry (hydro/mines) brings in a mere 8% by comparison.

We are important to the provincial economy and it is time we begin patting ourselves on the back. We are pretty efficient compared to some of the other industries and it is agriculture that keeps rural Manitoba alive. Agriculture runs this province, plain and simple and needs to be valued more by the provincial government. No other sector would go through what we have gone through these past six years without rolling over and dying. That says something about cattlemen as a whole and it’s that attitude that will help shape our future.

Since we generate over 28% of the provincial revenue, close to 1/3 of each government employee’s salary and departmental budget comes from agriculture. So every MLA and the Premier should really care about what’s happening on the rural landscape.

We as an industry are tired of being viewed as the poor cousins. Having said that, we are all facing tough economic times and producers are frustrated. It is discouraging to see cattlemen in other provinces receive more help from their government, but the fact is, Manitoba doesn’t have the money that Alberta has. It is hard to stomach but that is the reality.

The North American industry has lost 7 million cows; and the U.S. cow herd is down 8 percent. The recession will have a short term affect as we see a lot of the middle cuts ending up as ground beef in order to move beef. But as the herd continues to contract, the supply and demand cycle will start to kick in. We here in Manitoba want to be well-positioned when that happens.

The focus of our lobbying efforts
If we could get a per head payment to help producers through this rough spot, we would have done that already. But the government has made it clear - no more ad hoc (per head) payments. It is a waste of your check-off dollars and the MCPA’s time to continue in that direction so we are focusing our attention on providing more tools you can use; and bringing forward a strong position on every proposed regulation that will have an affect on how cattlemen do business in this province. We lobbied for the Cash Advance program and got it. We are at the table discussing needed changes to AgriStability. We designed and brought forward an Environmental Goods and Services proposal that is being taken very seriously by both the federal and provincial governments. We continue to press for changes to the current tax deferral regulation and lobby vigorously to ensure that all policies brought forward are workable for our industry.

We support your right to choose.
Independence and the free market is the cornerstone of the cattle industry.
If I could best sum up the MCPA’s philosophy, it is: we believe in a free market and the right to choose. We will oppose any legislation that takes away that producer’s right.

Anyone who wants to invest their time and resources in the cattle industry can get into any sector they choose. And that’s a great thing about our industry and something we need to protect.

I know that the position of MCPA President carries a lot of responsibility and I am looking forward to the challenge. I know I am the youngest President ever, but I’ve been assured I’ll look a lot older when I’m done.

I am not a politician, I am a cattle farmer and I’m not going to make wild promises I can’t keep. The only thing I can promise is that (my next column will be shorter) and I’ll do the best possible job I can to represent and lead our industry this year.

I wouldn’t be able to do it without the support of my family and neighbours who help out when I’m not home. Ultimately, our families and neighbours are what this is all about.