Canadian cattle producers may soon be paying an increased checkoff to fund industry research and marketing efforts.
A representative from Canada Beef Inc., attended Manitoba Beef Producers (MBP) district meetings to update producers on the National Beef Strategy and discuss the proposed increase to the National Beef Checkoff (NBC).
“Your expectations have to match your input. If the industry doesn’t invest in research, the government won’t invest either. This is a critical step to keeping our industry moving forward,” said Ron Glaser, vice-president of corporate affairs and public relations with Canada Beef Inc.
Collected through a levy when cattle are marketed, the NBC was initiated in 1999 under the Farm Products Council of Canada and is administered by the National Checkoff Agency (NCOA).
A mandatory $1 checkoff is collected per head on all sales across the country and this generates over $8 million annually. Those funds are then targeted into research and marketing activities on behalf of the industry as a whole.
“How are we going to build future opportunity for the industry that young people are going to choose to stay in? That is something that is always front and foremost in the minds of those who have been putting this plan together,” said Glaser. “We need good science and growth in terms of competitiveness and in order to achieve those things, we are going to need to continue to invest.”
The Beef Cattle Research Council and Canada Beef Inc., are the organizations that tackle the research and marketing, with their main goals focusing on increasing domestic and export sales and seeking out better and more efficient methods of production.
The NBC is also used to leverage further funding from exterior sources towards beef research and marketing. According to Glaser, there is currently $6 being attracted for every producer dollar invested.
“Research follows the money and generally, government investment follows industry. If the industry is willing to invest, the government is usually more willing to make financial commitments,” said Glaser.
The National Beef Strategy (NBS) has come to fruition through collaboration of provincial cattle associations from across the country, the Beef Cattle Research Council, the Canadian Beef Breeds Council, Canada Beef Inc., the Canadian Cattlemen’s Association and the National Cattle Feeders’ Association.
“These groups have gone through a lengthy process to develop the national strategy and Manitoba has certainly been a great partner in that,” said Glaser.
The NBS has four goals it aims to reach by 2020 — increase carcass cut-out value by 15 per cent, reduce cost disadvantages compared to main competitors by seven per cent, increase production efficiency by 15 per cent and enhance synergies within industry and connect positively with consumers, the public, government and partner industries.
“For the five-year strategy, the vision is a dynamic, profitable Canadian cattle and beef industry with a mission to be the most trusted and competitive high-quality beef cattle producers in the world, recognized for our superior quality, safety, innovation and sustainable production practices,” said Glaser.
The cost required to achieving these industry goals has been estimated to require an NBC investment of $16 million to $17 million or $2.50 per head.
“Why the increase? There are a number of things that factor in here, but most significantly, the loss of buying power due to inflation, we have lost about 25 per cent of our buying power, just from inflation alone,” said Glaser.
Glaser explained, when you look at annual inflation the $1-per-head NBC that was established in 1999, would equal $0.73 purchasing power in 2015.
Fifty-eight per cent of the funds collected would be allocated into promotion and marketing, 20 per cent into research and 14 per cent would be placed into provincial investment.
In Manitoba, cattle producers currently pay a $3 provincial checkoff. With an increase to the NBC producers will be looking at $5.50 per head.
According to Canada Beef Inc., at the 2015 cattle prices, producers would be investing less than one-half of one per cent of their sales into policy, research and marketing.
Cattle producers at the District 7 MBP meeting seemed to be receptive to the increase, putting forth a resolution in support of the change, which will be discussed at the MBP annual general meeting in February.
For more information on the National Beef Strategy and the National Beef Checkoff, please visit, beefstrategy.com.