This week’s announcement of federal loans and another Manitoba Cattle Enhancement Council investment to support Keystone Processors’ bid to become Manitoba’s largest federally inspected meat processor isn’t enough to turn the tide for this province’s struggling beef producers.
But it’s a step in the right direction.
The move by this company along with two smaller processors – Plains Processors near Carman and Oak Ridge Meats Ltd., in McCreary – to expand this province’s federally inspected domestic processing capacity can help farmers here access export markets with beef instead of live animals.
It’s no secret that Manitoba farmers produce more cattle than local markets can consume. The usual statistic is that the Manitoba market can consume only 13 to 15 per cent of the cattle produced.
Can consume. But does it? Or has industry become so export oriented, it’s not serving the domestic markets that do exist?
According to a 2008 Manitoba Beef and Cattle Industry profile, all but 17,800 of the 560,000 head of cattle this province produced in 2008 left the province. The cattle that were raised to market weight and processed here produced 11.4 million pounds of beef.
Annual consumption estimates vary between 52 pounds per person (MAFRI 2004) and 68 pounds per person (AAFC 2008). That equates to between 58 million and 70 million pounds. Seventyseven per cent of that is purchased through five national grocery chains, which typically only source meat from federally inspected facilities. The MAFRI analysis indicates we’re importing close to 44 million pounds of fresh and processed beef from other provinces and just under six million pounds from other countries. That’s about 78,000 animals.
That would be OK if our producers were making gobs of money exporting. But our cattle industry, once an anchor for this province’s agricultural economy, is spiralling into oblivion in the wake of BSE, U. S. country-of-origin labelling (COOL), the dollar near par, and high feed and transportation costs.
Up until the mid-1980s, cattle production and slaughter were pretty much on par in this province. In 1976, for example, the province had capacity to kill 581,000 head of cattle annually. But the industry consolidated outside of the province, reducing annual federally inspected slaughter capacity to 16,000 by 2001.
These facts run counter to the value-added and diversification rhetoric around livestock. Expanding of our livestock industry without maintaining local processing has made this province’s agricultural sector more vulnerable to the vagaries of export trade and less, rather than more stable.
You can stick wheat, oats and barley in a bin indefinitely if the border closes tomorrow. You throw a load of meat into the freezer. The same can’t be said for live cattle and hogs. Meanwhile, statistics show that while live animal exports have been hurt by COOL implementation, export sales of meat have risen.
It has been estimated that transportation costs for shipping cattle outside of the province have risen fourfold since 2003. That factor alone should make the local market a premium-value market. Even if that processed product is sold for export, it will cost less to transport, face fewer barriers to trade, and result in fewer greenhouse gases hauling cattle across the Prairies only to truck beef back in boxes.
And it could support the local economy.
If local producers are affiliated with local processors catering to local consumers, there are expanded opportunities to create products tailored to the variety of “values” chains that are emerging.
There’s not much point using science-based arguments on consumers who say they don’t want growth hormones, sub-therapeutic antibiotics or electric prods used on their meat.
No one throws the laboratory logic at religious preferences for halal or kosher meat products, which require specific killing and handling rituals that bear no relationship to efficient production methods. Why then does the industry balk at consumers who express other values? Just give them what they want and charge them what it costs.
Now that we are getting some local processing capacity back, cattle producers have a choice – certainly not for all the cattle they produce, but for some.
Assuming these smaller plants will be competitive with other buyers, the question then becomes what quality of beef animals they can access.
Will they get the best farmers here have to offer, or only those animals that don’t conform to the loads of commodity beef assembled for out-of-province buyers? Will local farmers be willing to adjust their production methods to meet the specifications for markets these smaller plants are trying to access?
Local investors have committed. Governments have now committed. Will Manitoba cattle producers do the same? [email protected]