Bad news for XL Foods is good news for organic beef

Smaller, independently operated production, slaughter and marketing channels 
paying off in higher prices and increased consumer confidence

Some Manitoba ranchers aren’t losing any sleep over the problems faced by the XL Foods beef recall.

That’s because their beef is certified organic, and marketed through channels that operate totally independent of the big players.

“I think we are definitely starting to see demand perk up, not that it wasn’t hot already,” said Allan McKenzie, a Nesbitt-area rancher who runs a 150-head operation and belongs to a 14-member organic beef-marketing group based in Manitoba.

Fallout from the scandal, which has seen the Brooks, Alta., plant delisted for exports to the United States, and millions of pounds of beef taken off store shelves across the country, may have “tainted” beef’s image as a safe food in the minds of consumers, he added.

That’s not good news for the cattle industry in general, said McKenzie, but on the other hand, it may encourage beef consumers — especially those buying ground beef products — to reach for organic burgers the next time they go shopping.

That’s because there are big differences between conventional and organic beef production. While the XL Foods plant operated on a massive scale, slaughtering upwards of 4,000 cattle per day, the marketing group that McKenzie belongs to ships about 1,000 head per year, mainly to small, organic-certified abattoirs that kill fewer than 50 head per day.

“Some of the plants only kill 25 head a day, so it’s a very different sort of world,” he said.

While XL operated a massive 75,000-head feedlot near the plant, the marketing group’s cattle are finished in small-scale organic feedlots like the one on Gaston Boulanger’s farm near Grand Clairiere.

Gaston, who farms with his sons Marc and Daniel, has been raising organic beef since 2005, and currently fattens 175 head a year.

High feed prices

The steers and heifers are fed a diet of organic grains, mainly oats and peas as well as wheat and barley screenings in portable steel feed bunks along with free-choice hay.

The price of organic feed grains has gone “through the roof,” he said, noting that due to the drought in the U.S., organic grain buyers have been coming up to Canada and buying all the feed barley and wheat that they can find.

But using oats helps keep costs down, even though the animals take about a month longer to finish. Another upside is a reduced risk of bloat on the lower-energy ration. This year, they were able to grow most of their feed grains on the farm, and bought some more organic oats at $6 per bushel.

“You can’t make it work on $12 barley,” he said.

Keeping the animals healthy is critical, because organic protocols don’t allow antibiotics.

“We don’t have a lot of health issues. We make sure the cattle have lots of room — that’s the key,” said Boulanger.

The steel bunks and round-bale feeders are moved regularly to clean areas in a wide-open field, and ample bush cover on the periphery allows them to take shelter from the cold winter wind.

In the rare event that an animal gets sick, it is separated from the rest, given a different ear tag, needled and later shipped through conventional channels via the local auction mart.

The marketing group has five companies vying for their production, two in the U.S., two in Ontario, and one in Alberta. The meat generally ends up on store shelves in major cities such as Ottawa, Toronto and Vancouver.

“Demand has been really increasing now for a little over a year. Right now, we cannot supply everyone,” said Gaston, adding that that wasn’t the case two years ago.

When the North American economy took a turn for the worse in 2008, many predicted that organic products would be hit hardest due to their higher prices. However, apart from a temporary dip, the industry has bounced back stronger than ever.

On a recent trip to Ottawa to visit his daughter, Boulanger used the opportunity to investigate the organic retail market. What he discovered there shattered the myth that only rich people buy organic products.

“You’d be surprised. Most of the people who purchase organic are young parents with young kids who want to make sure that their children eat the best, safest food,” he said.

At present, the marketing group’s beef sells for $3 per pound hot, hanging weight.

“I think there’s room for a few more, but if too many guys come in, we’ll end up with the same problem of too much supply,” said McKenzie.

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