Canadian beef producers should expect to see an increase to the Canadian Beef Cattle Check-Off sometime in 2017, but the exact date is yet to be determined.
“I suspect producers will see this take effect in 2017. But, it is hard for me to nail down an exact time that producers will start to see it reflected on their sales receipts,” said Melinda German, general manager of the Canadian Beef Check-Off Agency. “What we are targeting is that some provinces will look to implement the increase in January, while most will look to implement this in April.”
The national checkoff is currently a mandatory $1 levy Canadian beef producers pay on each head of cattle they market. The checkoff generates approximately $7.5 million annually. That amount is then divided to support marketing and promotion, through Canada Beef, and industry research through the Beef Cattle Research Council (BCRC).
The goal of the checkoff is to increase the sales of domestic and export beef, and find better, more efficient methods of producing beef and beef cattle.
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“The national checkoff came into place about 17 years ago and we have never seen an increase to that. What that means, is that right now we are operating on about a 70-cent dollar when we just include inflation and not all the other things that can erode that dollar,” German said. “Not only is that dollar eroded to about a 70-cent dollar, but we have also seen our cattle inventory in Canada decrease significantly. What that means is smaller budgets for those national groups. What this increase will mean is the ability to not only continue programming for those national groups at the level they are now, but also enhance them.”
A few years ago the National Beef Strategy, a group of representatives from across the Canadian beef industry, proposed an increase from $1/head to $2.50/head. Since that time, provincial organizations have presented the proposed increase to their producers.
“Producers had an opportunity to attend those meetings. Right now, eight of the nine provinces we deal with have had a positive resolution or motion come to their AGM and passed in support of that increase,” German said.
Provincial input
Manitoba is one of the jurisdictions that approved the increase.
“Last year at the Manitoba Beef Producers (MBP) annual general meeting, a resolution was passed to support an increase to the national checkoff from the $1/head to $2.50/head,” said MBP general manager, Brian Lemon.
Provincial organizations also determine how they would like to see their contribution to the national checkoff allotted.
“As a provincial organization, we get to decide where that split should be. In Manitoba, it was decided that the appropriate split was: 85 cents goes to promotion and marketing and 15 cents goes to research,” Lemon said.
To go along with the increase, provincial organizations will now have a third allotment avenue, which has been entitled, issues management.
“There (is) a need to support the consumer and the public, in terms of beef and why beef is a healthy protein option, but also being able to tell our story about things like hormone-free beef or antibiotic resistance,” German said. “This area of issues management is all about ensuring we are out in front of things, telling our story to the consumer, to the public about really what is happening in the industry and making that connection. We have really lost that connection and that is why this issues management came up as a component of one of the pillars in the National Strategy that we felt was very important to support.”
Evaluating value
Every five years the Canadian Beef Cattle Check-Off Agency has committed to conducting a study that will examine the economic benefits from the checkoff.
“What do you get for your checkoff? Where is the value in the checkoff? It recently conducted this study that looked at the years 2011 through 2014,” Lemon said. “Every time you pay your $1/head national checkoff, it returns $14 worth of value to the beef industry, in terms of new and improved innovations, efficiencies, new markets, bigger markets, market access, those sorts of things.”
The study, Evaluating the Economic Benefits from the Canadian Beef Cattle Check-off, was the second analysis of the checkoff and was completed in June.
“Every five years we commission someone to evaluate and crunch the numbers about what is getting back to producers for the dollars they give up. How well are we working on their behalf?” German said. “What we found this year was the return on investment rose to 14:1. That is very significant and if we compare that to our trading partners in Australia and the U.S., we find that our return on investment is higher and we are doing a very good job.”
Next step
At this point the Canadian Beef Cattle Check-Off Agency is working with provincial organizations to get through the paperwork of enacting the increase.
“It does get fairly complicated because every province has different rules and regulations,” German said. “So, a little complicated, but not undoable, it just takes us some time to go through the process and the paperwork.”
German adds that Manitoba producers can expect more information on when they will see the increase at MBP’s upcoming AGM in February.
“We are currently working on negotiating agreements with each province. Most of the provinces will be signing those in December and January. So, by February we will have a lot more knowledge as to when we might anticipate that increase,” German said.
For more information visit, canadabeef.ca/national-check-off/.
