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Red Meat Industry Trying To Survive

Governments need to show more concern for the survival of the red meat industry and worry less about countervailing action because some provinces are willing to support livestock producers, pork and beef groups have told the House of Commons’ agriculture committee.

Jurgen Preugschas, president of the Canadian Pork Council, told the MPs March 5, “It’s not just farmers who are in jeopardy but also suppliers, packers, distributors. We’re in a serious situation and we need to do something fast.”

Help could include a support payment, he said. “We must be creative.”

For example, rather than bemoaning the Saskatchewan government’s decision to spend $71 million in direct payments to cattle and hog producers, governments have to appreciate the depth of the income problem in livestock production, he said.

Preugschas called on Prime Minister Stephen Harper to tell U. S. President Barack Obama that the mandatory country-of-origin labelling (COOL) proposals announced by Agriculture Secretary Thomas Vilsack will hurt the farmers and packers in both countries.

Agriculture Minister Gerry Ritz has to do better than say farmers will have to wait at least until April 1 before they find out what additional relief governments will provide.

The pork council, along with the Canadian Cattlemen’s Association, the National Farmers Union and individual livestock producers, appeared before the committee in recent days to update the MPs on the tough times in the sector.

“CANNOT CONTINUE”

Bill Jeffrey of Stratford, Ont., president of the Perth County Beef Farmers Association, said that after 50 years in the business, he’s realized, “We cannot continue to market our beef the way we have for the last 50 years.”

He’s formed a committee of 14 members from six counties in southwestern Ontario and hired a professional marketing consultant “to look outside the box for a fresh look at our entire industry.”

Risk management programs respond too slowly, he said. In the past five years since the onset of BSE, there have only been two months when the average beef producer could cover costs of production.

“We can no longer continue in the direction we were going, which not only exploits beef farmers but allows for the importation of beef raised through methods prohibited in Canada,” he said.

“If we continue to lose young farmers who have been forced to pursue off-farm income and who are now exiting the industry, who’s going to produce the food for the citizens of not only Ontario but of all Canada?”

NFU board member Grant Robertson outlined the work his organization has done in examining the problems in the cattle industry. He points to 1989 as pivotal in the industry’s prosperity because that was the year Cargill first came to Canada, triggering a consolidation in the packing industry that has left 80 per cent of slaughter capacity in the hands of Cargill and XL Foods.

Fred Tait, another NFU board member, said the advent of free trade with the U. S. turned the industry into a continental business, which led to packer ownership of cattle.

Dennis Laycraft, executive vice-president of the CCA, focused on the impact of COOL and the number of countries still shunning Canadian beef . “We’re an export-oriented industry. We export, and have traditionally exported, to close to 60 countries around the world. That access remains impaired, but, nevertheless, it remains very important to us.”

Canada got to be the largest exporter of grain-fed beef in the world through a global marketing strategy that meets the different demands for beef products, he said.

We “intend to be a leader in quality, service, safety and animal health, and certainly Canada’s reputation for veterinary infrastructure. And while we’ve had challenges with BSE and getting markets open, virtually every market that has reopened, we’ve exceeded pre-BSE sales into those markets, with the exception of Japan, where simply the age requirement is so restrictive that it impairs our ability to produce enough cattle to satisfy the demand that exists there.

“We’re hoping to see progress to move that to an age level that will allow us to move considerably more product to that market.”

PROFITABILITY

When the global recession turns around, there will be markets for Canadian beef but questions about profitability for the farmers will remain, he said.

Preugschas said there has been a 28 per cent drop in the number of farms reporting hogs in the last two years and hog inventories are down 18 per cent in that period. At first, higher feed costs and the high value of the loonie were the main problems; now it’s COOL and the lack of credit.

Major U. S. processors have said they will stop buying Canadian feeder pigs to avoid the complicated labelling Vilsack has called for. “This not only hurts Canadian farmers but also U. S. producers relying on Canadian feeder pigs and processors who depend on Canadian finished hogs,” he said.

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