Elsewhere in the paper was a reminder that the Wartime Prices and Trade Board required all trucks to have the owner’s name and address on both sides in letters not less than an inch in height. There was also a regular update on expiry dates for ration books for sugar, butter, meat and preserves.

There was extensive coverage of a controversy about Canada’s difficulty in producing enough bacon to meet its contract with Britain. Progressive Conservative Leader John Bracken had apparently suggested it would be necessary to supply hogs over 240 pounds, thereby sacrificing quality. However, Agriculture Minister J.G. Gardiner responded that the industry agreed it was necessary to supply the “long, lean streaked type” that Britain required. British Minister of Food J.J. LLewellin had said that if Canada could not supply 450 million pounds of bacon per year, “I may be put in the position where I have to cut the ration from four ounces a week to three.” However, he had also warned that when the war ended, “it will be well to look around to see if the time has come to grade bacon more carefully,” an apparent hint that Danish bacon would again be preferred.

The editorial praised the “Let’s Eat” nutrition education program underway at 10 schools — topics included “The food colour chart,” “Hidden hunger and hollow hunger,” and “Grow your own and eat better.”

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Granted, Co-operator staff had the rare opportunity last week to visit with ranchers in and around Calgary that were specifically selected by their colleagues at Alberta Farmer Express specifically because they do things a little differently.

Nevertheless, it was an eye-opener listening to beef producers who see healthy soil as the foundation of their commercial success. Or chefs and meat cutters at Canada Beef Inc. who are demonstrating new ways to keep beef on the menu in Canadian and international kitchens.

Or Rich Vesta, an American entrepreneur with a story that could turn any skeptic about the prospects for more domestic meat processing on the Canadian scene — and there are more than a few — into a believer.

Vesta recalls sitting in a beef industry conference at which the keynote speaker referred to Alberta as the “home to world-famous Alberta beef — known only in Alberta.”

“That was a defining moment for me. There is a story here to be told and it hasn’t been told,” he said. “Part of the reason is, you’ve got American companies marketing all your cattle.”

Vesta, who made his fortune as the guy U.S. meat processors brought in to get struggling plants back on track, is hoping — no planning — to change that.

There was lots of buzz when he bought the mothballed Rancher’s Beef plant just outside of Calgary in 2013. The plant, built for $80 million in 2005 in response to the BSE crisis, hasn’t cut any beef since it went bankrupt in 2007.

He renamed it Harmony Beef and announced plans to spend $18 million in renovations and open a plant capable of processing 800 head a day and employ 325 people by June 2014.

Circumstantial evidence would suggest Harmony Beef is on the road to broken dreams just like every other effort to get a small- to medium-scale export-accredited meat processor up and running in Western Canada.

It is now June 2015. Renovation costs are estimated at $20 million. Vesta says he is now targeting early 2016 for opening. As he toured us around the facility last week we saw lots of construction workers, new equipment and cutting-line configurations that defy conventional thinking — but no sign it will be receiving any cattle or shipping any beef any time soon.

There’s a wastewater treatment permitting issue that needs to be resolved. Meanwhile, the City of Calgary is making noise about not wanting a slaughterhouse so close to town.

It all sounds sadly familiar, except for one thing — Rich Vesta.

Vesta readily concedes that if someone asked him about the feasibility of building a new plant in Western Canada today, he’d say “absolutely not.”

But he didn’t have to build this plant, and although he won’t disclose what he paid for it, it’s safe to assume he and two sons paid cents on the dollar. That’s often the way it goes in business.

Vesta was drawn to this plant by the fact that it has extraordinarily ‘good bones’; it was built to meet European standards at the outset. As well, it’s located in the heart of Canada’s cattle-feeding sector.

In Vesta’s world, big is not beautiful. There will be no 250-head-per-hour high-speed cutting lines. Once a carcass is on the hook, it will move only six feet every 30 seconds.

He says it is more efficient. Workers at each station have more time, which increases the proportion of the carcass that makes its way into the higher-value cuts instead of trim. It also improves food safety and reduces worker strain.

“We have an obligation to use every ounce of that animal — not every pound, every ounce,” said Vesta, who learned meat cutting from a Dutch master butcher in his home town in Illinois as a teenager. “He taught me dignity and respect for animals once they were harvested.”

It’s about money too. One of the many anecdotes he shared from his years working for the likes of Packerland, Smithfield and JBS, was how his cutting methods could add $60 to carcass values.

Vesta has similar ideas around carcass size. He’ll be paying premiums and discounts to attract the size of cattle that produces the cuts needed in the food-service sector. Hint: Carcasses that tip the scale at 925 lbs. won’t be the ones getting a premium.

If Vesta nails higher cut-out efficiency and right-size carcass size, the production from his plant will be competitive in the commodity beef market as well as specialty markets or export to Europe, Asia or the U.S.

He might also help rewrite the rules in the beef value chain. “From my perspective, there is a need to do some things a little differently in the beef business,” he says.

Amen to that.

The post Editorial: Beef production and the view from Alberta appeared first on Manitoba Co-operator.

We’re still waiting for more details, but a story on our June 17 front page reported that two Agriculture Canada scientists at Lethbridge had genetically altered wheat to produce its own nitrogen. They reported that they had substituted chromosomes from Cadet wheat with a pair from Rescue wheat, and that the modified wheat supported nitrogen-fixing soil bacteria from around its roots.

In the House of Commons, Agriculture Minister Eugene Whelan threatened to clamp down on imports of cheap beef from Australia and New Zealand. Canadian Cattlemen’s Association manager Charlie Gracey said that the dumping of the cheap cow beef into Canada was in turn forcing Canadian beef into the U.S., which did have restrictions on Australian and New Zealand imports. The CCA had been calling for a Canadian beef import law for several years.

The Soviet wheat crop was in trouble again, and was expected to fall by about 20 million tonnes. A U.S. congressman urged Agriculture Secretary Earl Butz not to allow the Soviets to buy more than the eight-million limit in their agreement for fear of pushing prices too high.

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“Imports continue to flow into Canada,” said Derrick Ash, director of national marketing for Canada Pork. Domestic pork consumption dropped by five per cent in 2013 and imports now account for 29 per cent of pork sales in Canada compared to 25 per cent in 2011. More information on the reasons for that growth is needed.

“We’re trying to rebuild Canadian market share by displacing imports, by increasing consumer demand for Canadian pork,” he added. Canada Pork was created last year as a producer and processor initiative to build that demand much as Canada Pork International has done for foreign sales. “We’re making progress on several fronts.”

A Verified Canadian pork label has been developed along with some new products. Canada Pork also plans to work on educating consumers and look for new ways to promote pork cuts.

Robert Serapiglia, director of business innovation for Canada Beef, said his organization “is aiming for a sustainable relationship with consumers. We want to promote the Canadian beef advantage and stress the excellence of our meat.”

His group will use its Canada brand to drive innovation and build consumer communications,” he noted. It has developed a video that shows how cattle are raised on farms across Canada with producers explaining their approach.

Canada Beef aims to get more farmers involved in promoting the sector and engaging with consumers, he said. “We want to find the sweet spot in the process.”

The drop in the value of the loonie compared to the U.S. dollar has helped ease the pressure of imports but the beef industry needs to keep working on the home front as well as exports, he added. As well, the industry will have to cope with tight cattle supplies through 2015.

Canada Brand will also be looking for global opportunities to build demand for Canadian beef, he said. The industry is using its Centre of Excellence in Calgary to look for ways to build business and connections.

Ash noted that pork accounts for 64 per cent of Canada’s total exports with beef at 32 per cent and poultry 18 per cent. About two-thirds of the pork exports are shipped to the United States and Japan. Ontario, Quebec and Manitoba account for 84 per cent of the pork production.

While the growth in exports has been a welcome development for the industry, “if any of our traditional markets closed, we couldn’t consume all the pork we produce annually.”

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Imports of communion wafers are apparently one of the Canadian beef industry’s trump cards in its ongoing battle to overturn Washington’s country-of-origin labelling Law (COOL).

“It’s not that the government of Canada doesn’t like Catholics,” Manitoba Beef Producers general manager Cam Dahl said at the recent District 6 meeting.

“It’s because there happens to be a particular U.S. representative who really likes COOL, and one of his strong supporters exports a lot of communion wafers to Canada.”

After ending up on the wrong end of a World Trade Organization ruling, Washington “doubled down” on the discriminatory practice requiring all meat products to have labels indicating whether the animals had been born, raised and slaughtered in the country.

The original labelling law struck down by the WTO cost Canadian producers $45 to $50 per head, but the revised version is much worse, with the industry estimating the cost of segregating foreign cattle at packing plants at $90 to $100 per head.

“If the WTO rules in our favour again, we will be in the position to retaliate for around $1 billion a year,” said Dahl.

A “very strategic” list of American products, communion wafers included, that could be subjected to 100 per cent tariffs has been published, he said. It’s hoped that — along with a legal action, supported by American packers — will pressure American lawmakers to make changes before a second WTO ruling, which is about 18 months away.

“Hopefully, that will lead to a legislative solution, which is the right solution,” said Dahl.

Dahl also briefed producers on an agreement in principle between Canada and the European Union that could open up new tariff-free market access for 65,000 tonnes of hormone-free beef worth $600 million a year — roughly the equivalent of Manitoba’s entire annual production.

But the deal must first be translated into 21 different languages, and then ratified by 29 governments, including Canada.

“I’m confident that’s going to be done,” said Dahl. “There’s some really strong political arguments in favour of it, but it’s going to take time.”

The Japanese market is also boosting the industry’s fortunes by about 20,000 tonnes per year after Tokyo agreed to allow beef from animals under the age of 30 months (versus 21 months previously). The deal, once beef starts flowing, will be worth about $75 million a year.

In response to the growing potential for new markets, formerly mothballed small- to medium-size packing plants, such as Natural Valley in Saskatchewan and Rancher’s Beef in Alberta, are being reopened, said Dahl.

New markets may be opening up, but the question of heifer retention and a possible expansion in the provincial cattle herd remains unsettled.

Robin Hill, manager of Heartland Livestock in Virden, said contrary to expectations, the liquidation of cows and heifers appears to be accelerating in his area.

“They’re going,” said Hill, noting that unusually high numbers of cows are being sold even with the traditional cull cow selling season still weeks away.

If the herd continues to decline, it will reduce Manitoba Beef Producers’ budget, which relies on a $2-per-head refundable checkoff, said president Trevor Atchison.

Last year, reserves were used to cover a budget shortfall of $6,000, and this year’s deficit is on track to exceed $40,000.

A resolution proposing a 50-cent increase in the checkoff next year, to be followed by a further 50-cent increase in 2015-16 was approved by District 6 and will be forwarded to the association’s annual general meeting in February.

A 50-cent increase in the checkoff would generate $250,000 and put the group back on the funding level that it enjoyed two years ago when the provincial herd was much larger, said Atchison.

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The need to feed the world’s most populous nation has seen Chinese firms gobble up foreign dairy, sugar and cereal producers, and Shuanghui International’s $4.7-billion bid for top U.S. pork producer Smithfield Foods is just the country’s latest food ‘land grab.’

Beef could be next on the menu as Chinese opt for the protein-rich meat, which is seen as a higher-quality product than pork, the nation’s staple. While pork and poultry remain China’s meats of choice, beef consumption is growing rapidly as hot-pot restaurants, Korean barbecue joints and burger bars set up across the country.

Chinese consumers are also more wary about cheaper local meat products after a series of recent food safety scandals — from bird flu to rotting pig carcasses in Chinese rivers.

All of which is making imports more affordable — good news for major beef producers such as Australia and New Zealand — and encouraging Chinese firms to look overseas to secure future supplies.

“There are many companies closely following this market and looking for the right time to come in. One of the major reasons is food safety,” said a consultant who advises Chinese agribusinesses.

One state-owned agribusiness firm is in talks with a foreign beef supplier and eyeing future overseas production, he said, asking not to be named because the information is commercially sensitive.

Chongqing Grain Group, a state-owned business that has expanded aggressively overseas in recent years, plans to invest in breeding beef cattle in Australia, its president Hu Junlie said, without giving further details. Tianjin Dawnrun Beef, too, has been buying up rivals to expand its business and is looking to breed cattle in Australia, said a company official.

A struggling industry

China’s beef imports soared in January-April to more than 75,000 tonnes, more than 10 times those in the same year-earlier period, and look set to far outpace initial forecasts. That’s still just a fraction of China’s total consumption of around 5.6 million tonnes a year, but the proportion is set to swell.

“Domestic beef prices are going up faster than the import price,” said Joy Tang, China manager at Meat and Livestock Australia. “The gap is closing.”

Traditionally the domain of China’s Muslim minorities, raising cattle for meat only began to expand in the 1980s, but remains small scale and fragmented.

One of China’s earliest beef processors, Fuhua slaughters 30,000 head of cattle a year, with about a quarter of those raised on its own farm. Its Chinese Yellow-Swiss Simmental crossbred bullocks are reared in stalls on farmland that once supplied Chinese emperors, but is now overlooked by high-rise apartments — a sign of the capital’s spreading urban sprawl that is rapidly swallowing up agricultural land and pushing up farmers’ costs.

“Farmers aren’t breeding anymore. It gives poor returns and they prefer to move to cities to work where they can earn 100 yuan ($16.30) a day, while a cow only earns them 3,000 yuan a year,” said Fuhua sales manager Liu Chunsheng.

“The beef market is very scattered. There’s not a single big company,” Liu added. “It’s to do with capital. This year everyone’s losing money. Live cattle are expensive and imports are cheap. It’s quite simple.”

China currently only allows beef imports from Australia, New Zealand, Argentina, Uruguay and Costa Rica, but recently added four Canadian firms to its list of approved exporters. It has also signed a framework deal with India to import buffalo meat.

For now, the Chinese eat just four to five kg of beef per head each year, around a fifth of the global average.

“Chinese knowledge about beef is still very low. We’re teaching butchers how to cut the meat and consumers how to appreciate a good steak,” said Tang at Meat and Livestock Australia.

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That’s a quote (see page 16) from Brian Sterling, president of SCS Consulting which advises food companies.

Anyone care to disagree?

Or how about this, which is a paraphrase from a statement by a U.S. senator a few years ago?

“The law in this country requires that my underwear has a label to say where it comes from. Are you going to tell me that I shouldn’t have the same information about what I put in my mouth?”

Over the past few weeks we’ve been bombarded by indignant Canadian reaction to the new U.S. rules on country-of-origin labelling (COOL) for Canadian meat. Federal and provincial agriculture ministers and commodity organizations have issued statements. National newspapers have run columns from various pundits. Everyone agrees. It’s unfriendly. It’s unfair. It’s unnecessary. It will cost Canadians more. It will cost U.S. consumers more. U.S. meat packers and retailers don’t like it either.

Uh, huh. All true. But so what?

For several years, or at least since that senator’s comparison with underwear labels, it was clear that this thing was a done deal. There is overwhelming support in the U.S. (as in Canada) from consumers who want to know where their food comes from, and knowing where meat comes from would be at the top of everyone’s list. To think Canada could be an exception is simply unrealistic. Yes, we know all about the complications of animals raised in one country and slaughtered in another. Yes, we know there’s a free trade agreement with the U.S. Yes, we know it’s contrary to World Trade Organization (WTO) rules.

Yes, but we should also know that we’re dealing with the U.S. This is the country which refuses to recognize the International Court of Justice, which kidnaps people to be interrogated by the CIA in other countries run by dictators, which uses drones to execute suspected opponents without trial and monitors everyone’s phone and Internet traffic.

In comparison, violating the rules by insisting that a package of bacon say “Canada” on it is presumably not something that President Obama and colleagues are losing much sleep over.

Though it is a violation of the WTO, as we were proudly informed by the usual blizzard of government and industry press releases when Canada won its COOL challenge. Apparently they assumed the U.S. would roll over and comply.

Which it has, apparently with a set of rules that are even more complex than the ones already in place. According to the Canadian Cattlemen’s Association, the previous rules cost the Canadian producer approximately $25 to $40 per head. The new ones will increase that to $90 to $100.

In other words, we were better off doing nothing. The headline should read: “WTO challenge more than doubles cost to Canadian producers.”

That doesn’t include the cost of all the legal work and fruitless lobbying by producer organizations.

Meanwhile, the U.S. is eating our lunch in the beef business, or perhaps that should be serving us lunch with beef from our own cattle. According to last year’s Canadian Agri-Food Policy Institute’s report on the Canadian beef industry, in 2002 Canada had a beef trade surplus of $1.4 billion with the U.S. By 2011 it had dropped to $42 million. They’re taking our cattle and shipping us high-end beef cuts that we should be producing ourselves. CAPI says we are at risk of becoming a net importer of beef.

The U.S. is also using some of our beef to expand exports offshore. Since 2005 its exports are up 280 per cent by value. Since 2002 ours are down by 3.5 per cent. How is it that Canada, with a comprehensive cattle identification system, can be so outsnookered by the U.S., which has none?

Even more ironic is that we have a better identification system than the U.S., but Canadian industry representatives have spent all this time and effort on insisting that a label not be placed on Canadian product.

Could it be that all the fuss over COOL is just a smokescreen for failure to address bigger issues in the industry?

The latest WTO “victory” will mean the cost to export to the U.S. will more than double. The Canadian Cattlemen’s Association and the Canadian government need to look up the definition of a “Pyrrhic victory” — “one with such a devastating cost that it carries the implication that another such victory will ultimately lead to defeat.”

Please, let’s not try to win another one.

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That list of 40 or so items includes live cattle and pigs, meat products, corn, processed foods containing spent fowl, chocolate, puffed cereal products, pastas, communion wafers, frozen orange juice, ketchup, jewelry, wines, wooden office furniture and swivel seats with adjustable height adjustments.

We have no idea how they choose which items to target; there is undoubtedly a process. But judging from the list, it’s safe to suggest that it will be Canadian consumers paying the price for the American’s pigheadedness on COOL, and they will be paying it on some items for which the original ingredients originated in Canada.

It might even bump up the cost of the imported corn used to feed Canadian sows, the offspring from which are then shipped to the U.S. to be fattened and processed, some of the meat from which is then shipped back to Canada, once again penalized under the retaliatory tariffs.

That’s if these measures are even implemented after the estimated 18 months to two years it will take to go through the WTO process.

That coincides with the possibility of a federal election in Canada. Success on the trade front has been one of the Harper government’s priorities, but gains have been limited.

There’s no argument that COOL is costing Canadian farmers dearly and their indignation is understandable. The Canadian Pork Council says that since COOL was introduced in 2008, Canadian exports of hogs to the U.S. have fallen by 41 per cent. Cattle exports have dropped by 46 per cent. The livestock industry estimates the U.S. law is costing their sector a cool $1 billion per year.

However, given some of the other Canada-U.S. issues on the table, such as its efforts to gain approval for the Keystone pipeline through the U.S., it’s unlikely Canada’s ruling party will want to initiate a trade war with its biggest trading partner.

Canada’s so-called pipeline deficit, the main push behind the Keystone project, is estimated by the Canada West Foundation to be costing between $30 million to $70 million per day. Granted, there’s a big difference between 30 and 70 when you’re talking millions, but suffice to say that over the course of a year it’s adding up to a lot more than the cost of COOL to the Canadian livestock sector.

The two issues have no relationship except in the tit-for-tat politics for trade.

These COOL provisions have strong support in the U.S. In a May 31 column, University of Tennessee economists Daryll E. Ray and Harwood D. Schaffer said the comment period for the revised COOL provisions drew in 936 responses, including 453 who supported the new rules. Also included were four petitions signed by more than 40,000 individuals.

“The 476 comments opposing the rule were from numerous producer, packer, and international trading partner entities, as well as individual ranchers, packing companies and foreign government officials,” they write.

The pundits are also eyeing the status of the Canada-EU comprehensive trade agreement, for which negotiations have dragged on far longer than first anticipated.

It was originally thought that Prime Minister Harper would be signing on to a deal as he heads off to the G8 summit this month. The media reports out of Ottawa last week speculated he might just go ahead and do that, desperate as he is to shift attention away from Senate spending scandals and staff that go and write a $90,000 cheque to make the first issue go away without even telling him.

As expected, it seems agriculture is one of the remaining stumbling blocks to a deal worth an estimated $12 billion to Canada’s GDP.

As expected, the Europeans want more access to the Canadian market for cheese. But it’s not just Canada’s protection for supply management that’s holding things up. The Europeans are balking at Canada’s demands for an increase in market access for Canadian beef and pork, which must be hormone free. Canada originally sought access for up to 100,000 tonnes. The EU is offering 40,000 tonnes.

In 2011, Canada shipped about 9,000 tonnes of hormone-free beef to Europe, less than half of its current quota of just over 23,000 tonnes. Part of the challenge for Canada shipping beef to the EU is that it must set up segregated supply chains to meet requirements for being hormone and antibiotic free. In theory, a larger quota would make that a more appealing proposition.

The only conclusions we can draw from all this is that trade deals and all their trappings are one thing, but real market access is another.

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If the word on the street is correct, those concerns are well founded. It appears that the Brandon Research Station, the home of beef, forage and nutrient management research for the eastern Prairies, will be hit hard by a new wave of unannounced cuts to the federal civil service put into motion last week.

It’s all hearsay at press time, because even as word leaked out and unions representing the people affected confirmed the numbers, the federal government was refusing to own up to anything.

Employees — both researchers and support staff whose programs are being gutted — are forbidden from talking to anyone about what is going on, least of all journalists. Official spokespeople for the federal civil service and the minister’s office say they can’t comment due to privacy concerns. We suspect it has more to do with keeping bad news quiet.

Cultivated forages are Canada’s biggest crop by acreage. Forage is a $5-billion industry in Canada and it provides the underpinnings to the $11-billion beef and dairy sectors. The public good it delivers through environmental benefits are immeasurable. Public investment in this kind of research is recouped many times over.

We recognize that responsible government is about making tough choices. But accountable government is about taking ownership of those decisions, not rolling them out in secrecy. The public has a right to know what is taking place and why it is being done.

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