Investing in local processors step in right direction
It’s commonly known Manitoba’s cattle industry depends heavily on exports.
So much so, people in the sector have tended to look at you funny
whenever you float the idea of marketing more of what our farmers
produce into local markets. After all, we’re told Manitoba consumers
can only eat between 13 and 15 per cent of the cattle produced in the
Granted, that’s not very much.
But how many of the cattle produced on Manitoba farms are actually
processed into beef in this province and eaten by Manitoba consumers?
That number is only a fraction of “not very much.”
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 processed here produced 5.17
million kilograms of beef.
Annual average consumption estimates vary between 23.5 and 30.8
kilograms per person. That equates to between 26.3 million and 31.7
million kilograms of consumption.
We’re importing about 20 million kg of fresh and processed beef from
other provinces — mostly Alberta — and just under three million kg
from other countries. That’s the equivalent of about 78,000 animals —
four times our local slaughter.
That would be fine if producers were making heaps of money at this
export business. 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.
Cattle farmers are selling animals this year for the same
non-inflation-adjusted dollars they sold for in 1960. Plug those
numbers into an inflation calculator and a $600 cow in 1960 should be
worth $4,440 in today’s dollars.
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 by 2001, that had
been reduced to 16,000 head.
Several factors have combined to create a scenario in which our beef
industry is so focused on exports, it is not even meeting the domestic
market’s needs. Manitoba has historically been a cow-calf province.
Farmers here have typically sold their spring calves in the fall to
produce cash flow.
Cattle feeding and finishing capacity gravitated west in the face of
the Alberta government’s decision to subsidize livestock feeders in the
1980s, and south due to the relatively strong U.S. currency.
Winnipeg, once known as the Chicago of the North because of the
colony of slaughterhouses in St. Boniface, soon lost those, too.
Statistics show 77 per cent of the beef purchased in this province
comes through five major retail chains, which only source meat from
federally inspected facilities.
Although there are dozens of regional plants operating in the
province, all but one lack federal certification. Most say their volume
of business isn’t large enough to justify the cost of meeting federal
and export standards.
But there are signs this might change. The federal government and
the Manitoba Cattle Enhancement Council, which is supported by producer
checkoffs, last week threw a significant investment into Keystone
Processors Ltd., which is retrofitting the old Burns Meats plant in St.
Boniface. The processor of hormone- and antibiotic-free beef hopes to
be federally certified in the next two years.
The move by this company, along with aspirations of two smaller
processors — Plains Processors near Carman and Oak Ridge Meats Ltd.,
in McCreary — to expand this province’s federally inspected processing
capacity makes sense on multiple fronts.
It has been estimated transportation costs for shipping cattle
outside of the province have risen four-fold since 2003. That factor
alone should make the local market a premium-value market. Even if the
locally processed product is sold for export, it will cost less to
transport and face fewer barriers to trade. Statistics show that while
live animal exports have been hurt by COOL implementation, export sales
of meat have risen.
It would result in fewer greenhouse gases hauling cattle across the Prairies only to truck beef back in boxes.
And it would 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 — ranging
from catering to religious protocols for kosher and halal products to
the growing interest in beef not treated with hormones or antibiotics.
Last week’s announcement isn’t enough to fix what’s broken in this
province’s struggling beef industry.
But it’s a step in the right direction.
Laura Rance is editor of the Manitoba Co-operator. She can be reached at 792-4382 or by email:
Republished from the Winnipeg Free Press print edition November 7, 2009 B8