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Never Mind the XL Wreck...We're in big Trouble!

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    Never Mind the XL Wreck...We're in big Trouble!

    Braid: Quiet desperation masks larger cattle crisis
    REUTERSCALGARY — In all the photo ops staged by governing politicians to reassure us about the beef business, one senses a kind of veiled desperation. They seem to feel powerless in the face of something much larger.

    And here it is: Alberta’s iconic industry was is deep trouble even before the XL Foods recalls erupted into the biggest Canadian food disaster story since BSE and listeriosis.

    The recall story has now raised endemic troubles to the level of genuine crisis, enormously magnifying dangerous trends that were already clear.

    These problems are clearly laid out in a report that was posted online just about the time the XL story began to emerge.

    Produced by the Canadian Agri-Food Policy Institute, a non-profit agency created by the federal government, the study emerged from many months of consultations last year and this spring.

    It isn’t about food safety; in fact, the report’s one and only irony is that it lists safety as an industry strong point.

    The beef business has “food safety systems considered as good, or better, than anywhere in the world,” it says.

    Nobody would write that now.

    Setting safety aside (as if we could), the state of the industry is dismal.

    The report notes this astonishing pair of numbers: Canada’s balance of trade in beef was $1.4 billion in 2002. Last year, it was $42 million.

    In any business that not just trouble — it’s a potential collapse.

    The decline might not look so bad if Canadian beef were doing well at home. But it isn’t.

    Our producers now supply 75 per cent of domestic beef, down from 87 per cent in 2005. The herd has declined by one million animals.

    Exports to the United States are worth only 60 per cent of American beef shipments to Canada.

    “The country is at risk of becoming a net importer of beef with the U.S.,” the report says.

    BSE caused much of this damage. The recall crisis could wreak even more, especially at a time when the entire developed world finds steaks and burgers less appealing.

    One reason for the decline in consumption, the report says, is that “consumers are increasingly concerned about the environmental footprint of the beef sector.”

    Add the biggest recall in Canadian food history, and that trend surely escalates.

    To judge by the report, the industry may not have the internal strength to rectify any of this. It appears beset by resentments, miscommunications, and lack of trust.

    “Many beef stakeholders told us that the sector is operating without a strategy, minimal collaboration, no vision, no sense of common objectives and fragmented leadership,” says the study.

    Not surprisingly, “the beef sector is foregoing economic opportunities and its competitive position is falling behind.”

    Industry veterans recall the days when the rancher and packer collaborated on quality and safety. Retailers once went to plants to pick their own sides of beef.

    Now, the focus on fast, high-volume production in huge slaughterhouses seems to destroy those relationships.

    The report calls for leadership from industry and government “champions.”

    Some experts believe that if the players resist the urge to cover up, and confront problems honestly, the cattle business could restructure and thrive again.

    But to this point the main actors — the Alberta government politicians, the federal safety crowd and XL Foods — aren’t acting like leaders. They seem more like people who suspect they’re walking the wrong way in a train tunnel.

    Don Braid’s column appears regularly in the Herald

    dbraid@CalgaryHerald.com

    © Copyright (c) The Calgary Herald

    #2
    "To judge by the report, the industry may not have the internal strength to rectify any of this. It appears beset by resentments, miscommunications, and lack of trust."

    Amen

    Comment


      #3
      Are we? Really?

      I'm not 'feed the world' mentality. Could care less.

      And our own people? They aren't completely stupid. Well many are, but that's not the point. If they can get similar product for cheaper, they will buy the cheaper product 90% of the time. You'll see this more if the beef prices keep climbing.

      Keep whittling down the herds. Sure wasn't getting over $1000 for calves when we had a million extra cows.

      Those who put a premium on Canadian beef will pay it. Those who don't, won't.

      My money always goes where it stretches the furthest. And that never means Canadian products. American businesses know the meaning of negotiating.

      On another note, coming from a large farm family, if the meat we eat currently was not our own, we wouldn't eat beef at all. Stuff in the store is too expensive and tastes like crap. I am a greedy consumer and want to pay $1.50 for extra lean and $3.00 lb for prime rib. So when articles like this come out and the authors beat their chests about the state of the industry - blow it out their backside. Beef is not the be all and end all of food. To think otherwise is just B.S.

      Be competitive or fail.

      Be innovative or fail.

      I eat about as much pork as I do beef and if I could find it cheap, would likely eat more lamb than anything. I won't raise them because I don't like to feed wildlife.

      Comment


        #4
        I can see your point of view.
        I guess where I have concerns is this: As the cow herd continues to retract the infrastructure starts to break down, the sales barns close, the small and large (?) packers start to close, the trucking industry seeks new cargo.
        Obviously some people can adapt to this changing scenario.....and all the power to them....that is probably the future.
        Personally I liked the "mainstream commodity cattle business" where you raised the cattle.....and that's all you needed to do....you didn't need to be a butcher, or salesman, or sanitation expert!

        Further more I live in an area where we are limited in what crops we can grow. Barley really grows well here. As the feeding industry shrinks it will be harder to find markets relatively close to home.

        I still prefer Canadian products. I like to think they are raised in a safe manner as compared to products from Mexico or China, or even the USA. Maybe that is naive thinking after this latest gong show? In my mind the CFIA lost a lot of credibility at Brooks!

        As a side note: I don't eat any pork. I guess I had one too many pork chops that stunk like a hog barn!

        Comment


          #5
          Attitude is perception 15444.

          I see more and more people who want to look after their bodies with concious nutritional choice and they are willing to pay for it.

          As for just raising cattle ASRG. Who says you can not just be the supplier in a true value chain? The key is to have experts at every level and trust that the trickle down of profits will always be there. Commodity marketing may sound easy and maybe was for you, however it always leaves room for competition at every level for each carcass animal.

          Comment


            #6
            We've lost two auction marts and our neighbourhood feedlot in the past year. Even finding someone to haul cattle is getting difficult. I expect in the next few years, only those with cattle will even grow hay at all. Big problem if a drought hits.. again.

            The retraction of infrastructure is already in progress. Canada as a country has undervalued the economic spinoffs of the beef industry, especially lately. I wonder if anyone will miss us when we're gone? I suspect they will, but once gone, this is one business that will be hard to kickstart again.

            We are at a turning point, IMHO. It's time to get together and make a plan for how we want this to play out. Given that the lack of vision and leadership so widespread, it's going to be up to us to figure it out ourselves.

            We're on our own, and it's up to us.

            Comment


              #7
              http://www.capi-icpa.ca/pdfs/2012/CAPI_Beef-Food-System_2012.pdf

              This is a great report by CAPI. Written in plain English with lots of colour diagrams and graphs. Even I understood most of it.

              No whining about the state of the beef industry, just a wake-up call. Lots of data on where the industry has been, and where it appears to be going without intervention.

              The value-added kids will love this report. Lots of 'evidence' to back up their position, and even a few suggestions that may assist going forward.

              FYI in 2010 exports of beef to the US averaged $3.33 per kilogram, while exports to the EU averaged $6.86 per kilogram. Clearly Christof is on the right track. So are many others.

              This is a self-help manual for the industry. Should provide lots of ammunition the next time you make a pitch for support from the banks, government, or anybody else for that matter.

              Many thanks ASRG.

              Comment


                #8
                Wow, that's quite the piece of work. Only had the
                quickest of scans through it but it looks impressive.

                Comment


                  #9
                  Figure 2-7 on page 28 is revealing. It appears to
                  show Alberta cow/calf returns over the 20 years from
                  1992 to 2012 averaged around $8.35 per cow/year.
                  Not sure exactly what this figure is but it bears a
                  similarity to Cam Ostercamps net feedlot profitability
                  over 30 years figure.

                  Comment


                    #10
                    Does anyone else see this as hypocritical
                    "Traceability System
                    The traceability system in place for the Canadian beef sector does not fully enable the tracking and tracing of information from the farm or origin of the animal to the retail store shelf or food service outlet. It is comprised of several systems that must link together.
                    The first piece on the live side is the Canadian Cattle Identification Agency (CCIA). The CCIA is an industry-led non-profit organization that maintains a cattle identification system from the producer to the packing plant and other off-farm sites in the beef sector for the purpose of animal disease control and food safety assurance. Its strength is that it is mandatory, with penalties for non-compliance.
                    The second component, Canadian Food Product Traceability, relates to processed foods. This Canadian approach came about as a result of the work of the Can-Trace Project involving the federal government, the food industry, standards organizations, and consumer groups in Canada. It is a voluntary system. The data are captured using barcodes and RFID tags and is readily shared among the parties in the supply chain. As a voluntary scheme, participation levels are not as high as under a mandatory scheme. Furthermore the identifiers used are up to the discretion of the company and therefore are not consistently “linkable.”
                    Mandatory with penalties vs Voluntary

                    Comment


                      #11
                      I like the word "collaboration" as used in the report ...such a wonderful word.

                      Since when did the upper parts of the beef value chain give a damn what the primary producer thinks? Its always been a "talk down to" process. "Take it or leave it."

                      The sooner that producers get the ball rolling on their new version of "vertical integration" from the bottom "UP" the better. Otherwise we are stuck with what has prevailed for eons.

                      Comment


                        #12
                        Yes this is the best chance that the value chain believers have at changing the industry right now. Along with maybe a few more consumers who saw the truth behind the shit show at XL. Especially now that another multinational player is in town.

                        The whole report can be summed up very easily. There is no conventional beef supply chain in Canada. We have a cow calf sector, a feedlot sector and a packing sector that is likely more integrated with retail than anyone would admit or accept.

                        As the ABP/CCA and even the Canadian Government go about their promotion of Canadian Beef domestically and around the world, the multinationals (and yes NB was a "non significant" multinational.) have thanked them all for the gifts and went about business the way they would have even without those gifts. There never has been collaboration in the commodity beef industry. Other than maybe some contracted deals between feeders and packers and under the table agreements that none of us will ever hear about.

                        If we get no traction now, I don't know if we ever will. At least not in my time left in the industry.

                        Don't get me wrong, our little value chains will never stop and will likely move forward over time as more and more people wake up to multinational commodity ("so called") food production. However, for the Canadian industry to become a sustainable interdependent industry with room for cattle owned by independent ranchers and feeders and not multinational puppets, those of us who are left are finally going to have to sit down and make some plans together.

                        Comment


                          #13
                          Okay --- not an alias Grassfarmer. Kathi is actually the love of my life (beyond the cattle biz) and I have been using her computer which she registered as KathiL on agriville.

                          Her first post was her words and the last two have been accidentally mine.

                          Now I know that all of you are saying, "how could a goof like Kaiser; who can't even figure out a puter run a packing plant.... LMAO

                          No having fun Mr. Pallett and Semper Ad Merliora back at cha.......

                          Comment


                            #14
                            K finally found the log out --- log in buttons,,,,

                            Comment

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