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    Beef Promotion

    Alberta producers are facing a 50% increase in their checkoff from $2 to $3. The majority of these checkoff dollars are being spent on beef promotion. At some point it seems necessary to sit down and determine if the producer is receiving a benefit from the millions of dollars being spent on the generic promotion of beef.
    The problem as I see it is not whether generic promotion of a commodity such as beef offers benefits, the problem is whether or not any of those benefits actually reach the producer who is funding the promotion. I suggest there is a disconnect in the value chain that reaches between the consumer down to the producer and that any value generated by beef promotion does not trickle down to the producer but stops at the packer level. As a result all the benefit of promotion goes directly to the retailer and packer, none to the primary producer.
    The reason for this disconnect is that American calves, under normal market conditions, come into Canada and Alberta in particular and they establish the market price that Canadian producers receive. Canadian cow calf operators could spend $10 on promotion and still receive no benefit, the price they receive is going to have a ceiling based on what American calves can be purchased for.
    In fact, if this new checkoff is approved the Alberta cow calf producer will actually be paying about $10 per head because margin operators such as the backgrounders and the feedlots will pass their $3 head checkoff down to the cow calf man.
    I believe we need to sit down and realize that the real problem facing the beef industry is not lack of promotion rather it is that too much of the value of the calf is being sucked off higher up in the value chain leaving too little for the people who are actually producing the product. It is time to stop pouring good money after bad, the retailers and packers are enjoying record profits and dont't need our hard come by promotion dollars. We need to figure out how to spend our checkoff dollars in a way that actually benefits the producers who are funding the programs.

    #2
    I agree with 1/2 of what you said. There is no doubt that the packer is realizing profits way beyond any reason. And the retailer always charges a margine above his cost. The only solution as I have said before is for producers to either build their own packing hosue or buy out one of the 2 in Alberta. We loose enough money every year to build our own.
    However the thing you don't seem to realize is that even you (non-Albertan) recieved huge benifits to the promotion check off dollars spent this past summer.
    Why do you think consumption is Canada went up by an unpreccedented 60 %. A lot of that promotion went across Canada. Can you immagine where we would be today if consumption would have dropped like it normally does in situations like this.

    Comment


      #3
      Just to be clear, I am not arguing that generic promotion of beef doesn’t work. The consumer reaction to our single case of BSE was heartwarming and encouraging but the benefits all went to the packers. My point is that the benefits do not make it back to the cow calf producer who is paying the checkoff therefore our producer checkoff dollars would be better put to use somewhere else.

      I agree with your comments on producers owning packing plants. I think some resolutions at this falls producers meetings to the effect that our provincial beef producer associations conduct independent feasibility studies on producer owned packing plants would be appropriate. There are substantial obstacles involved in producers owning packing plants but there is nothing wrong with identifying what those obstacles are and seeking solutions. It would seem that the millions of dollars we are spending on beef promotion are benefiting the packing plants way more than the cow calf producer, why not own a piece of that action.

      I suggest that once we start importing American calves again that will effectively put a price ceiling on what Canadian weaned calves are worth, therefore dollars spent on promotion will not benefit the cow calf producer beyond that point. I see a benefit to redirecting those dollars that are presently going to promotion to instead research ways to lower production costs for the cow calf producer who is actually paying the checkoff.

      Comment


        #4
        There is presently several studies underway and several more that have been done on the producer owned packing plant. The Alberta Value Chain Cooperative is well on there way and in the final stages of building a plant. They still have some producer dollars to collect, but my understanding is they are ready to open their shares up to all producers.

        Beef promotion has always been a challenge and the bottom line is that this promotion should not rest All on the producers. In fact there have been cases in the US where a check off for promotion has been challenged and the producers have won.

        I believe we need promotion but not at a 100% producer cost!

        Comment


          #5
          The primary producer(cow/calf) always has and always will pay the whole shot when it comes to check-offs. The other players in the industry just factor in their check-off and lower the price of the calf. They are middle men.
          The sad part is the packers and retail reap the rewards of this promotion with very little filtering down to the basic producer. And now they want to increase the check-off?
          Now I'm not sure what the CCA takes in a year in check-off dollars but it must be a good chunk of change. They tell us how much good our promotion dollars do for exports...which may have been very true, but now we aren't exporting!
          How about forgetting promotion for awhile and put some of that money into some regional packing houses owned by the cattle producers? How about putting some money into getting those two big thieves, Cargill and IBP, out of Canada? How about supporting the people who pay the check-off instead of the big feedlots, cattle dealers, big packers and Safeway? Do we really need an organization that in reality works against our interests...as in the blue tongue thing?
          A few years ago there was a movement to stop the check-off. I think about 12% of elegible voters voted and the check-off won by about 1%! I was part of a small group that wanted it gone and I did my best to spread the word! I was appalled by how people just didn't care! Shortly after that vote the check-off went up and the ACC(with the full co-operation of the CCA and federal government) robbed the tri-partate stabilization fund. Now they've pretty well pissed that money away and are back looking for a raise??? I guess no one has told them we are facing a crisis here? We don't need more expenses but less?

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