Letter from Deputy Minister S. B. Williams 1974 No.93-1:75 Breif out line.
The Canadian beef industry is going through a difficult period. As farmers, you know this without reading the headlines in the papers. You know that it is a complicated problem. You know it will take a while for markets to return to normal.
Continuing high prices for feed grains and fuel, plus the American restrictions on our cattle and beef exports, and the lower demand on world beef markets have added pressures to the Canadian cattle markets.
Cow-calf producers who have been expanding their herds in response to strong markets in the last five years have started an unusually heavy cull of older cows. This is coinciding with a heavy cull of dairy animals.
As this cow beef has hit the market, prices have droped.
The average price for D1 and D2 cows in 1973 was 35.53 per hundredweight. In early December, 1974 the price had dropped to 21.00. The D4's were selling for as low as $8.00.
GOVERMENT ACTION
In response to this situation, the government has brought in a four-point program to restore farmer confidence in the future of beef-production in Canada.
1. Extending the Beef Stabilization Plan beyond August 11 1975.
The support price of 45.42 per hundredweight is based on 90 per cent of the average price for A1 and A2 animals over the past five years. The formula for determining the average price includes a cost of production index. In August the support price will be adjusted to reflect production cost at the time.
I hope the extension of the Beef Stabilization Plan will give confidence to cattlemen who buy light-weight animals to be fattened for marketing in 1975.
For the perion Nov. 16, 1974 to April 30, 1975 a support price of 23.21 per hundredweight will be effect for D1, D2, D3 and D4 cows. Both dairy and beef cows are included. This does not mean that all farmers will be guaranteed a selling price of $23.21 per hundredweight or higher. The average of all slaughter cows at Toronto, Winnipeg and Calgary will be calculated and a deficiency payment will be made to producers if this average falls below $23.21. As always, farmers are encouraged to watch the market and try for the best price possible.
The program is designed to provide price protection to farmers while allowing for the culling of herds in an orderly manner. Therefore, there is a limit on the number of animals for which a farmer can claim a deficiency payment.
- Nov.16 to Dec 13 1974 herd owners may claim on all cows marketed.
- Dec 14 to Apr 30 1975 a producer may claim on two per cent of his cow herd each month up to a maximum of 5 per cent of his herd in Dec to April period.
-Regardless of herd size a farmer can claim on at least two cows during the perion Dec.14, 74 to April 30, 75.
3. Agr. Canada will call te4nders for quantities of canned beef to be used by the Canadian Internation Development Agency in food aid programs. The amout of canned beef to be purchased will be decided in consultation with food aid agencies. Beef for this pogram will come from cows of Canadian origin that are slaughtered after Jan. 1, 1975.
4. We are undertaking special ground beef promoptions and asking meat retailers to do the same. We will be stressing that cow beef is as nutritious as higher grades and encouraging consumers to use more ground beef during this period of heavy marketing of cows.
I have personally written the heads of the food chains in Canada asking for their cooperation in promoting ground beef. The food advisory services section of agr. canada will be preparing special recipes and cooking hints for consumers and will be working with the media to promote increased consumption of ground beef.
The Future
There are nearly 15 Million Cattle in Canada at the present time. Between 1973 to 1974 cattle numbers across the country increased by 6 per cent.
The culling of cows which is now occurring should help to balance beef supply with current demand.
I know the situation today is slightly different, but after 30 years you would think soom of the laugage and prices would of changed. But it seem the policy is the same, I'f we don't get cheep cattle from the farmer, We'll make it happen soom way.
The Canadian beef industry is going through a difficult period. As farmers, you know this without reading the headlines in the papers. You know that it is a complicated problem. You know it will take a while for markets to return to normal.
Continuing high prices for feed grains and fuel, plus the American restrictions on our cattle and beef exports, and the lower demand on world beef markets have added pressures to the Canadian cattle markets.
Cow-calf producers who have been expanding their herds in response to strong markets in the last five years have started an unusually heavy cull of older cows. This is coinciding with a heavy cull of dairy animals.
As this cow beef has hit the market, prices have droped.
The average price for D1 and D2 cows in 1973 was 35.53 per hundredweight. In early December, 1974 the price had dropped to 21.00. The D4's were selling for as low as $8.00.
GOVERMENT ACTION
In response to this situation, the government has brought in a four-point program to restore farmer confidence in the future of beef-production in Canada.
1. Extending the Beef Stabilization Plan beyond August 11 1975.
The support price of 45.42 per hundredweight is based on 90 per cent of the average price for A1 and A2 animals over the past five years. The formula for determining the average price includes a cost of production index. In August the support price will be adjusted to reflect production cost at the time.
I hope the extension of the Beef Stabilization Plan will give confidence to cattlemen who buy light-weight animals to be fattened for marketing in 1975.
For the perion Nov. 16, 1974 to April 30, 1975 a support price of 23.21 per hundredweight will be effect for D1, D2, D3 and D4 cows. Both dairy and beef cows are included. This does not mean that all farmers will be guaranteed a selling price of $23.21 per hundredweight or higher. The average of all slaughter cows at Toronto, Winnipeg and Calgary will be calculated and a deficiency payment will be made to producers if this average falls below $23.21. As always, farmers are encouraged to watch the market and try for the best price possible.
The program is designed to provide price protection to farmers while allowing for the culling of herds in an orderly manner. Therefore, there is a limit on the number of animals for which a farmer can claim a deficiency payment.
- Nov.16 to Dec 13 1974 herd owners may claim on all cows marketed.
- Dec 14 to Apr 30 1975 a producer may claim on two per cent of his cow herd each month up to a maximum of 5 per cent of his herd in Dec to April period.
-Regardless of herd size a farmer can claim on at least two cows during the perion Dec.14, 74 to April 30, 75.
3. Agr. Canada will call te4nders for quantities of canned beef to be used by the Canadian Internation Development Agency in food aid programs. The amout of canned beef to be purchased will be decided in consultation with food aid agencies. Beef for this pogram will come from cows of Canadian origin that are slaughtered after Jan. 1, 1975.
4. We are undertaking special ground beef promoptions and asking meat retailers to do the same. We will be stressing that cow beef is as nutritious as higher grades and encouraging consumers to use more ground beef during this period of heavy marketing of cows.
I have personally written the heads of the food chains in Canada asking for their cooperation in promoting ground beef. The food advisory services section of agr. canada will be preparing special recipes and cooking hints for consumers and will be working with the media to promote increased consumption of ground beef.
The Future
There are nearly 15 Million Cattle in Canada at the present time. Between 1973 to 1974 cattle numbers across the country increased by 6 per cent.
The culling of cows which is now occurring should help to balance beef supply with current demand.
I know the situation today is slightly different, but after 30 years you would think soom of the laugage and prices would of changed. But it seem the policy is the same, I'f we don't get cheep cattle from the farmer, We'll make it happen soom way.
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