April 2002
Cattlemen and cattle feeders remain at loggerheads over program funding and research
The Ontario Cattle Feeders Association has asked the province's agriculture minister to mediate the dispute, while the cattlemen are calling for a new Beef Industry Council to bring the groups togetherby DON STONEMAN
A new beef body may be required for a provincial industry torn by dissension.The Ontario Cattlemen's Association has called for the creation of a Beef Industry Council where producer groups and packers can hash out issues. Currently, relations are soured by an open dispute between the Ontario Cattlemen's Association (OCA), which has the authority to collect checkoff under the Beef Marketing Act, and the Ontario Cattle Feeders Association (OCFA) whose roughly 100 members feed about half of the cattle marketed in the province yearly.
The OCFA owns the trademark for Corn Fed Beef, a successful marketing program which cattlemen of all stripes say should continue but which needs more financing, only available with the help of the OCA.
The fight last fall came down to money and more say in what goes on. The cattle feeders wanted a substantial sum of money to spend on projects of their choosing and also a seat on the OCA's research and development committee. The OCA position, as published in the annual meeting report, is that the Beef Cattle Marketing Act prohibits it from providing direct funding to another organization. It funds the Ontario Veal Association through a Memorandum of Understanding and that is the only way that it will fund Ontario Cattle Feeder proposals.
The Cattle Feeders, says its president Ron Bennett, shouldn't have to go to the OCA "on bended knee" asking for money every time it has a project.
The fight had been brewing for some time. A confrontation was expected at the OCA meeting in February, 2001. It was defused and, during the summer, it seemed that some kind of an agreement might be reached. This all fell apart at the OCA's December board meeting, when Bennett told the OCA board that their draft memorandum of understanding was unacceptable. All agreements between the OCA and the OCFA fell through. The position of Feedlot Officer was terminated. The OCA board decided that a new position called Industry Development Director was to be created; a position with a broader mandate than just feedlots and the Corn Fed Beef program.
Though the OCFA owns the Corn Fed trademark, the program was funded by an agreement with the OCA and also with money from the Ontario Ministry of Agriculture Food and Rural Affairs' Healthy Futures program. The money ran out in mid-February. A deadline of Mar. 1 to apply for more Healthy Futures money was missed.
Dave Clark, who was jointly employed by the OCA and the OCFA, acted as general manager for the cattle feeders while the OCA paid for his position as Feedlot Officer. With office salary and expenses, the costs totalled $80,000 a year.
The OCFA's membership fees vary from $150 to $300, based on the number of cattle shipped per year. With sponsorships for their annual meetings, the cattle feeders' income last year totalled just under $36,000. Ironically, a number of members of the OCFA executive are former Cattlemen's Association leaders. By comparison, the OCA represents 25,000 producers across the province and virtually everyone who raises and sells a beef animal pays a checkoff to the association, including members of the OCFA.
In the short term, there's no staff to bring new farmers into the program if they wanted to join. In the longer term, there is no one to award certification and to perform annual audits as required. Clark says the program needs financial support for another three or four years before it will become self-sufficient.
The Ontario Cattlemen's Association has asked the Minister of Agriculture, Food and Rural Affairs to perform an independent review of the OCA. This must be related to the squabble with the cattle feeders.
Mike Buis of Chatham, the new OCA president, says there is no connection. He says the review has to do with the OCA's attempts to restructure itself, a two-year effort which more or less flopped. The delegates to the annual general meeting in February voted restructuring proposals down, claiming that the organization would lose a lot of grassroots input by reducing the number of board members representing counties with low cattle and producer numbers, and few dollars would be saved.
Ian McKillop of Elgin County, who had served as a chairman of the committee, said restructuring was never intended to save much money (only $17,000), but was supposed to make the organization "more effective."
The last time there was a review of the OCA was in 1988, during the debate over supply management. There was an OCA review earlier in the 1980s, when Agriculture Minister Dennis Timbrell took at look at the industry. Both times, there was a crisis, with disenchanted producers forming a splinter group. It's likely to be the fall before the review of the OCA is completed.
In the meantime, the Ontario Cattle Feeders Association, anxious to keep the Corn Fed project alive, has asked Agriculture Minister Brian Coburn to sit down with the two organizations to mediate a solution.
Alberta is forming a Beef Industry Council as well. The acting chairman is Jeff Warrack, a director of the Alberta Cattle Feeders Association, and he is inviting the Alberta Cattle Commission to take a seat at the table. In Alberta, the cattle commission has the powers to impose checkoffs on cattle sales. However, the ACC's mandate to keep its checkoff powers comes up for renewal every five years and this is the year. Warrack says the call for the beef council isn't a checkoff challenge, but an opportunity to look at the industry in the light of the tremendous growth in the industry and rising animal rights and environmental concerns. He expects that the council can be disbanded by the end of the year. BF
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Smithfield acquisitions make it U.S.'s fifth largest beef processor
Smithfield Foods, a name synonymous with pork in the United States, is reinventing itself as a meat company by using its deep pockets to buy beef processing capacity. In the winter, it was widely rumoured that Guelph's Better Beef Ltd., the province's largest processor, was being wooed.In 2001, Smithfield was reported to own 710,000 sows, more than any other company in the world and more than three times the size of its closest American competitor. With 20 per cent of the processing capacity in the United States, it was looking at producing pigs in Mexico, Brazil, Poland and China. And it owned Schneiders Meats in Kitchener.
It was also making inroads into the beef business. Last June, Smithfield swallowed Moyer Packing Company, which has about a two per cent share in the American industry and $600 million US in sales, processing 2,375 head a day.
In October, it took over Packerland Holdings, based in Green Bay, Wisc., which claims to be the largest vertically integrated beef company east of the Mississippi River, processing 5,500 head of cattle per day and racking up annual sales of more than $1.3 billion. Before Smithfield acquired it, Packerland rejuvenated the flagging Murco Foods Inc in Plainwell, Mich., whose plant kills Canadian cattle. Packerland's other division is Sun Land Beef Company in Arizona. It markets boxed beef and value-added beef products.
Prof. William Heffernan of the University of Missouri, considered an expert on packer concentration, says that with its new acquisitions Smithfield Foods is now the fifth largest beef processor in the United States, after Tyson-IBP, ConAgra, Cargill and Farmland National. "The eastern seaboard is the diamond in everybody's ring now," says Dave Clark, the former feedlot development officer for the OCFA. With a large population of high-income earners, the east is a major market for higher priced beef items.
Clark says the major packing companies want to be all things to all people in order to meet the new demands of their big customers. Wal-Mart, for example, would like to be able to get pork, beef and chicken from the same supplier and is becoming a major grocery player in the United States. In February, there were published reports that Wal-Mart wanted to buy Loblaws in Ontario and Quebec.
When a reporter tagged along with a group of farmers touring the newly renovated Better Beef plant in 1990, the tour guide bragged that the animals that were killed today would be chilled, boxed, loaded onto a truck and on the highway the next day.
Better Beef is Ontario's largest plant. Slaughter remains at about 7,500 a week and has been dwarfed by expanded plants in Alberta. Better Beef appears to have abandoned that fast turnover and switched to specialty products. It now claims to age beef as it hangs. A 132,000 square foot freezer warehouse was built in 1998. Last fall, Better Beef launched a new fully cooked pot roast which is marketed at A&P stores and can be heated in the microwave in 10 minutes. Furthermore, Better Beef has installed the hardware and software to make use of the new cattle ID system.
Last year, Better Beef got a $770,000 Healthy Futures grant to develop a farm-to-plate traceability system. It is working with the OCA and with Hubbert's Processing and Sales in Brampton on the $3 million project, which is called Cutting Edge. When Agriculture Minister Brian Coburn announced the project last May, he predicted beef sales would expand by $160-$180 million and that 300-400 jobs would be created.
Also last May, Better Beef. was certified by IFANCA (the Islamic Food and Nutrition Council of America) to produce Zabiha Halal beef. IFANCA says this meat can be exported to Moslem nations anywhere in the world. BF
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What prospects for a single national milk pool?
With milk marketing in Canada still divided into two pools, and Newfoundland out of the system, a nationwide system is still not a reality. But its advocates believe the gap can be closedby DON STONEMAN
Are dairy farmers going to see a national milk pool anytime soon?A single pool across Canada could mean a few more dollars in the pockets of farmers here in Ontario. Perhaps more important, it could mean a more stable milk pricing and marketing system across the country.
Pushing hard for a single pool is Saskatchewan dairy farmer Leo Bertoia. He is already half way through his two-year term as president of Dairy Farmers of Canada and admits that he hasn't made much progress towards his stated goal of a single pool for milk across Canada.
Milk marketing in Canada is still divided into two pools. In Western Canada, British Columbia, Alberta, Saskatchewan and Manitoba have been working together to achieve common pricing. The five eastern provinces (Newfoundland is the tenth province and still outside the system) do the same thing this side of Kenora.
Two forces are driving Bertoia's desire to merge the pool of five provinces in eastern Canada with the four provinces in the west. The first is the continued concentration in the processing industry. There are only three major players in dairy processing and Bertoia fears that they may start to play producers on one side of the country off against the other in order to get cheaper milk. "Producers will use one pool against the other for their benefit....they will derive the cheapest product. Unless we get these prices homogenized, that's what you will see happen."
The second reason, says Bertoia, is fear of Australian style deregulation of the dairy industry. He says Australian state producers had insisted on maintaining their own state pricing mechanisms in spite of relatively gentle suasion from the national government. As in Canada, there was a blended price system, and producers in states with a higher percentage of milk going into the "fresh" (fluid) market received a higher price than a state where more of the milk was made into cheese and other further processed products. Therefore, there was an unwillingness to share the "wealth" from higher fluid prices.
Last June, the Australian government de-regulated the industry countrywide, a move which Bertoia says has been a disaster for dairy farmers. Prices to producers have fallen by as much as 25 per cent. There has been a slight benefit to producers of export milk in some areas, where prices have risen to some degree. The real sore spot is that consumers have benefited very little, about three per cent at most. Bertoia says it appears that the processors have eaten up the difference.
In Canada, the four western provinces get a higher blended price for their milk than in the east, where more milk is made into cheese. Bertoia is unwilling to "point fingers" at where the intransigence lies. "There just isn't any real willingness to make some sacrifices," he told Better Farming. He warns "short-term gain often equals long-term pain."
Ontario's milk marketing board is in favour of a single pool. However, Dairy Farmers of Ontario chairman Gord Coukell of Stayner urges caution. "It has to evolve when people are ready," he says.
Coukell points to many changes going on in provincial dairy organizations. Alberta, for example, is in transition from a government-appointed board to a producer board, similar to Ontario's.
In Eastern Canada the next pooling issue is likely to be how to get Newfoundland in as the newest member. Nova Scotia has just finished restructuring its government-appointed milk marketing board into a producer-run organization. And there are other differences as well. Some organizations, Coukell points out, don't take control of the milk supply in the same way that Ontario does. Ontario buys the milk from farmers and sells it to processors on their behalf. He maintains that other approaches make it harder to advance the single pool concept.
However, Coukell doesn't think that the discrepancy between the eastern and western pool prices is that big, in spite of the much larger percentage of milk in Western Canada that gets a higher price from the fluid market. We are looking to close the gap Coukell says. BF
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Watch for more El Nino-La Nina surprises
Analysts are on the alert to see what the next changes in tropical Pacific temperatures will mean for our weather patternsby HENRY HENGEVELD
Weather in Ontario is as varied as it comes. In summer, we can have bright sunshine in one location and a hailstorm only a few miles away. In winter, land areas in the lee of lakes can accumulate several feet of snow within a day, while the folks in the next township over get none.It can also vary dramatically from one hour to the next. Earlier this winter, for example, I watched the day's weather change from sunshine to snow to sleet and then rain, followed by freezing rain and back to snow again, all within the space of a few hours.
In recent years, researchers have discovered that the characteristics of climate from year to year are about as varied as day-to-day weather. The key for these variations seems to be the changing moods of the tropical Pacific Ocean. We are now familiar with the slow changes in surface temperature patterns from an El Nino state (a warm eastern tropical Pacific) to a La Nina state (a cool eastern Pacific) and back again -- about one complete cycle every three to seven years. Since a warm pool of tropical ocean water acts much like a hot plate under the atmosphere above it, it causes the air to warm, rise and circulate in a distinctive pattern.
Hence, if the location of this "heater" within the tropical Pacific changes, it also changes where the air rises and where the winds blow around the world. That is, it changes our weather. Keep an eye on the changes in the tropical Pacific temperatures and you can get a bit of advanced warning as to what your weather downstream over North America is likely to be like for the next few months. If the changes are large, expect some weather surprises.
The last El Nino in 1998, for example, was the largest of the past century. It caused weather havoc around the world, and was a contributing factor in the great 1998 Canadian ice storm. That year was also a record year for both average global and Canadian temperatures. Analysts are now watching with great interest to see what the next El Nino, which now appears to be starting to brew in the Pacific, will bring.
This winter, two American researchers, Michael McPhaden and Dongxiao Zhang, added a brand new chapter to the story about the role of the tropical Pacific in our climate and weather. In a February issue of the prestigious science journal Nature, they reported that, in addition to the El Nino-La Nina cycle, the tropical Pacific conditions also vary in a similar manner on a time scale of multiple decades.
Their analysis showed that the upwelling of cold, deep waters to the surface of the tropical Pacific was quite strong for several decades prior to about 1976. However, since then, this upwelling has decreased by some 25 per cent, causing the average surface temperatures of the Pacific waters to become 0.8C warmer than in the earlier period. They note that this may explain why there have been more frequent intense El Ninos and weaker La Ninas during the past few decades. In turn, this may also have contributed to observed changes in ecosystems and in the frequencies of other weather extremes (such as major drought).
Furthermore, if this sloshing back and forth of the tropical Pacific occurs as a cycle of about 50 years or so, as it now appears, then the reverse should begin to happen in the next few decades, possibly bringing a period of cooler, wetter weather back to much of North America.
However, there is one further factor complicating the story. In addition to the El Nino-La Nina cycle and the presence of this longer 50-year variation in Pacific climate, there has also been an upward trend in global temperatures over the past century that may be changing the rules of how the tropical Pacific behaves. Last year, the Intergovernmental Panel on Climate Change concluded that most of the warming during the past 50 years was likely due to human activities, and that these activities will continue to cause further warming.
Ironically, some climate models predict that, as the world warms in the decades to come, it will appear in much the same uneven pattern displayed by both the El Nino-La Nina oscillation and the multi-decadal sloshing back and forth. Hence, much like a rising ocean tide will cause waves to gradually wash further up the beach, such an underlying upward trend in average temperatures can be expected to cause the intensity of the warm peaks of the long-term Pacific cycle to increase with time. This would result in a world that seems more and more like an El Nino climate with time. Perhaps that's already happening.
Stayed tuned. This story isn't over yet! BF
Henry Hengeveld is senior science advisor on climate change for Environment Canada.
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Uncertainty reigns over the next generation of farm programs
With Ottawa seemingly in retreat on its integrated "risk management" package, confusion reigns on the farm policy front. Farm leaders believe it is better to get it right than to get it fastby BARRY WILSON
On more than one occasion, agriculture minister Lyle Vanclief has groused about the contradictory leadership demands he has been receiving from the provinces and the farm community. In the first instance, he is told to show leadership. Canada needs a vision. Tell us where you want to lead us.So last winter, based on the vague principles agreed to by federal and provincial ministers in the Yukon in June, Vanclief had his bureaucrats draw up proposals for a national, comprehensive policy that would fold existing safety net programs into one "risk management" package. It would include environmental, food safety, innovation and renewal planks as well and all would be part of one integrated, inter-connected national program.
But when he presented the proposals in Toronto in January, he was denounced for being too dictatorial and inflexible. Some provinces claimed to be surprised. Quebec refused to sign a communiqué, insisting it be able to keep its own programs. Farmers felt they had not been properly consulted.
By the end of February, when Vanclief traveled to Halifax to appear before Canadian Federation of Agriculture delegates, he seemed to be in full retreat, promising he had formed no strong ideas, everything still was on the table and a massive national consultation was planned through March and April.
By any measure, it was a setback for the original political goal of having in place a new agricultural policy framework by March 31, 2003, when the existing safety nets deal expires. Now the bar has been lowered and the hope is for another principles "umbrella" agreement in Halifax next June.
It seems certain there will be a need for a federal-provincial agreement to keep the existing mix of safety net programs in place until something new is developed. If the present deal is not extended beyond March 31, 2003, and no new deal is in place, up to $1 billion in government funding drops out of the envelope. That would be in nobody's interests, except perhaps deficit-conscious finance ministers.
So another Canadian political drama unfolds, illustrating once again how complicated this country is to govern. Agriculture, as a shared federal-provincial jurisdiction, is particularly susceptible to endless bargaining before anything can be decided. For farmers, who pay part of the freight and whose ability to make a living often depends on national and international political rules, the stakes are high.
Many farm leaders believe it is better to get the new program right than to get it fast. Many of the programs developed out of the last long-term policy framework, signed in Fredericton in the late 1990s, were deeply flawed.
Still, it is late in the cycle for there to be so much uncertainty, confusion and disagreement over the next generation of farm programs. For the past six months, ministers and farm leaders have been putting a lot of faith into the importance of the so-called Whitehorse Agreement.
They are now finding that agreeing on vague principles of sustainability, innovation and risk management is the easy part. The details are a different, more complex and contentious matter altogether.
And as usual, the clock is ticking.BF
Barry Wilson is a member of the Parlimentary Press Gallery specializing in agriculture
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