[UPDATED Jan. 24, 2017] The national cattle checkoff is set to rise in most parts of the country this year — but a hike in Alberta is “on hold” for now.
The $1 mandatory checkoff, applied to every head of cattle that goes to market, generates about $7.5 million annually. The funds are used to support marketing and promotion (through Canada Beef) and research (through the Beef Cattle Research Council). But the levy hasn’t gone up since its introduction 17 years ago, which means it has declined about 30 per cent because of inflation.
Members of eight of nine provincial beef organizations, including Alberta, have backed a proposal to raise the levy.
“In order to do what needs to be done for the industry, the national checkoff needs to be at $2.50,” said Bob Lowe, chair of Alberta Beef Producers (ABP). “In Alberta, the delegate body has voted in favour of raising it to $2.50. When we actually do that is another story. There are a whole lot of issues going on, and that’s probably not No. 1 right now.
“In Alberta, it’s kind of on hold. We have voted for it and that was passed overwhelmingly. But as far as it being implemented really soon, we haven’t even discussed that yet.”
The challenge for his organization is the $2 provincial levy, said Lowe. The provincial checkoff raised $10.4 million in the last fiscal year (ending March 31, 2016). But because it’s refundable, ABP ended up handing back $2.4 million — mostly to big feedlots.
“We have to sort our provincial levy out first, I think, if we can,” said Lowe. “And if that proves to be an impossibility, well then, we take other steps beyond that. First things first, we sort out our provincial.”
The former Conservative government made the provincial checkoff refundable in 2010. While the current NDP regime has said it would consider reversing that move, it has asked ABP to get the agreement of the Alberta Cattle Feeders Association. But negotiations so far have not been successful.
“As you know, we’ve been talking to cattle feeders pretty regularly — we’ve put a proposal before government,” said Lowe, owner of Bear Trap Feeders in Nanton.
“All government has to do is change the legislation to allow the non-refundable checkoff. If it can do that, then let us as an industry sort out how to get that done.”
Lowe said he’s hoping for a resolution soon.
“We’ve got to do something,” he said. “There’s been too much time talking about it.”
He said he would also like to move on the national checkoff, which he called “100 per cent justified.”
“I would have no trouble speaking and trying to promote that, whether or not we have a refundable checkoff. But it would sure be nice to know which way we are going to go before we go to bat for the national one. We will be trying to get the national levy through, whether or not we end up with a refundable or non-refundable checkoff. But right now, we’re concentrating on the provincial issue first.”
Talking to consumers
Provincial organizations determine how the national checkoff is allotted. In 2015-16, ABP directed $2.7 million of the national checkoff collected in Alberta to Canada Beef, and $680,000 to the research council.
When the national levy is raised, provincial organizations will have a third allotment avenue, which has been dubbed ‘issues management,’ said the general manager of the Canadian Beef Check-Off Agency (the parent agency of Canada Beef and the beef research council).
“There (is) a need to support the consumer and the public, in terms of beef and why beef is a healthy protein option, but also being able to tell our story about things like hormone-free beef or antibiotic resistance,” Melinda German said in an interview earlier this winter.
“This area of issues management is all about ensuring we are out in front of things, telling our story to the consumer, to the public about really what is happening in the industry and making that connection. We have really lost that connection and that is why this issues management came up as a component of one of the pillars in the national strategy that we felt was very important to support.”
Every five years, the checkoff agency conducts a review of the economics benefits from the levy. The latest one, completed in June, concluded that every dollar of checkoff money results in $14 worth of value to the beef industry.
“That is very significant and if we compare that to our trading partners in Australia and the U.S., we find that our return on investment is higher and we are doing a very good job,” said German.
Her agency is currently working with provincial organizations to get through the paperwork of enacting the increase. She expects that process will be largely complete in most provinces by the end of this month.
For more information visit, canadabeef.ca/national-check-off/.
With staff files