Come spring, more than the grass will be rising — the national cattle levy is going up $1.50 per head on April 1.
“The impetus for us was the national beef strategy,” said Rich Smith, executive director of Alberta Beef Producers.
“The national beef strategy is a plan for us for the next five years in terms of moving our industry forward. These are ambitious plans in terms of market demand and productivity arising out of that strategy.
“We need to increase our industry funding if we are going to stay competitive globally.”
The national beef strategy was developed by all the provincial and national organizations, and released back in 2014. Its backers said the current $1 national checkoff, which has been in place since 2002, wasn’t nearly enough to help the beef sector achieve its plan. They did an assessment of both Canada Beef and the Beef Cattle Research Council before coming up with the $2.50 figure that goes into effect April 1. (Combined with the $2 provincial levy, the total checkoff will be $4.50 per head.)
A group called the Canadian beef advisers (which included reps from the Canadian Cattlemen’s Association, the Beef Cattle Research Council, Canada Beef, the National Cattle Feeder’s Association, and the Canadian Beef Breeds Council) recommended how the $2.50 should be allocated — 65 per cent to Canada Beef, 30 per cent to the beef research council, and five per cent to an issues management portfolio, which will be handled by CCA. (This works out to $1.625 to Canada Beef, 75 cents for beef research, and 12.5 cents for issues management.)
Some provinces do things a little differently (Manitoba keeps some of the national checkoff for its provincial organization) but Alberta and Saskatchewan — which have the biggest cattle herds — pass on every penny, said Smith.
“To put that in perspective, in Alberta, we (currently) charge $1 — 80 cents goes to Canada Beef and 20 cents to the BCRC,” he said. “So basically, we’re taking BCRC from 20 cents to 75 cents and taking Canada Beef from 80 cents to $1.62.”
The research council also needs the funding boost because the rules are changing for government funding. To get the same amount of funding under the Canadian Agricultural Partnership (the successor to Growing Forward, which also takes effect April 1), industry has to up its contribution.
“It’s not going to give BCRC a lot more money, but it will allow it to have the science cluster operate at the same level that it currently is,” said Smith.
Canada Beef has been getting money from a legacy fund, but that fund has finished.
“There’s no big windfall for any of these organizations. It’s more just enhancing the money they need, with some enhancements to the work they’re doing. If we didn’t increase the national checkoff, they would have been left with a lot less money to operate.”
The increased checkoff, first presented to producers at their fall meetings in 2015, has been endorsed by Alberta Beef Producers delegates. Once the change comes into effect, beef organizations will be stepping up their communication efforts, first with producers and then those who collect the checkoff (such as auction marts, packing plants and dealers). The hope is that explaining why the increase is needed and how it will be used will solidify support for the national levy.
The $2 provincial checkoff hasn’t enjoyed universal support in the industry, particularly among cattle feeders, who account for the lion’s share of the roughly $2.5 million that Alberta Beef Producers refunds every year. (That’s about one-third of what’s collected.) But Alberta Beef has reached a deal with the Alberta Cattle Feeders Association to make the provincial checkoff, like its national cousin, mandatory (and therefore not subject to refunds).
Cattle producers backed the deal at their fall meetings and the feeders’ association is putting it forward for approval at its annual general meeting next month. If it wins support there, it’s expected the province will hold a plebiscite on making the provincial checkoff mandatory.