The current problems facing producers have not been caused by service charges or the failure of producer organizations.
Over the past seven years, the cattle and beef industry in Alberta has been battered by a series of significant and catastrophic events. These events have included drought in 2002, BSE in 2003, R-CALF challenges in 2004, high feed grain prices, the global recession that has affected all commodity prices, mandatory COOL in the United States, the rising value of the Canadian dollar, and now drought again in 2009.
We are still paying a high price in reduced export market access and increased regulatory costs for BSE. A significant reduction in the cow herd is occurring and we could see reductions in cattle feeding and beef-processing capacity. We have an aging group of producers and not enough young people are entering the industry. As I observed this summer, it used to be a lot more fun to be a cowboy.
In the face of such extraordinary challenges, the search for solutions takes a winding path that can lead people in the wrong direction. There is a temptation to blame existing organizations and funding processes for the state of the industry. Some people grasp for answers that appear to be quick and easy. The reality though, is that the current problems facing producers have not been caused by service charges or the failure of producer organizations. With all the industry and government efforts on solving these problems, we can safely conclude that there are no quick and easy answers to the challenges.
Alberta Beef Producers (ABP) is a democratic and truly representative organization that works, to the best of our ability, for the benefit of all cattle producers in Alberta. Through our own efforts and our support for national organizations such as the Canadian Cattlemen’s Association (CCA), Beef Information Centre (BIC), Canada Beef Export Federation (CBEF), and the Beef Cattle Research Council (BCRC), we will continue to work on solutions that will make the industry more sustainable and profitable for producers. We need solutions that will provide a benefit for the majority of cattle producers and the overall industry, not just a few producers who may be involved in a specific branding or processing venture.
Our priorities and strategies for making the industry more competitive and profitable have been developed over the past two years with significant input from grass-roots producers and ABP delegates. Producers will have another opportunity to review our policies and priorities at the upcoming fall meetings. The solutions that cattle producers and ABP have identified include: (1) increased export market access, (2) reduced regulatory costs and barriers, (3) increased value for our products through branding and differentiation of all Canadian beef, (4) improved feed grain and forage productivity, (5) better research and development performance, and (6) improved business risk management programs for cattle producers.
Most of these solutions are not new and the focus on them is easy to explain. Increased export market access has been a priority for the Canadian beef cattle industry for 20 years and restricted access to important export markets is estimated to cost Canadian producers around $100/head. Reducing regulatory costs and barriers has been a very high priority for ABP since determining these costs add at least $65/head to our production expenses. Branding and differentiation strategies can add value to our products, although we must ensure that our production costs remain competitive and recognize that there are limits on the volume of products that can be marketed through specific brands.
There is no doubt that improvements in the productivity of feed grains and forages have not kept pace with the progress made by our competitors. We also need to improve our overall research and development capabilities in order to enhance the efficiency and effectiveness of our production systems to make us competitive producers of high-quality beef. Finally, the current suite of business risk management programs is clearly not working well for cattle producers, particularly cow-calf producers.
Successful implementation of these solutions could represent several hundred dollars per head for cattle operations in Alberta and there has been solid progress on a number of them. The Agricultural Market Access Secretariat, the Canadian Beef Advantage (CBA), and the Beef InfoXchange System (BIXS) are examples of initiatives that will help increase access to export markets, enhance the value of all Canadian beef, and improve communications, information sharing, and efficiency across the entire beef supply chain.
Notwithstanding this progress, however, the industry has not yet been successful in fully implementing these solutions. Furthermore, we have faced some difficulty in getting other cattle organizations and governments to recognize their priority. Despite these challenges, ABP strongly believes that these solutions are valid and we will continue to take a practical and pragmatic approach in addressing them. While it would be easier to simply sell hope, we recognize that producers need real and meaningful solutions.