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Comment: Ontario banks on branding

It was near the end of the Beef Farmers of Ontario (BFO) meeting and Sylvain Charlebois, the well-known food researcher from Dalhousie University was wrapping up his talk on changes in consumer buying habits.

One final questioner asked him if he had any suggestions for the best way to convince consumers of the value of beef in an era when so many are skeptical of advice from scientists, government or beef producers.

“I’m a big believer in branding,” replied Charlebois. When trust is more fragile, he explained, people often seek out a brand.

That must have been music to the ears of the questioner, and every delegate in the hall. It also summed up all the reasons why BFO delegates had earlier resolved to once again put off agreeing to a $1.50 increase in the national checkoff until Ontario can lock up its share of the extra revenue.

To date, seven of nine provincial cattle organizations have passed resolutions in support of the increase, although only Nova Scotia is collecting the $2.50 levy and New Brunswick just signed the agreement with the checkoff agency last month. It’s worth noting 88 per cent of the money goes toward provincial initiatives in Nova Scotia and 90 per cent in New Brunswick.

Currently 33 cents of every $1 of national checkoff collected in Ontario goes to Canada Beef, 17 cents to the Beef Cattle Research Council and 50 cents back to Ontario to spend on projects that satisfy the national beef strategy.

Ontario is now the only major cattle province with a non-refundable provincial checkoff but BFO president Matt Bowman freely admits they will need more revenue if they are going to meet all the demands being placed on them, particularly when it comes to marketing. So they need a higher checkoff.

Leading Ontario’s push for branding is the highly successful Ontario Corn Fed Beef program operated by the Ontario Cattle Feeders Association. Working through partnerships with retailers, principally Loblaws, food distributors like Sysco, and most federally registered packers, the corn-fed brand has grown to the point where it accounted for 51 per cent of the federal slaughter in Ontario last year. If you looked at just fed slaughter, executive director Jim Clark says that figure would be even higher.

BFO helped fuel that growth, diverting $500,000 of producer money into the program in 2015 and another $420,000 last year. Their 2017 budget shaves that support by $20,000 but opens up the purse strings for a new regional marketing initiative.

Producers have committed $600,000 over three years to increase the reach of additional beef value chains operating in the province. Consultant John Baker, who is heading up this effort, says the ultimate goal is to increase the consumption of Ontario beef by leveraging regional value chains that complement the work of the corn-fed beef strategy and the national beef strategy.

Baker is also involved in expanding the international market for corn-fed beef.

While corn-fed beef is well placed in the retail sector and sees plenty of opportunity with Ontario food service companies, Clark says exports are going to be key to growing their sales in the future. In co-operation with their industry partners they’ve made inroads into the east coast of the U.S., and opened channels into Japan, United Arab Emirates, Saudi Arabia, Indonesia and China. They moved their first container into China in December and shipped 10 more loads since then.

The one hitch to this marketing strategy is the same one facing the entire beef industry in Canada. Where will the cattle come from to feed the demand they are creating?

Ontario beef cow numbers that have been in freefall since 2005, dropped three per cent in the past year to 275,100 head on January 1. Since 2010 the Ontario cow herd has declined 13 per cent.

Beef heifers for breeding were also down 4.6 per cent from last year.

By bringing in western calves the Ontario feedlots have managed to replace some of those numbers, particularly on the steers, to maintain fed slaughter at 530,000 to 560,000 head. That, of course, puts them in competition with Alberta and U.S. buyers for western calves.

Last year feeder exports to the U.S. dropped but offsetting that was a flip in the east-west spread that occurred late in 2016 and is still showing up this year.

Historically, the average price for fed cattle in Ontario is a few dollars over Alberta, but starting back in October the Ontario rail steer weekly price slipped an average $18 below Alberta. This has raised enough of a disruption that BFO and the cattle feeders, with some research help from the Canadian Cattlemen’s Association, are looking into the reasons behind this aberration.

Next year, who knows? It’s hard to lay out a sales plan for a brand when your supply line is up in the air.

It is easy to see why Ontario cattle feeders would love to see a turnaround in local cow numbers, but given the present evidence that seems unlikely.

About the author

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Gren Winslow is editor of Canadian Cattlemen.

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