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$2.50 national check-off on track for 2018

Policy: News Roundup from the January 2018 issue of Canadian Cattlemen

Most Canadian beef producers will be kicking in another $1.50 per marketed head to the Canadian Beef Cattle Check-Off starting at some point in 2018, with the long overdue increase in funds being used to further marketing and research efforts for the industry.

The national check-off, which hasn’t changed in about 20 years, will increase from $1 per head to $2.50 per head, says Melinda German, general manager of the check-off agency. Most of the agreements with provincial beef industry associations, approving the increase are in place, she says, with three yet to be finalized.

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German says while the national check-off generates about $7.5 million annually now, in real terms the “buying power” of the initial $1 levy created in the late 1990s provides a 70 cent dollar.

Alberta beef producers, for example, in 2017 paid a total $3 per head check-off with two of those dollars going to the provincial Alberta Beef Producers, and $1 going to the national check-off. Starting in April 2018, Alberta ranchers will be paying a total of $4.50 per head, with $2 still going to ABP and the new $2.50 amount going to the national check-off.

The Alberta national check-off collected about $3.8 million in 2017, Saskatchewan just under $1 million, Ontario $896,000, Quebec about $887,000, B.C. about $235,000. In Atlantic Canada, New Brunswick $17,000, P.E.I. about $15,000 and Nova Scotia $8,200.

Six of nine provinces have all agreements in place for a 2018 start, German told delegates attending the recent Alberta Beef Producers annual general meeting in Calgary. In fact, Nova Scotia and P.E.I. producers are already paying the increased check-off. Manitoba, Saskatchewan and Alberta producers will start in April 2018, with B.C. to follow in July, 2018.

Ontario beef producers are close to finalizing their agreement. Quebec is committed to have their agreement in place at some point in 2018. And after a legal delay, New Brunswick is working on its agreement.

The need to increase the check-off was approved collectively by all provincial beef industry associations about four years ago. It was all part of developing a Canadian National Beef Strategy needed to improve marketing and research efforts to keep the industry moving forward, German says.

Producing and marketing beef in the world is a competitive business with some big players. Canada’s national check-off collects between $7.5 and $8 million annually, compared to Australia which collects about $106 million, New Zealand collects about $10.5 million and the U.S. about $40.5 million.

Canada’s national check-off is spent in three key areas — market development, research and promotion. There’s also an option to direct money to provincial initiatives. Money for marketing and promotions goes to Canada Beef, while the research dollars go to the Beef Cattle Research Council. German emphasized that it is provincial beef associations that directs the agency on where they want their national check-off money used.

For example, B.C. wants 90 per cent of its national levy spent on market development with 10 per cent to research, Alberta directs 80 per cent to market development and 20 per cent to research. Saskatchewan goes for a 70/30 split, while Manitoba wants 85.5 per cent spent on marketing, seven per cent on research and 7.5 per cent on provincial initiatives.

Eastern provinces lean the other way. Ontario wants 32.6 per cent spent on marketing, 17.4 per cent on research and 50 per cent on provincial initiatives. Quebec, New Brunswick, Nova Scotia and P.E.I. have all earmarked anywhere from 88 per cent to 98 per cent of the national check-off to provincial initiatives.

As the new $2.50 check-off comes into effect with each province, the provincial associations have a one-time chance to reallocate how they want the national levy used.

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