[UPDATED: Oct. 12, 2018] This past month started off with a bang at the Canadian Beef Industry Conference in London, Ont. No doubt you’ve read yards of material about the three-day event but I wanted to pass on some of my observations as I moved from one event to another while it was still fresh in my mind.
First stop was the annual meeting of the Canada Beef Cattle Check-Off Agency. It’s been a big year for them. They started 2018 with only two Maritime provinces collecting the new $2.50 per head check-off and by July all the cattle-producing provinces but Ontario had signed on (see note at bottom). Ontario has since signed agreements with the agency detailing how the $2.50 would be collected and dispersed but no final decision had been made on when Ontario would begin collecting it.
In 2017-18, the national check-off brought in $7.7 million and the $1 levy on imported beef raised another $947,000. From that six provinces took back $1.2 million for their own promotion and research projects, leaving about $6 million for marketing, $1.3 for research, and a little under $100,000 for issues management by the Canadian Cattlemen’s Association.
For 2018-19 the agency expects the check-off to bring in about $15 million. Once the provinces take back their share, and the agency’s bills are paid, that should leave $7.5 million for marketing by Canada Beef, $5 million for the Beef Cattle Research Council and $670,000 for issues management by the CCA. This is only the producer portion, all of which is used to leverage other funds from government and industry.
Once Ontario signs, that will open the door for the agency to raise the import levy to $2.50 per head equivalent, or something close to $2.5 million per year for generic beef promotions.
Another hot topic was the session on alternative proteins such as the plant-based Beyond Meat burger sold by A&W and the Impossible Burger as well as meat tissue grown from animal cells in a laboratory.
The National Cattlemen’s Beef Association in the U.S. has been after Washington for some time to keep these “fake meat” products from being labelled as beef, or meat.
Sonya Roberts, president of Cargill Proteins, suspects they might lose the argument over the term “meat,” but the debate is still raging over using the terms beef, pork or chicken.
A lot of venture capital is also moving into the creation of aquatic cell grown proteins.
When Roberts looks at the global market for protein she sees unlimited potential. With each passing year more of the world’s 7.6 billion people gain enough income to add protein to their diets.
Based on that vision Cargill has made a significant investment in Memphis Meats which is developing lab-raised products, and while lab-grown beef is still uncompetitive and has other technical hurdles to clear, she is convinced it will eventually find its place in the protein market.
Unlike vegetable-based burgers, which are finding a niche with North Americans who relish variety in their diet, Roberts thinks lab-grown proteins will be introduced first through food-service menus. She’s had cell-grown duck that tasted like duck and fed lab-raised burgers to meat lovers who could not tell the difference. Muscle cuts are still on the research bench but she’s sure they will eventually come up with the right structure for these products, as well.
The key point, says Roberts, is people still love meat. This year Americans are expected to eat 220 pounds of meat per capita. If we raise it, it will be eaten. Whether these alternative products ever gain enough market share to alter the price for the traditional product remains the big question for producers.
Down the hall John Masswohl of the CCA caught my eye with a slide outlining Canada’s beef trade with the EU before and after the CETA agreement came into force in 2017.
Every year since 2014 the average value of the beef sales to the EU has gone up, from $9.07 to $16.83/kg up to May of this year. Over the same span the value of our imports from the EU have been falling, except for 2017 when the average value jumped to $5.26/kg from $4.43 the year before, and kicked up again to $6.37 in the first five months of this year.
So the agreement seems to be working but the volumes are quite small. In 2017 we exported only 496 tonnes of beef to the EU, up from the 340 the year before, but quite a bit less than the 720 tonnes we sold to Saudi Arabia. At the same time we imported 2,808 tonnes from them.
So maybe the agreement is working, but we need more volume.
With that in mind the CCA has come up with a three-step plan to goose the EU supply line. First, come up with the funds to offset some of the auditing costs imposed on people who agree to segregate EU-eligible cattle from birth. Second encourage more vets to sign up as auditors by helping with the training costs. And three, develop software to automatically generate some of the documents on EU-bound cattle.
The hard part will be finding the money to put these ideas into force. That part of the plan was still in the wings as this issue went to the printer.
*[UPDATE] We previously reported that Ontario had signed agreements with the Canada Beef Cattle Check-Off Agency detailing how the new $2.50 national check-off would be collected. In fact, the service agreement that was signed pertains to the existing $1 national check-off that Ontario continues to collect.