Once in a while I eat crow and a few years back my criticism of CBEF (Canadian Beef Export Federation) was one of those occasions. Like many armchair coaches it was easy to be critical of things when you do not see the full picture and/or aren’t in the game. Since our company became an export member of CBEF and I took on the role of technical chair, it has been an immense eye-opener as to what goes on in the day-to-day world of beef exporting. It makes killing the cattle seem like the easiest part of the whole chain.
As a member of CBEF I saw that it was driven by a committed, talented and knowledgeable staff with a mandate to push the Canadian Beef Brand backed by an advisory board of both exporters and producers. I learned that the CBEF staff are the implementers but it is the export members who own/sell the boxes who are the drivers that instigate the opening of new markets. On top CBEF functions independently, reporting to a membership that represents all the provincial cattle groups as well as the Canadian Cattlemen’s Association (CCA) and the exporters.
It’s no secret there are two dominant players in the processing and slaughter of cattle in Western Canada. Obviously their market goals determine significantly the direction of CBEF’s efforts and of trade negotiations. That said there is still room for smaller players at the CBEF table and in the end our voices are heard as much as those of Cargill and XL. I only learned this once we became members. Things that can always be improved but overall, CBEF is a great platform for the advocacy and marketing of beef exports from Canada.
Opposite to CBEF’s trade mandate is the Beef Information Centre (BIC). It promotes the Canadian Beef Brand in domestic and U. S. markets. It is directed by a producer advisory board, and its control and guidance come from the CCA. In my dealings with BIC I have found it to be helpful and knowledgeable organization but much more politically correct than CBEF. Unfortunately political correctness does not sell beef and in a dog-eat-dog world I believe blue heelers survive better than bassett hounds. This is especially true now with the dollar at par and U. S. product flooding north.
With Alberta’s refundable checkoff and fewer cattle being marketed, cattle organizations are looking for ways to save money. In an effort to cut costs and improve effectiveness, the CCA is advocating the merger of CBEF and BIC.
Many studies have looked at this idea and depending on who was paying the bills there have been varied recommendations. The latest study done for the CCA determined that the biggest weakness of the current structure of CBEF and BIC was a lack of collaboration between the two organizations and the governance guiding BIC. They also estimated that combining both organizations would save from $150,000 to $200,000 per year. I agree with the consultants and firmly believe that there must be better collaboration and that BIC governance and guidance needs to be improved. That said even though there is a predicted annual savings in merging the two organizations the upfront cost is too high to justify merging them. Besides, the cultures of the two organizations are too polarized to be combined at the current time.
One consultant “loosely” predicted an upfront cost of just over one million dollars to merging the two organizations once you included relocating staff, severance, lease payouts etc. These are valid costs but it still doesn’t take into account the cost to the industry for any disruptions in trade that may occur because of this process and any staff changes that occur.
Yet another study predicted a cost benefit ratio 6.75:1 in the early stages, meaning that for every dollar in savings it would cost $6.75! This report looked beyond the infrastructure, office and staff costs and attempted to quantify the costs of disruptions in trade and marketing efforts. Their numbers predicted a negative impact of over $18 million over a four-year period. Beef sales are not just all about price they also come from relationships; in today’s global market we cannot afford to lose these ties.
Either way the die has been cast. The CCA has recommended a merger to its member organizations. No matter which way you slice it, this merger will cost our industry. Whether in the end there will be a net benefit remains to be seen.
Our industry has faced immense challenges for the past seven years. The biggest challenge we face now is the appreciation of the Canadian dollar, last predicted to go to $1.25 in the next four years. This means we need to be even better at marketing our product in order to sustain our present returns.
Personally I felt it would have been wiser to fix the governance and cultural weaknesses within BIC first and then mandate collaboration between the two organizations rather than the process that has now been set in motion. Our beef exporters need organizations that not only bark, but bite. By crossing our blue heeler and bassett hound I fear we will get something more like a Labrador. A nice family dog that everyone likes but doesn’t serve much purpose other than keeping the kids entertained, and eating lots of dog food. We need working dogs.
— Dr. Christoph Weder
Dr. Christoph E. Weder is a purebred Angus breeder in the Peace region of Alberta and also runs SVR Ranch Consulting. He is a founding member of Prairie Heritage Beef Producers. For additional info check out www.spiritviewranch.com.