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News RouNdup – for Apr. 5, 2010

POLICY WHAT NEEDS TO BE DONE

The 2010 Alberta Beef Industry Conference opened this year with a new event that asked some well-known members of the industry how they saw the road ahead for the Canadian beef business.

Alberta Cattle Feeders’ Association chairman Doug Price believes the greatest obstacles at the moment are the industry’s reliance on the U. S. market, specified risk material (SRM) regulations, and reduced consumer demand for beef due to the global recession.

Price owns Echo Sand Ranching, is a shareholder in Korova feeders and a director in Sunterra Farms. He and his four brothers, their families and their parents also own and operate Sunterra Foods, which is involved in producing, processing and marketing the farm’s pork and beef products through seven Sunterra market locations in high-end districts of Calgary and Edmonton, the U. S. and a premium pork market in Japan. Their federally inspected plants at Trochu and Innisfail also custom process beef, lamb and bison for other producers serving niche markets.

Price points to the fact that Canadian producers sell high-quality beef for $80 to $200 a head less than American producers as evidence of the industry’s failure to create competition for its beef by diversifying export markets. At the same time Canadian beef processors are operating at a $30 to $50 disadvantage to the U. S. to process mature animals because of SRM regulations. Renderers that used to pick up deadstock for free now charge seven cents a pound to provide the service. The final irony is Canadian cattle can be shipped to the U. S., processed under different SRM regulations and the beef exported back to Canada or elsewhere.

Alberta Cattle Feeders’ Association board of directors for 2010: (l-r) Leighton Kolk, Jack de Boer (past chairman), Greg Van Varenberg, Jeff Ball, Brent Chaffee (vice chairman), Doug Price (chairman), Rick Sears, Bryan Walton (CEO), Jason Hagel, Jeff Warrack, Page Stuart, Glen Thompson, Russ Evans (policy and research manager).

One positive sign to Price is the increasing number of producers who are developing brand-label products to meet specificustomer demands. He says the traceability system provides a way for producers to learn more about what they are producing. “There’s nothing like the power of information to grow a business,” he says.

Going forward, he believes the responsibility for creating value and chasing diversified markets throughout the world will remain with producers because the major packing plants aren’t interested in filling this missing link. He says the problem these producers face now isn’t really one of finding markets, but rather finding processing capacity with the cost efficiency necessary to be competitive in global markets. This is why Price supports the Beef Industry Alliance’s campaign for industry and government money to reopen the Ranchers Beef plant in Balzac, Alberta.

He contends the plant closed not because of a lack of demand, but a lack of startup capital. The lesson learned is that if it costs $55 million to build a plant, you need another $35 million to get through the first year of operation while you iron out the kinks. The plant is for sale at a significantly reduced price.

“It will take producer dollars and government dollars in designated processing capacity targeting diversified global markets to move this industry ahead,” Price states. “And that’s no different than the government has done historically.”

Kirstin Kotelko at Highland Feeders, near Vegerville is one of those involved in building a value chain. Her family’s Spring Creek Ranch branded beef is raised without hormones or antibiotics and was certified by the Canadian Food Inspection Agency (CFIA) to carry a natural label in 2004.

Their first Spring Creek product rolled out of the Rancher’s Beef plant in 2006. By 2007, they were processing 25 head a week and currently market 75 per week to supply 47 restaurants in Alberta and B. C. They’ve also developed a whole carcass line of fresh, frozen, deli and hot-to-go products that retail though independent grocery stores and chains such as the Country Grocery Stores on Vancouver Island, as well as 300 Safeway and Save-On-Foods locations. In February they added Federated and Calgary Co-op stores to the list.

Spring Creek beef entrées command a premium price on restaurant menus, but the cost of producing, processing and marketing the label is high-end as well. The ranch’s breakeven on finished cattle is 11 cents a pound above the CanFax price.

In the big picture, Highland Feeders’ future plan is to have three equal income streams from the beef operation, carbon credits and energy produced from a biodigester plant associated with the feedlot.

Highland Feeders finishes its own animals and purchases calves from a supply chain of producers who have been certified to Spring Creek standards. As for expanding into export markets, Kotelko says the reality at this point in time is that they wouldn’t be able to consistently produce and process the required quantity. That’s a major step that would have to be carefully scrutinized.

WILDLIFE SASKATCHEWAN PREDATOR PAYMENTS ANNOUNCED

The Governments of Canada and Saskatchewan have committed $2.5 million per year to compensate Saskatchewan producers for livestock killed or injured by predators, as part of overall enhancements to the provincial Wildlife Damage Compensation Program.

Effective April 1, producers will be compensated for 100 per cent of the market value of livestock killed by predators and up to 80 per cent for injured livestock requiring veterinary services.

Compensation is also being extended to damaged crops and feed in the form of swaths, bales and corn grazed by wildlife. In addition, compensation for wild boar damage to crops is being added to the program. The previous $5,200 per yard site com-

pensation limit for wildlife damage to stacked feed has been removed.

Producers are not required to pay premiums or sign up for provincial crop insurance to be eligible for benefits.

For more information visit the web-site or call 1-888-935-0000 in Saskatchewan.

Meanwhile the province’s environment ministry has launched a study of the cougar population and the number of cougar-related livestock deaths in the Cypress Hills of southwestern Saskatchewan. It is an extension of similar studies conducted by the University of Alberta in that province’s share of the Cypress Hills over the past several years.

“Preliminary results from the Alberta study are already being used to provide information to ranchers concerned about the potential impact cougars may have on their operations,” the Saskatchewan environment ministry said in its release.

Cypress Hills Interprovincial Park, which straddles the Alberta/Saskatchewan border south of Highway 1, is considered perfect habitat for cougars and has a high population of cougars’ principal food source, white-tailed deer.

Further east, the Manitoba Cattle Producers Association were disappointed by the refusal of the Manitoba government to increase payments to trappers that harvest problem wolves and coyotes. Trappers currently receive $10 per hour plus mileage from the province in addition to the price of the pelt.

The producers believe predators are a growing problem but the province disagrees.

The Manitoba Agriculture Services Corporation pays 80 per cent of the value of livestock killed by predators when the kill can be confirmed. The number of claims last fiscal year were down from the year before.

SEEDSTOCK DISASTER IN MONGOLIA

An extremely harsh winter coming on the heels of last summer’s drought has killed millions of head of livestock in central Mongolia. In early February, after a severe spell of minus 50 temperatures, losses were pegged at 2.7 million head of goats, sheep, cattle, horses and camels.

Herders were selling the hides of dead animals for whatever they could get to buy a few days worth of fodder for their remaining stock. One woman interviewed by Sky News had lost 700 of her 800 head of goats, sheep and cattle. With the severe feed shortage — let alone the logistics of transporting bags of fodder into the remote region of the central plains with spring still three months away, aid groups were estimating livestock losses could climb to 20 million head.

Russell Horvey of Delburne, Alta., has been helping a friend introduce Galloway genetics to Mongolia. He says this winter’s disaster has the potential to surpass the severe winter of 2000, when Mongolia lost 18.5 million head or 58 per cent of its livestock population.

INSURANCE PRICE ON 13 PER CENT OF ALBERTA FED CATTLE INSURED

While federal politicians and national cattle organizations are looking at national price insurance schemes for cattle, the Alberta Cattle Price Insurance Program (CPIP) has been putting the concept to the test this winter.

To late March CPIP co-ordinator Jennifer Wood says about 13 per cent of the cattle on feed in Alberta are insured. Something like half of the eligible producers have enrolled on the program and half of those have been using it this winter.

Anne Dunford, the general manager of Gateway Livestock Exchange in Taber, says many of her clients are now using insurance to manage price risk.

“CPIP allows us to limit our losses by locking in a floor price on our cattle,” says Dunford. “It also leaves our upside open so we can still go out and sell our cattle at the highest price possible.”

Whenever CPIP coverage levels approach a producer’s break-even price on cattle, “that’s when we buy coverage,” says Dunford.

The cattle business is inherently risky, she says, but the risks have become more volatile and unpredictable. “The recession showed us how volatile markets can be as they become more global. As producers who want to remain in this business a very long time, we have to look for ways to manage our risk and eliminate some of the wild volatility we’ve seen over the past 12 to 18 months.”

When there’s an opportunity to lock in price protection close to your break-even point, “that’s something we need to look at seriously,” says Dunford, adding her clients still use other tools such as futures, options and packer contracts for managing risk.

Many producers are also buying protection below their break evens, says Wood. “We’ve seen extreme losses in the marketplace lately — up to $300 a head in some cases. Producers tell us

pensation limit for wildlife damage to stacked feed has been removed.

Producers are not required to pay premiums or sign up for provincial crop insurance to be eligible for benefits.

For more information visit the web-site or call 1-888-935-0000 in Saskatchewan.

Meanwhile the province’s environment ministry has launched a study of the cougar population and the number of cougar-related livestock deaths in the Cypress Hills of southwestern Saskatchewan. It is an extension of similar studies conducted by the University of Alberta in that province’s share of the Cypress Hills over the past several years.

“Preliminary results from the Alberta study are already being used to provide information to ranchers concerned about the potential impact cougars may have on their operations,” the Saskatchewan environment ministry said in its release.

Cypress Hills Interprovincial Park, which straddles the Alberta/Saskatchewan border south of Highway 1, is considered perfect habitat for cougars and has a high population of cougars’ principal food source, white-tailed deer.

Further east, the Manitoba Cattle Producers Association were disappointed by the refusal of the Manitoba government to increase payments to trappers that harvest problem wolves and coyotes. Trappers currently receive $10 per hour plus mileage from the province in addition to the price of the pelt.

The producers believe predators are a growing problem but the province disagrees.

The Manitoba Agriculture Services Corporation pays 80 per cent of the value of livestock killed by predators when the kill can be confirmed. The number of claims last fiscal year were down from the year before.

SEEDSTOCK DISASTER IN MONGOLIA

An extremely harsh winter coming on the heels of last summer’s drought has killed millions of head of livestock in central Mongolia. In early February, after a severe spell of minus 50 temperatures, losses were pegged at 2.7 million head of goats, sheep, cattle, horses and camels.

Herders were selling the hides of dead animals for whatever they could get to buy a few days worth of fodder for their remaining stock. One woman interviewed by Sky News had lost 700 of her 800 head of goats, sheep and cattle. With the severe feed shortage — let alone the logistics of transporting bags of fodder into the remote region of the central plains with spring still three months away, aid groups were estimating livestock losses could climb to 20 million head.

Russell Horvey of Delburne, Alta., has been helping a friend introduce Galloway genetics to Mongolia. He says this winter’s disaster has the potential to surpass the severe winter of 2000, when Mongolia lost 18.5 million head or 58 per cent of its livestock population.

INSURANCE PRICE ON 13 PER CENT OF ALBERTA FED CATTLE INSURED

While federal politicians and national cattle organizations are looking at national price insurance schemes for cattle, the Alberta Cattle Price Insurance Program (CPIP) has been putting the concept to the test this winter.

To late March CPIP co-ordinator Jennifer Wood says about 13 per cent of the cattle on feed in Alberta are insured. Something like half of the eligible producers have enrolled on the program and half of those have been using it this winter.

Anne Dunford, the general manager of Gateway Livestock Exchange in Taber, says many of her clients are now using insurance to manage price risk.

“CPIP allows us to limit our losses by locking in a floor price on our cattle,” says Dunford. “It also leaves our upside open so we can still go out and sell our cattle at the highest price possible.”

Whenever CPIP coverage levels approach a producer’s break-even price on cattle, “that’s when we buy coverage,” says Dunford.

The cattle business is inherently risky, she says, but the risks have become more volatile and unpredictable. “The recession showed us how volatile markets can be as they become more global. As producers who want to remain in this business a very long time, we have to look for ways to manage our risk and eliminate some of the wild volatility we’ve seen over the past 12 to 18 months.”

When there’s an opportunity to lock in price protection close to your break-even point, “that’s something we need to look at seriously,” says Dunford, adding her clients still use other tools such as futures, options and packer contracts for managing risk.

Many producers are also buying protection below their break evens, says Wood. “We’ve seen extreme losses in the marketplace lately — up to $300 a head in some cases. Producers tell us

pensation limit for wildlife damage to stacked feed has been removed.

Producers are not required to pay premiums or sign up for provincial crop insurance to be eligible for benefits.

For more information visit the web-site or call 1-888-935-0000 in Saskatchewan.

Meanwhile the province’s environment ministry has launched a study of the cougar population and the number of cougar-related livestock deaths in the Cypress Hills of southwestern Saskatchewan. It is an extension of similar studies conducted by the University of Alberta in that province’s share of the Cypress Hills over the past several years.

“Preliminary results from the Alberta study are already being used to provide information to ranchers concerned about the potential impact cougars may have on their operations,” the Saskatchewan environment ministry said in its release.

Cypress Hills Interprovincial Park, which straddles the Alberta/Saskatchewan border south of Highway 1, is considered perfect habitat for cougars and has a high population of cougars’ principal food source, white-tailed deer.

Further east, the Manitoba Cattle Producers Association were disappointed by the refusal of the Manitoba government to increase payments to trappers that harvest problem wolves and coyotes. Trappers currently receive $10 per hour plus mileage from the province in addition to the price of the pelt.

The producers believe predators are a growing problem but the province disagrees.

The Manitoba Agriculture Services Corporation pays 80 per cent of the value of livestock killed by predators when the kill can be confirmed. The number of claims last fiscal year were down from the year before.

SEEDSTOCK DISASTER IN MONGOLIA

An extremely harsh winter coming on the heels of last summer’s drought has killed millions of head of livestock in central Mongolia. In early February, after a severe spell of minus 50 temperatures, losses were pegged at 2.7 million head of goats, sheep, cattle, horses and camels.

Herders were selling the hides of dead animals for whatever they could get to buy a few days worth of fodder for their remaining stock. One woman interviewed by Sky News had lost 700 of her 800 head of goats, sheep and cattle. With the severe feed shortage — let alone the logistics of transporting bags of fodder into the remote region of the central plains with spring still three months away, aid groups were estimating livestock losses could climb to 20 million head.

Russell Horvey of Delburne, Alta., has been helping a friend introduce Galloway genetics to Mongolia. He says this winter’s disaster has the potential to surpass the severe winter of 2000, when Mongolia lost 18.5 million head or 58 per cent of its livestock population.

INSURANCE PRICE ON 13 PER CENT OF ALBERTA FED CATTLE INSURED

While federal politicians and national cattle organizations are looking at national price insurance schemes for cattle, the Alberta Cattle Price Insurance Program (CPIP) has been putting the concept to the test this winter.

To late March CPIP co-ordinator Jennifer Wood says about 13 per cent of the cattle on feed in Alberta are insured. Something like half of the eligible producers have enrolled on the program and half of those have been using it this winter.

Anne Dunford, the general manager of Gateway Livestock Exchange in Taber, says many of her clients are now using insurance to manage price risk.

“CPIP allows us to limit our losses by locking in a floor price on our cattle,” says Dunford. “It also leaves our upside open so we can still go out and sell our cattle at the highest price possible.”

Whenever CPIP coverage levels approach a producer’s break-even price on cattle, “that’s when we buy coverage,” says Dunford.

The cattle business is inherently risky, she says, but the risks have become more volatile and unpredictable. “The recession showed us how volatile markets can be as they become more global. As producers who want to remain in this business a very long time, we have to look for ways to manage our risk and eliminate some of the wild volatility we’ve seen over the past 12 to 18 months.”

When there’s an opportunity to lock in price protection close to your break-even point, “that’s something we need to look at seriously,” says Dunford, adding her clients still use other tools such as futures, options and packer contracts for managing risk.

Many producers are also buying protection below their break evens, says Wood. “We’ve seen extreme losses in the marketplace lately — up to $300 a head in some cases. Producers tell us

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