The Rural Voice, 2003-01, Page 23OUTLOOK 2003:
BEEF
Dunford sees better
cattle markets
aheadin 2003
There are several factors which
will impact profitability in the
beef industry this year, Anne
Dunford, market analyst with Canfax
told Beef Symposium 2002 in
Brussels, November 28.
"The loss of equity has affected the
buyer's ability to purchase animals,"
she told cow/calf producers, after
discussing the crippling double -
whammy of low beef prices and a
drought that meant many western
producers had to sell their cattle
because they couldn't feed them.
The drought may cause producers
to place animals on the market earlier
and at lighter weights. Spring had
always been the preferred time to
market if the weight is up. Summer
cattle tend to lose money, as a 1979
to 2001 trend analysis showed.
"At some point, there will be heifer
retention and that will mean further
need for feed supplies," she said.
There were problems in the beef
industry prior to the most recent
drought with consumer demand
falling through the 1980s and 1990s,
with the lowest between 1996 and
1998, she said, noting that there is a
great difference between
consumption and demand.
"There was a nine per cent increase
in demand last year," she said, but
that was because the price per pound
went up. Consumers have been
paying more since 2000.
"The goal of the meat manager is
to move meat. He doesn't care what
(meat) or how much of each."
Realizing that beef consumption in
Canada has stayed somewhat the
same for 15 years, producers had to
start looking at where the product
was going.
"In 1990, 88 per cent of Canadian
beef was sold to Canadians and 12
per cent to Americans. Last year, just
53 per cent stayed at home and 35
per cent went to the U.S. Mexico has
become our number -two customer, in
just three years. Our customer base
has changed."
Dunford said the industry is now
marketing the product with the
export markets in mind.
The growing U.S market is
significant because, while Canadians
eat an average of 47 pounds of beef
per year, the Americans consume 68
pounds.
While Canada only accounts for
three per cent of the producers on the
world trade scene, the country is the
third largest exporter with 15 per cent
of the trade.
The country of origin labeling,
which becomes mandatory in 2004,
will continue to be a factor as
producers of pork, fish, beef and
produce deal with the regulations.
Dunford believes some foreign
retailers may say no to Canadian
product to avoid the hassles of
imports as it is an "administrative
nightmare".
For the future, Dunford foresees a
small calf crop this year and next,
allowing prices to recover if crops
support that move.
Feed cost will help determine the
calf prices and the U.S. could still
play a major role, boosting exports if
Canadian prices fall to the American
floor price.
The industry will have to continue
to deal with world economics and
health issues such as food safety and
country of origin labeling.
There will also have to be an
increased focus on the customer
demands.
"Meeting consumer preferences is
critical," she said. "Consumers want
information and a 1-800 number
provided and retailers want case -
ready product."
With the top four retailers
controlling 65 per cent of beef sales
in the country and the top eight
holding 85 per cent, meeting the
retailer's needs is vital to selling the
product.
Providing a satisfactory product to
the processors is also important as
four plants handle 78 per cent of the
meat and two of those, which are in
Alberta, process 60 per cent of the
Canadian total.
This consumer -focused trend will
also force producers to sell cattle on
formula, contract or grid instead of a
negotiated average price, said
Dunford.0
MAKING IT
ALL FIT
With a farming background, over 18
years retail experience and years of
knowledge in the insurance and
investment industry, providing
financial help and advice to farmers
and agri-businesses has proven to
be a natural fit for Nancy Ackert.
Both her grandfather and father have
farmed in Bruce County all their
lives. Nancy grew up on her dad's
farm not far from where she lives in
Kincardine, today. Her retail
business experience allows her to
relate to the needs and worries of
her clients concerning the future. In
a world of change, Nancy feels her
understanding of the insurance and
investment industry allows her to
offer valuable help and advice to her
clients. Such things as investment
and tax planning, as well as farm
transfers to the next generation or
new owners, takes effort,
communication and understanding.
Often transfers can be made without
borrowing money. It's this aspect of
helping people assess their situation
and options, discuss their goals, and
establish a workable plan that suits
everyone involved that Nancy
specializes in. Working with you to
help achieve your goals, protect
what you have worked your life for
and secure the future gives Nancy a
great deal of satisfaction. Whether
your goal is to keep the family name
on your mailbox or to plan for an
orderly windup, be sure to call for an
appointment to discuss your unique
situation. Consultation meetings are
complementary. These appoint-
ments can take place at your home
or business where you are
comfortable in your surroundings.
Nancy can provide you with
recommendations and solutions that
suit your family/business goals. Take
a moment of your day and call Nancy
Ackert at 519-396-8108 or toll free
1-866-396-8108 to arrange a time to
meet and personally discuss your
individual situation. (Nancy Ackert,
Life Insurance Advisor, Berkshire
Insurance Services Inc.)
JANUARY 2003 19
A/