The Rural Voice, 1981-03, Page 13The beef marketing debate
Bl ADRIAN VOS
For several years now, there has
been a battle going on among beef
producers on the merits of a marketing
board versus a completely free marketing
system.
The Rural Voice has been listening to
the various sides in the dispute and has
heard the opinions expressed below.
THE NATIONAL VIEWPOINT
The official position of the Canadian
Cattlemen's Association (CCA), often
expressed by manager Charles Gracey, is
any tampering with the free flow of meat
merchandise is an intrusion on the
freedom enjoyed by Canadians. It is also
less efficient, as the protection afforded
the less efficient producers will prevent
their being weeded out of the production
process, and therefore unnecessarily
increase the price consumers must pay
for their steak.
Barney Evans, a thorn in the side of
free-market beef men, who has a
cow/calf operation near Embro in Oxford
County, has for more than half of the last
decade tried to convince Ontario beef
producers to adopt a supply management
system for beef, complete with quotas.
He called his efforts, "Beef Farmers of
the Future", but it never got far and
received little support.
Cattlemen's Magazine, a publication of
the conservative United Grain Growers of
Winnipeg, called beef production quotas
"a ridiculous issue". Nevertheless, it
warned the Ontario Cattlemen's Associa-
tion to try to see if there are ways to
improve the marketing system as it is
known today. This magazine reminds
cattle producers of the losses suffered by
those pork producers who resisted
changes in the pork marketing system.
THE ACTION GROUP
In August. another group of beef
producers lost patience with the long
years of low income for the beef farmers,
and formed the Ontario Cattlemen's
Action Group (OCAG).
Led by Dan Pope of Linden, and with
Jim Harkness of Harriston as secretary -
treasurer, this group has been active
everywhere cattlemen congregated, in-
cluding a booth at the International
Plowing Match in Kent County.
Apparently enjoying more ,support
than Evans, the group got some measure
of support from the Wellington, Bruce
and Grey county cattle associations.
Together they drew up a resolution to be
presented at the annual meeting of the
OCA in February.
They reasoned that at present there are
too many feedlots which sell directly to
packing plants, thereby defeating the
competitive system on which the market
depends for its best price.
Their solution is to prohibit all private
sales and have all cattle sold by public
auction.
Jim Harkness told Rural Voice at some
county meetings there is the impression
that approval of the resolution will lead to
quotas, and that the vote should simply
be "yes" or "no".
He said that all the action group is
asking at this time is for an OCA
committee to study this proposal. How-
ever, this is not stated in the resolution.
Nevertheless, Harkness claims at most
county meetings the motion is defeated
with a narrow margin and close to 50 per
cent of producers favour a study
committee. Several county associations
have already approved the resolution,
according to Harkness, among them
Dufferin, Grey, Bruce, Wellington,
Wentworth and Simcoe.
The Dundas County Cattlemen's Asso-
ciation seems to be tired of suppositions,
and asked all county associations to
support them in a bid to ask the Ontario
Farm Marketing Council to order a
plebiscite among beef producers. This
resolution also has run into opposition,
because many beef men fear they may be
outvoted by farmers who raise a few beef
animals on the side, or by dairy farmers
selling spent cows and veal calves.
As Rural Voice reported in February,
the USA also has dissatisfied beef
producers with the same complaints as
the action group.
However, the opinion expressed by
USDA spokesman George Engleman, at
the Agricultural Outlook Conference,that
the Toronto Stockyards has a correcting
influence, is not shared by Harkness. In a
letter to OCA directors and presidents, he
complains there are so few cattle coming
to the Toronto Stockyards that the
stockyards are in danger of responding to
private sales.
Chris Mills, manager of the Alberta
Cattle Commission, said at the Outlook
Conference that before the cattle industry
can follow the lead of pork producers with
an electronic selling system, they have to
have an accurate index system. After all,
a buyer must know what he is buying or
he will take the safe road and underbid.
Bob Henry, who runs a large feedlot
near Blyth, agrees there are quite a few
thoughtkprovoking ideas in the proposals
by the action group, and he plans to keep
an open mind.
That is just what Cattlemen's Maga-
zine is advising Ontario's cattlemen.
They say: "Be on the lookout for all.
marketing improvements that may come
along."
An academic looks at a beef board
The Ontario Cattlemen's Association
asked the School of Agricultural Econom-
ics at the University of Guelph to do an
analysis on various methods of stabiliza-
tion and supply management in the
Canadian beef industry.
Dr. Larry Martin and Richard Haack
did an extensive study, with the help of
computer models, completed in 1977.
The outlook for supply management
was not encouraging, and subsequently
little support for the idea developed.
The only acceptable support for beef
income was through a stabilization
payment, which would have little or no
effect on cattle prices, but which would
have prevented the drastic cut-back in
breeding herds in Ontario that occurred
in the mid -seventies.
When all available facts were fed into
the computers, the answer was "Supply
management and quota programs for the
Canadian beef industry without trade
restrictions would provide little benefit to
Canadian producers during depressed
periods and in the long run would merely
allow imports from competing nations to
capture an ever increasing share of the
Canadian market."
The authors find it difficult to believe
the federal government would be politic-
ally willing or able to set restrictions for
meat imports. They point to the experi-
ence with federal restrictions or the lack
of them in imports of other commodities
such as eggs and dairy products.
The analysis shows production levels
would fall by as much as 40 per cent
because of the high prices compared with
other meats. The lower utilization of
production facilities would result in a
higher production formula and even
higher prices for beef to the consumer
who is already resistant to the extra cost.
Dr. Martin admitted he couldn't
accurately forecast the effect of the
greater price spread between beef and
other meats, such as pork, lamb and
chicken, but he said that if anything, the
result would be even more detrimental to
the beef industry.
His research covered a period of 12
years, from 1963 through 1975.
THE RURAL VOICEI MARCH 1981 PG. 11