‘Disjointed’ cattle industry has issues, opportunities

Producer surveys | Communication, co-operation identified as problems

Canadian cattle producers identified CCA as a problem in recent industry studies, CCA being an acronym for communication, co-operation and attitude.

Two recent studies indicate that most producers think improvements are needed in the cattle industry to ensure efficiency and profitability in the future.

The Canadian Beef Industry Synergy Study was prepared by FCC Market Insights, while the Canadian Beef Industry Benchmark Study, prepared by Toma and Bouma Management Consultants, is an analysis of the Straw Man initiative, an effort by cattle industry players and consultants to address industry issues.

“It’s more of a disappointment as opposed to a surprise,” said Dr. Allan Preston about the latter study.

The Manitoba cattle producer and veterinarian said the two surveys were similar in showing that better communication and co-operation between industry sectors are needed.

“The industry is a bit disjointed,” Preston said.

“It doesn’t speak with one voice and because of that, it’s had a little difficulty making the kind of progress competing sectors like the hog and poultry sector have been able to do.”

In its analysis of the Straw Man initiative, Toma and Bouma said there were “multiple disconnects” in the industry value chain. It said there were many frustrations about lack of vision or strategy, poor communication and difficulties with co-operation.

It noted two key areas of disconnection: from the customer and retailer back to the supply chain and vice-versa, and from cow-calf, breeders and feedlot operations and the packers that have carcass quality and performance data.

John Kolk, a member of the original Straw Man group, said those particular results bode well for the chances of improvement.

“It’s the big opportunity,” he said.

“You’ve got two players each identifying something similar, which is, ‘we don’t hear enough.’ So what does that tell you? If you solve that, you’ve got great opportunity. It forces a discussion … on the need for a better information flow.”

The FCC study asked respondents about industry synergy and effectiveness of the national checkoff.

The resulting “positivity index” was 10.2 out of 100. Put another way, nine out of 10 cattle producers think something is amiss with either or both of those things.

“The lukewarm sentiments about Canadian beef industry co-operation are generally all encompassing,” said the FCC report.

“No one particular subgroup of industry members consistently grades the industry better or worse than the others, regardless of province, age, size of operation, etc.”

The FCC study identified three areas where industry leaders could improve public perceptions of the industry: improve producer margins, improve consumer education campaigns and increase beef promotion.

The Toma and Bouma study noted similar suggestions. It found survey respondents to be most polarized when it came to industry voice. Some felt there are many conflicting views and others felt the industry voice is respected and improving.

As well, Toma and Bouma said there is overall agreement that the beef industry could achieve much more in the marketplace through effective branding, listening to customers, differentiating Canadian beef in domestic and export markets and ensuring consistent, high quality supply.

Both Preston and Kolk said the Canadian Cattlemen’s Association is working on a strategic plan, and results from both studies are likely to figure into it.

“To some degree, I would characterize both the Bouma study and the FCC study as a bit of a wake-up call for the industry, and it follows well on the heels of what the Straw Man group did,” Preston said.

“Now it’s up to the industry to decide if they want to continue down the same path or change, and the strategic plan that is taking place tells me they are already changing.”

Kolk agreed on the promise of a strategic plan.

“I think they’re trying to engage a number of people, and if that engaging process works well and engages people outside of the traditional production sector, I think that’s got potential to go forward.”

The BSE crisis that damaged the industry beginning in 2003 constituted a revolution, said Kolk. Since then, U.S. country-of-origin labelling, a reduced cow herd and high feed prices have exerted additional pressure.

“The cattle industry is an evolution. We prefer not to see a revolution,” he said.

“There’s the potential to evolve more deliberately.”

Record high cattle prices of late make this a good time to implement change.

“You don’t turn the Titanic around in a real big hurry,” said Preston.

“It will take some time, but what better time to be doing this type of thing? We’re riding all time highs for prices. It’s pretty hard to find a cattleman who isn’t in a good mood these days.”

He said consumers are more demanding today, and the industry needs to pay closer attention to consumer desires.

“I think one of the mistakes that we’ve made in the past (as an industry), we’ve just made the point that we produce the ultimate in animal protein. Our beef’s the best in the world, so line up and pay the price and away you go,” he said.

“Unfortunately that’s not the way the world works anymore. The people who are paying the price also want to have a little bit of the say in how it’s produced.”

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