EDMONTON – Alberta’s New Democratic opposition is calling for an investigation into the increase in packing plant profits at the expense of Canadian cattle producers.
Brian Mason said according to the cattle industry’s figures, the gross margin of packing plants has increased by 200 percent since the start of the BSE crisis 10 months ago.
During the news conference the New Democrats referred to the Alberta Beef Industry Council’s report released at its meeting in Red Deer in mid-February.
The report said the average packer gross margin from Sept. 22 to Feb. 16, 2004 was $431 per carcass, compared to $144 per head a year ago and $208 per head for the U.S. during the same time.
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“In other words, packer margins are 200 percent higher than one year ago and 107 percent higher than what is currently the case in the U.S.,” said the Consolidated Beef Industry Action Plan report distributed by the New Democrats.
According to the Feb. 23 Canadian Cattlemen’s Association Canadian Boxed Beef Report for the week ending Feb. 13, Canadian packer gross margins were approximately $320 per head while last year at the same time, the figures were less than $100 per head. In the United States, packer gross margins were $110 US per head, said the same report.
The packer’s costs to remove the specified risk material are estimated to be $20-$50 per head.
“The costs added are a fraction of the increased margin,” said Mason.
He said the majority of the $800 million provincial and federal government BSE aid programs, put in place to help all producers, ended up in the hands of the two Alberta-based American packing plants, Cargill and Tyson, which slaughter 90 percent of the finished cattle in Alberta.
When the support programs were implemented, the packers discounted the price they paid for the cattle by the amount of government support.
“The $800 million BSE compensation package pads the bottom line of packing houses. The package was supposed to help the entire beef industry, not triple the margin of one part of the business,” said Mason, who called for an investigation into where the government money ended up.
He also called for the resignation of Alberta’s agriculture minister Shirley McClellan for not responding to the desperate needs of the cattle producers.
Calls to Cargill, Tyson and Alberta agriculture officials were not returned before press time March 1.
