EDMONTON – Alberta beef farmers will have to wait a few more months to find out if meat packers benefited from government BSE aid programs.
While at first glance Alberta Agriculture’s report on prices in the beef industry concludes there is no evidence to suggest unfair packer profits, the investigation did not look at the accounts of the packing plants.
“The conclusion we came to with the information we have to date, we were able to compile, there isn’t any evidence of unfair packer profits,” said Alberta agriculture minister Shirley McClellan during a news conference March 11.
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But McClellan also said the report didn’t go beyond a review of the pricing information and interviews with representatives of the packing, processing and retail sectors.
“I’m giving you the best information we have. If someone tells me something, unless I have evidence otherwise, I accept that they’re telling the truth,” she said. “I did not ask packers to open their books.”
McClellan said the report was never intended to be a deep investigation into all parts of the meat industry, but more of a review for herself because she was concerned about numbers being “tossed” around about how much money packers had made from the variety of aid programs related to BSE.
Some politicians and producers have accused packers of taking advantage of producers by dropping the prices they offer for cattle by the amount of the aid program. The suspicion seems supported by the fact that the price of meat in grocery stores has not dropped accordingly.
The report said overall the retail price of beef has dropped by 20 percent. Most of the decline in prices has been in the cheaper cuts of ground beef and chuck.
Despite the criticism of the federal and provincial BSE aid, McClellan said the programs worked. Paying money to feedlot owners got beef sales moving again. The supply of beef dried up when the prices packers were paying dropped dramatically. But after the BSE programs were introduced, fat cattle were once again sent to packers.
“The program worked for the purpose it was intended. It moved over a million head of fat cattle through the system,” she said.
So far, $359 million has been paid to 1,534 cattle feeders in Alberta.
Arno Doerksen, chair of the Alberta Beef Producers, said while the money was paid to the owners of feeder cattle, it benefited cow-calf producers who received a surprisingly good price for calves in the fall.
“While the programs were not perfect, they did address the current situation,” said Doerksen during the news conference. Without the programs feedlot owners would not have felt confident to bid as high as they did on fall calves.
“That market was significantly higher than any cow-calf producer would have bet it would be through the end of June,” said Doerksen.
After a week of intense criticism of the aid program, Alberta premier Ralph Klein said the provincial auditor general would investigate how the province’s $400 million in provincial BSE aid money was spent.
That report is expected to be done by July. Unlike the Alberta Agriculture report, auditor general Fred Dunn said he would ask meat packing companies to open their books.
Alberta government opposition members panned the report immediately after it was released. New Democrat Brian Mason said the report didn’t ask the right people the right questions. Packers should have been asked if they discounted the price of cattle by the amount of the government support payment.
