REGINA – The ailing bison industry needs a long-term strategic plan, and fundamental changes in practices from the farm to the grocery store.
That was the message delivered in a consultant’s report at the Canadian National Bison Convention in Regina last month.
Bison prices for meat and breeding stock reached a 10-year low this summer and meat prices have remained in the tank since, slipping to $3.50 per kilogram in July. The five-year average dressed carcass price between 1995 and 2000 was about $6.20, according to the Canadian Bison Association.
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According to sales records for the past two years, breeding cow and heifer prices have fallen 75 percent when compared to 1999.
Breeding stock animal prices have rebounded slightly in November but remain at near record lows compared to the last decade, said Gavin Conacher, executive director of the CBA.
Conacher said the Canadian Bison Marketing Council, the marketing arm of the CBA, is working on a long-term plan to help the industry through this period.
“It has been a tough couple of years but things may be turning around a bit. This does mark a change in the industry though,” he said.
Ray Salmon of Manitoba Agriculture said the change was inevitable as the industry went from producing breeding stock to producing meat.
“I think we forgot that this business is about meat and raising grass to build that meat. That’s what came as a surprise to a lot of folks when prices started to fall,” said Salmon.
Conacher said the industry also saw strong demand for its product from 1992-95. Production volumes increased by 15 to 20 percent per year. But there was little investment in marketing the meat.
“We finally exceeded demand and prices did what they do when that happens.”
The CBMC hired a meat industry consultant from Ontario, Kaji Kado of PPD Inc., to develop a marketing plan.
His report highlighted the problems and what could be done to solve them.
“The consumer doesn’t need your product. That is a misconception about this business. They don’t need it. You have to make them want it,” he said.
Kado said bison producers will need to work together to market the product to consumers.
Low prices have caused many growers to sell their meat from the farmgate directly to consumers, but Kado said that is not a long-term solution.
“You will make more profit on a single animal. The best farmgate seller in your association sells three carcasses a week. Most of you sell a couple a month. It takes a lot of time sell an animal this way and it isn’t what you really want to do. You want to raise bison,” said Kado.
The North American Bison Co-operative in New Rockford, North Dakota, has for several years slaughtered and marketed bison from Canada and the United States.
Producers say the formula of getting paid once the sale is made by the co-op worked well when there was an unlimited demand and the co-op had 65 percent of the North American market.
Conacher says there are 25 companies competing for the market and the co-op is finding it more challenging to move meat other than premium cuts.
Kado told the CBA that the glut of meat would have to clear the market before a true meat price could be established.
“You may have to price it lower than beef to get it out of the freezers. But you need to get it moving. This idea that you can price it at two times or three times beef is just wrong. Maybe 20 percent. It costs you 20 percent less (than beef) to produce. That is your advantage,” he said.
Kado also advised the group to organize around supplying one major city at a time until the meat side of the industry is developed.
“There is no point in marketing to whole continent. You can’t supply it even if they want it,” he said.
Other changes he recommended:
- New meat products that use the trim cuts and older animals.
- Improve compensation, attraction and retention of association staff.
- Make alliances with packers, value-added food processors and distributors.
- Avoid building small, specialty slaughter facilities.
- Create a national quality and food safety certification program.
- Change the name to buffalo.
- Promote the natural and heritages aspects of the meat.
- Reduce producer ownership of the animals at the packer and distributor level.
Murray Woodbury, scientist and professor at Saskatoon’s Western College of Veterinary Medicine, said the industry is shaking out some of the people who were in it for a fast buck.
“Elk, deer and bison were never going to displace beef in the consumer marketplace. That was the way some people saw it a few years ago, it was going to save western Canadian agriculture. That just couldn’t happen, but the enthusiasm carried the price into places that were unrealistic,” he said.
