An organic livestock marketing association believes it has turned the corner and will soon be in a position to reimburse producers owed money for cattle they marketed through the agency in the fall of 2003.
The Canadian Organic Livestock Association has spent the last 20 months trying to carve out a niche market for organic beef in Eastern Canada in an effort to repair the damage caused by a sale gone bad.
“It’s a long, hard road that we’re on, but we are starting to see some real good progress being made,” said COLA vice-president Kevin Beach.
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After a dismal 2004, in which revenues failed to top $10,000, COLA animals are once again starting to move into Eastern Canada.
Over the past few months the producer association has shipped four semi-loads of cattle to Montreal. The animals have been slaughtered and the frozen beef is slowly being marketed through Fresh Cutz, the same distributor that owes a handful of COLA members $170,000 for cattle they marketed in 2003.
The firm has been paying its bills within seven days of invoicing and there is an agreement in place to start charging Fresh Cutz a 20 cents per pound live-weight premium on future shipments, which amounts to $16,000 per load of cattle.
That extra revenue will go into the pockets of the five or six members who are owed money. It will take 11 shipments before the outstanding debt is settled.
The repayment strategy was announced at
COLA’s annual meeting in Saskatoon April 22.
It is an encouraging development for the small collection of farmers who have been awaiting payment since August 2003. But this isn’t the first time the affected producers have been told the cheque is in the mail.
“It is sort of the same old story, that they will pay us eventually,” said Dave Bober, who is owed $10,000.
His outstanding bill stems back to a deal COLA brokered involving two semi-loads containing 136 western Canadian organic cattle sold to Fresh Cutz. One shipment was sent in August 2003 and another in October.
In addition to the nine cattle he hasn’t been paid for, the Hudson Bay, Sask., farmer estimates he is out another $100,000 in opportunity costs caused by waiting for organic meat markets that never materialized.
Those delays cost him when he was later forced to sell old and overfed cattle through conventional auction markets at disappointing prices, a mistake he blames in part on his own optimistic disposition.
Bober said he went to the annual meeting prepared for a tussle with board members but the fire in his belly was doused by news that COLA’s live cattle sales have already topped $220,000 during the first few months of 2005 and that the association has devised a feasible repayment strategy for producers owed money.
Don Bogen, a rancher from Consort, Alta., who is owed the most money, is more optimistic than ever that he will finally be paid for his cattle. He shipped 15 finished head in August and another 15 in October 2003 and is still awaiting his $47,000 payment.
“We’ve got our fingers crossed,” he said.
Beach said COLA’s travels back to respectability have been arduous. Trying to convince retailers to put a new product like organic beef on store shelves is a time-consuming task.
“Their biggest concern is the assurance of supply. They’re not going to stock it one week and then not have it for a month,” he said.
COLA feels it is finally making headway with retailers like Sobeys and IGA that now appear receptive to stocking their shelves with organic beef.
The association has also sent two prepaid loads of cattle to another interested eastern buyer.
COLA second vice-president Barry Ermel said it was just a matter of time. The mistake made in 2003 was supplying organic beef before the market was ready to accept it, an oversight compounded by the BSE crisis.
“Everything just compiled and dropped a load of dirt on our heads and we’re just starting to crawl out from under that,” he said.
Fiscal 2005 is already shaping up to be a far better year than 2004 and sales are starting to materialize. At this pace COLA will need to sign up new members to help meet future demand, said Ermel.
“I think we were kind of like Panasonic, we were slightly ahead of our time.”
Bober isn’t convinced the organic beef sector has turned the corner.
He recently tried to sell 70 head of certified organic feeder cattle through a classified ad that ran for four weeks in the Western Producer. The ad solicited four calls, three “feelers” and one serious inquiry that didn’t lead to a sale.
“That tells you there really isn’t much happening,” he said.
But he and Bogen remain hopeful that some day they will see a cheque for the animals they marketed in 2003.
