Corporate concentration a problem

In a recent report from the Canadian Cattlemen’s Association, the organization’s president Bob Lowe stated there is a critical need for better business risk management tools for the beef sector.

In addition to improving coverage for cow-calf producers by seeking the removal of the reference margin limit, he called for raising the current $3 million payment cap, as apparently this isn’t enough to cover individual feedlot losses.

It is ironic that the CCA, a free market supporter, is asking for government funding to support cattle producers unable to secure a living from the market, while at the same time many tax-paying consumers are forking out record high prices for beef. Clearly, the free market is not functioning as advertised.

As the national cow herd continues to shrink at an alarming rate, there is certainly a need for government action. The current model is unsustainable when feedlots running thousands of animals can’t pencil enough of a profit margin over the years to sustain them through a downturn, and when the cow-calf sector that sells animals to the feeders has become so unprofitable that ranchers running several hundred cows resort to selling halves of beef to their neighbours to survive.

Meanwhile, over recent months, the profits being realized in the cull cow market by the packers have exceeded the total sum realized by the rancher selling a well fattened cow.

Given the escalating climate crisis, we need to lower greenhouse gas emissions and sequester more CO2 on agricultural land through regenerative grazing practices. Breaking up pastures and replacing cattle with fossil-fuel intensive, mono-culture row crops is an environmentally disastrous land-use choice.

A national cattle herd of sufficient size is required to achieve those goals. To do this we need to change the economics of the cattle business and make it financially rewarding.

Despite the CCA’s apparent inability to see it, the solution is hiding in plain view, as it has been for more than two decades. There is enough profit being generated in the beef production chain to support a viable livelihood for ranchers, feedlot owners, packers and retailers — if only it were distributed more equitably.

The CCA and its provincial counterparts should urge the federal government to address corporate concentration beyond the farmgate.

This is what is preventing the equitable distribution of the wealth created by beef production.

The government has both the tools and the authority to tackle this problem, but lacks the political will.

They need to hear this solution from the cattle producer organizations. For the Canadian beef cattle sector to have a viable future, we need to stop treating the symptoms and deal with the root cause of the problem once and for all.

Iain Aitken runs a beef cattle herd at Belmont, Man., with his wife and daughter. They produce purebred Luing breeding stock, feeder cattle and grass-fed beef.

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