The repercussions of a $1.50 beef check-off increase

A proposal that failed last year to boost marketing funds passed at this year’s BFO annual meeting

Beef farmers have approved an increase of $1.50 in check-off per animal to fund an ambitious industry-wide marketing effort for Ontario beef.

The move has been closely watched by other agriculture commodity organizations pondering their own ability to market product more effectively for their members.

Farmers at the Beef Farmers of Ontario (BFO) annual meeting in Mississauga, recently, voted 87 per cent in favour of the plan. A similar plan was rejected at last year’s annual meeting. As a constitutional change was needed, a two-thirds majority had to approve.

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Why it matters: The beef sector has been stagnant or declining in Ontario for years. It is hoped an increase in marketing, tied to the Ontario Corn Fed Beef Programs’ successful history, can change that.

The current check-off for beef cattle sold in Ontario is $3 provincial portion and $1 for the national check-off agency. Once the regulations under the Beef Cattle Marketing Act are changed, the check-off will be $4.50 provincial and $1 national. The new $1.50 provincial check-off increase will be split $1.25 to marketing and 25 cents to BFO producer and consumer engagement.

The program will increase ties with the Ontario Cattle Feeders Association and its popular Ontario Corn Fed Beef program as the new marketing funds will be managed by a committee of the BFO and the OCFA.

Joe Hill, who was returned as chair of the BFO at the annual meeting, said the proposal was well-thought-out and was the best hope of increasing value in the Ontario beef sector.

Joe Hill, president of Beef Farmers of Ontario.
photo: File

“Today is the day to fund it and bring it to life,” he said in making a plea for the approval of the increased check-off.

Producers heard his request, but it was not a new story for them. After last year’s failure to fund what was called the Regional Marketing Initiative, BFO staff and directors provided extensive opportunity for beef farmer delegates to learn about the proposal during numerous meetings across the province.

That extra explanation seemed to work as the mood in the room at the annual general meeting of the organization was more positive towards the proposal than it was a year ago. That showed in the questions and statements of support before voting.

“We have to try it. I have to trust the people that the people who have been appointed will do their best,” said Stewart Cressman, a Waterloo County beef farmer.

Ontario beef is much more likely to be sold under branded programs, mostly the Ontario Corn Fed Beef program, which uses 30 to 40 per cent of the beef processed in the province, but increasingly by other local-beef focused brands by processors and food service companies. That’s in contrast to the national beef check-off that tends to go to generic beef marketing, especially for export. A levy charged on imported beef also has to be used for generic beef promotion, not specifically branded beef, hence the push in Ontario for more funds to make sure the large Ontario market is consuming Ontario product.

A changed proposal

The proposal was different this year with more details on how the program will be managed. A marketing committee has been formed of members of BFO and the Ontario Cattle Feeder’s Association, led by OCFA Executive Director Jim Clark, who also leads the association’s corn-fed beef program.

The OCFA’s 20-year-old Corn Fed Beef Program now accounts for 30-40 per cent of all cattle processed in the province and has achieved market penetration into many major supermarket chains and also into targeted markets in Asia and the Middle East.

The goal is to use the branding experience of the CFBP to drive more demand and eventually grow the sector, especially the number of cow-calf operations in the province.

“Outcomes have to benefit our beef producers from top and bottom,” said Clark at the BFO meeting. ”BFO and Cattle Feeders have to develop a process that works.”

Beef farmers in Ontario have challenges others in Canada do not, such as being the landing place of 85 per cent of imports from the U.S., with ready large markets nearby. Cow numbers have declined over the past 10 years but stabilized in the last three.

What about beef check-off paid for by dairy farmers?

Albert Fledderus, a Dairy Farmers of Ontario board member asked a question at the meeting about why the check-off increase hadn’t been discussed with dairy farmers as they pay significant check-off to BFO with the sale of cull animals. Dairy farmers also pay a check-off on the sale of young bull calves headed for the veal market, but that money goes to the Veal Farmers of Ontario.

Hill said that the BFO had reached out for a meeting with the Dairy Farmers of Ontario board of directors, but with the timing of the two organizations’ annual meetings, and the departure of DFO General Manager Graham Lloyd, there wasn’t time to arrange a meeting.

Other organizations have watched the BFO check-off debate carefully.

The BFO increase doesn’t apply to the check-off for members of the Veal Farmers of Ontario, says VFO Executive Director Jennifer Haley, as the organization sets its own check-off as a marketing board.

However, Haley said the issue will be on the VFO board’s agenda.

“There’s something to be said for consistency in the marketplace,” she said. “Beef is not far from veal and veal not far from beef.”

About the author

Editor

John Greig has spent his career in agriculture journalism and communications. He lives on a farm near Ailsa Craig, Ontario. Contact John at [email protected] or follow him on Twitter @jgreig

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