Canada's first branded beef product sailed into white table cloth restaurants in fine style late February, nearly five months behind schedule. The reason for the delay? Good products take time to develop, and getting Five Star Canadian Beef with Attitude on line was tougher than anyone first thought."We had to keep going back to the drawing board" because standards weren't enough to provide consistency, says Lou Albanese, president of Stoney Creek's The Meat Factory. Furthermore, there weren't enough cattle available last fall to meet standards for the product. Of the first 116 cattle going through the MGI Packers Inc. (MGI) plant in Kitchener, only three were accepted for the Five Star program. But lately, feeders have been able to meet the tough Five Star specifications with 65 to 85 per cent of the cattle put on the feeding program.
The Five Star's high standards start at the feedlot driveway and don't quit until the steaks are cut by the consumer, with more money in it for everyone along the way, says Jim Gillies, co-ordinator of the Linkages Program for the Ontario Cattlemen's Association.
Feedlot operators get an eight-cent-a-pound carcass weight bonus for cattle meeting strict standards. Animals must be at least 50 per cent Angus, get a high energy corn diet for at least 120 days before slaughter, and in the last 100 days in the feedlot get 500 international units daily of vitamin E added to their diet.
The vitamin E extends shelf life of the meat. Carcasses that weigh between 650 and 750 pounds must grade triple A for marbling, eliminating the giant cattle disliked by supermarket meat managers. All these standards are verifiable and are checked by Gillies.
Currently, Five Star program cattle are killed at Dorr Brothers in Stoney Creek and MGI in Kitchener on Fridays. Delaying grading until Monday enhances marbling.
Dave Hicks, key account manager for The Meat Factory, explains that carcasses are trucked to The Meat Factory where they are "cryovac bagged", then aged for 14 to 17 days at a constant 28 degrees F before delivery. Each meat box is marked and stacked according to the date of slaughter. The end user finishes aging on his own premises.
The product is trademarked so that no one can short circuit the system and take advantage of the advertising program. Restauranteurs and retailers, who will likely come on stream in April, must sign an agreement not to substitute other beef in the showcase or on the plate.
The goal of the Five Star program has grown along with the program. At the start it aimed to displace the U.S. Department of Agriculture (USDA) choice grade on restaurant menus. Now, Albanese says, it is aiming higher, at pushing Certified Angus Beef off restaurant menus and top-quality retail meat counters as well.
"It was a massive undertaking," Lou Albanese said at the product launch in Toronto last month, citing countless hours spent at feedlots and in coolers. He says its time to get the "fast buck attitude" out of the beef business.
"I'm tired of standing on the bridge over 401 and looking at our industry and watching all the trucks bringing American beef into Canada.
"We want to get the beef industry in Canada out of the commodity business and into the business of value-added." The Albaneses say they have had at least 30 inquiries from restaurants about being on this program. "This is going to change the beef industry in Canada," says Jim Albanese, vice-president of marketing. "We are working very hard to ensure its success."
There are currently more cattle eligible than can be used in the program. The excess is absorbed into the regular cattle kill.
But this is expected to change now that Commonwealth Hospitality, the supplier for the largest hotel group in Canada, Holiday Inns, Ramada, and Radisson hotel restaurants, signed up.
If the prospective customer asks the price first, Albanese says, they're told to look for beef elsewhere.
This isn't restaurant food for the cost-conscious. It's aiming at the market where consumers want a good experience, and won't risk a disappointment.
The origins of the Five Star program go back to surveys in the early 1990s, which showed that beef consumers were likely to be disappointed with a steak as often as three times out of 10, Beef Information Centre co-ordinator Carolyn MacDonell says. Furthermore, a hard look at the industry then showed that Canadians eating in restaurants were likely eating meat from cattle that were raised and slaughtered in the U.S.
Provinces bicker over farm safety net
Federal and provincial agriculture officials were silent following a ministerial meeting in Toronto late February. Although the word leaked out that an agreement had been reached on safety nets for farmers, little information was available.It appears that the federal government will work out a bilateral agreement with each province, rather than with all the provinces as a group. This means that farmers will be treated a little differently depending on the province they operate in.
As far as beef is concerned, agriculture ministers for the two major producers, Alberta and Ontario, have each been charging that the other's farm program is richer than their own. And each of them has been claiming, with apparently more than a grain of truth, that the other's program is actionable under GATT.
Meanwhile, Canada's beef industry is watching silently, hoping that the fight doesn't attract attention south of the border and bring on a countervail action that would be disastrous for an already price-beleaguered beef industry.
Gary Sergeant, Alberta Cattle Commission general manager, says the Net Income Stabilization Account (NISA) is actionable under the new GATT because supply-managed dairy and poultry aren't included.
That view seems to be shared elsewhere. But it's true that both the Ontario agriculture ministry and the federal government see Alberta's new Farm Income Stability Program (FISP) program as actionable as well, says Graeme Hedley, Ontario Cattlemen's Association executive vice-president. Ontario beef producers want Alberta to get rid of its FISP. Alberta cattle organizers want to get rid of FISP as well as Ontario's NISA.
The Canadian Cattlemen's Association (CCA) wants to see both these plans in the dumpster before there's a payout and protectionist Americans get riled.
While many commodities are eligible under both of these plans, it is the beef industry that feels it will hurt. Protectionist attitudes are riding high in the United States, and when prices are low, the northwestern U.S. turns into a powder keg of protectionist feelings. The surge in popularity of anti-NAFTA Republican candidate Pat Buchanan, considered a fringe candidate not long ago, shows how deeply anti-trade feelings are running in the U.S.
The merits of a beef countervail "won't be tried by the GATT courts. It'll be tried by the coffee shops in Washington and Montana," says CCA president Doug Gear, Orton, Ont. The CCA fears that a large payout could trigger a countervail from the U.S. which could result in cattle prices falling as low as 35 cents, if the 30 per cent of Canadian beef production that is currently exported were held up. Gear points to the recent softwood lumber settlement as proof.
Legally, Canada was in the right, but still had to settle with the U.S. to get on with the business: "These people start going to their senators and start raising hell."
Meanwhile, in Alberta, the three beef producer organizations are lobbying hard in Ralph Klein's office to get the FISP stopped. The government's argument is that in a round table discussion with grassroots producers two years ago 70 per cent of farmers told them they wanted a program.
But there is no political sense to this, Gear says. The Alberta government cut health care $35 million, "and now they give cattlemen a program they don't want.
"How does [Premier Ralph Klein] convince the taxpayer this is real sound economics?" Gear asks.
Still, he doesn't think this program does much more for the Alberta cattle industry than NISA does in Ontario.
"It's not that rich. "Our official position is, no program, period, in any province."
At press time, Gear expected that position would be reaffirmed at the CCA annual meeting March 7, 8 and 9. "We can't afford that closed border." - DS
Overseas school stirs up controversy
By ROBERT IRWIN
Special to Farm & Country
Eastern Breeders Inc. (EBI) faces another financial challenge: a western Ontario-based school that aims to train technicians in embryo transfer techniques for Eastern Europe.Last October, the Canadian International Development Agency (CIDA) gave an $800,000 grant to Tavistock-based Donaldson International Livestock, launching the long-time swine exporter into a field pioneered and dominated since 1986 by Semex Canada's International Livestock Management Schools (ILMS), run out of EBI's offices in Kemptville.
Donaldson is helping build a dairy industry for Slovakia, an impoverished state which left the Czechoslovak Federation about three years ago.
He says he is working with Western Ontario Breeders Inc. (WOBI) and its veterinarian Brian Hill on exchange work in Slovakia and in Canada. WOBI is EBI's partners in Semex. But EBI knew nothing about the launch of the school last fall. "It is complete news to me," said EBI president Terry O'Gorman, when contacted by Farm & Country. "We share facilities and we do contract training for them (ILMS). It is a revenue source." Hill, who recently trained technicians in Slovakia in the science of embryo transfer, may have already sparked some embryo sales for WOBI, says Donaldson.
WOBI and EBI are among five AI units which last month signed a memorandum pledging to work together in areas such as international training. WOBI spokesperson Vicki Davey, who drafted the public announcement of the new alliance, says Hill's participation with Donaldson who is competing with the group "is a problem." However, she points out Hill used his vacation time for the Slovak work.
"WOBI/UBI, whoever we are now, along with the other units are firmly together working with Semex and working with the ILMS school. We were not in any way affiliated with or want to be perceived as supporting Donaldson." Hill was in Mexico at presstime and couldn't be reached for comment.
ILMS livestock industry specialist Tom Clapp says the Semex school, based at Kemptville, has trained about 1,800 students from 60 countries over the past 10 years. Most students are themselves trainers back home. "Our main thrust is workshops in their home countries," Clapp explains. "Our last estimate is that we've reached about 50,000 people."
Donaldson's CIDA grant enables him to bring 25 people from Slovakia to Ontario and send about the same number of Ontario experts to Slovakia over a three-year period. CIDA also supports ILMS. Clapp estimates it provides about 20-per-cent of school's revenues.
There are about 1,000 Slovak dairy farms, milking an average of 300 mainly dual purpose Simmental cows. Milk production averages between 3,200 and 3,500 litres annually. Donaldson views his role as part of an effort to "Holsteinize" the Slovak industry. The immediate goal is to boost average production to 4,500 litres per year.
The Slovak agriculture minister was on his side, Donaldson says, because of work he had previously done there on swine training programs, and helped Donaldson by filing a request for CIDA support.
In response to questions from Farm & Country, CIDA issued a written statement saying the Donaldson project has "gone off to an excellent start." The statement explains CIDA is trying to help as many private sector companies and organizations as possible to gain experience in Eastern Europe and the former Soviet Union.
Cows fertilize oranges on Florida farm
Chuck Knight milks Holsteins northeast of Tampa, Florida, a long way away from Canada. But he's better known here than you might expect.In a report on Bovine Somatotropin (BST) on CBC television's The Fifth Estate nearly 18 months ago, Knight claimed that BST nearly cost him his herd. Today, he stands by that assertion. Dairying is now almost a sideline for Knight. A diversification program born to get rid of manure has borne fruit, in more ways than one.
Knight grows organic fruit, mostly oranges. He bought an orange grove five year ago as a way to get rid of 450,000 gallons of manure and washwater a year from his parlour. Cows are raised extensively and there are no followers. A few years ago he bought an adjacent orange grove populated with 120 trees to an acre. Each tree gets 90 gallons of manure spread from a 1,500-gallon tank pulled behind a tractor and gravity-applied through a simple six-inch valve at the rear of the tank.
Two applications are made, in early and late spring. Knight's farm is certified organic, in the same way as farms in Ontario. Pesticides and synthetic fertilizers have to be shunned for the three years previous to certification.
On 17 acres this year he grew 5,500 90-pound boxes. Yields are very close to conventionally grown groves, but expenses are far less because of a lack of chemical inputs. "It's amazing what chemical companies have talked us into in the last 20 years," he says. Traditional pests such as rust mite, greasy spot, and snow scale have virtually disappeared without spraying.
"The first year, we had quite a lot of rust mite damage. Five years later, we have no rust mite damage. It's unique how your natural environment takes control, comes back to life. There is so much money to be made."
Last year, Knight quadrupled sales after he quit using a broker and started marketing his own fruit. This year, he expects that fruit sales will produce more income than milk from his dairy cows.
He has opened his own packing house and now sells fruit for other farmers as well as himself.
"The last two months, it has been tremendously enjoyable. Now I have the confidence." This year, he plans to go into organic vegetable production as well, growing zucchini, peppers, eggplant and celery.
Knight milks 120 cows in what he calls typical Florida fashion. Cows are grazed for much of the year on 60 acres, and they are fed purchased rations because it is nearly impossible to grow good hay in that part of the country. They eat eight pounds of hay a day in the winter, and spend most of the summer on grass. They are milked in a Westfalia parlour where each cow's milk is individually weighed and recorded every milking. Cows graze on bermuda grass and ryegrass on the pasture during winter. In the summer, cows graze on native grass and they are fed three-quarters of a pound of grain for every pound of milk they produce. Grain is in a pelletted ration with 16-per-cent protein and 16-per-cent fibre.
Knight's Dairy Inc. involves Chuck's two sons, and his elderly father, 83. Chuck Knight says using BST was the worst thing he has done on his dairy farm. Like most of the rest of Florida's dairy industry he migrated from the Midwestern U.S. about 25 years ago, lured by the incentive of a higher price for milk and less work.
Rather than growing feed, Florida dairymen were buying it, and they were buying replacements as well, selling calves at a few days of age. This is still how cows are milked in Florida. But the incentives are now gone. Chuck remembers that in 1990, the price of milk dropped from US$20 per hundredweight to US$15 in two months. It was the start of a long slide that continues today.
Knight says his herd average was about 16,500 pounds of milk per cow before he began giving cows BST. He got immediate production increases, easing his tight cashflows.
"I paid for it six months later, by the fact they were in such poor health after the summer.
"They [BST maker Monsanto] gave me the services of a veterinarian to help me with any problem....He came to the same conclusion that I did; you've got to be very careful about who you give it to."
Knight says he still needles his cull cows with BST, just to prove a point. He says response varies considerably from one cow to another. Some cows give a 10 to 15-per-cent increase in milk. "In other cows, we don't get any. On others we get more than that. It is so unpredictable."
But while Knight thinks there is a lot wrong with the product, he doubts that there is a health risk involved for people who drink milk from treated cows.
"I think it is just one more thing to hurt agriculture. The only health risk is from the extra infections that require drug treatments and risk of contaminated milk. "I'm not excited a lot about dairy right now," he says. "After five years of fighting for every penny, it feels good to have cashflow again.
"We are all involved in this [the grove], like we used to be with the dairy. To see that dream almost shattered a year and a half ago was almost devastating."
David Bray, animal and poultry sciences department, University of Florida, Gainsville, acknowledges that Florida is a tough place to milk cows, but says BST is just another tool: "The product works." He says Florida herds average 600 cows: "It's hot from April to November. If you don't provide supplemental cooling, dry matter intake suffers."
Summer conception rates are around 15 per cent and rainfall averages nearly 60 inches a year. Most labour is non-family. Florida used to have the highest prices for milk in the U.S., because it all goes to fluid uses and there was a transportation bonus, Bray says.
That changed with the development of a powerful dairy industry in Arizona, which displaced milk in Texas, sending it to Florida and flooding markets.
The price dived, and now stands at US$16 a cwt., before trucking deductions of US$0.85 to $1.25, and feed costs are up. Bray says they are the highest in the U.S. because feed is trucked from Idaho and the Midwest corn belt.
Furthermore, there are no bonuses for low somatic cell counts or for quality. Even citrus pulp for feed must be imported from Brazil.
"We are a depressed dairy area," he says.
Canadians respond to trade challenge
By DON STONEMAN
Forget about the softwood lumber deal, Canadian supply management leaders say. It has nothing to do with the dispute over poultry and dairy product tariffs being considered by the North American Free Trade Agreement (NAFTA) panel.The U.S. and Canada have both laid their cases before the NAFTA trade panel, which must decide whether NAFTA signed in 1989, or GATT, signed in 1993, has precedence.
The NAFTA treaty bans new tariffs from being put in place to restrict trade between the two countries. The GATT allows Canada's restrictions on volume of imports into the country to be replaced by tariffs.
The Canadian view is that tariffs should stay in place as in the GATT. The Americans believe the tariff walls should come down immediately.
A final decision in the long and complicated process is expected in June.
The Canadian case looks good, says John Core, Dairy Farmers of Ontario chairman. It's full speed ahead, with no indication from the government that another course should be taken. The American case, which was made to the NAFTA panel in late January, totalled 10 pages and not once was the word GATT mentioned.
On the other hand, the Canadian case is 55 pages of legal arguments and 50 more pages of appendices. That buoys up the spirits of Dairy Farmers of Ontario chairman John Core, who has never shown any doubt about the Canadian position. "It was well done, well put together. The legal arguments are clear and it is well documented.
"It puts together a strong case," Core says, while quoting his favorite line from the Canadian arguments: "The U.S. is thus seeking what it did not bargain for, what it did not get, and what it could not have expected after several rounds of extensive negotiations."
As for the American submission, made in January, "there's nothing in it; no arguments, nothing." He says it merely sums up the American position that Canadians "don't have the right" to convert import quotas to tariff under NAFTA. The fact is, Core says, Americans didn't negotiate to enter Canadian markets.
The lumber dispute was about Canada shipping products into the U.S., with pressure coming hard on American politicians from constituents who feel their livelihood is threatened. The NAFTA panel is about Americans trying to increase their markets, says Ed Benjamins, Canadian Chicken Marketing Agency.