Local cattle producer calls for inquiry into profit discrepancies

  • Dec. 15, 2009 8:00 p.m.

Staff reporter

A Rimbey-area beef producer is calling for an inquiry into the discrepancy between the profits realized by processors and retailers and those of the producer after having a cull cow custom-processed.

Rancher Iain Aitken, who raises cattle west of the community, said while his experimental cow would have brought just $340 if auctioned off, the same cow would have yielded $1,233 in hamburger and stew meat when compared to current store prices.

“Producers are selling cull cows at record low prices, yet retail stores claim they use the beef as a loss leader and the beef packers claim they lose money processing cows. We need an inquiry to discover the truth,” Aitken said.

“The Canadian retail price of hamburger today is around $2.75 per pound, up from the $1.75 per pound it was 10 years ago. In those 10 years, however, the price of cull cows at auction has halved. Clearly something is wrong,” he added. “The producer’s share of the retail beef price has fallen from 24 per cent to under 16 per cent in the last 10 years. If we could restore the producer’s share back to the 1999 level of 24 per cent, we would receive 50 per cent more for our fed cattle.”

Aitken said while cull cows are older animals that have been removed from the breeding process, they, along with younger head of cattle, nevertheless provide a crucial source of income for producers and used to bring upward of $700 or more at auction.

“Many producers believe the problem is corporate concentration and the lack of competition in the retailing and particularly the processing sector,” Aitken continued. “The situation in Alberta got worse this summer when Nilsson Brothers Inc. bought the Tyson Foods Lakeside plant at Brooks, thereby reducing the number of main buyers of cull cows from two to one.”

Joining Aitken in suggesting that a more equitable system to protect producers is vital for the health of the industry, is retired National Farmers Union regional organizer Jan Slomp who said the entire matter falls at the feet of politicians in Ottawa.

“We need to have a federal government investigation into the profits made in the beef processing and retailing sectors to identify how much is being made and by whom,” Slomp said. “The previous government investigation in 2004 was abandoned when the large beef packing companies refused to open their books to the auditors. In a democratic country we cannot have these large corporations deciding they are above the law while the livelihoods of beef farmers are threatened due to their monopolistic practices.”

In the spirit of the holiday season, after the cow was processed Aitken donated the beef to the Bissell Centre, which assists low-income families in Edmonton, as well as the Calgary and Rimbey food banks.