Canadian Meat Business - January/February 2017

January/February 2017

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FOR THE CCA, IT’S ABOUT ‘FINDING OPPORTUNITY IN THE UNCERTAIN’

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GUEST EDITORIAL

IN THIS ISSUE January/February 2017

5 6 8 10 13 14 17 18 20 22 22

The importance of relationship building

By Tom Lynch-Staunton

For the CCA, It’s About ‘Finding Opportunity in the Uncertain’

By Scott Taylor

President Donald J. Trump saves the best for last

By Chuck Jolley

Canada Beef’s Ron Glaser: The Exciting Road Ahead Comparing the Service Stations of Yesteryear with Today’s Meat Departments

By Philip Verduce

The Banff Pork Seminar Overview with Mark Chambers

By Cam Patterson

The Meat Department Open House

By Ronnie P. Cons

Limited profitability and growth for the red meat industry are forecast due to labour shortages Is There Work Load Discrimination In U.S. Meat Departments?

By Philip Verduce

Cattle outlook appears bearish

By Richard Kamchen

Poultryponics land in the north

January/February 2017 Volume 16 Number 1

23 24 25 26 26 27 28 30 32 33

PUBLISHER

Vientero Introduces Probiotics for Meat and Poultry

Ray Blumenfeld ray@meatbusiness.ca MANAGING EDITOR Scott Taylor publishing@meatbusiness.ca

Top Economic Drivers of 2017: Energy Prices

By J.P. Gervais

DIGITAL MEDIA EDITOR Cam Patterson cam@meatbusiness.ca CONTRIBUTING WRITERS

Are you prepared to be more efficient with your plant maintenance in 2017?

Chuck Jolley, Tom Lynch-Staunton, Philip Verduce, Ronnie P. Cons, Richard Kamchen, Treena Hein, J.P. Gervais, Dan Kelly CREATIVE DIRECTOR Christian Kent

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Higher Retail Meat and Food Prices Expected in 2017

THE IMPORTANCE OF RELATIONSHIP BUILDING

By Tom Lynch-Staunton

This column highlights the work being done to address beef industry issues by Canadian Cattlemen’s Association (CCA) staff, featuring Issues Manager Tom Lynch-Staunton.

In past columns, I have talked about the importance of greater connectivity among industry groups for effective and efficient issues management. Connectivity among industry organizations will be important for communicating effectively to the public about how we produce beef and why we produce beef in certain ways. Presenting a united front provides more credence to our messaging and shows the public that we are sincere in our commitments to the environment and animal care and to building a sustainable beef industry. Demonstrating our shared values to the public will instill confidence in them that we are indeed doing the right things.

The importance of relationship building is essential to building public trust. Simply getting to know each other starts to build that trust among one another and establish common ground. Once that trust is established and is strong, then meaningful debate, negotiation, and problem solving can occur. The CCA and other industry groups spend a tremendous amount of energy creating relationships with our federal and provincial governments, for example, which allows us to work together in respectful and professional ways.

This has especially been the case when working with our largest trading partner, in both imports and exports, the U.S. Our respective beef industries have developed a strong and collaborative relationship over the years. Even though the border was closed in 2003 for bovine spongiform encephalopathy (BSE), the time it took to partially reopen the border to Canadian beef was only about three months, which in comparison to other similar situations around the world, was unprecedented at the time. Another example was the assistance of many allied U.S. national and state level organizations in support of CCA and the Government of Canada to repeal mandatory Country of Origin Labeling (COOL) legislation. Without that strong relationship, COOL repeal would likely have not yet occurred.

With the inauguration of president-elect Donald Trump in the U.S. giving rise to uncertainty with respect to Canada and trade, we are likely entering a period where our efforts into our relationships will be as important as ever. Not only is this obviously important for continued trade which benefits both of our industries, it is important for that continued cohesiveness or united front when dealing with similar consumer issues and concerns. For example, in the fall of 2015 when the International Agency on Research of Cancer (a division of the World Health Organization) released its analysis placing red meat in a possible carcinogen category, we worked very closely with the North American Meat Institute, the National Cattlemen’s Beef Association (NCBA) and other industry groups to strategize and share some common messaging around the healthfulness of meat and provide important context around the actual risk, which is very low. We believe the action of presenting factual information and necessary context from a united front helped to neutralize the story very quickly, which we considered a big accomplishment.

In any good relationship, whether internal or external, good communication is essential. Making sure we continue to communicate with governments, as well as consumers, will be essential to maintaining that strong relationship.

Canadian Beef Industry Works to Sustainably Increase Production

It remains to be seen what the Trump administration will do with respect to Canada and trade, but be sure that CCA will continue to work very hard at strengthening our relationship with the U.S., as well as other export markets around the world. It will be more important than ever to communicate how our trade, information sharing, and collaborative relationship has benefited both countries in many ways.

By Treena Hein

For more information, contactTom Lynch-Staunton at lynch-stauntont@cattle.ca

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January/February 2017 CANADIAN MEAT BUSINESS 5

Dan Darling

FOR THE CCA, IT’S ABOUT ‘FINDING OPPORTUNITY IN THE UNCERTAIN’

By Scott Taylor

For John Masswohl, what’s going on in the United States these days should not be approached with worry or concern -- and certainly not with any sense of fear.

In fact, the Ottawa-based Director of Government and International Relations for the Canadian Cattlemen’s Association (CCA) believes quite strongly in a single, positive approach to what might appear to some as administrative and legislative chaos south of the border.

club operator rode to power on a platform that included, among other things, building a wall between the United States and Mexico, pulling out of the Trans-Pacific Trade Partnership (TPP) and making life as miserable as possible for people who didn’t operate businesses within the United States.

“I have a saying I’m sticking to,” an upbeat Masswohl said via telephone from Nashville, Tenn. “It’s called ‘finding opportunity in uncertainty.’

The loud, charismatic and yet obviously undisciplined, indelicate and often careless 45th U.S. President, has made a number of statements that have beef and cattle producers on both sides of the border wondering (a) when will it end, (b) why is this happening and (c) what’s the end game?

“We’re busy taking every opportunity we have to interact with Americans and convince them – although in fairness, most of the people we have worked with don’t need all that much convincing – that trade between our two nations has long been beneficial to both sides and will be beneficial in the future.

Of course, Masswohl is eminently suited for the White House’s current chaotic approach to international business. Based in the CCA’s Ottawa office, Masswohl is the association’s government and international relations liaison. He spends the majority of his time as the voice for the Canadian beef industry to both the Canadian and U.S. governments, as well as maintaining international relations around the world.

“What we’re doing is reminding Americans – and people all over need to be reminded – that American jobs rely on trade.

Sure, it’s easy to become concerned about a trade deficit, but the movement of goods in both directions means more jobs for Americans as well as Canadians.”

Masswohl joined the CCA after previously working closely with the Canadian beef industry as Agriculture and Trade Counsellor with the Canadian Embassy in Washington, D.C. He is experienced enough to understand clearly that despite all the talk in Washington – talk that seems to be going off in all directions -- international trade has never been in as good a place as it is today.

6 CANADIAN MEAT BUSINESS January/February 2017

from the perspective that nothing seems to be off the table with Mr. Trump. We were hoping that we were all going to be more liberal on trade, but there is no longer a guarantee that it’s going to go in that direction and we will have to be prepared for potential stoppages and the occasional extra tariff or even border closing.

“I look at it this way. Despite what President Trump says from day to day, we’re not in any trouble, at least not yet. Our relationship with the beef and cattle organizations in the United States has never been better, more co-operative and more understanding of each other’s needs than it is right now.

“However, I also don’t believe you can worry about the everyday. President Trump has been firing shots over every bow, often just to see what he can flush out. I think he likes having people on edge. We just need to think long-term and go about our business as we always have, keeping in mind that what comes out of Washington now is not necessarily what we’re used to anymore.”

“I believe when it comes to our relationship with the United States, we just have to take everybody aside and assure them that Canada-US trade is beneficial to everyone and from what we’ve encountered, our American counterparts share our view.

We just have to continue to remind them that we have mutual interests that are made stronger by our solid, positive, longterm relationships.”

That being said, there are some choppy waters out there. There is Comprehensive Economic Trade Agreement (CETA) and TPP and a U.S. President who has convinced many Americans that international trade is a problem and if something isn’t done in the good ol’ USA soon then trade must be stopped – immediately.

Masswohl and Darling are not going to spend a lot of their time worrying about it.

“I think we might end up in a situation where we might have to negotiate individually with some countries on trade or we might have to deal with something in regards to President Trump that upsets current agreements,” said Darling. “It is concerning

In the meantime, Canada is still upbeat about both CETA and the TPP. And while Trump has officially pulled the United States out of the TPP (actually the Republican Congress was not going to support it anyway), CETA is proceeding. While the agreement isn’t completed yet, both Masswohl and Darling are convinced it will be beneficial for Canadian cattlemen.

Negotiations on CETA began in 2009 and ended in August 2014. The deal aims to eliminate 98 per cent of tariffs between Canada and the European Union and includes new courts for investors, harmonized regulations, sustainable development clauses and access to public sector tenders. The agreement was signed in late October during the EU-Canada Summit.

“On CETA, we are optimistic the final agreement will be completed, but we do have some significant technical issues to iron out,” said Masswohl. “In virtually every public document related to CETA, the CCA has indicated that while the zeroduty quotas for additional access to European markets are welcome, the real benefits for Canada will come through

For Masswohl and his boss, CCA President Dan Darling of Ontario, an attitude of wait-and-see is substituting for the approach known as, “oh-my-goodness-what-happens next?”

“It’s worth remembering that the only time the U.S. fully closed its border was on 9/11. And we all understood that. You’re under attack and you’re going to hunker down. No one had a problem with that, at the time. But then, within a few hours, auto plants all over the United States were shutting down and sending their workers home because they didn’t have enough parts to continue building cars.

It’s been a rather amazing month as Donald J. Trump settles in as President of the United States. The New York-based hotelier, landlord, salesman, reality TV star/producer and elite country

as usual,” Masswohl said. “I’ve been around all this for more than 15 years and I can say, there has not been a day when something doesn’t come up that’s crucial and sometimes controversial in terms of international trade. However, I can also say that we’ve never been in as good a position on trade as we are right now.

“Our approach to the situation in Washington is business meatbusiness.ca

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January/February 2017 CANADIAN MEAT BUSINESS 7

removing longstanding technical barriers and these include carcass washes such as citric acid and peroxyacetic acid.

“Until these treatments are approved, the signal that we have from the cattle side, from Cargill and JBS, is that they will not be interested in accessing the European market. And, as long as Cargill and JBS remain uninterested in the European market, there’s not really much incentive for cattle producers to increase their production of cattle that are eligible for Europe.

“However, we aren’t giving up on the process. There is a lot to do, but everyone agrees if we can come to an agreement on these technical issues, then CETA could be, potentially, worth $600 million a year to us and would be our second largest trade agreement. Right now, all of our negotiations are designed to make the agreement better and while we wish it was a fait acompli, we aren’t going to give up on the process.

We are committed to the advocacy plan and we’re doing the technical work and if we’re committed and our government is committed then I believe it will happen, but I would also say it’s at least three years down the road.

Meanwhile, as Trump publicly pulled out of the TPP, the Canadian Cattlemen’s Association was almost immediately looking at ways to make the agreement work without the United States.

“TPP is now a little less clear,” Masswohl said. “The original agreement involved 12 countries, but they all agreed that 85 per cent of each country’s GDP had to be part of the agreement to make it go forward. The United States would look at no more than 65 per cent and now they won’t proceed.

“But that doesn’t mean the negotiations have ended. There are now discussions about bringing in China. We know that both Korea and Taiwan want in. So stay tuned on that one over the next couple of months.”

Both Darling and Masswohl are still bullish on international trade and also on Canada’s desire to be part of it.

“I think it’s safe to say that despite what you hear in the news every day, trade issues aren’t as grim as they might sound,” said Darling. “As John says, it’s better today that it’s ever been before. If some of the bigger agreements fall through, we will continue to direct our attention to bi-lateral agreements or with the remaining TPP partners.”

Masswohl agreed and added that there are always issues with which to deal, especially when those issues involve international traded relations.

“We’re in a constant state of expectation,” he said. “Hey, another BSE case could come up tomorrow and some country might irrationally over-react and shut their borders and we’ll have to deal with that. You know, possibly talk of COOL could come back, although I think we’ll see that coming at a distance and have our various retaliations at the ready.

“But I think my point is this, you can see the Bogeyman in every corner if you want, but we choose not to. Our counterparts at the National Cattle and Feed Association and at the National Cattlemen’s Beef Association agree that trade between Canada, Mexico and the United States works for all of us.

And you know, President Trump just ordered that for every new regulation, two have to be removed. For us, there are a number of old, outdated regulations that could be dropped as soon as possible so maybe that type of order will be good for trade between our nations.

“Governor Perdue has a strong record as two-term chief executive of Georgia and is acquainted with a wide array of agriculture commodities, from chicken and peanuts to cotton and timber.

“As a veterinarian, agribusiness owner and a governor who established an agricultural advisory committee in Georgia, he understands and appreciates the importance of American agriculture both here and abroad. He is a welcomed choice from the ‘Broiler Belt.’

“In a time of increasing regulations and a growing governmental footprint, we have no doubt that Gov. Perdue will step in and stand up for rural America.

Environmental groups tended to be much more cautious.

Kari Hamerschlag, deputy director of food and technology at Friends of the Earth, said, “Farmers need a champion in the USDA who will fight for conservation programs to help farmers be more resilient in the face of extreme weather, not pray for rain.”

Perdue is famous for his 2007 call for a prayer vigil. ”I’m here today to appeal to you and to all Georgians and all people who believe in the power of prayer,” he said, “to ask God to shower our state, our region, our nation with the blessings of water.”

The Environmental Working Group (EWG) was just as quick to condemn the selection as the NCC and NAMI was to praise it. EWG’s Wednesday night statement said, “It should be no surprise that the incoming Trump administration, which has proposed putting executives from Big Food and Big Oil in top cabinet positions, would pick someone like Governor Perdue – who has received taxpayer-funded farm subsidies – to lead the Department of Agriculture.

It’s certainly hard to imagine that a former fertilizer salesman will tackle the unregulated farm pollution that poisons our drinking water, turns Lake Erie green, and fouls the Chesapeake Bay and the Gulf of Mexico.”

Barry Carpenter, President and CEO of the North American Meat Institute, (NAMI) was just as quick with his praise.

“We’re just going to continue to remind our counterparts that American jobs rely on trade moving in both directions and thus far, I would say that we haven’t had any problem doing that.

Of course, most farmers and ranchers question the extent of the USDA’s conservation programs and see pollution

“We welcome news that a person like Governor Sonny Perdue, with his extensive knowledge and experience in the agricultural sector, has been nominated to serve as the Secretary of Agriculture. We look forward to working with Governor Perdue to ensure the safety of the nation’s meat and poultry supply and to address the challenges facing our industry.”

“As I said, it’s all about finding opportunity in the uncertain.”

As Trump filled in the blanks on his cabinet choices, he seemed to be intentionally courting controversy. Each nominee brought a boatload of baggage to the Senate floor, giving the liberal opposition a field day during the usually semi-polite question and answer sessions. It didn’t help that all of them were amateurs and several were on record as opposing the existence of the government agencies they were being asked to lead.

8 CANADIAN MEAT BUSINESS January/February 2017

Coming even before the official announcement, National Chicken Council (NCC) President Mike Brown released a statement in response to reports that Perdue was to be nominated to lead the U. S. Department of Agriculture, not surprising since Georgia is the #1 poultry producing state in the country.

Tracy Brunner, president of the National Cattlemen’s Beef Association, said,

“We hope he is confirmed expeditiously so we can begin work with the department on the many issues of importance to chicken producers.”

By Chuck Jolley

Then came former Georgia governor Sonny Perdue and all was suddenly well.

A solid, reliable nominee who knows agriculture well, Perdue is relatively free of the many taints surrounding the other would-be cabinet heads. The accolades were quick as the major ag industry associations jumped on board almost immediately. Quickly supporting the nomination were the American Farm Bureau, American Soybean Association, Farm Credit Council, National Cattlemen’s Beef Association, National Pork Producers Council, North American Meat Institute, and others.

clear definition for country-of-origin labeling information.”

“Just remember, our industry is not in the crosshairs. In terms of international trade, a lot of President Trump’s people are from the steel and manufacturing industries and trade agreements have, indeed, hurt those segments more significantly than they’ve hurt agriculture.

PRESIDENT DONALD J. TRUMP SAVES THE BEST FOR LAST

Trump’s team seemed anxious to ramrod the men through.

They even deemed the usual pre-hearing vetting process as unnecessary. But there was no Ag Secretary nomination, a misstep that troubled long-time USDA secretary Thomas Vilsack. Serious concerns were expressed by the agricultural community, the heart of the Trump constituency, too. Most felt that Trump owed them something for their support.

“They want someone who will go in there and kick some ass. And Sonny is that guy,”.

Making the late announcement, Trump said, “From growing up on a farm to being governor of a big agriculture state, he has spent his whole life understanding and solving the challenges our farmers face, and he is going to deliver big results for all Americans who earn their living off the land.”

Gary Baise, who helped Trump put together his 70-member agricultural advisory committee, a conservative group that counted Perdue as one of its own, said the selection should please the members. According to politico.com Baise said, meatbusiness.ca

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United States Cattlemen’s Association (USCA) President Kenny Graner said, “USCA commends President-elect Trump on his long-awaited nomination of Secretary of Agriculture. We are confident that Mr. Perdue will serve as a strong leader for rural America. Given Mr. Perdue’s veterinary background, we know that we will have a strong advocate for issues related to animal health and welfare.

Graner suggested Perdue should concentrate on the current state of the cattle market and lack of competition and true price discovery; the need to modernize the Livestock Mandatory Price Reporting law and the Packers and Stockyards Act; the opening up of export markets, such as China, with a growing demand for U. S. beef; and a meatbusiness.ca

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regulations aimed at agriculture as a reach much too far. The infamous Waters of the U. S. (WOTUS) rule is an especially loathed choking point. Pushing hard to reduce or eliminate those rules and regs will earn Perdue and the Trump administration fulsome thanks from agricultural America, a major benefit during the upcoming 2018 mid-term elections when sitting Presidents usually lose a few House and Senate seats.

Asking for instant relief might prove too much to ask, though.

America’s immense federal government is like those huge, ocean-going supertankers. Stopping or changing direction takes lots of advance planning. It simply does not happen quickly and any ‘fast and furious’ change always results in absolute disaster.

Perdue, a man known for his lack of patience, will be tested early and often as he tries to change a huge, bureaucraticallydriven Department that has been set in its ways for decades.

The strength of his predecessor, Thomas Vilsack, was his eight years of service and his willingness to work with Washington politicians on both sides of the aisle, something not part of Trump’s or Perdue’s management styles.

About the next four years? Let me use the Bette Davis misquote from “All About Eve (1950): “Fasten your seatbelts, it’s going to be a bumpy ride.”

Chuck Jolley is the President of Jolley & Associates and is a respected writer, editor, publisher and public relations expert with more than 25 years experience in the meat and poultry industry.

CANADA BEEF'S RON GLASER: THE EXCITING ROAD AHEAD The year ahead is an open road in many ways for Canada Beef, the organization amalgamated out of the former Beef Information Centre (BIC), the Canada Beef Export Federation (CBEF), and the National Check-Off Agency (NCOA). They are tasked with marketing and promoting Canadian Beef to global markets and have grown into a multinational entity with offices throughout the world.

The organization has created and launched the Canadiana Beef Centreer of Excellence and has successfully provided a marketable identity to the Canadian Beef brand. But like all organizations growing pains ensue and Canada Beef is not immune. President Rob Meijer announced his departure in 2016 and with that came the conclusion of what Ron Glaser, Vice President of Corporate Affairs, Canada Beef, calls Phase One. Now they are ready for the launch of Phase Two. Canadian Meat Business spoke with Ron Glaser about the exciting and bumpy road ahead that will be 2017.

CMB: Let's start with the check-off hike to $2.50 that was agreed on but is now stalled pending a review of the Alberta provincial levy.

RG: When the check-off was first being collected every province had its own set of regulations. The National CcheckOoff came later and was built on top of these provincial regulation mechanisms. So, therefore, to increase the Nnational Ccheck-Ooff (currently set at $1 per head) up to $2.50 per head we must work with every province and make individual deals agreements with each of those jurisdictions in order to amend the Nnational Ccheck-Ooff. So there is this 10 CANADIAN MEAT BUSINESS January/February 2017

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Ron Glaser

matrix of regulation that has to be updated and changed. It is a long process and it's not as simple as a single swipe of the pen on one agreement.

CMB: Do you think the new National Check-Ooff will come into effect in 2017?

RG: Yes. Once we have all the provincial agreements signed then the check-off increase can be applied to the import levy on beef products imported into Canada. But the import levy is automatically at the lowest level of check-off within Canada. So, subsequently, as each of the provinces come on board you'll see the increases in those regions then it can be applied to the import levy, and then the check-off would be the same across the country. So, for our purposes we’re anticipating the increases to come online through this next fiscal period from April 2017 to March 2018. Next year we have that base budget, based off of the $1 checkoff, but we do have a contingency budget in place for increased investment when that predicted revenue starts to flow.

CMB: What are some of the components to the deals that slow the process?

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RG: Every region has its own particular process. Some producer cattle associations can implement the check-off on their own. Others have to have regulations updated with their provincial governments. Of course the turnaround then depends how efficiently you can work with those governments and when they're able to pass those regulation amendments depending on when their cabinets are in sessions.

CMB: How many provinces have actually signed off?

RG: Currently we have one province that is prepared to sign the increase check-off and that is Nova Scotia. We're anticipating that most of the other provinces will be coming online through the spring and into the summer this year. So, it's important to note we're not stalled per se because the process is going forward as quickly as can be expected given the jurisdiction and regulative changes.

CMB: Can we touch on trade because what Canada Beef does is so integrated with trade opportunity? What are the current concerns with the Trump administration and how have they played a part in your marketing plans for this year?

RG: That's a good question and let me give some background. Canada Beef is strictly the marketing group for Canada's beef industry. We are setup distinctly from the groups like the Canadian Cattlemen's Association (CCA), Canadian Meat Council (CMC), the National Cattle Feeders Association, and others that participate in trade negotiations and set policy in the industry. We don't get involved with lobbying or policy review and development, but as the marketing arm, we provide market intelligence and opportunities with those policy maker groups. For our beef sector, it's primarily the CCA that takes that lead on deals like TPP, CETA, NAFTA, etc. Now, that being said, Canada generally has good trade access globally for our Canadian beef products, albeit some deals are more restrictive than others. But as an industry, we have always been fair trade minded because we produce more product than we can consume so we have an eye towards export access with our high quality beef. Certainly with the TPP, we were looking forward to having decreased tariffs in various Asia markets, particularly Japan. So the outcome to date is disappointing but that being said, we're a strong competitor in many of those markets already. Obviously you hope for the best, but you don't bank on it until it's ratified because essentially you have to live and trade within the world markets that you have.

CMB: Let’s look ahead at 2017 for Canada Beef. I know some key positions are being replaced.

RG: Currently we are in the process of hiring a new senior executive. That new position will be the Executive Vice President and they will be in charge of our marketing operations around the world. That competition is currently active and we hope to have that individual in place by March of this year.

CMB: This new position came about in lieu of Rob Meijer's departure?

RG: Yes, Rob has moved on to a senior marketing role with JBS Canada and we certainly wish him well. Rob had a very good run with Canada Beef establishing the organization during what we refer to as ourcould be called Phase One period. As you might remember, our organization was formed out of several beef marketing groups and Rob came 12 CANADIAN MEAT BUSINESS January/February 2017

on and oversaw the development and new culture of our organization. He was instrumental in the development of the Canadian Beef Centreer of Excellence and the marketing strategies that further developed the Canadiana Beef brand which has been pivotal to our efforts around the world. He really did set us on the path to successfully leverage the brand into a solid offering in the marketplace. As a matter of fact, we are quite happy to continue to work with Rob in his new position with JBS, and since he left, he has been an ongoing customer of ours as we've done a number of initiatives together already.

CMB: So the incumbent will be the leader to take Canada Beef through Phase Two? RG: Yes, and it's kind of an exciting time for us because what does Phase Two hold for us? How will we continue to bring value to the beef producers who fund us? How will we continue to successfully market Canadiana bBeef around the world? So we look forward to our new leader bringing us down that road.

CMB: Especially this year being a milestone in Canadian history.

RG: Yes, we've put a lot of thought and planning into incorporating Canada's 150th birthday. So understandably we are very excited to market our brand with that celebration internationally.

CMB: It appears the new Executive Vice President role is completely separate from the new previous President role, yet both are born from the aspects of what Rob had done previously.

RG: Yes, before Rob was President, the check-off and marketing functions were differing entitiesdifferent but managed under the same roofby the President. As we evolved, we saw an advantage in putting a firewall between the two functions, essentially the check-off is the banker of the money and Canada Beef is the marketer. When Melinda German came on board last year to take overlead the NCO chair – the last Q & A we did with Canadian Meat Business – that was a new role to specifically handle the check-off.

Subsequently the new Executive Vice President will reflect this redefined role within the evolution of the company focused on market development.

CMB: There seems to a level of anticipation and positive change for Canada Beef in 2017.

COMPARING THE SERVICE STATIONS OF YESTERYEAR WITH TODAY’S MEAT DEPARTMENTS

By Philip Verduce

As a writer for the Meat Cutter’s Club, I constantly look for examples to share with fellow meat cutters that compare the service counters of old vs. the modern day supermarkets or megastores of today. Then the other night it hit me like a ton of bricks. My dad’s Atlantic service station. Yep, it was right there in front of me all along.

Back in the day, during my high school years from 1955 to 1960, I worked after school and on Saturdays for my dad.

He paid me .75 cents an hour when gas was only .18 to .25 cents a gallon. My job was a service attendant. I would pump gas, clean windshields, check air pressure, oil and water and I knew everybody by name.

In our little town, we had several service gas stations all with brand name gasoline like Atlantic, Gulf, Mobile, Sunoco and Sinclair. People would buy gas by brand name associations and service levels. Today that has all changed with the era of “convenient stores” selling gas and food. Customers do their own work at the pumps and don’t have the time to wait for anything and they generally buy by price. Today there is no brand-loyalty, except for a few hold outs.

Could this be the fate of today’s supermarket meat departments? There was a time when customers bought their meat from small butcher shops and chain stores such as A&P or Piggly Wiggly, who seemed to have a store on every block, but also had service meat counters. Those stores were their own brands and customers talked about how good their meat was over the kitchen table. A good counter butcher was worth his weight in gold. He knew his customers by names and knew what they liked or disliked. All this iteration created customer loyalty. Unfortunately in today’s food shopping world it seems that companies are taking away the human interactions.

The first supermarket opened in 1916, a Piggly Wiggly store, and from that point on the stage was set for self-service.

However, self-service really didn’t get rolling until between 1947 and 1970. Labor cost savings was the driving force that slowly, but steadily created a “chasm” between customers and store operators and oh how wide that chasm has become.

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RG: We're certainly looking forward to it. The industry itself has been in an interesting cycle and we’re looking forward to the Canadian beef herds’ growth this yearover the next few years, and with that will come increased supply over the next number of years. Right now we can sell every pound of beef we produce due to the fact the herd size is at a fairly low point historically, but it is poised for growth, and of course with that we'll have more beef available for world markets.

We Internationally, we are a niche supplier in that we have always been about quality and value and not just quantity.

And regardless of what the road ahead will be, the coming years, our Phase Two will continue to market that quality and high value product to the world. How were going to be accomplishing that is the exciting part.

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Will the supermarket meat departments of today fall by the wayside, just as the Service Stations of yesteryear did? It certainly looks that way. The only force that can slow or stop it are the consumers. However, I see changes coming ever so slowly. All you have to do is look at the popularity of farmers markets and food coops, and the increased business activity of local home grown produce and meat sources. This trend has gone viral as consumers are voting for local and again enjoying interaction between customer and merchant. Their enthusiasm has led suppliers, grocers and restaurants to change and adapt by offering “local” raised goods to their fare, year-round.

As for meat cutters, I believe there is a light at the end of the tunnel and it isn’t a freight-train. Our trade will slowly make a comeback. It will someday flourish again. If you are a betting person, put your bet on the consumer, because they are demanding that old-fashioned iteration of yesteryear. Embrace the consumer, because they will continually be our lifeline. It is the consumer who allows us to make a good living, not the supermarket companies, they are merely money handlers.

Don’t ever be afraid of engaging your customers, because the more you engage, the more you cement your future. It is and will be the consumers who bring back, not only our trade, but other trades as well, and it has already begun. Many economists believe that it is the trades that are the missing link in strengthening our economy. As I write this piece many apprenticeship programs are popping up in colleges and institutions all around the country. All driven by the consumer!

Many of life’s failures are people who didn’t realize how close they were to success when they gave up - Thomas Edison.

Courtesy of The Meat Cutters Club, click on http://www.meatcuttersclub.org/ comparing-the-service-stations-of-yesteryear-with-meat-depatments/

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January/February 2017 CANADIAN MEAT BUSINESS 13

THE BANFF PORK SEMINAR OVERVIEW WITH MARK CHAMBERS

By Cam Patterson

The Banff Pork Seminar has become one of the most anticipated annual industry events and this year’s conference held in January set the bar even higher according to Committee Chairman Mark Chambers. Attendance for the seminar has grown, attracting attendees from as far away as Asia, Russia, South America, Australia, and other pork producing countries around the world.

This year’s conference was supported by over 70 sponsors including such brand names as Maple Leaf, Canadian Pork Council, Alberta Pork, Swine Innovation, Olymel, and DuPont.

MC: You know that’s funny because my opening comments this year spoke to that. I’ve been going since 1997 and I’ve gone to everyone since then. So that’s 20 years for me and it has grown from 260 attendees to around 680. That’s tremendous growth. We get people attending from all over the world including Asia, South America, Australia, Europe, so a very world renowned seminar.

CMB: With all that diversity and multiculturalism, what is the common concern you find?

MC: The concern that is always on the agenda is the economics. Our industry deals with strict commodities and the prices are set according to demand. Since that model is a similar system used through the world, it is a common primary issue every year. Another common theme is the pressure from humane groups forcing change.

That’s not necessarily a bad thing but one of the latest issues is switching from gestation pens to loose housing.

14 CANADIAN MEAT BUSINESS January/February 2017

Fingertips:

CMB: What were some of the other areas covered?

MC: We had a number of breakout sessions on transportation, swine health, productivity, better management of herd sizes and labor management.

CMB: I would think labor is a prime concern in the industry – especially for Canadian producers.

MC: Yes. I spend quite a bit of time on labor on the national level, working with government to get more people into the industry, including accessing overseas workers.

MC: Yes, we’ve been back and forth to Ottawa over the TFWP and I do think we are making some progress.

There have been some positive changes. For example we managed to get the four year rule removed so that helps.

(After a four year term the worker had to leave the country).

CMB: How did you become involved with the Seminar and what is your role now?

CMB: What changes have you seen in the Seminar since you started going?

At Your

CMB: The Temporary Foreign Worker Program (TFWP) is a major source of frustration among pork producers I’ve spoken with.

Canadian Meat Business had the opportunity to speak with Mark Chambers regarding the conference high points and what he sees as the important topics on pork producers’ minds going into 2017.

MC: I’ve been senior production manager for Sunterra Farms since I emigrated from England some 20 years ago now. I got asked if I would sit on the advisory committee four years ago. Sunterra has always been actively involved in the industry, so I was honored to be asked to do my part to be honest. It is a very prestigious seminar that has been around for 46 years. But this year was my first as chairman of the seminar. I feel somewhat fortunate since committee seats rotate every three years, but with the chairman role, I’ve got next year as well.

We’ve got to better understand it and embrace it because unfortunately with a growing world population, malnutrition is inevitable. Frank spoke to the farming science side of the GMO question. They were our first speakers and were very well received because over the years, we know were going to have to continue to grow and produce more, so to get a perspective on sustainable GMO technologies is really good.

CMB: With so many attendees from all parts of the world, trade must have been at the top of a lot of sessions.

Mark Chambers

Europe has already adopted the concept because outside pressure resulted in legislation. We also have a lot of focus on feed and feed efficiencies; how we can get more from less because we’ve got a growing population to feed, yet only have the same amount of land. So the question is how do we maintain good stewardship of the land and good environmental practices without depleting natural resources while still feeding our ever-growing world?

CMB: Did you have speakers who addressed those issues this year?

MC: Yes, we had a couple really good plenary speakers this year. We had Sandra Vijn, director of the Sustainable Food Team of the World Wildlife Fund, and Frank Mitloehner, Professor and Air Quality Specialist in Cooperative Extension in the Animal Science department at the University of California. Sandra addressed feeding the world in a sustainable manner and understanding that if we don’t want global malnutrition, we have to adopt modern technologies such as GMOs, getting more from an acre of land with new science. She talked how this in particular would have positive impact in third world countries where they’re able to grow crops now through the use of GMOs.

MC: We had Steve Meyer from Express Markets Analytics and Kevin Grier who has his own market analysis and consulting firm. Their presentations focused on trade economics and how important it is to keep those markets open. They are always entertaining and Steve was using pig disease acronyms like PED and then he said “PT.” He kept the audience guessing then finally told them he was meaning “Post Trump”. That got a big laugh. The point really was, what is going to happen with Trump’s administration in regards to NAFTA? We don’t really know and there is concern because the U.S. is our biggest trading partner and we need open doors there.

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CMB: The same goes for the European producers with respect to the CETA deal.

MC: Yes, for sure. Canada is an exporter market, so the deals we can get in Europe, Asia and South America are important because we don’t want to be left with discount markets to sell our herds.

CMB: Can we talk about the overall lack of industry marketing to the general public?

MC: We need to be enable to engage with the public so that our industry doesn’t always get such a bad rap. There are groups out there that are well organized and well funded and they seem to be able to connect with the public on a very emotional level and in the process, have managed to change the perspective of the pig farmer. We had Terry O’Reilly from the CBC give a lecture on “Changing the conversation.” He talks about how to connect with people,

Join Today! www.cfib.ca/agri

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January/February 2017 CANADIAN MEAT BUSINESS 15

with your public. Right now it seems like the conversation is farmers are bad, so we need to connect with them to change the conversation to how we are trying to do the right thing and why we are doing the right thing. We also had Joe Schwarcz of McGill University who talked about countering misconceptions that the public have about modern agriculture. Joe was saying you can’t just show the public science because people shop with emotion.

when you consider changing travel mandates, that could be impactful, forcing less trade and less movement of animals.

The flip side of that is there has not been a lot of science put into transportation because we’re good at it. We typically transport weanlings long distances and our loss rate is less than .001 % over ten years. So the science says transport is absolutely sound but somebody, somewhere has decided it should change.

CMB: Do you think the pork industry is doing enough to change that conversation and counter those misconceptions?

CMB: Can we touch on disease control talks at the seminar?

MC: You know you leave the conference thinking we got some great information, and good ideas, and expecting someone else to do it. As farmers or producers, we are very good at doing what we do, but were just not very good at the marketing side. I mean we market our product, but what we really need to do is market our story about how and why we do it. The opposition has managed to hit that mark and sell the idea that our how and why is a bad thing. There is a lot a work to be done on our story and maybe Terry O’Reilly should be the man to lead the campaign.

CMB: Even the transport side of the pork industry has been taking a lot of knocks.

MC: There are changes coming down the pipe now from the CFIA regarding transport times for different species.

They’re shortening the duration that is allowable for animals to be off loaded and rested, fed and watered. So that is going to have an impact because we ship a lot of herds across Canada and deep into the mid-west. Historically the industry has moved the animals to where the feed is. As an example, a lot of Manitoba producers grow weanlings and ship them down to the mid-west because the grain is there. Slaughter is done there and the meat gets sold. So

MC: There wasn’t too much talk about PED this year.

Canada has done a very job of cleaning up the outbreak and eliminating it. However there was a lot of discussion about disease challenges with reduced antibiotic use. I think it’s good the issue has been brought to the forefront and discussed but I don’t think it should be phased out. In reality they should be used in areas experiencing disease pressure. The upside is there will be a lot more attention put on vaccines to prevent disease outbreaks.

CMB: What are some of the topics for discussion in next year’s Seminar?

MC: We will definitely be talking more about sow housing conversions because we mandated that by 2024 it has to be loose housing. The conversations about antibiotics is ongoing, and who knows what advances will come before next year’s event. From my perspective, I was really pleased with the turnout the overall event and it would be nice to see us maintain or grow our attendance. We’ve had a couple years in a row where it’s been fairly steady so that is definitely encouraging. I think one of the real wins we had out of this year’s conference is that we hit a home run with each of our four plenary speakers – they were outstanding.

And we are going to continue the conversations that our important to our industry and move forward from there.

THE MEAT DEPARTMENT OPEN HOUSE OPENING THE DOOR TO NEW MEAT AND POULTRY SALES

By Ronnie P. Cons

Holding an annual ‘Open House’ is a great way for grocery store meat departments to drive new growth in their sales of meat and poultry. The event should be set up as follows: Promoting the event - The one day event should be promoted to existing customers as well as in the local media to target new clients. It should also be advertised in social media including Facebook and Twitter. Local newspaper reporters can be invited to attend and sample the free food (everybody loves free food!). This will lead to free exposure that stems from newspaper write-ups.

Nature of the event - The open house would be promoted as a social occasion where everybody is welcome to sample the wonderful products of the meat department.

The idea is to make existing customers excited about their meat department through the use of social interaction and free food which will encourage their fidelity to their store.

As for new potential clients, the objective is to get them into the store for the first time as an icebreaker. Great food combined with socializing with existing customers and personnel will give them a good first experience. This will lead to future visits for purchases if coordinated with the following point.

The role of the personnel - Employees of the meat department would network with these potential customers and get their feedback on which products they liked best.

They would also discuss their general meat and poultry needs. The objective is to have personnel really connect to these potential customers and to convey to them that they truly understand and care about their meat and poultry needs. This sentiment can be a game changer or store changer for that matter.

16 CANADIAN MEAT BUSINESS January/February 2017

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Their first purchases - The potential clients should be offered a generous first time discount to encourage them to make their first purchases at the open house. They should also be given free samples to take home to their families to taste. Impressed family members will then encourage their parent to make more purchases at this store. The new client can also be given a voucher for a generous discount for their next purchase. This will encourage them to make a second purchase which will help lock them in as long term customers. To keep costs down, suppliers would be asked to supply the free samples. The incentive of more business down the road will motivate them to do so.

Long term relationships - The prospective clients will then be asked for their email addresses in order to send them information on specials and other meat department news of interest. These emails should be sent in the name of the employee that made the initial contact with them in the store. The emails should convey the message that they are there to satisfy any of their meat and poultry needs and to answer any questions that they may have. As such, a personal and satisfying relationship will be built up between the store employee and their new clients. This is an essential key to retaining them as long term customers.

A annual meat department open house will openin the door to new meat and poultry sales.

Ronnie P. Cons is CEO of C&C Packing Inc. a leading Canadian Meat and Poultry distributor. He can be reached at rcons@ccpacking.com or visit www. ccpacking.com

January/February 2017 CANADIAN MEAT BUSINESS 17

reported delaying expansion plans due to insufficient workforce.

The most significant factor in the growing labour shortage is the retirement of these industries’ olderthan-average workforces. Over the next 10 years, nearly one in three Canadian beef workers and one in four Canadian pork workers are expected to retire.

LIMITED PROFITABILITY AND GROWTH FOR THE RED MEAT INDUSTRY ARE FORECAST DUE TO LABOUR SHORTAGES The impact of labour shortages on the beef and pork industries have become increasingly critical in recent years. New research indicates that the trend will worsen between now and 2025, resulting in a widening labour gap that threatens to limit the profitability and growth of Canada’s red-meat industry.

The Canadian Agricultural Human Resource Council (CAHRC) has completed a three-year study of the Canadian red-meat industry and released Labour Market Forecast to 2025 studies for the beef and pork industries – an examination of the workplace trends and realities that will shape these industries between now and 2025. The red-meat industry includes finished cattle and swine, as well as feedlots.

The study is part of the Labour Market Information (LMI) initiative, which examined the labour market in Canada’s agriculture sector across 11 commodity areas.

The study revealed that in 2014, the beef industry workforce consists of 40,900 people and was unable to fill 3,500 jobs due to a lack of domestic workers. The pork industry, which employed 14,000 people that year, was unable to fill 800 jobs.

By 2025, these industries are expected to see the labour gap widen significantly, with as many as 15,500 more jobs than 18 CANADIAN MEAT BUSINESS January/February 2017

the domestic workforce can fill.

Renewed global markets and a growing demand for animal protein in emerging markets are driving a higher demand for Canadian beef and pork. At the same time, Canada faces a shrinking pool of domestic agricultural workers. As a result, by 2025, more than one in four of jobs in the beef industry and nearly one in five jobs in the pork industry are expected to be at risk if additional sources of labour can’t be found.

The widening labour gap will have a significant economic impact. In 2014, labour shortages in the beef and pork industries resulted in an estimated $311 million in lost sales.

In addition to financial losses, a national survey of beef and pork producers indicated a range of other issues: 23 per cent of beef producers and 38 per cent of pork producers reported production losses due to an insufficient workforce, and 21 per cent of beef producers and 17 per cent of pork producers meatbusiness.ca

While the beef and pork industries offer a work environment with low seasonality, little variability in hours, and less physically demanding work than many other agricultural commodities, these benefits are not expected to be enough to attract enough new workers.

In particular, a shrinking number of young people entering the workforce and a lack of awareness among young people about the career opportunities available in agriculture will create challenges for agricultural employers in the coming years.

To address the labour issues identified in the research, CAHRC, with the help of the Government of Canada, has developed agriculture-specific human resource (HR) tools designed to support modern farm operations to manage their workforce. CAHRC also offers Agri Skills, online and in-person training programs, and the Agri HR Toolkit – an online resource guide and templates to address the HR needs of any business.

For agricultural organizations there are customized labour issues briefings that apply the new research to specific commodities and provinces, to explore the labour implications within their specific area.

This study data was validated through Canada-wide industry consultations including: 1034 surveys of employers, workers and industry stakeholders; 80 phone interviews; six focus groups for a total of more than 100 participants; and seven webinars focused on specific commodity groups with 100 participants in total.

The Beef and Pork Labour Market Forecasts to 2025 reports can be downloaded at http://www. cahrc-ccrha.ca/agriLMI.ca.

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January/February 2017 CANADIAN MEAT BUSINESS 19

IS THERE WORK LOAD DISCRIMINATION IN U.S. MEAT DEPARTMENTS?

By Philip Verduce (Personally I believe there is!)

Over the years our members have complained bitterly about increased “workloads” applied on them due to department labor reductions. Many blame increases in “dollars per man hour or pounds per man hour”. The complaints are universal and extend from the Atlantic to the Pacific, from North America to South America and it could be worldwide as it applies to meat departments. Maybe it’s time for meat cutters to put down your knives, step back from the cutting table and read The Fair Labor Standards Act, but before I get into this let’s take a look around our place of employment.

The operating meat department (not a Walmart meat department) has a mandate. That mandate is governed on what we all know “dollars per man hour” or some form of it. With no regards to: An environment that is hostile due to refrigeration, noise, dampness, equipment operations and knives, lots of knives. Above average hot water must be used for sanitation purposes, including all kinds of chemicals. Heavy lifting is also the norm. The potential for injury is higher in the meat department than any other department, but despite these issues management stands by “The Mandate”.

No doubt there are hourly modifications in other departments like grocery, produce, bakery, prepared foods, deli, floral and other related departments. However, nothing compares with the rigid-standards set for the meat departments. Most savvy store manager will agree that they must be careful about cutting to much labor hours in 3 departments; deli, prepared foods, and check out! Yes, I consider check out as its own department. I call them money-handlers. Now in this regard is where I bring in “Fair Labor Standards Act”.

The Fair Labor Standards Act (FLSA) is a federal law which establishes minimum wage, overtime pay eligibility, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments.

The law has many twists and turns. However, in its simplest form and for this discussion, hourly workers must get paid overtime pay after 40 hours. In legal terms, hourly employees and some salaried employees are non-exempt workers, which means they are entitled to overtime. So why do I feel that meat departments and meat cutters are being discriminated against? Because of the “The Hourly Increase Workload”.

So many men and women have left our trade, you can read it here any day of the week from cutters around the globe. They left our trade because of ” Workload Abuse” and all of the above mentioned operational duties that are required of a meat department employee.

Now let’s look at this from upper management’s point of view just to be fair and balanced.

If the demand for meat products and services increase, the company has a few options to accommodate the surge in business. Hiring additional staff, whether permanent or temporary can be costly, or cut back on services which can lose customers, or pay overtime to keep everything in sync, but that hits the bottom line. Or just simply increase the “Work Load” and try to stay within the Labor and Employment Laws. Personally, I feel many companies are operating in the “gray area” without being checked on this by FLSA. Increasing the workload for a salaried worker doesn’t increase the pay — salaried workers earn the same fixed rate, regardless of how many hours it takes to complete their duties.

Hourly employees and some salaried employees are non-exempt workers, which means they are entitled to overtime. The FLSA requires that employers pay non-exempt employees one and a half times their regular hourly rate when they work more than 40 hours in a work week. Salaried workers who are non-exempt are the ones who perform duties that don’t require independent judgment and jobs that aren’t directly connected to the management of the company. Before they increase a non-exempt employee’s workload, companies should check state law to determine whether it differs from the federal law. Many states have their own overtime regulations; when the state law differs from the federal law, employers must pay the higher of the two. For example, California law mandates paying one and a half times the employee’s hourly rate when he works more than eight hours in a day. If he works more than 12 hours in one day, he’s entitled to double time. In Kentucky, workers must be paid overtime after the sixth day of work in a week.

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I know this sounds harsh, but after hearing so many stories from members concerning heavy workloads it certainly seems that management is putting bottom line before the health and welfare of meat department employees.

Courtesy of The Meat Cutters Club, click on http://www.meatcuttersclub.org/is-there-work-load-discrimination-inmeat-departments/

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CATTLE OUTLOOK APPEARS BEARISH

By Richard Kamchen, Farm Credit Canada

It was a nice run while it lasted, but a recent bearish government report pressured the United States cattle futures lower.

Larger than expected placements in the United States Department of Agriculture’s December Cattle on Feed report sent the Commodity Market Exchange live and feeder cattle futures to their lowest levels since Jan. 9 earlier this week.

The USDA cattle inventories released last week showed a two per cent increase in cattle inventories and support the bearish trend.

Prior to the declines, Alberta producer Bob Lowe felt pleased about the more positive movement in markets since October.

“There is some money being made and it has given us the opportunity to do some forward contracting,” Lowe says, adding with foresight, “Hopefully it holds on, but we are on the downside of the cycle.”

Still, Alberta feeder cattle prices have improved since last fall, points out provincial livestock analyst Jason Wood. He explains prices are up 23 per cent for 500- to 600-pound steer calves, 12 per cent for 800- to 900-pound yearling steers, and 23 per cent for slaughter steers.

“Tightening supplies of slaughter ready cattle, strength in the beef cutout value, and good packer margins in quarter four of 2016 were price supportive,” Wood says. “Retail beef prices are also starting to decrease, positive for consumers

and demand.”

But he adds packer margins have pulled back and cutout values are seeing resistance. Also, this is seasonally a slower period for beef demand, and there’s an impending increase in slaughter cattle supplies.

In the short-term, Wood expects prices to range from steady to softer. Going into late winter/early spring, prices will move lower on increased slaughter cattle supplies before seasonally increasing in the fall, he says.

FarmSense Marketing’s Herb Lock says in the big picture, the industry is facing increasing supplies of beef, particularly in the U.S. There, herds have been growing in the last two years and are likely to grow for another one, possibly two more years.

Beef demand is now being impacted by the new trend of allday breakfasts at restaurants, which is much more positive for pork, Lock says. Beef is also facing more competition from large international supplies of pork and chicken.

Beef demand, however, is shifting toward people consuming less, but demanding higher quality and more expensive beef, Lock says.

VIENTERO INTRODUCES PROBIOTICS FOR MEAT AND POULTRY Canada-based Vientero Inc. has announced the release of Biacta, an innovative cooking-resistant probiotic for meat, poultry and seafood with the ability to safely extend those products’ shelf life between 20 to 30 per cent.

Probiotics are widely sought-after for their health benefits in milk products like yogurt, kefir and soft cheeses. Proven to contribute to healthy gut flora and improve intestinal health, probiotics have been credited for a wide range of additional health benefits.

Despite these benefits, many people are either allergic to dairy, or unwilling to pay high prices for probiotic supplements. The whey protein in milk provides a buffer that helps probiotic cultures to survive digestive acids and do their work. Other proteins, in particular meats, have the same buffering effect, but traditional probiotics are destroyed by cooking.

Biacta probiotic cultures can endure intense cooking processes as well as salts, preservatives and freezing. This proprietary technology is a unique opportunity for market differentiation and an unprecedented added value, with a very low cost per portion.

Biacta also increases shelf life in a wide range of meat products through a process called Probiotection, in which the active probiotics are laboratory-proven to stop spoilage agents and pathogens including E. coli, salmonella and listeria. This bio-preservative benefit can lead to a substantive reduction in food waste for retailers and meat processors.

POULTRYPONICS LAND IN THE NORTH

By Treena Hein, Farm Credit Canada

Work has begun on a ground-breaking project in Hay River, N.W.T. combining egg production with greenhouse vegetable production. It’s set to be fully operational in May. The initiative is spearheaded by AgriArctic of Whitehorse and Polar Egg of Hay River, with input from Lethbridge College staff.

The idea of combining vegetable and egg production appears to be the first venture of its kind in the world. The circular concept will have some waste plant material fed to laying hens, and chicken manure treated with a bioreactor to producer fertilizer for the plants.

The physical setup is also circular. About 200 hens will be housed in a hexagonal base structure with vertical hydroponics towers situated above in a frameless structure called an intershelter dome. High pressure sodium lamps will be used for light, and heat will be provided with a standard 1,500-watt space heater. The bioreactor will also produce 22 CANADIAN MEAT BUSINESS January/February 2017

some heat, as will the hens.

“The hens will have the same amount of space as they would in any other free-range housing set-up, with access to the outside in the summer,” says Kevin Wallington, head of marketing and sales for Polar Egg Head.

He says the eggs will be graded at the Polar Egg grading station with the rest of the company’s production, but they may be marketed separately.

“There is the possibility to market them separately however, as we are looking to modify one of our barns to free-range production with an outdoor enclosure, and then we hope the combined number of free-range eggs would make that feasible.” meatbusiness.ca

The combined technologies, patented and patent-pending worldwide, enable Vientero to offer market exclusivity to industries accustomed to seeking even very minor points of differentiation.

research, I invented a way to significantly increase shelf life, and to offer consumers the health benefits of probiotics even after high-temperature cooking.”

The technology behind Biacta has been validated through third-party laboratory testing, is approved by Health Canada and the Canadian Food Inspection Agency (CFIA), making it market-ready in Canada. Biacta uses probiotics that are FDA approved with Generally Regarded as Safe (GRAS) status.

Tisserand believes by adding probiotics to meats, health benefits can be delivered to consumers who need them most.

“The people who regularly eat fast foods and highly processed foods suffer the most from a loss of healthy gut flora,” he says. “By adding probiotics to those products, we can better the health of consumers, including many who will never buy it in expensive capsules or drinks.”

Biacta can be applied to meat products or carcasses as a liquid spray, or added in powder form to spice mixes. It is applicable to a wide range of proteins from frozen meat patties to sushi, sausages, eggs and fried chicken.

“Our vision is to make probiotics available to everyone,” stated Tisserand. “And at the same time we recognize every player in the meat industry is looking for a way to be different and better. We are hoping to strike a good balance”.

For more information, visit http://biacta.com/

Vientero president Pierre Tisserand, a French-born food scientist with an extensive meat industry background in research and development and quality assurance, says he came upon the idea when seeking an alternative to the harsh acids and chemicals used in conventional meat processing.

“I wondered why the amazing ability of beneficial active cultures to increase shelf life in yogurts and cheeses was not being applied to meat proteins,” says Tisserand.

“There were in fact a number of complications, such as the need to cook and salt most meats. But after years of meatbusiness.ca

January/February 2017 CANADIAN MEAT BUSINESS 23

TOP ECONOMIC DRIVERS OF 2017: ENERGY PRICES

By J.P. Gervais, Farm Credit Canada

From the production of equipment and crop inputs to the fuel required to transport products to market, energy is an important part of the Canadian agri-food supply chain.

Energy prices may be volatile with an uncertain global supply throughout 2017. With their potential to significantly impact overall profitability, energy prices are our second trend to watch in 2017.

For more on our number one driver expected to impact Canadian agriculture, check out Top Economic Drivers of 2017: Canadian Dollar.

While all energy markets -- coal, natural gas, and oil -are important to Canadian agriculture and agri-food, the biggest energy influencer will be oil. Oil prices declined from their mid-2014 peak of US$110 per barrel to US$30 per barrel at the beginning of 2015 on the strength of global surpluses. Prices rebounded somewhat through 2016.

Forecasts of muted world economic growth in 2017 suggest demand for oil won’t significantly change from 2016 levels.

Instead higher oil prices in 2017 will reflect weaker supplies.

Late-2016, OPEC (Organisation of the Petroleum Exporting Countries) announced production cuts of 1.2 million barrels a day to address soft oil prices and growing world supplies.

Major non-OPEC producers, (e.g., Russia, Mexico, Oman, and Kazakhstan) have committed to produce 558,000 fewer barrels a day. The news had an immediate impact, raising oil prices by year-end.

What’s the bottom line?

What can Canadian ag expect from oil supply and demand in 2017?

Our advice? Monitor oil production cuts throughout the year. Sustained cuts could easily push oil prices above US$50 per barrel.

Cyndi Willems-Gibson joined CSB with more than 20 years of experience in the food industry, with a strong knowledge of quality management and production. She provides the understanding and expertise to expand the use of the CSB-System into more detailed quality inspections, data capture and reporting for the North American market.

Keat Hor supports our users with plant maintenance. He has been involved in both project-based and support services across a range of technology solutions consisting of ERP. Need someone with experience in accounting and BI? Sarah Baigrie joined the CSB-System consulting team to

help support our User Group. She will use her knowledge of accounting processes and her customer support experience to specialize in the Financial Accounting Module in the CSB-System.

Since 1977, CSB-System has successfully provided integrated software solutions that allows meat processing companies to efficiently orchestrate all aspects of their operations, dramatically increasing their profitability. CSB combines excellent industry know-how with state-of-theart technologies in modular and scalable solutions for the meat industry.

For more information, visit www.csb.com

Reductions in oil production in some parts of the world may be offset by production increases elsewhere, giving a sense of stability to oil prices. This isn’t likely to produce much inflationary pressures in the Canadian agri-food supply chain throughout 2017, and may even support profitability.

About the writer: J.P. Gervais J.P. is the Vice-President and Chief Agricultural Economist at Farm Credit

Gasoline: $0.85 – $0.88 per litre

Canada. Prior to joining FCC in 2010, J.P. was a professor of agricultural

Diesel: $0.86 – $0.90 per litre

held the Canada Research Chair in Agri-Industries and International Trade at

Fuel price trends in each province should roughly match the trends above.

He obtained his Ph.D. in economics from Iowa State University in 1999.

24 CANADIAN MEAT BUSINESS January/February 2017

CSB-System has added many new consultants to the ever growing team this year to help you optimize your business processes and make you more efficient in 2017.

The challenge will be to maintain production cuts as price increases give incentives to ramp up production. U.S. production, in particular, may increase in 2017 with looser government regulations and more profitable oil projects.

We project average 2017 oil prices will be about US$50 per barrel, i.e., higher than they were in 2016, as stockpiles ease. Average fuel prices will also be higher, while prices for fertilizer and other inputs are expected to increase throughout 2017, while still remaining lower than the average 2016 prices. Prices should rise during periods of peak demand.

Alberta farm gasoline prices averaged $0.81 per litre in 2016 and farm diesel averaged $0.78 per litre. Our forecast of oil at US$50 per barrel means we expect average Alberta farm prices to range as follows in 2017:

ARE YOU PREPARED TO BE MORE EFFICIENT WITH YOUR PLANT MAINTENANCE IN 2017?

economics at North Carolina State University and Laval University. He also Laval. J.P. is Past-President of the Canadian Agricultural Economics Society.

Follow J.P. on Twitter - @ jpgervais

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CELEBRATE CANADA’S AGRICULTURE DAY Canadian agriculture representatives announced February 16, 2017 will be Canada’s Agriculture Day – a time to celebrate and draw a closer connection between Canadians, our food and the people who produce it.

The announcement, made last June on the final day of the Canadian Centre for Food Integrity Public Trust Summit in Ottawa, marks the first time the industry has dedicated a day to celebrating agriculture and the people in the industry.

“We all eat food yet many people don’t automatically make the connection between what’s on their plate and the commitment and care that goes into raising livestock, growing crops or processing food,” said Crystal Mackay, CEO of Farm & Food Care Canada, a national charity committed to building public trust and confidence in food and farming in Canada.

In the 1930s, more than 90 per cent of Canadians had a connection to agriculture. Today, it’s less than three per cent, according to Statistics Canada census information.

“Every link in the food production chain – from the farm to the grocery store and restaurant – plays a vital role in bringing food to your table every day,” said Mackay, whose group organized the summit. “Canada’s Agriculture Day is an opportunity to get involved, celebrate and be a part of the conversation about food and farming.”

Candace Hill, manager of Agriculture More Than Ever, said Canada’s Agriculture Day complements the industry-led initiative that has attracted over 470 partner organizations and 2,100 individuals committed to creating positive perceptions of agriculture.

Launched more than four years ago, Agriculture More Than Ever’s goal is to encourage those involved in agriculture to speak up and speak positively about the industry.

“It’s all about showing our love, pride and passion for an industry that puts food on our tables,” Hill said. “We want to give everyone the opportunity to have a voice in the conversation and celebrate the industry that feeds the world.”

Hill encourages the industry, organizations and individuals to mark the date on calendars and come up with their own ideas and activities to promote and celebrate Canadian agriculture.

For more information, visit AgDay.ca or follow us on Twitter at #CdnAgDay.

INOTEC NOW EXCLUSIVELY AT HANDTMANN IN U.S. AND CANADA Tom Kittle, President of Handtmann Canada Limited and Handtmann Inc. has announced that effective January 1, 2017 sales, parts and service for INOTEC Technology in the United States, Canada, Puerto Rico and Jamaica became available exclusively through Handtmann.

According to Kittle, “the equipment offered by INOTEC is a good fit with our Handtmann technology, but the quality of INOTEC design, the rigor of its manufacturing standards and the culture of quality within the INOTEC organization are what make it a great fit for us at Handtmann. I think those same qualities will also make this a valuable relationship for Handtmann customers served by Handtmann Inc. and Handtmann Canada Limited.”

INOTEC was established in 1988 and developed its first emulsifier with automated cutting set adjustment in that same year and now offers a broad range of emulsifier 26 CANADIAN MEAT BUSINESS January/February 2017

models. INOTEC mixers feature INOTEC’s innovative Vario Mixer design and the company also manufactures Giromatic string tying equipment, delinkers and a wide variety of link cutters for all casing types.

Kittle urges current INOTEC customers fill out the simple contact form at http://handtmann.us/inotec-signup or http://handtmann.ca/inotec-signup to help ensure there is no delay when parts or service are needed. In the case of an emergency, INOTEC customers can call their Handtmann office directly at 847-808-1100 in the U.S. or 519-725-3666 in Canada for immediate assistance. meatbusiness.ca

REISER BEGINS MAJOR EXPANSION TO ITS U.S. HEADQUARTERS Reiser has begun construction on a significant expansion to its Canton, Massachusetts headquarters to support the continuing growth of their business. The construction will add 46,000 square feet of space, increasing the size of the facility by approximately 70%. Construction 1 2014-05-16 1:20:17 PM began earlier this year and is targeted to be completed YesGroup_CanadianMeatBusiness-Qtr-pg.pdf in 2017.

“The expansion of our Canton facility reflects the continued growth of Reiser and the many services we provide to our customers,” said John McIsaac, Vice President of Strategic Business Development at Reiser. “The additional space will allow us to take even better care of our food processing and packaging customers and fulfill our ongoing commitment of providing them with the highest quality equipment, service, support and training.”

The expansion will double the size of the Reiser Customer Center. The Reiser Customer Center features customizable processing rooms with space to run individual machines or fully automated lines, and a full test kitchen for preparing, cooking and sampling finished product. The facility allows processors to test and develop new products and processes under the same conditions found in most food plants. Reiser’s full line of processing and packaging equipment can be tested at the Customer Center. The Center also includes modern conference rooms for meetings and training, as well as comfortable workstations for visitors.

With more than 55 years of experience, Reiser is a leading supplier of food processing and packaging equipment and solutions. Reiser offers a wide variety of equipment to help food processors produce a higher quality product while maximizing their production efficiency and profitability.

Reiser’s range of equipment includes: Vemag Holac AMFEC Seydelmann Fomaco

Ross Supervac Repak Fabbri Group Variovac

For information, visit www.reiser.com meatbusiness.ca

January/February 2017 CANADIAN MEAT BUSINESS 27

ENERGY While there has been some good news recently with the approval of pipelines and the prospect for U.S. approval of Keystone XL, most energy-related news is troubling.

Ontario’s small- and medium-size businesses are apoplectic over hydro pricing and the government’s mismanagement of this file. While there are mixed views among SMEs on carbon pricing, they are in store for major hikes in fuel and natural gas costs, with little natural customer growth to make up the difference.

CHALLENGES SMALL BUSINESS WILL CONFRONT IN 2017

By Dan Kelly

As I looked at the stockpile of exciting new Lego sets and Nerf guns waiting under the Christmas tree, my mind instinctively drifted toward what must be done in this new year (aside from toy assembly), and what we can expect going forward.

The past year was a tough one for many small businesses.

The cancellation of promised reductions in the small business corporate tax rate, the surprise agreement to increase the Canada Pension Plan over a seven-year period starting in 2019, and five years of carbon prices kicking in next year, have many small firms wondering where they will find the money to keep going, let alone to expand, in 2017.

From the outset, it’s shaping up to be another tough year.

The Canadian Federation of Independent Business’s Business Barometer, which measures small business optimism, has been flat-lining for months. Most important, for the first time in many years, there are now more small firms reporting that they will reduce full-time employment than increase it. This is very troubling and needs to be taken seriously by public policy measures.

So what else can we expect? While my crystal ball is no better than anyone else’s, here are some of the things I’ll be keeping an eye on as we head into 2017.

TRADE With the signing of the Comprehensive Economic and Trade Agreement (CETA) with the European Union, many more small and medium-sized businesses across Canada will look to Europe for opportunities. Having just visited Helsinki to promote CETA, I can confidently say that interest 28 CANADIAN MEAT BUSINESS January/February 2017

MINIMUM WAGES Alberta’s headlong plunge into a $15 minimum wage with one of the worst economies in Canada will trigger fallout.

If experience in other jurisdictions is any guide, expect more Alberta employers to downsize, replace staff with technology or simply give up. Also, expect calls from unions for the other provinces to follow Alberta’s ill-considered lead.

SMALL BUSINESS TAXATION Some members of a federal government task force appointed to look at tax expenditures are questioning whether small firms should have a lower tax rate than large firms. Even last year’s changes to the small business rate as it applies to partnerships has created concern over unintended consequences and overreach. I for one am very worried that Ottawa will implement Quebec’s rollback of

the small-business tax rate for firms with fewer than four employees. Sadly, in 2017, the dépanneur in Trois Rivières with two staff will now be considered a big business from a tax perspective. This would be a Code Red issue for CFIB and small business owners if applied federally.

DEFICITS While some provinces appear to be clawing their way out of deficit, the federal government is sinking deeper in. New generous civil service contracts that do not scale back such benefits as excessive sick-leave entitlements are proof that infrastructure spending is but a small part of our ballooning deficits. Entrepreneurs have learned the hard way that today’s deficits are tomorrow’s taxes, so their big question is when will higher general rates of taxation result. All eyes will be on the Spring budget to see if this happens in 2017.

So, there’s lots to watch for in the coming year. After 45 years, CFIB begins another year of serving the small business community. We’ll continue to applaud good policies and developments and sharply criticize the bad.

Along the way, I’ll work on this pile of new toys needing assembly.

Dan Kelly is President of the Canadian Federation of Independent Business (CFIB). In this capacity, Dan is the lead spokesman and advocate for the views of CFIB’s 109,000 small-and medium-sized member businesses across Canada, including 7,200 agri-business members. Follow Dan on Twitter @ CFIB and learn more about CFIB at www.cfib.ca.

in Canadian goods and services is high. And while the European economy remains stubbornly flat, a market with 500 million customers is surely an attractive proposition for Canada’s entrepreneurs.

As for NAFTA, I don’t anticipate any premature disruptions.

Prime Minister Trudeau’s early offer to renegotiate the agreement could prove a solid strategy, as President Trump may look for a symbolic win in public that doesn’t disrupt NAFTA’s critical elements. And while the future of the TransPacific Partnership looks bleak, there is a play for Canada to press on independently with the other countries involved, to create what in the end would be preferential access to three major trading blocs (Europe, the U.S. and Asia).

SHORTAGE OF LABOUR The government’s early changes to the Temporary Foreign Worker program are very positive and have reduced the recent fears over this issue. The elimination of the four-infour-out rule will end the practice of sending home workers who have, after four years here, had their credentials recognized and begun to establish roots in the community.

The government appears to be listening to the needs of small business owners on this issue and seems open to CFIB’s recommendation for a pathway to permanent residency for TFWs, regardless of their skill levels.

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YOUR BUSINESS, YOUR ASSOCIATION, YOUR OPPORTUNITY.

save the date

REPORT LISTS TOP EMERGING COUNTRIES IN MEAT INDUSTRY Market Research Hub has released a new report listing the top 5 emerging countries in the meat market which are expected to reach a value of $321,494.7 million in 2020, with a CAGR of 2.6% during the forecast period of 2015-2020. The 134-page research report is entitled as “Meat Top 5 Emerging Markets Industry Guide-2016” and offers top line qualitative and quantitative summary data that includes market size and segmentation data, textual and graphical analysis of market growth trends in top 5 regions of the globe.

The report begins with the brief introduction to the emerging countries of meat production and compares data from Brazil, China, India, Mexico and South Africa. It has been observed that industrialized countries are demanding less meat, but better quality and that’s where significant opportunities arise. The BRICS nations are increasing their investments in their Meat industries to help growing local demand for Meat and Poultry production, with the goal to liberty in the near future.

With the further economic development of the above regions, food consumption will lead to greater demand for protein derived from meat and poultry products; that is why the number of meat-eaters is rising all over the world. According to the report findings, China is the leading country among the top 5 emerging nations within the meat industry, currently accounts for over 30% of the world’s current meat production with market revenues of $206,171.5 million in 2015. This was followed by Brazil and Mexico with a value of $38,757.4 and $27,569.0 million, 30 CANADIAN MEAT BUSINESS January/February 2017

respectively. Rising incomes in China are leading to shift in the consumption of higher quality food products. This trend is signified by an increase in the consumption of animal protein, meat, poultry, dairy and aquaculture products. Meat feeding in China grew rapidly in the past three decades and has become the most important category of food consumption in recent years.

April 4-6, 2017

Join industry leaders to discuss issues relevant to the meat industry and to the success of your business including:

Connect with old and new friends in sunny California over 3 days.

✓ Labor and Employment

the Supplier Showcase Reception

Enjoy networking at the John Duyn Memorial Golf Tournament and

✓ Economic Insights

and Sausagefest.

✓ Food Safety and Regulatory ✓ Communications and Public Relations ...and more!

GET INVOLVED

by participating in NAMI Committee meetings.

Further, leading company profiles are also mentioned in the report along with the details of key meat market players and their evolving five operations and financial performance. This report was prepared using five forces analysis to determine the competitive intensity and hence attractiveness of the emerging five meat markets. Through this report, the reader will be able to understand what factors are affecting the strength of competition in the top 5 emerging meat market nations along with the knowledge of top competitors.

Open to all and a great way to learn even more about issues affecting your business and the entire meat industry.

Learn more

www.meatinstitute.org

For more information, visit www.marketresearchhub.com

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Rancho Bernardo Inn, San Diego, California

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January/February 2017 CANADIAN MEAT BUSINESS 31

HIGHER RETAIL MEAT AND FOOD PRICES EXPECTED IN 2017 Canadians can expect to pay 3-5 per cent more for food in 2017, an increase of as much as $420 for an average family.

That’s the conclusion of the seventh edition of Canada’s Food Price Report, published for the first time this year at Dalhousie University.

inflation surpassed four per cent and went on to say, “I think 2016 was volatile and 2017 will be, at the very least, equally as volatile.”

Built on the expertise of authors and advisors from four different Dalhousie faculties — Management, Computer Science, Science and Agriculture — the Food Price Report is led by Sylvain Charlebois, dean of the Faculty of Management. The popular annual report forecasts food prices for the upcoming year across different sectors and analyzes trends in Canada’s food industries.

Food prices fluctuated this year, rising rapidly before later easing off. In October, food prices recorded their first yearover-year drop in nearly 17 years, according to Statistics Canada.

“Food pricing affects all Canadians,” says Dr. Charlebois, who previously led the project out of the University of Guelph. “It affects our quality of life. It’s top of mind for everyone every single day when we go out to buy food, whether at a restaurant or at a grocery store. And many Canadians struggle to cope with fluctuating food prices.”

The study estimates food inflation will increase in 2017, driven by a falling loonie and U.S. president-elect Donald Trump’s first year in the White House and the expected rise in retail prices will affect beef, pork and poultry as well as vegetables, fish and other types of seafood. Restaurant costs are also expected to rise by two to four per cent.

The study says the sweet spot for food inflation is between one and two per cent, a rate it says is manageable for restaurateurs, grocery stores and consumers.

Charlebois says he wouldn’t be surprised if next year’s food 32 CANADIAN MEAT BUSINESS January/February 2017

Charlebois expects the cost of food to remain fairly stable over the holidays and into the New Year before starting to edge up around April. The two biggest factors behind that will be the Canadian dollar and the incoming Trump administration, he says.

Depending on where they live, Canadians will experience different levels of sticker shock at the grocery store and in restaurants, the report says.

Those living in Ontario and B.C. should prepare for aboveaverage food inflation -- around four to five per cent, says Charlebois.

The study says residents of Newfoundland and Labrador, New Brunswick, Quebec, Manitoba and Alberta should enjoy below-average price increases, while the remaining provinces and the Northwest Territories should expect average rises in food costs.

To view the full report, visit https://www.dal.ca/faculty/management/newsevents/canada-s-food-price-report.html

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CANADIAN BEEF INDUSTRY WORKS TO SUSTAINABLY INCREASE PRODUCTION Canada has an opportunity to play a leading role in meeting rising global food production needs responsibly through investments in agriculture research across a variety of disciplines. The Beef Cattle Research Council (BCRC) and the national Beef Value Chain Roundtable (BVCRT) have released a strategy to achieve high priority beef research objectives that support increasing productivity while remaining environmentally, socially and economically sustainable.

The new Canadian Beef Research and Technology Transfer Strategy will support the industry’s ability to manage challenges and sustainably supply demand.

This strategy builds upon the success of the 2012-2018 National Beef Research Strategy. The new strategy’s research objectives are to be captured by 2023.

“With a growing global population that desires beef, research and innovation is critical to produce more using limited resources,” said Andrea Brocklebank, Executive Director of the BCRC and Chair of the BVCRT Research Committee. “The Canadian beef industry meatbusiness.ca

January/February 2017 CANADIAN MEAT BUSINESS 33

will be increasingly challenged to responsibly increase

“Limited, fragmented funding does not complement or

productivity while remaining environmentally, socially

adequately support a national value proposition of Canada

and economically sustainable. Adequate research and

as a leader in animal health, food safety, and quality,”

technology transfer funding, infrastructure, and expertise

added Brocklebank. “Clear direction of funding allocations

focused on the knowledge and innovations that have

across funding agencies is needed to achieve specific

the greatest potential to advance the industry are key to

outcomes that adequately address industry research

meeting this important objective.”

priorities. Together we can invest in a portfolio of research

The Strategy identifies desired research outcomes related

that includes both near-term and long-term research.”

to beef quality, food safety, animal health and welfare,

The Strategy was developed for and by industry

feed grains and feed efficiency, forage and grassland

stakeholders, researchers, research institutions, and

productivity, environmental sustainability and antimicrobial

beef research funding agencies. It outlines how research

use, resistance and alternatives. It encourages greater

dollars have been invested in the past, which research

communication and collaboration between the various beef

issues are of highest importance to industry stakeholders,

research funding agencies across Canada so that funding

and specific desired outcomes that require dedicated

can be allocated in ways that adequately address industry

research or technology transfer. The Strategy will better

priorities, avoid duplication, and enhance adoption.

enable the industry to achieve its core research objectives of enhancing industry sustainability, improving production efficiencies, improving consumer confidence and beef

“ WITH A GROWING GLOBAL POPULATION THAT DESIRES BEEF, RESEARCH AND INNOVATION IS CRITICAL TO PRODUCE MORE USING LIMITED RESOURCES, THE CANADIAN BEEF INDUSTRY WILL BE INCREASINGLY CHALLENGED TO RESPONSIBLY INCREASE PRODUCTIVITY WHILE REMAINING ENVIRONMENTALLY, SOCIALLY AND ECONOMICALLY SUSTAINABLE.”

34 CANADIAN MEAT BUSINESS January/February 2017

demand, and improving public confidence in Canadian beef.

The Canadian Beef Research and Technology Transfer Strategy 2018 – 2023 was developed through an extensive collaborative process that engaged researchers, funders and grassroots producers. Input was sought through various means including direct stakeholder consultation, an online survey, and two workshops. The collaborative process helped to identify gaps in research needs, research capacity, and programming.

For more information, visit http://www.beefresearch.ca/about/national-beefresearch-strategy.cfm

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