Cattlemen's financial challenges spread to forage group

Saturday, January 31, 2015

When the Canadian Cattlemen's Association pulled its funding, the Canadian Forage and Grassland Association was hit hard and with it the prospects for a multi-billion dollar industry. But insiders are convinced the CFGA will survive

by MARY BAXTER

Ron Pidskalny took up the reins of the Canadian Forage and Grassland Association (CFGA) as executive director in the fall of 2013, convinced of its promise.

International interest in Canadian hay is surging. Forages and grasslands are worth $5.1 billion to beef and dairy sectors and potentially $13 billion to Canadian society in ecosystem services, such as preventing erosion and supporting recreational activities.

Barely six months after he took on the job, however, the Canadian Cattlemen's Association (CCA), one of the organization's principal partners, pulled its funding. Pidskalny learned both that the grant – initially $30,000 a year but which had dwindled to $10,000 in 2013 – and another $10,000 grant from Dairy Farmers of Canada (DFC) did not represent ongoing funding but rather conditional grants reviewed and renewed from year-to-year.

He realized the potential alone would not be enough to rescue the five-year-old national association from its cash-strapped plight. And so, on the last day of its annual conference, held in Bromont, Que., in November, Pidskalny announced his resignation.

"I did manage to accomplish a few initiatives," he said in December, but lack of funding transformed his role from strategic management to general administration, and "with a national organization the amount of day-to-day work is incredible."

Doug Wray, a beef producer near Calgary and the Cattlemen's chair, said the association's own financial challenges are what led to the decision to nix the grant. Even though the price for cattle has reached an all-time high, years of low prices and other issues had reduced the country's cattle herd. There are simply fewer animals to trigger check-off fees (the association is funded by its provincial counterparts which, in turn, derive their income from check-offs) when they were sold.

Other sources of revenue are available to help the CFGA finance its roughly $100,000 annual operating budget, including $1,500 membership fees charged to provincial forage associations and individual members, and strategic partnerships such as one with New Holland Agriculture. Profits from an annual conference constitute yet another source.

But CCA and DFC funding formed a considerable proportion of CFGA's financing. It doesn't have the option of replacing that income with a check-off fee because most of what's produced remains on the farm as livestock feed.

Wray said the association provides a vital unified voice for provincial forage associations and other industry stakeholders. The federal government tends to listen more to an organization that represents the whole country than to one representing a single area. "We've seen that and developed some pretty good and useful relationships with people in Ag Canada. Those conversations are ongoing."  

Ray Robertson, the association's vice chair and manager of the Ontario Forage Council, says a unified national voice for the industry is essential. So, too, is a unified approach to developing the hay export industry for all of those involved. "Our West cannot do it all on its own," he said, adding that even Canada won't be able to supply all of the demand for hay that is being driven by China's huge dairy industry expansion and water shortages in the Middle East. "But we're a good alternative."

Pidskalny explained that the association also represents forage and grasslands "along the whole value chain, so we're looking at right from the point of seeding." Beef and dairy industries, by way of contrast, have traditionally focused further along the chain.   

He believes that to make the association thrive buy-in is needed from its greatest stakeholder, the Canadian public, which would ultimately benefit from the crop's ecological services. Many have spoken supportively of the idea, but turning talk into real action is an immense challenge, he said.

In the meantime, industry needs to step up. Pidskalny, a plant pathologist by training and a business strategist and analyst by experience, says industry needs to pay closer attention to forage as well as to specialty crops. These crops are essential for ensuring diversity in crop rotations, a cornerstone conservation practice. Without the variety they offer, "we'll have the whole country in a two-crop system if we keep moving where we're moving."  

Many of the groups representing special crops are facing a similar financial crunch, he added.

Kelly Dobson, industry co-chair of the national Special Crops Value Chain Roundtable, confirms that organizational capacity is one of the issues most often talked about. Special crops organizations "need a certain critical mass to really work and fulfill the mandate that they've set out for themselves," he explained.

For some, like the association, not being able to generate funding through a check-off fee is the challenge. Those able to charge a check-off face climatic and environmental problems because special crops tend to be small and regional in nature.

Dobson is a past president of the National Sunflower Association of Canada and uses his organization as an example. Most of the crop is grown in Manitoba but, in the last four years, floods and late seedings have halved the crop size. "You accumulate that year over year and it starts generating revenue problems."

As for CFGA's next steps, there are plans to begin a search for a new executive director, Wray said. Efforts are also underway to recruit sheep and bison organizations.

Survival is a given. "The uncertainty is more of how big and robust will it be," he said.

Wray is convinced that the CCA will return to the fold. With "a pretty nice list of accomplishments on a pretty meager set of resources" and "a little bit of a track record," the association is in "a better position now to make our case than we were five years ago."

He adds: "I'm a glass half full kind of guy. So I look at it from the opportunity side more than the limitations side. And the opportunities are absolutely there." BF