Province beefs up Corn Fed marketing with $2.5 million grant

Saturday, January 12, 2013

by BETTER FARMING STAFF

A beef marketing program that has grown in volume by nearly 800 per cent since 2006 is poised to expand some more with the help of provincial funds.

Applause broke out from the audience on Friday afternoon as provincial Agriculture Minister Ted McMeekin, the last speaker at the Ontario beef industry convention in London, announced $2.5 million over three years to help the Ontario corn-fed beef marketing program expand sales in North America and the Far East, including Japan.

photo: Ted McMeekin

“We have some more than anecdotal evidence that Ontario corn-fed beef is in the process of quadrupling,” McMeekin said after the announcement.

Dale Pallister, president of the Ontario Cattle Feeders’ Association, which operates the program, said the money would be used to prepare for expansion, helping the organization ensure it can offer a steady supply of beef. One of the challenges will be traceability. Another is to find ways of ensuring consistent, year-round supply and also establishing consistent year-round consumer demand.

“It’s a learning curve for everybody when you get to using this amount of product. To take and match supply and demand, it takes some planning both before and after to make it happen.”

 “The success of our program has been by taking small steps  . . .  we have to be able to make sure that we can supply the product to the consumers on a consistent basis and that the product is consistent so it’s a slow steady growth.”

Earlier in the day, Pallister and Jim Clark, Cattle Feeders’ executive director, noted the program had some good potential for growth, not only within Ontario but also outside provincial borders.

Last year, the program nearly doubled the number of grocery stores it supplied in the province when Loblaw Companies Limited, which already carried the product in some specialty chains, added it to its Loblaws and Real Canadian Superstore banners. The number of animals processed in 2012 grew to 242,087, compared to a lowly 27,628 in 2006.  

Last year a premium product category was added and is currently offered in some Loblaws and Zehrs stores. The category features product from the top three per cent of Ontario corn-fed beef cattle.

Clark noted that there is also potential for the premium product in wholesale and restaurant markets.

However, the brand does face some hurdles in the coming year. Economic pressures are changing people’s buying habits and tighter shopping budgets tend to affect protein consumption, Pallister said.

Drought and high grain prices are taking their toll. Clark said that while larger cattle feed lots are maintaining their volume, some smaller operations are disappearing. There is also concern that, with high grain prices, the amount of land under pasture is reduced and the number of feeder cattle available for finishing is shrinking.

High feed costs could lead to higher protein prices, Pallister added. Higher prices, though, could provoke consumer reaction. “If the consumer has some confidence in the economy, I think we we’ll be able to compete with other proteins,” he said.

There is also the challenge of promoting the brand to consumers that are overloaded with conflicting perspectives on issues such as animal welfare, food safety, organic versus conventional production, antibiotic use and the feeding of genetically modified corn.

Clark notes that images on the truck used to promote the program have been changed to emphasize the different types of grains that go into rations. “The one thing we’re finding was corn was a lightning rod. After the movie, Food Inc., people associated corn with Frankenfood, the rest of it and we were losing the battle even at the store level talking to people.” The new images have been successful in promoting more discussion with consumers, he said.

Greater producer presence during store visits also helps, he added. “That’s what the consumer wants to see.”

But there are no plans to change the name of the brand. “If we ever change that brand, that means that we’re not being true to ourselves,” Clark said. “We built the brand over 11 years, that was the name we picked; there’s a lot of attributes that go with the brand. But to be true to ourselves, we grow corn. We’re grain farmers. We’re proud of that. And why do we want to hide from that? Because if we do, then we’re not telling the consumer the true story or the real picture.”

Pallister noted that the organization was in discussions with a potential client outside of Canada that is interested in the product. “I’m not at liberty at this time to say who it is,” he said.

Pallister noted that while the program does not offer a premium for producers, it has improved the basis for Ontario cattle.  “It helps the whole industry to be sustainable if we continue to grow a program like this, producing upwards of 6,000 cattle a week or more than 50 per cent of the province’s cattle. That is a pretty significant impact.” BF