The Board of Directors of the Ontario Cattlemen’s Association (OCA) has just concluded a one-day meeting in Guelph, Ontario. At the forefront of discussions was the current state of the beef industry in Ontario. All of the Directors of the OCA are producers and are well aware of the current collapse in pricing. Primary factors acting to decrease the price currently are:

• Excessively high inventories of pork and other proteins in North America

• The recession affecting purchasing power of consumers in North America

• A rise in the Canadian dollar, which some Canadian banks are forecasting to continue to climb toward par by year-end

• Government regulations like the enhanced feed ban which make processing in Canada more expensive

• Implementation of Mandatory Country of Origin Labelling (mCOOL) in the United States

• The dairy cow buy-out program in the US

The magnitude of the impact of currency is easily calculated. Using September 15th data, finished cattle in the US were $83.72 per cwt, finished cattle in Ontario traded at $80.89 per cwt, and the dollar was trading at $1 Canadian equal to $.933 US. Using these numbers, the basis in Ontario was $-8.84. If we had an eighty-five cent dollar and applied the same basis, we would see an increase in the price of a 1400 pound steer by $122.70. However, if the dollar went to par, which some banks are forecasting for year-end, with these prices and the same basis, losses would deepen by a further $84.14 per head. The impact that currency has on our profitability and selling price cannot be ignored.

Throughout the year OCA Directors have met with Ministers, Deputy Ministers and various MPs and MPPs, to explain the situation which we saw unfolding. Just last week four Directors were in Ottawa bringing your issues to the forefront with your elected MPs.

OCA is monitoring the implementation of the Alberta Cattle Price Insurance Program, to assess its ability to help Ontario producers. Two Directors are participating on a four-man panel set up by the Canadian Cattlemen’s Association (CCA) to examine the program and suggest changes to it, as it becomes a national lobby. The Alberta program was launched in mid-September, and details are now available on the Agriculture Financial Services (AFSC) Website. Producers can view this program at , and decide how a program like this might work for their operation.

Recently, at the national beef value chain roundtable, OCA was successful, in collaboration with other eastern producer groups, in raising issues around implementation of costly processing regulations, with officials from the Canadian Food Inspection Agency (CFIA). These regulations work to lower the price paid to producers, and threaten the viability of processing businesses in Eastern Canada. The Roundtable unanimously endorsed a resolution to have the CFIA address this situation.

We need you to help too. Please call your MP and your MPP and let them know how this current situation in our industry is impacting you. If you are unsure of what points you might discuss, please call the OCA office for their input. As well, make sure that you, your friends and your relatives all ask for Ontario beef where you shop, and where you eat. If there is only USDA product on the shelves, ask the store manager, "why?"

Your Directors are caught in the same price/cost squeeze as you all are, and are trying to take actions to improve the industry.

Sincerely,