This is part one of a three-part series. You can find part two in the September issue of ABP, and on ABP Daily.
ABP’s fiscal situation is in flux. The substantial check-off refund rate is limiting our ability to execute programs under priority areas and support external organizations at levels we have in the past.
With a 46 per cent refund rate in 2020, the Board of Directors was forced to make some tough decisions about the future of our industry organization.
“We finally came to a realization that this was the year that we really have to make some drastic cuts… ABP couldn’t keep going on the budget we had last year,” says Melanie Wowk, ABP Chair. “The amount of time that the staff and Brodie [Haugan, ABP Finance Chair] put in was unlike anything we’ve ever gone through before. It took some soul searching on the part of the executive and the board to figure out what we were going to do.”
Directors went through several draft budgets and scheduled dedicated board meetings to discuss the direction of the organization, and where producers would see the best return on check-off dollars – while keeping ABP as whole as possible.
“The biggest thing we had to consider was to truly understand where we were and if we continued on this path without any changes, it was evident that ABP as we know it would no longer exist,” says Brodie Haugan, ABP Finance Chair. “We were trying to wrap our heads around – as producers and as executive – where we felt comfortable directing ABP so that we would have a stronger industry for everyone.”
As for the refund rate, Haugan suggests approaching it from a different perspective.
“It’s a loaded number. I don’t believe it illustrates properly how well supported ABP actually is. 46 per cent is the number of dollars refunded; it doesn’t represent the number of producers that keep their money in or pull their money. Those percentages would be vastly different.”
As a result of our financial situation, we’ve had to cut funding to external industry groups who have relied on ABP since their inception. The Simpson Centre, a Canadian agricultural policy research centre, has received annual contributions of $50,000 in the past – this year, it was removed from the budget.
Cows and Fish, Alberta Farm Animal Care, and AgSafe Alberta came to fruition to fulfill necessary gaps for Alberta’s beef industry. ABP has been involved in supporting these organizations since they were established. This year, all three saw their funding from ABP reduced by half.
Significant adjustments were also made to ABP communications, marketing, and education.
“In a time when the industry needs to keep moving ahead, we have a lot of issues to deal with… we have to start figuring out how we are going to survive as an industry,” says Wowk. “The less money industry has access to, the more we’re limited on how we handle issues, and work on new ideas and new ways of doing business.”
ABP is committed to contributing 53 cents of our $2 provincial check-off to funding the Canadian Cattlemen’s Association (CCA) until June 2023. With the current refund rate, that contribution equates to 90 cents of the $2 per head marketings.
The $2.50 national check-off portion of the total $4.50 supports Beef Cattle Research Council, Canada Beef, and Public and Stakeholder Engagement. CCA is directly funded through the $2 provincial check-off dollars.
Once this commitment is honoured, we’ve made the extremely difficult decision to request that ABP be able to fund CCA based on dollars retained.
Alberta is currently the largest contributor to CCA, and this move will see their annual budget cut by almost $1 million. CCA has two years to prepare for the shift from gross dollars per head to retained marketings. This will limit CCA’s ability to address issues related to market access and international trade, policy, government relations and sustainability. When crisis hits and the dollars aren’t there, it is already too late if Canada’s beef industry doesn’t have access to a contingency plan with funds in place.
“I want producers to know how much time we’ve spent on this and how much soul searching we’ve done as an organization. I want them to know how much we’ve had to cut, the work that is put into the provincial association, the research, the marketing and advocacy, the government relations. If we aren’t able to continue with this work, it’ll be a sad day for producers,” says Wowk.
“For such a large economic driver in this province, we need to start putting money back into the industry for ourselves. We have to drive our own industry.”
This article was originally published in the September 2021 issue of ABP magazine. Part two (an in-depth look at the programs and organizations impacted) will appear in the November 2021 issue of the ABP magazine, and part three will appear in January 2022.
You can read and share articles from the magazine on ABP Daily, under the ‘ABP Magazine’ tag.