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Lethbridge Herald Newspaper Archives

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Lethbridge Herald (Newspaper) - March 29, 1971, Lethbridge, Alberta 14 - THI UTHMIDOI HttAlD - MentJay, Mart* If. Wf| Seminar forecasts continued growth Lethbridge is hub of booming beef business Lethbridge centres the giant feedlots produce more than 10 A fourth packing plant wheel of the beef industry in per cent of Canada's beef but scheduled to open in the city southern Alberta. also present a quality product, this spring will enhance the Not only do the south's vast recognized in the markets favorable three - point pro-grazing lands and king - size coast to coast.. gram of local production, pro- Seminar highlights Beef consumption in Canodo will increase about 50 per cent by 1980. Key to meet the demand is increased economies throughout the industry and increased calf-crop production. Alberta, the largest beef producer in Canada which supplies 37 per cent of Canadian consumption, is . located in the middle of the best markets. Alberta's pastiireland carrying capacity can be Increased by 50 per cent, accommodating another 600,000 head. Alberta's feed grain production will support a substantial increase in livestock feeding. More ownership of cattle by feedlots will be seen in the 70s. cessing and marketing. i building and marketing beef, others involved In the industry Speakers included Bud Olson, lot in Canada, a banker, and A beef seminar held in Left- reflecting the vital role of the spent the day in learning about federal agriculture minister. representatives of other m bridge Saturday at the end of industry in the economy of present operations and future A government economist, a ... www the week - long Agrorama, I southern Alberta. plana of the Alberta, Canadian meat packer's representative, P06** �* toe Tultry complet- dealt with the many facets of I More than 400 beefmen and and world beef business, toe operator of the largest tod- ed the full -day'a program. Prepare for increase, says Olson BUD OLSON Facts and figures Following are some facts and figures of interest which were presented at Saturday's beef industry seminar. - U.S. cattle imports, excluding breeding animals and cows for dairy purposes, decreased considerably from Canada but increased sharply from Mexico between 1960 and 1969. In 1960 imports from Canada were 233,415 head, dwindling to 187,687 in 1969. Imports from Mexico,' however, increased from 390,517 bead in 1960 to 810,387 in 1969. Canada dropped sharply in the 200499 pounds bracket, exporting 140,471 head to me U.S. in 1960 and only 18,522 head in 1969. Mexico, correspondingly, sharply increased its exports from 369,113 head to 773,829 head. Both countries lost in exports to the U.S. of cattle in the 700-pounds-and-over category, Canada declining from 60,865 head to 42,482 and Mexico dropping from 19,631 head to 4,099 bead. In the category of under 200 pounds, both countries exported more. Canadian exports rose from 32,079 bead to 126,683 head and Mexican exports increased from 1,773 to 32,459. - Per capita consumption of meat in Canada by 1980 is forecast at 106 to 144 pounds for beef, five pounds of veal, 54 pounds of pork, four punds of mutton and lamb, eight pounds of other types, for a total of 185 pounds of red meat. Add 55 pounds of poultry for a total per capita meat consumption of 240 pounds. Compared with 1967-69, beef consumption is expected to increase 20-28 pounds by 1980, veal is to drop by 1.2 pounds, pork is to increase by nine-tenths of a pound, mutton and lamb will be about steady, other meats are to drop by half a pound for a total red meat increase of about ZlVi pounds. Poultry consumption is expected to increase by 14 pounds resulting in a total meat consumption increase of about 413& pounds. - Per capita consumption of meat in Canada from 1949 to 1969 is as follows, showing the low, high, and 1968 consumption in pounds: Beef - 50.8 (1950), 86.7 (1968), 86.4 (1969). Veal - 5.1 (1969). 9.9 (1949). Mutton and lamb - 2 (1961), 4.2 (1968), 4 (1969). Pork - 45.4 (1954), 58.6 (1951), 51.9 (1969). Canned -4.2 (1955), 7.5 (1952), 4.6 (1969). Offal - 3.6 196546), 5.3 (1955), 4 (1969). Total red meat -127.4 (1950), 159.4 (1968), 156 (1969). Poultry - 15.8 (1949), 42.8 (1969). All meat-143.5 (1950), 199.1 (1968), 198.8 (1969). $295 million seen for development CoW'Calf is key The cow-calf operation will be the key to most future production growth in Canada and this expansion will be primarily in the Prairies where land is available, beef men from throughout Canada and parts of the U.S. were fold at a seminar here. Dr. Glen Puraell, director of the economics branch of the federal department of agriculture, sairi the average stockman lost money in the production of cattle in the 1960s. He emphasized a cow-calf operation has to be better than average to make money. In 1969 gross return per cow in Alberta was $151 compared with $103 the previous year. Feed costs, fixed costs and other variable costs resulted in total costs of $137 in 1969 and $91 in 1968. This resulted in returns to labor, management and risk of $15 per head in 1969 and $12 in 1968. FAST EFFICIENT SERVICE! The major expansion in the Canadian beef industry to meet the 1980 projection of 5.3 million bead of beef cattle can be expected to occur in southern Alberta, said K. R. Svein-son, manager of the agriculture department for the Royal Bank of Canada. He told delegates to the beef seminar in Lethbridge the beef industry will have animal values of $1.25 billion by 1980. Additional capital investment of about $295 million will be spent on buildings, equipment, pasture and hay land development. "There are basically five methods by which farmers and ranchers may obtain the capital they use in the business - savings, renting and leasing, purchase contracts, vertical integration (association with stock, feed, or equipment supplier), and borrowing," he said. "Capital accumulated through savings forms the foundation of the farm financial structure. Savings provide risk-bearing ability and a demonstrated capacity to earn and save, two very essential components of a strong credit rating." Renting or leasing, usually thought of as the second rung on the ladder of farm ownership, is a common way of getting additional capital. This system is run on a crop share, livestock share or cash lease basis, he said. There is relatively little risk for the tenant in the lease system. The purchase agreement, a written agreement where one party agrees to convey land or chattel farm property, including livestock, to another party for an agreed price, provides a means of low-equity financing. ' Possession of the property passes to the buyer while deed to the property remains with the seller to be delivered at some future date or upon payment of a specified amount. Vertical integration financing involves b r i n g ing together under central management two or more of the links in the chain of production and marketing. Mr. Sveinson said the Farm Credit Corporation remains by far the single largest government mortgage agency lending to farmers. "Chartered banks are by far the most important source of short and intermediate term credit for the livestock farmer and it is my personal guess the bulk of funds to be used in future livestock enterprises will come from these sources," he said. Mr. Sveinson advised all credit seekers to look to lenders who are dedicated to and serious about providing financial support for agriculture and for the beef industry. A lender who is concerned with the future of farming and ranching and who is knowledgeable about it and related new technological developments can contribute much to the success of your beef business. By RIC SWIHART Herald Staff Writer If south Alberta cattle producers are to maintain their status as the primary beef growenTin Canada, they will have to prepare to meet the projected increase in beef demand, Bud Olson, federal minister of agriculture Mid at a beef seminar Saturday. Speaking to about 400 people attending the beef seminar in the Lethbridge Exhibition Pavilion, he said the solution which is apparently clear is for the cattle producers to increase the supply of .feeder cattle from summer grazing. He said as the cattle demand has increased substantially in the past few years, there baa been an increase in the number of cattle which have been taken to market and an increase in the size of the animals. "There is a limit to the rate of this increase and this rate may have been reached already," he said. "Therefore, the number of cattle processed through the markets must be increased to keep up with the demand." He said a long term look at the situation indicates a need for an increase in the development of the cow-calf industry. "The short grass here gives growers the upper hand and nowhere in Canada or the world is better suited to the cow-calf industry," he said. "South Alberta has its own speciality." He said a good point in the seminar was the organizers looked at the practical applica-iton of technology and research and deviated from the old approach which placed production problems ahead of marketing research. He said if the cattle producers ever reach the level where there is enough beef to satisfy the ready market, the research done today will pay off for tomorrow. The relative success of the beef industry combined with recent grain marketing troubles and the glut of pork has brought several new growers into the industry. He said the beef industry has the best balance of economy. The growers were not hit as hard as the wheat growers due to the recent grain marketing problems but there was some effect on them. "All agricultural commodities can't be kept separate - there is always a link - and the link between the cattle industry and the grain industry is a strong one," he said. "If we solve the grain marketing problems, it will have a definite effect on the beef raisers." He said the federal Income Stabilization Plan will have a definite and beneficial side effect on the livestock industry because, by off-setting the boom and bust cycle in cash receipts from grain production, we reduce the short-term incentive for grain farmers to enter the livestock industry simply as a method of marketing their surpluses. He said a national marketing association could be an effective tool. 1 "But if any industry or group doesn't want such legislation passed, the federal government won't ram it down their throats," be said. "It would he political suicide for any government to pass legislation on any industry which didn't want that legislation." He said Canada has inter-ferred less than most countries in the western world in the marketing of agricultural products. "We recognize the strengths of the free enterprize system but we also realize the weaknesses," he said. "We would like to combine the best features of free enterprize with an attempt to atop the sharp swings in the livestock industry." He told the gathering wttfa the technology in the beef industry today, the prune beef growing area from Calgary south to the United States border and from Pincher Creek to Swift Current, can double the cow-calf industry. "Technology is the answer to increasing the beef production because all the acres for cattle raising are being used by someone, he said. 50 per cent boost by 1980 says federal economist GLEN PURNELL By Jim Maybie Herald Staff Writer Forecasts for 1980 predict Canadian beef consumption will climb about 50 per cent, nearly 900 million pounds above the 1969 consumption level, an estimated 400 persons were told here Saturday at a seminar on the beef industry in the '70s. Glen Purnell of Ottawa, director -general of the economics branch of the Canada de- Custom feeding seen on decline The beef industry in the '70s and in southern Alberta will experience a trend away from custom feeding cattle to more direct ownership of cattle by the feedlot, said J. Wilfley, president of Lakeside Feeders Limited at Brooks. Mr. Wilfley said he projects that the high amount of overhead in bookkeeping, customer relations and general administration costs will make it more profitable for the feeder to own the cattle. "On the other hand, cattle breeders who are producing that outstanding crossbred animal will turn to custom lots where they can retain ownership and receive the benefits of their crossbreeding programs," he said. "There will also be increased feeding of cattle by packers and this will not be a bad thing." He said the most common projection regarding the use of feedlots in the cattle industry is that we need increase our per-capita consumption of beef to 100 pounds per capita from 86 by 1980. The general economy of Canada will make this very difficult to achieve because the consumption of beef has declined slightly the last three years, he said. Beef output in the '70s will continue to increase but not at as strong a rate as in the 1960s. He tried to explain some of the trends in feedlot operations for Canada, including: -a trend to larger feedlots which will contain from 1,000 to 25,000 cattle. -banks will prefer to take risks with operators who can live with the industry's structure continually through all its ups and downs. -feedlot operators will feed calves only and yearlings will go the route of the two-year-old cattle. In order to maintain the stability that is necessary to the industry, it will be necessary to have a width of range in weights and length of feeding period. -as feedlots become larger, the relationship between the veterinarian and the operator will change. Animal drugs will be in the forefront. The problem of feedlot waste will prompt total confinement. -changes in the grading system' will send more dollars back to the producer who raises the most efficient feeder calf. The majority of the cattle will continue to be sold on a live basis, with a slight increase in rail grading. Plants vital From the beef industry standpoint, covering all steps beginning with livestock and ending with the consumer purchase, the highest degree of central plant processing will present the best opportunity for large scale efficiencies, said Don Read, meat operations director for Federated Co-operatives Limited in Saskatoon. U.S. offers largest market, best prices The U.S. and Canada have the greatest potential for increased beef consumption, beefmen were told here Saturday. The U.S'. market is the largest in the world for cattle or beef and at the same time the U.S. has the greatest potential to pay the best prices. In Europe the largest and potentially fastest growing market is the European Eco- CARPET and UNO (Complete Installations!) Free Estimates! No Obligation! PHONE 327-8578 CAPITOL FURNITURE "The Carpet House of the South" nomic Community, Italy and Germany, said Dr. J. J. Rich-ter, professor of international trade and marketing, department of agricultural economics and rural sociology, University of Alberta. The most revolutionary changes in consumption patterns for meat have already taken place and fewer upheavals will occur in the future, he said. However, changes will inevitably occur in developing countries where the per capita incomes are presently low, preventing people from buying higher priced food items such as beef, he said. As people get richer they are LEARN TO MASTER . . . THE ART OF MAKE-UP Learn How . . . Easily, Delightfully . . . With Our Compliments. I teak �K. T MERLE NORMAN COSMETIC BOUTIQUE J "Home of the Personal Beauty Vlw^/^ COLLEGE MALL - 328-1525 inclined to spend more on food. It has been calculated that a one per cent increase in income will result in four-tenths of a per cent increased expenditure on beef. The ratio in Japan, however, is that for every one per cent increase in income, two per cent more is spent on beef, one of the highest ratios in the world. Japan now consumes about four pounds of beef per capita and is far from the saturation point. Dr. Richter suggested that Canadians looking at the Japanese market should focus their attention on the question of whether there is a potential market there for the type of meat which can best be produced here. He suggested Canadians should steer clear of Kobe beef and should not duplicate efforts which lead to the successful establishment of the meat trade from Australia and New Zealand. Kobe beef is raised in Japan, on a very special diet -almost hand fed. To understand the Japanese market, he suggested, it would be beneficial to investigate ways in which competitors manage to overcome trade barriers and how they pene- trate the rather closely knit system of traditional market channels. "People in the world prefer beef," he said. "There is no substitution between beef and pork." The big problem is of an institutional nature, with governments. Dr. Richter said the importance of opening markets must be impressed on the Canadian government The Canadian beef industry must get its position established in foreign markets now if it ever hopes to export in the future. Producers can't do it alone, he said. It is necessary to get the government to stand behind producers and packers. Go after even small orders to get established, he suggested. Canada has to be represented in the various beef importing nations to get a foothold if it is ever going to play any role in the international market. He suggested producers join packers and help the government establish a permanent trade setup in Hamburg or Milan. Mexico got a small start in the U.S'. and now is exporting about one million cattle a year. Canada's exports to the U.S., in the meantime, have dwin- dled to about a fifth of Mexico's. "Relatively high prices in the domestic market provide an incentive to stay at home, particularly when international trade is hampered by tariff and quota restrictions," Dr. Richter suggested. Dr. Richter listed potential markets as Canada, U.S. Italy, Germany, EEC and Japan. The U.K. and the rest of western Europe may not be able to keep pace with the EtEC in economic development but "a potential market exists and should not be neglected." NOW TAKE A SENILE LAXATIVE From the makers of TUMS* Take gentle-acting, Nt... Nature's Remedy! There is, no letdown, no uncomfortable after-feeling. M'� an all-vegetable laxative. For over' 70 years, Nt has been giving folks' pleasant, effective relief overnight Nt tonight... tomorrow alright! IfGUUt'CHOCOUrf COATU'JUNtOM partment of agriculture, said the cow - calf operation will be the key to future output expansion. An annual increase in cattle slaughter of 3.5 to 4.1 per cent will be necessary to meet the 1980 demand. The future of the Alberta industry, he said, will depend on economies of production and marketing. Most of the methods used by producers in the 1960s to satisfy a 45 per cent increase demand have reached or are reaching their upper levels, he said. Filling the demand in the '70s will depend upon larger calf  crops and production efficiency in all phases of the beef industry. In 1960 - 69, Canadian consumption of beef and veal increased from 76.9 pounds per capita in 1960 to 91.6 pounds in 1969 because of higher income levels and a population growth exceeding 1.5 per cent annually- Production increased from 1.26 billion pounds to 1.8 billion pounds by: feeding out a higher percentage of animals; feeding these animals to a higher weight; selling less veal; reducing the dairy herd; and reducing the beef herd between 1965 and 1968. By 1980 it is estimated consumption of beef and veal will hit almost 2.7 billion pounds. Alberta, the largest beef producer in Canada, supplying 37 per cent of Canadian consumption, is located between large growing markets in the east and west. Afore than 50 per cent of the cattle slaughtered in the province is available for export from the province. Assuming Alberta supplies the entire slaughter - consumption deficit in B.C., 80 per cent of Alberta's beef is available for shipment to eastern Canada and other markets. Most of this 30 per cent goes to Montreal and accounts for 40 to 50 per cent of Montreal's beef requirement. Future exports from Alberta to the U.S., Dr. Purnell said, will depend largely on the domestic supply - balance and prices relative to the U.S. market. "The potential is there, but only when our prices are down to an export basis." The size of Canada's world beef trade is small. Recently, special shipments have been AWARD WINNER J. P. (Joe) Griffin Mr. Keith Bickerton, Areo Manager of Engineered Hornet, Lethbridge, is pleased to announce that Mr. Griffin ef the lethbridge area has been named Engineered Homes Top Salesman In Canada for the month of February, 1971. Mr. Griffin is a very worthy recipient of the February bonus prize with new home sales in that month, in excess of $154,000.00.  sold to Japan on a trial basis, but such shipments would need to be much larger before they would become economical, he said. "We must also keep in mind that competition is keen in world markets." Through reseedlng unimproved pasture and improved range management, Alberta could increase its pastureland carrying capacity by 600,000 head to 1,750,000 cows, Dr. Purnell said. A study shows Alberta has 19.3 million acres used entirely for pasture of which 85 per cent is unimproved, phis 6.3 million acres of crop aftermath used for grazing. Most of the permanent pasture is located in southern Alberta. The southern portion of the province.he said, has the most potential for herd expansion through rangeland improvement. Qrylot feeding will become more economical in regions as arable land prices become too high for profitable operation of cow - calf enterprise. Alberta's feed grain production will support a substantial increase m livestock feeding. The beef industry must prepare for the future to produce adequate volumes efficiently to compete with meat analogs and substitute meats at the. retail and processing levels, Dr. Purnell said. "The responsibility to meet this challenge rests with the producers." As beef production becomes increasingly complex and com* petitive, he said, the progressive producer will require a working knowledge in all aspects of beef production and marketing. SIMPSONS Solves Hot Water Problems PRICES START AS LOW AS Call 328-9231 For Fast, Low Cost Installation ;