Measuring The Price Impact of OCFB

Measuring The Price Impact of OCFB

Researchers at the George Morris Centre have found that the  Ontario Corn Fed Beef brand is having a positive impact on cattle prices in the province. The Ontario Corn Fed Beef Program commissioned this research project to assess whether there has been a pricing and market impact in Ontario as a result of the program.

The full report by Kevin Grier, senior market analyst, and Al Mussell, senior research associate, is available at the George Morris Centre website.

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Summary and Conclusions

After many years of difficult and challenging work, the Ontario Corn Fed Beef program is now widely hailed across Canada as an example of a successful agricultural marketing program. It is a preferred and demanded product by consumers and leading retailers and food service businesses.

As a result of consistent and widespread marketing efforts the product is now widely known, accepted and merchandised across the province and even in the U.S. Ontario Corn Fed Beef has created its own demand and its own niche market within North America. It is not easily or willingly substitutable with other beef as it has acquired unique and differentiated attributes such as local and consistent high quality eating experience.

As a result of this long term effort and the accomplished results, the cattle producers in Ontario have attained pricing gains that can be attributed to the Corn Fed Beef program. Based on simple analysis of price flexibility it can be logically asserted that the Ontario Corn Fed Beef program is generating up to $2/cwt or about $26/head in added revenue to Ontario cattle producers.

Producer and packer participation in the program comes with the benefits of creating a product in robust high demand. The costs of participation are not any higher than those costs borne by any contemporary and innovative cattle feeder and packer.

In addition, producers are compensated by $3/head for the record-keeping associated with the program. As such there is little or no realistic reason for not participating in the program.

Furthermore, and perhaps ironically, by extension of the pricing impact argument noted above, the greater the participation in the program, the greater the likely positive pricing impact on Ontario cattle.

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