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2012 R eport to M embers

messa g e from

the president Ray Armbruster President

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ver 2011-2012, some of the ongoing issues have been challenging, but our directors and staff have worked hard to lobby governments to bring important policy forward. You can read about these issues in the committee reports and the reports from our national organizations. Looking at concerns in Manitoba, flooding and TB are chronic issues that have taken a toll on producers. MBP has made these issues priorities and they need to be resolved. We value the announcements of support for the 2011 Flood to help producers through that very difficult time, including help for our feedlot sector which is often forgotten. However, MBP is disappointed about the slow delivery of those funds to producers. More concerning is the fact that the continuation of support through 2012 that was promised to producers has not been forthcoming. MBP has worked hard to lobby governments for this promised compensation that to date has not come forward.

There are chronic issues in all parts of Manitoba that are limiting our opportunity for growth. TB in the Riding Mountain Eradication Area (RMEA) is one chronic issue that has been a priority for us. MBP lobbied for the appointment of a TB Co-ordinator to help ensure government departments are working in the same direction and meeting their established benchmarks. We have been pushing for financial support for producers and eradication of TB in the province. MBP has lobbied all levels of government and agencies to meet the goal of eradication and return some normalcy for producers. MBP provided leadership on a new challenge that came forward over the past year, the Community Pasture Program. MBP facilitated producer leadership and helped create a path forward that will ensure the land in the Community Pasture Program remains available to beef producers for grazing. Our work will also preserve the environmental integrity of that landscape for future generations. We have experienced significant gains on market access and trade promotion. Countries like China, the Philippines and Japan are more open to Canadian beef today because of the efforts of

your associations. We strongly lobby both levels of government to expand trade opportunities. We have committed to new initiatives that will help us meet the need for high quality food and protein. We are seeing new ways for producers to do business such as through the Beef InfoXchange System (BIXS), and development of a price insurance program under Growing Forward 2. Governments and industry are investing in research to improve competitiveness, production methods, feed efficiency, and develop new feed grains and forages. In the coming year we will continue to work on the development of an Ecological Goods and Services (EG&S) program that will, if designed right, help preserve forage and grazing lands as well as meet some of society’s environmental goals. MBP’s directors, who are all beef producers themselves, along with our staff, are committed to the beef industry in Manitoba and to the families who raise beef. Thank you to everyone for their work in 2011-2012 and thank you to all of our beef producer members for your support. I hope you will attend the AGM and be in contact with MBP in the coming year on the issues that are important to your operation.

board of directors 2 0 1 2

Ray Armbruster President District 7

1st Vice President District 9

Mac McRae

Trevor Atchison

Thereza Zuk

Kim Crandall

Ted Artz

Dave Koslowsky

Brad McDonald

Heinz Reimer

Ramona Blyth

Glen Campbell

Caron Clarke

Bill Murray

Stan Foster

District 3

District 4

2nd Vice President District 6

District 5

Treasurer District 10

District 8

Secretary District 13

District 11

District 1

District 12

District 2

District 14

MA NITO BA BEEF P R O D UC ER S

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Committee REPORTS

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a n i mal h e alth committee

he Animal Health Committee has been busy on a number of fronts. The presence of bovine tuberculosis in the vicinity of Riding Mountain National Park has had a negative impact on Manitoba’s cattle industry for more than two decades. Although fewer cattle are being tested because of risk-based assessments, the impact of testing on affected operations has not diminished. MBP has been working diligently with federal and provincial officials to develop improved strategies for dealing with bovine TB that will ultimately lead to its elimination. A key priority for MBP has been lobbying governments to create a new position of TB coordinator to help oversee efforts to eradicate the disease from the Riding Mountain Eradication Area. Numerous federal and provincial departments and agencies are involved on this file, and MBP has long believed a more coordinated approach is needed. In December 2012, Dr. Allan Preston was appointed TB Coordinator for a one-year term. A veterinarian and a former deputy minister of agriculture with the Manitoba government, Dr. Preston brings considerable experience and expertise to this position. He will be employed by the CFIA but operate at arms-length from governments. MBP appreciates the efforts of the ministers involved in bringing this initiative to fruition including Hon. Gerry Ritz, Minister of Agriculture and Agri‐Food; Hon. Peter Kent, Minister of the Environment (Minister responsible for Parks Canada); Hon. Ron Kostyshyn, Minister of Agriculture, Food and Rural Initiatives; and, Hon.

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Gord Mackintosh, Minister of Conservation and Water Stewardship. Another critical tool in the bovine TB eradication effort is wildlife sampling. MBP, working with the Manitoba Wildlife Federation (MWF), approached the Manitoba government offering strategies to ensure hunter-killed sampling targets are being met. Suggested approaches involved a longer deer season in the Riding Mountain area, more deer tags and coordinated efforts to encourage more hunting in the region. MBP was pleased when in November 2012 the Manitoba government extended the hunting season in the Western Control Zone and provided 500 free deer hunting licences. Hunters who proved they had turned in a sample for testing were allowed another licence. To help encourage increased deer hunting and sampling, MBP worked with the MWF to match interested hunters with interested landowners in the zone. The combined efforts were a major success with sample numbers up sharply over previous years. Bovine TB testing creates considerable costs for producers. MBP is providing $1 per head to affected producers to help defray these costs, but provincial contributions toward the mustering fee have ended. MBP will continue to pursue federal and provincial government contributions to provide full compensation for producers participating in the testing program. MBP continues work on other animal health issues, including anaplasmosis and liver flukes, among others. MBP is requesting the Government of Manitoba have the provincial veterinary diagnostic services laboratory accredited for anaplasmosis testing. It is important that there is

capacity in Manitoba to carry out required testing when it is no longer done at federal laboratories. This will occur when anaplasmosis is no longer classified as a reportable disease. Raising awareness of liver flukes is another priority for MBP. Initially diagnosed in southeastern Manitoba, there are concerns these parasites may be present in cattle in other regions. MBP is working with veterinary clinics to ensure swift access to treatment products via the Emergency Drug Release program. MBP will continue to lobby for reforms to the Veterinary Drugs Directorate (a division of Health Canada) to help ensure effective products are licensed for use in Canada in a timely manner, particularly if needed to control an outbreak or emerging diseases. In closing, I thank the members of the Animal Health Committee for their diligent work this year. We have made considerable progress on some issues and will continue our efforts on behalf of Manitoba’s cattle producers. Respectfully submitted, MAC MCRAE Animal Health Committee Chair Heinz Reimer, Vice-Chair Ted Artz Kim Crandall Bill Murray

C o mm u n i cat i o n s committee

anitoba Beef Producers (MBP) has continued to develop upon its communications with beef producers and partners this fiscal year. MBP has been working to get news about beef producers’ concerns and activities out in the mainstream in order to better inform governments and the public of our issues. We do this through the editorial pages of newspapers, Facebook and Twitter and the other tools of modern communication. One major focus for MBP has been ensuring our news releases, commentaries and event information is published and broadcast by rural and urban media. In the past year, MBP representatives

did numerous media interviews and commentaries on issues such as the impacts of flooding and drought, Growing Forward 2, bovine TB, community pastures, environmental stewardship, predator problems, traceability, the XL Foods situation and more. General Manager Cam Dahl also continued his regular column in the AgriPost newspaper, was selected as a featured blogger on mySteinbach.ca, and from time to time appears in many of your local papers as a guest columnist. The committee is pleased with the positive results over the past year and will continue to make this a priority. The committee undertook an initiative to connect with producers who refund the check-off in order to encourage support for MBP. We have

also reached out to our members in the feedlot sector as the perspective of this valuable link in our production chain must be included in our lobby efforts. In addition to producers, we connected with our industry partners such as dealers and auction marts. Information about the issues and policy MBP is focusing on, the benefits of investing in the organization, upcoming event information, and submitting feedback was sent via mail-outs in order to reconnect with these important industry stakeholders. This strategy has provided positive results in terms of membership support, increased numbers at MBP’s district meetings, and increased partnerships with other sectors of our industry. Continued on page 4 MA NITO BA BEEF P R O D UC ER S

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Committee REPORTS Continued from page 3 As a pilot project, the committee also agreed to actively offer the annual report to members through Cattle Country, in order to reach all producers on our mailing list. MBP has invested in the redesign of its website after determining significant improvements were needed to meet the needs of producers, consumers and the general public. The new website will soon be in use and promises to be an informative, wellorganized site to provide regular new and practical content. Cattle Country continues to be the major vehicle to get information to our members and the committee welcomes ideas for articles and comments about the publication. MBP wants to ensure all beef producers are signed up to receive their free subscription. If you know someone who is not receiving it, such as young producers or new producers to the province, please contact us to add them to the mailing list. It has been a busy year promoting beef to consumers and educating the public about our sector. On the beef promotion side, MBP’s Beef Expert Adriana Barros kicked off the new season of the Great Tastes of Manitoba cooking show on CTV with a new host, Ace Burpee of 103.1 Virgin Radio. The videos and recipes are available at www.foodmanitoba.ca/great-tastes-of-manitoba. In 2012, Adriana also provided beef demos on CTV Morning Live and Breakfast Television to promote Manitoba beef in

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MBP helped present Dr. Temple Grandin, Animal Welfare: The Right Thing to Do, in Brandon on May 23. The crowd of over 700 people gathered to hear from the world-renowned animal advocate. This was an outstanding opportunity for industry and the public and to discuss animal welfare concerns and goals in a public forum. This event was a “highlight of the year” for many at MBP. The committee looks forward to working to continue to raise the profile and issues of MBP in the coming year while we represent beef producers through communication, education and beef promotion. Respectfully submitted, TED ARTZ Communications Committee Chair Kim Crandall, Vice-Chair Stan Foster Dave Koslowsky Theresa Zuk Ramona Blyth

cr o w n la n ds committee

t has been a frustrating year for the committee as it tried to make progress with the Government of Manitoba on the issue of informed access to agricultural Crown lands. MBP has long sought changes to provincial policies to ensure producers know when someone is going to access their leased Crown land. The rationale is simple: knowing who comes onto our land is integral not only for the safety of our animals, but also for those who could come into contact with them. Moreover, a fundamental principle of on-farm biosecurity programs is that producers should limit access to their operations whenever possible. This is essential in reducing the potential to spread livestock diseases and to transfer materials, like noxious weeds. A foreign animal disease outbreak could be devastating to our industry. As well, the environmental and economic damage caused by weeds like leafy spurge is considerable. Unlimited public access to agricultural Crown lands can also hamper efforts to limit livestock/ animal encounters in the Riding Mountain Eradication Area. This is very problematic given the costly multi-year efforts by producers and

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the mainstream. Key public outreach events that MBP attended include: Agriculture in the City at The Forks, the Royal Manitoba Winter Fair in Brandon; Agriculture in the Classroom’s events (Amazing Agriculture Adventure, Amazing Rangeland Adventure, and National Agriculture Literacy Month); Manitoba Ag Days, as well as the Go4Health Expo and Cattle Tales at the Red River Exhibition. Cattle Tales is an exciting new highlight at the Red River Exhibition which features an interactive beef experience as part of Touch the Farm. MBP contributed information on beef production, products and the people behind the family ranches. Thanks to the Red River Ex, together we developed and presented an inviting walk-through display taking visitors through the journey of beef from pasture to plate. The experience allowed the public to meet producers and other industry experts, and ask questions about the practices that enhance animal welfare, ensure food safety, protect natural resources and improve health and nutrition for consumers. In 2012, MBP became an official partner with the campaign Agriculture More Than Ever, created through Farm Credit Canada, to shift perceptions and create positive dialogue about Canadian agriculture. MBP helped our directors and other producers use videos to tell their positive stories about why they are working in agriculture. Visit the website www.agriculturemorethanever.ca for more information.

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federal and provincial governments to eradicate the disease. Finally, producers have borne the cost of property losses such as fences, forage and livestock because of improper behavior by the public when accessing agricultural Crown lands. MBP continues to pursue the following changes to agricultural Crown lands policies: notice to the lessee is required before public access; permission from the lessee is required before public access; and, lessees should be given the ability to discourage public access where there is high risk to public safety. MBP participates in the Agricultural Crown Lands Act Stakeholders Committee. It examines matters such as rental rates on agricultural Crown lands. In fall 2012 it was recommended that the rental rate be increased by eight per cent to $2.13 animal unit month (AUM), up from $1.97 AUM. This would apply for the triennial period of 2013-2015. MBP objects to this proposed increase and any further increase to the rental rates for agricultural Crown land until the Government of Manitoba implements an informed access policy. MBP welcomes the opportunity to participate in sessions of the Agricultural Crown Lands Act

Stakeholders Committee to develop the required informed access policy. We would be willing to discuss changes to the lease rate when this policy has been fully implemented—but not prior to this. Finally, MBP continues to lobby that Manitoba Agriculture, Food and Rural Initiatives be given the sole responsibility of approving the sale of Crown lands to the lessee for agricultural production. The goal is to accelerate the approval process which currently can take years. This is an ongoing concern for producers and MBP is still pursuing this important change. In closing, I would like to thank the committee members for their diligent work this year. Respectfully submitted, KIM CRANDALL Crown Lands Committee Chair Bill Murray, Vice-Chair Ramona Blyth Caron Clarke Stan Foster


Committee REPORTS

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DOMESTIC AGRICULTURE PROGRAMS committee

roviding input into what the next suite of farm programs will entail and dealing with the effects of disasters dominated the work of the Domestic Agriculture Programs Committee in 2012. For more than a year, federal, provincial and territorial officials have been negotiating what business risk management (BRM) and non-business risk management programming will look like when Growing Forward expires in 2013. In September, a new five-year agreement was struck for Growing Forward 2 (GF2). It covers key areas including business risk management, food safety and traceability, business development, the environment, markets and trade, and research. MBP participated in several GF2 consultations. MBP’s top priorities were: • Implementation of a cattle price insurance program to give real risk management for beef; • The importance of increased spending for research and innovation; • The need for improved market access; and • The importance of adequate funding for nonBRM programs like Verified Beef Production and traceability. MBP is generally pleased with the GF2 agreement and is providing input as the bilateral agreement between the federal and provincial government under GF2 is being developed. Our goal is to ensure that Manitoba beef producers’ priorities remain in the final agreement. GF2 includes a commitment by governments to examine the feasibility of livestock production insurance coverage. MBP has vigorously lobbied for a market-based cattle price insurance program we believe would be more effective than existing BRM programs.

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MBP is providing input into what shape such an insurance program should take. It should benefit all sectors, including cow-calf, backgrounder and finisher. It is hoped it will be available for feeder cattle in fall of 2013. It is expected that the earliest cow-calf producers could see benefits from an insurance program would be for the 2014 calf crop. GF2 includes a 50 per cent increase in support for non-BRM programs. MBP is seeking ongoing support for several non-BRM programs including food safety, biosecurity and traceability standards and systems. These types of programs help boost confidence at home and cultivate market access outside of Canada. MBP is providing input on the types of environmental BRM programs that would be most beneficial to producers under GF2. Producers provide valuable ecosystem services as they manage the landscape. MBP is again requesting that governments make an ongoing financial commitment to ecological goods and services programming. There is continued support for the Advance Payments Program in GF2. However, beef producers still face challenges accessing this cash advance program if they are not enrolled in AgriStability. MBP believes participation in a cattle price insurance program should be an option, like Agri-Stability, for producers wishing to enroll in the Manitoba Livestock Cash Advance Program. The focus on increased market development and access under GF2 is welcomed. MBP also appreciates the emphasis on research. We believe priority research areas should include feed, nutrition, production techniques, animal health and welfare, and genetics, to name a few.

MBP continues to lobby for the timely payment of compensation related to the 2011 flood. This process has been too drawn out and it is having a negative impact on Manitoba’s beef industry. Drought was a problem for some producers in 2012. MBP welcomed the federal government’s decision in late November to provide tax deferrals for local producers affected by drought. Eligible producers in designated areas can defer income tax on the sale of breeding livestock for one year to help replenish breeding stock in the following year. MBP is pursuing forage and transportation assistance programs to assist producers dealing with the flooding or drought conditions. Time is of the essence for announcing these programs. It is MBP’s position that ad hoc programs are not the best way to deal with disasters. The Disaster Financial Assistance program must be changed to meet the needs of modern agriculture operations. Key amendments should include the removal of eligibility restrictions based on a producer’s revenues and potential artificial geographic restrictions. I have certainly appreciated the efforts of the committee members this past year. As we develop our policy positions, MBP welcomes producer insight into the various government programs that affect your operations. Respectfully submitted, TREVOR ATCHISON Domestic Agriculture Programs Committee Chair Caron Clarke, Vice-Chair Ramona Blyth Brad McDonald Mac McRae

EN V I R ON M EN T committee

t has been an extremely active year for the Environment Committee as MBP continues to pursue environmental policies based on sound science which recognize the tremendous level of ecosystem services the beef industry provides. Much of the committee’s work revolved around water management. It involved lobbying to resolve outstanding issues from the 2011 flood such as pasture and forage losses and the need for debris cleanup. MBP will continue to seek programs and services to help producers with the recovery process and to have outstanding claims paid as quickly as possible. In February 2012, MBP director Caron Clarke was appointed a member of the Lake Manitoba and Lake St. Martin Regulation Review Committee. Its mandate includes making recommendations on “the current range of regulation of Lake Manitoba and Lake

St. Martin and the rules of operation for the Fairford Water Control Structure,” as well as “the most acceptable and practicable range of regulation within which the levels of Lake Manitoba and Lake St. Martin might be controlled.” The Committee’s report is expected early in 2013. Clarke is also MBP’s representative to the Lake Manitoba Flood Rehabilitation Committee and Trevor Atchison sits on the South West 2011 Flood Strategy Committee. MBP appreciates the opportunity to provide industry insights and concerns to these committees. MBP made a detailed submission to the 2011 Flood Review Task Force. It is examining a broad array of issues including flood forecasting, the operation of various flood control works, flood preparedness, and flood mitigation, among others. This report is

expected in early 2013. When it comes to provincial water management policies, it is MBP’s position that long-term flood mitigation strategies must consider all of Manitoba’s water. Further, lake outlets must match inflows. It is MBP’s belief that the existing infrastructure and control structures do not allow for appropriate upstream and downstream water management. The Government of Manitoba has launched a Surface Water Management Strategy initiative. It is examining matters such as water quality and quantity, wetland retention, flooding and drought, among others. MBP took part in two summits related to this initiative. Recent floods and drought have both had a negative impact on Manitoba’s beef industry. MBP will Continued on page 6 MA NITO BA BEEF P R O D UC ER S

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Committee REPORTS Continued from page 5 continue to seek a long-term watershed management plan to ensure that the effects of future floods and droughts are minimized whenever possible. Participation by our neighbours in the Lake Winnipeg watershed will be essential to this strategy’s success. In June, the Government of Manitoba unveiled TomorrowNow – Manitoba’s Green Plan, an environmental blueprint with more than 100 initiatives to be rolled out over eight years. It covers many areas including a potential ban on the cosmetic use of pesticides, updating provincial species at risk laws, climate change, water conservation, drought management, and a new regulatory system around drainage and water retention. MBP anticipates new legislation or regulatory changes will arise from the Green Plan and will seek to ensure that policies are based on sound science. In late October, MBP made a detailed submission to the provincial government on the Green Plan. MBP outlined its core principles for the development of environment policies including:

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position around ecological goods and services initiatives. The Manitoba government sought public feedback on the Nutrient Management Regulation in late 2012. MBP provided input about the regulation’s impact on producers and how it could be modified to help address these concerns. Again, MBP is seeking a science-based approach to the development of regulations affecting the livestock industry. I would like to extend my thanks to the members of the Committee for their continued efforts on behalf of Manitoba producers on such a diverse range of issues related to the environment. Respectfully submitted, GLEN CAMPBELL Environment Committee Chair Caron Clarke, Vice-Chair Kim Crandall Bill Murray Stan Foster

F EE D L O T committee

ver the past year, the Feedlot Committee examined issues ranging from business risk management programs, to government regulations to trade and market access. The committee is comprised of representatives from both Manitoba Beef Producers and Manitoba’s feedlot sector who are from outside of the MBP board. It offers an important perspective on local, national and international issues that impact the viability of our local feedlot operations. A local issue that had a significant impact on feedlot operations was the 2011 flood and excess moisture conditions. The Feedlot Committee provided valuable information about the type and level of damage incurred. This was used as the Manitoba government developed a compensation program. The Feedlot Committee is pleased this compensation has flowed. It was critical to helping restore operations and in ensuring this key link in Manitoba’s beef value chain was not broken. Much of the committee’s work involves providing input to MBP and the National Cattle Feeders Association about government policies and regulations that impact feedlot operations. For example, in 2012 the Manitoba government began a review of the Nutrient Management Regulation. This regulation deals with matters such as nutrient buffer zones, nutrient management zones, and restrictions on winter spreading of manure, among others. It has had both production management and financial implications. Feedlot

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• The need for public policies based on sound science; • Cooperation between producers and government, as opposed to excessive regulation, will lead to more effective results and the creation of more flexible programs; and • Governments and producers should work together to develop environmental initiatives that our sector can embrace and that won’t harm producers’ ability to earn a living. MBP continues to vigorously seek financial recognition from governments for the ecosystem services beef producers provide in managing the landscape for the benefit of society. MBP sees opportunities to promote ecological goods and services programming as the provincial government implements elements of the Green Plan related to biodiversity and protection of species and ecosystems at risk in agroManitoba. Similar opportunities may exist as programming is developed under Growing Forward 2 and MBP is pursuing this. MBP is also providing input to the Canadian Cattlemen’s Association as it develops a national policy

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Committee members provided input to MBP as it prepared a submission to the government on this regulation. The Feedlot Committee supports MBP’s position that government policies and regulations must be based on sound science. Further, the committee stresses the importance of having departmental staff that are very knowledgeable about livestock production and agricultural landscape management practices involved in onfarm visits regarding government regulations. The Feedlot Committee also notes the importance of flexibility in any regulatory environment. It is important that governments are able to modify provisions of regulations when conditions are appropriate. As a case in point, some flexibility was shown around the restrictions on winter application of nutrients under the Nutrient Management Regulation because of warm weather and low soil conditions. The Feedlot Committee is also an important conduit for taking Manitoba’s feedlot operators’ concerns forward nationally. Much of this work occurs in conjunction with the National Cattle Feeders’ Association (NCFA). The NCFA spends considerable time providing input to the federal government on issues such as trade and market access, the regulatory climate affecting the feedlot sector, animal health issues and business risk management programs. The goal is to create an operating environment that will allow the feedlot sector to thrive, which in turn benefits the entire beef value chain. To that end, Feedlot Committee members have given input to the NCFA on issues like trade. Expanding

opportunities to export our beef in Asian and European markets is essential to the long-term prosperity of Canada’s beef industry. This will be achieved through mechanisms such as the Trans-Pacific Partnership as well as the Canada-European Union Comprehensive Economic and Trade Agreement negotiations. The NCFA has also provided significant input into the mandatory country of origin of labeling issue. The feedlot sector is pleased the WTO has established a firm deadline by which the U.S. must act to remove this trade barrier. Growing Forward 2 will take effect in 2013, and the NCFA has provided input to governments about how to ensure business risk management programs can be more responsive to the needs of the feedlot sector. Other issues the Feedlot Committee has been working on in conjunction with the NCFA include modernization of the CFIA feed regulations, phytosanitary import requirements and inspection modernization, to name just a few. In closing, I would like to thank my fellow committee members for their work throughout the year. The issues we have addressed are broad ranging and ripple throughout the value chain. Respectfully submitted, Larry Schweitzer Feedlot Committee Chair Brad McDonald, Vice Chair Claire Scott Harry Dalke


Committee REPORTS

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p r o d u ct i o n ma n ag e m e n t committee

he future of the community pastures program, biosecurity, dealer defaults, herd protection, natural disasters and traceability were just a few of the issues addressed by the Production Management Committee in 2012. The federal government is giving up management of the Community Pasture Program, moving away from its partnership agreements with the provinces. This program is vital to Manitoba’s beef industry as it handles about five per cent of the cattle herd. A Steering Committee formed by MBP and the pastures’ Producer Advisory Committees recommended the formation of the Association of Manitoba Community Pastures (AMCP) to oversee pasture management. Kim Crandall and Trevor Atchison of the MBP sit on the Steering Committee. The AMCP involves a business plan to operate the pastures. Once the business plan is accepted by the Manitoba government, AMCP will form a non-profit corporation to manage the pastures. Under the proposed plan, the pasture program will be available to all Manitoba cattle producers as per allocation process for grazing privileges. Operations will be similar to the PFRA system, including cattle care and movement done by staff. While the federal government covered losses at some of the pastures, the program will need to be 100 per cent cost recovery. There will be no changes for the 2013 grazing season. MBP is committed to ensuring a smooth transition as the existing pasture program winds down so producers can retain access to these important grazing lands as the new management plan rolls out in 2014. The Committee continued work on biosecurity issues. A national Beef Cattle On-Farm Biosecurity Standard has been developed. The Canadian Cattlemen’s Association, in consultation with provincial beef organizations like MBP and the Canadian Food Inspection Agency, developed the standard with the goal to control and to reduce the risk and impacts of diseases in herds. The biosecurity standard is voluntary,

cost-effective and designed for on-farm application in operations of all types and sizes. MBP has developed a producer-oriented biosecurity guidebook. It covers areas such as disease prevention, managing pests, transportation, controlling access to operations, and working with vets to develop herd health plans. MBP began holding producer biosecurity workshops in the fall. The Committee is pleased to report some progress is being made on the issue of dealer defaults. The bankruptcy of a livestock dealer in 2011 again exposed concerns with the livestock dealer licensing system and the need to address problems before they lead to serious financial consequences and loss of trust. MBP and the Manitoba Livestock Marketing Association developed a common position that was provided to the provincial government. Our requests centred on additional oversight of licenses. Manitoba Agriculture has indicated significant updates are imminent, especially to the oversight of licenses and public notification. While MBP recognizes there will still be the possibility of dealer defaults, we believe the changes will help accomplish many of the goals desired by producers while also ensuring there is additional transparency in the process. Herd protection is an ongoing concern. MBP wants to ensure producers have tools to help protect their herds. MBP has requested changes to provincial policies, including adequate trapping incentives for problem predators and elimination of the 24-hour limit on the trapping permit. When it comes to predator kills, MBP is also seeking 100 per cent compensation for the cost of raising the animal. MBP and the Manitoba Trappers Association developed a joint proposal to address funding of the provincial problem predator removal program. It is our common position that it is not acceptable for this important program to be without funds. Ensuring there are responsive programs to help producers deal with disasters remains a priority. The flood has had a negative impact on the industry and rural communities and it is essential that outstanding

issues are more swiftly resolved. Drought is an emerging concern. MBP lobbied extensively on 2011 flood issues, including pasture and forage losses, timely payment of compensation claims and debris clean-up concerns. MBP is also represented on the Lake Manitoba and Lake St. Martin Regulation Review Committee and the South West 2011 Flood Strategy Committee. MBP provided a detailed submission to the 2011 Flood Review Task Force. Forage and transportation assistance programs to assist producers dealing with the flooding or drought conditions are being sought by MBP. Work continued on traceability policies, with some progress made. MBP had been seeking that a link be made between the Canadian Livestock Tracking System (CLTS) and the mandatory Manitoba premises identification system so producers and agri-businesses would not need to have separate ID numbers for each system. In October it was announced that Manitoba producers and agri-businesses could begin using their premises identification numbers to access the CLTS. Also related to traceability, a movement document, or manifest, is being developed. It will be required for all cattle movement. However, individual cattle ID numbers will not be required. Movement traceability will be based on “read in” and movement documents. It is important to note the new federal Safe Food for Canadians Act will give new regulatory powers to CFIA to enforce premises ID and manifest requirements. This is 18 to 24 months away. I would like to thank my fellow committee members for their ongoing efforts to address such a broad range of issues affecting our industry. Respectfully submitted, TREVOR ATCHISON Production Management Committee Chair Stan Foster, Vice-Chair Ted Artz, Brad McDonald, Theresa Zuk, Mac McRae

R E S E A R C H committee

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anitoba Beef Producers has long recognized the importance of investments in research and innovation to the long-term sustainability of the beef industry. During the consultations on Growing Forward 2 (GF2), MBP lobbied for increased investments in research and innovation. To be competitive internationally, the beef industry needs ongoing research in areas such as feed, nutrition,

genetics, and animal health and welfare, to name a few. MBP is pleased governments have reaffirmed their commitment to research under GF2. Manitoba beef producers’ check-off dollars help fund a broad range of industry-related research work being undertaken at institutions like the University of Manitoba and Agriculture and Agri-Food Canada’s Brandon Research and Development Centre. MBP research funding contributions are often leveraged by researchers

to secure additional sources of project funding, multiplying the benefits to producers and the beef industry. MBP also works with other industry organizations like the Dairy Farmers of Manitoba and the Manitoba Pork Council to pursue research in areas of mutual interest such as the environment or animal health. Additionally, MBP is working with research partners in other provinces and nationally, such Continued on page 8 MA NITO BA BEEF P R O D UC ER S

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Committee REPORTS Continued from page 7 as the Beef Cattle Research Council, to better coordinate research projects. This will help limit the possibility of duplication thereby making the most effective use of research dollars. Finding ways to improve herd health and onfarm productivity are important aspects of research. It is essential that work undertaken in the lab or in the field is converted into tools that primary producers can use on their farms. Examples of research projects in which MBP has been involved with in recent months include bovine tuberculosis testing, the fertilizer equivalence of manure, residual feed intake, farm management strategies in the Canadian beef sector, and developing a strategy for forage and grassland management in Manitoba through an examination of the multi-functionality of forages. An equally important function of research relates to the development of public policy. It is MBP’s belief that sound science must shape public policy, not public opinion. It is critical that legislators and policy makers have access

to current science-based research when policies are being developed or modified that could impact the beef sector for many years. As a case in point, the provincial government has released TomorrowNow – Manitoba’s Green Plan. It is an environment blueprint containing more than 100 initiatives to be rolled out over eight years. It covers many areas including a potential ban on the cosmetic use of pesticides, updating provincial species at risk laws, climate change, water conservation, drought management, and a new regulatory system around drainage and water retention. MBP anticipates new legislation or regulatory changes will arise from the Green Plan and will seek to ensure that policies are based on sound science. That is why it is so essential MBP supports research in areas such as how the beef industry interacts with the environment. That research has shown the substantial level of ecosystem services arising from beef production, like protection of habitat for species at risk. If new regulatory requirements are going to be required of our industry, MBP will seek ecological goods and services programs (EG&S) that

compensate producers for the ecosystem services they provide. After all, these services benefit society as a whole. Finally, governments are accountable to taxpayers when it comes to how public money is spent. They are seeking deliverables when they make investments in initiatives like EG&S programming. Research funded by MBP can show the value for money when public dollars are invested in various programs. I would like to thank my committee colleagues for their work on research and innovation-related matters over the past year. Respectfully submitted, GLEN CAMPBELL Research Committee Chair Caron Clarke, Vice-Chair Ted Artz Stan Foster Brad McDonald Mac McRae

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Canadian Cattlemen’s Association Amazing Agriculture Adventure Great Tastes of Manitoba Show Steaks for Soldiers

2 012 report to members

5. 6. 7. 8.

10

Temple Grandin Cattle Tales Flood Tours Canadian Agriculture Literacy Week

9. Agriculture in the City 10. Royal Manitoba Winter Fair


messa g e from

canadian cattleman’s association Martin Unrau President Canadian Cattlemen’s Association

T

here has been plenty of activity in the cattle sector during the past few months enabling the industry to cap off a challenging year on a positive note. The relisting of Establishment 38 under the management of JBS USA has helped the industry move past the unfortunate XL Foods Inc. E.coli event which consumed the industry this fall. The United States Department of Agriculture’s (USDA) Food Safety and Inspection Service (FSIS) gave the facility the green light to resume exports of beef to U.S. in early December. The plant can now work towards normalizing capacity which in turn will help to restore normalcy to Canada’s beef cattle industry. Another significant development was the World Trade Organization (WTO) arbitrator assigning a firm deadline for the U.S. to ensure its Country of Origin Labeling (COOL) requirements comply with its WTO obligations. The U.S. has until May 23, 2013 to comply with the Panel and Appellate Body reports adopted by the WTO Dispute Settlement Body this past July, confirming that U.S. COOL legislation discriminates against Canadian livestock in the U.S. market. The Government of Canada introduced three new programs under Growing Forward 2 (GF2). These programs align with the CCA’s key priorities of research and innovation, competitiveness and market development and will come into effect on April 1, 2013, ensuring continuous funding for critically important existing programs like the Beef Science Cluster. The CCA would like to thank Agriculture and Agri-Food Minister Gerry Ritz for his efforts in these areas. The CCA International Trade Update The CCA has devoted a lot of effort recently to a few key trade files that are nearing the home stretch from a negotiation standpoint. The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is one of the files. I was in Brussels in late November along with CCA Executive Vice-President Dennis Laycraft to discuss a number of issues that still need resolution in the CETA. Top of the agenda for the CCA will be positive movement on sanitary and phytosanitary issues and other crucial technical issues that are part of the overall systems approvals. In my view this is a foundational piece that must be negotiated to a successful outcome before the remaining unresolved issues can be addressed in a way that makes sense for the for the Canadian cattle industry. The CCA continues to hold firm that cattle producers’ support for a CETA will depend on whether real and meaningful access is achieved. This means addressing the high EU tariffs on beef as well as technical issues that include blocking the ability of Canadian meat processing facilities to utilize current food safety interventions. The CCA will continue working closely with the negotiators and Ministers in order to ensure that if a CETA is reached, it will be a deal that Canadian beef cattle producers can support. Other trade files that have required a concerted ongoing effort to result in a positive outcome include restoration of access of under thirty month (UTM) Canadian beef to South

Korea and UTM boneless Canadian beef to China. The WTO determination that U.S. COOL discriminates against Canadian livestock, a decision subsequently upheld by the WTO Appellate Body, is a significant achievement of direct benefit to industry competitiveness. Japan recently pledged that it will seek entry to the TransPacific Partnership (TPP) talks. Canada joined the TPP in October and participated in the next negotiating session in December. CCA’s John Masswohl was in New Zealand to work with our Five Nations Beef Alliance partners to build support for our collective TPP platform. The platform is built on the unique opportunity TPP provides to address several trade barriers such as to achieve compliance with existing international standards and to create new standards within the TPP region that have not been achievable globally. Canadian beef is well positioned to gain new access to the important Japanese market regardless of whether or when Japan is eventually admitted to the TPP. Japan continues to go through its process towards access for UTM beef and is making solid progress. The best estimate for implementation is the first quarter of 2013. If Japan moves to UTM (from under 21-months) and we are successful with a favourable economic partnership agreement, our prospects are good. The CCA strongly encourages a Japan-Canada Economic Partnership Agreement which eliminates Japan’s 38.5 per cent import duty for Canadian beef. A successful agreement with Japan could increase the value of Canada beef exports to over $275 million annually and more importantly will increase the value of every animal we produce. The United Arab Emirates (UAE) fully re-opened its door to Canadian world-class beef. Market access successes In July, the United Nations’ food standards body, the Codex Alimentarius Commission, agreed on a set of maximum residue limits for the cattle and hog feed ingredient ractopamine. This is an important development for Canada’s cattle industry as it removes any justification for a non-scientific trade irritant that has hindered trade in Canadian beef to key Asian markets like Taiwan and China. It is paramount to note that the approval of the ractopamine standard is a victory for scientific decision making at Codex. The Regulatory Cooperation Council (RCC) effort to thin the border between Canada and the U.S. will require a concerted effort to see it through to the type of conclusion we envision. Important initiatives for producers under the RCC include roadmaps to achieve the elimination of unnecessary duplication of meat inspections for imports, implementation of electronic border clearances, and improved approval processes for veterinary drugs. Since the Government of Canada terminated the WTO Dispute Settlement Panel against Korea, the CCA has continued to call on both governments to conclude the Canada-Korea free trade agreement (FTA). Negotiations for that agreement began in 2005, but have been on hold since 2008. We must conclude a FTA with Korea to restore tariff parity between U.S. and Canadian beef so that we don’t become uncompetitive in that market after having restored access.

MBP members of CCA board: Ray Armbruster Heinz Reimer Ted Artz

Domestic issues update The CCA remains focussed on ensuring the long-term competitiveness and sustainability of the industry. Tools such as a national price and basis insurance program, modelled after the program available in Alberta, would help producers better manage risk. So would good disaster programs that work for producers in a timely manner. Disaster programs are ad-hoc programs and are not part of the Business Risk Management suite of programs. Pre-XL event concerns around maintaining processing infrastructure until the cattle herd expands remain. The impact of having fewer cattle available for processing, particularly cull cows for producing ground beef, is being felt and will continue into 2013 and 2014. The CCA is working to ensure that Canadian operations have a competitive advantage. Sustainability The CCA demonstrated its continued commitment to sustainable beef production by joining the Global Roundtable for Sustainable Beef (GRSB). Like the GRSB, the CCA is focussed on developing the necessary tools to ensure beef production is environmentally sound, socially responsible and economically viable. The renewal of the Canadian Code of Practice for Beef Cattle through the National Farm Animal Care Council process is important for our industry. We need to show the public and our customers that we are proactive on animal care, environment and any other issues of concern. A renewed Code will help in the conversations we need to have with these important groups. There are more than 700,000 detailed carcass records in the Beef InfoXchange System (BIXS) database, with ongoing developments to improve program and software delivery. This information is linked to the animal’s CCIA tag ID number and is being submitted by the two major packers in Canada, Cargill Foods and XL Beef. This Computer Vision System camera-derived data includes such economically important information as hot carcass weight, yields and quality grades, marbling scores, ribeye areas and more. This information is only available to registered BIXS users on the animals they have submitted data on in the system. BIXS is presently funded through the Agricultural Flexibility Fund of Agriculture and Agri-Food Canada so this system and the data provided comes at no charge. The beef cattle industry is an important contributor to the country’s GDP; a recent study funded in part by the CCA examining the industry’s overall economic impact found that the cattle industry is responsible for $33 billion worth of sales of goods and services either directly or indirectly; that every job in the sector yields another 3.56 jobs elsewhere in the economy; that for every $1 of income received by workers and farm owners, another $2.08 is created elsewhere; and that either directly or indirectly through induced income effects, the beef sector generates 228,811 jobs in the country. Martin Unrau President Canadian Cattlemen’s Association MA NITO BA BEEF P R O D UC ER S

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messa g e from

national cattle feeders’ association Bill Jameson Chairman National Cattle Feeders’ Association

A

s the National Cattle Feeders’ Association (NCFA) heads toward its fifth anniversary, it continues to mature in its role as a national voice for cattle feeder operations across Canada. As such, NCFA provides input to the federal government on issues that will improve domestic and international trade and market access, reduce or eliminate regulations that impact bottom line cost of production, and to create a better overall operating environment for the cattle feeding sector. The following are some highlights of the NCFA activities in 2012:

Trade and Market Access • NCFA has taken a proactive stance to support the federal government’s initiative to join the Trans-Pacific Partnership noting that the TPP is an important milestone in expanding trade of Beef into Asia market. • NCFA is a member of the Canadian Agri-Food Trade Association (CAFTA) and is actively engaged in providing input to the CETA negotiations to ensure the beef and beef products receive fair treatment as pressure builds to finalize a free trade agreement with the European Union. • NCFA also participates on several federal market access committees including BCTAG, BCPAC and BCMAS. • NCFA was also a leading proponent in pushing for a positive outcome from the mCOOL ruling to ensure barriers to trade with the U.S. are removed. Eliminating and Removing Regulations: • NCFA has been an active participant in setting priorities to be addressed by the Regulatory Cooperation Council established to streamline Canada/U.S. regulations and thin the border for cross-border trade. These include: » pushing for faster adoption of e-certification for the cross-boarder transportation of livestock; » the harmonization of pharmaceuticals registrations; » and zoning for foreign animal disease containment. • NCFA is active on many regulatory files currently being reviewed by CFIA, these include: » CFIA food modernization act, CFIA Feed Regulations modernization, » the CFIA pathogen reduction initiative including the draft directives, “D-12-04 Phytosanitary import requirements, » CFIA’s legislation modernization of ‘Safe Food for Canadians’ Bill S-11. • NCFA lobbied government to find a resolution to Product of Canada labeling which was affecting 10

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the ability of feedlots to market feeders purchased in the U.S. and finished in Canada to Canadian packers. While a temporary solution was enacted by CFIA, a permanent solution is still being pursued. NCFA also provides representation on the Canadian Beef Grading Agency and has also been proactive in addressing changes to grading regulations to drive the adoption e+v camera grading systems in the larger packing plants, more flexibility in regulation amendment processes and the adoption of a five class grading system based on U.S. grading standards. NCFA is also pushing to rework grading of B4 grades to better represent the usability of the less damaged cuts that current grade B4 and are severally discounted. NCFA was successful in bringing the importance of the CFIA inspection facilities in Moose Jaw to the attention of CFIA leadership and convincing them to continue staffing those facilities as they are the primary hub of cattle movement in southern Saskatchewan. NCFA is also working with CFIA on the development of an industry-based emergency preparedness implementation plan to be in place by mid 2013. As an additional initiative to reduce burden on the cattle feeding sector, NCFA has also initiated an interactive field/in-service training day for CFIA inspection staff. NCFA will host CFIA staff at a feedlot and facilitate an interactive session between feedlot operators and CFIA.

Input on Other Government Issues • NCFA has actively provided input to the development of the Growing Forward 2 program presenting to the Federal Standing Committee on Agriculture and Agri-Food in regard to realigning priorities for the Business Risk Management programs. • NCFA also hosted the Standing Committee on a tour of feedlot operations in Southern Ontario. • NCFA arranged for the Senate Committee on Agriculture to tour a feedlot in Saskatchewan as they toured across Canada. • During MPs’ summer break from Ottawa NCFA provincial directors and organizations actively engage with MPs in their ridings to keep them abreast of issues for which we are seeking their ongoing support. • On a regional basis, NCFA has collaborated with other agriculture sectors to drive changes at Service Canada to reduce processing time and increase the length of stay allowed for temporary foreign workers. • Progress on long-term issues includes official recognition by the federal government of the need

MBP member of NCFA board: Larry Schweitzer

for a secretariat to address the bovine tuberculosis issue in Manitoba. • During NCFA’s annual fall visit to Ottawa the directors engaged in a breakfast meeting with 14 MPs, held ten additional one-on-one meetings at MP offices including Minister Ed Fast, Minister of Trade and also held top-to-top meetings with CFIA and AAFC to pursue movement on all of the above issues. Addressing Industry Governance and Strategic Issues • NCFA is actively seeking changes to the governance structure and election process at Canada Beef Inc. to ensure that CBI has an open, transparent and representative election process that results in an effective skills based board that is not bound by geographic or regional representation. • NCFA is actively engaged in the development of regular top-to-top meetings between the executives of various national cattle organizations including the CCA and CBBC to address strategic issues. • NCFA actively participates at the semi-annual Beef Value Chain Round Table, sending two representatives, and also participates at the CCA semi-annual meetings. • During the XL Foods Inc. slaughter facility shutdown, NCFA took a leadership role in accessing and disseminating information from XL Foods back to industry. NCFA continues to push government for an open and transparent investigation that will help prevent this type of situation escalating to the same crisis levels in the future. • NCFA has funded the completion the Certified Livestock Transportation program ensuring that and auditable driver training program, with US accreditation, is available for industry. NCFA directors also engaged in the development of a comprehensive strategic planning process while in Ottawa during their fall meetings. Once complete the strategic plan will be used to guide the organization for the next five years. The strategic plan will be finalized with additional input from the staff and board of directors at the next annual meeting to be held in Banff on February 20, 2013. Other activities planned for 2013 include the executive traveling to attend board meetings of each of the member organizations and up to 5 additional trips to Ottawa to meet with representatives from industry organizations, government agencies and MPs. Respectfully Submitted, Bill Jameson Chairman National Cattle Feeders’ Association


messa g e from

canada beef inc. Chuck MacLean Chair, Canada Beef Inc. Board of Directors

A

t the completion of our first year of operation as Canada Beef Inc., we have many reasons to be proud of the accomplishments of the staff and board of directors. During our first 15-month fiscal year we have developed a strategic three-year plan for the organization, created organizational and governance structures that will guide us as we move forward, hosted our first Annual Forum and AGM and are well on our way to finding a new home for our offices in Calgary. All of this was accomplished while performing the day-to-day responsibilities and work of a global marketing organization. January 1, 2012 was the beginning of our fiscal year and we were challenged within a very short period of time to create a new corporate culture, vision, mission, three-year strategy, key drivers, targeted priorities, tactical actions, measurement tools and reporting, performance development systems and more robust financial accountabilities. This is a tall order, knowing that on average mergers take upwards of three years to fully complete. Regardless, Canada Beef Inc. will continue to evolve. We describe this as being Fit-for-Purpose and Managing-for-the-Future. Our three-year corporate strategy is the result of input from a widely diverse grouping of industry and government stakeholders. The feedback and market intelligence we received both enabled and facilitated the development of a new Market Development Program (MDP) which launched January, 2012, a new program intended to provide an objective means to predict and track returns based on investment. Ongoing dialogue, primarily with valued smalland-medium sized entrepreneurs and business leaders over “emerging market� opportunities, risk and priorities, led to the June 1, 2012 launch of the Market Outreach Initiative (MOI). This program is complementary to the MDP and has additional funds earmarked for such activities. Canada Beef Inc. promised to be nimble and market responsive, and at the same time, fiscally prudent and financially accountable. That is why both our MDP and MOI applications go through a rigorous assessment process to determine the value of the investment Canadian beef producers are being asked to make to any one individual or company. It is our expectation that both parties will share in the reward, but also the risk. Domestically we are witnessing strong alignment to the new way of doing business, while internationally the market has been slower to embrace

MBP member of Canada Beef board: Trevor Atchison

the notion of partnership based on our needs and expectations. More recently we are starting to confirm who our real partners are, and this is resulting in some very intimate brand, marketing and promotional work being done in such markets as Korea, Japan, Mexico and Russia. In some of these markets preferential tariffs are providing our competitors a large advantage, which may continue to increase. As of today, we have processed 70 MDP applications, and based on leveraged opportunities within the MDP, we are tracking a 6.2:1 ratio globally. Every producer dollar invested into partnered initiatives focusing on branding, marketing, promotion, education and/or training is returning $6.2 dollars. This is how we are working to establish sustainable results with key partners in markets around the world. Overall, our responsibility to our shareholders is to deliver a strong ROI. Our activities, tactics and priorities are more than just what the MDP delivers. We are also providing regular detailed Global Market Intelligence (GMIR) reporting to provide timely and factual information to enable business decisions to be made to the benefit of industry. The value generated through domestic programming has been wide reaching as efforts with the retail and foodservice markets have yielded strong results that will pay ongoing dividends. Programming with the retail and foodservice marketplace in Canada has been able to drive significant investment by the trade on specific beef programs. In total, ten market development programs were initiated with an average industry investment ratio of 3.22:1 at retail and 8.14:1 at foodservice. As the lead Canadian Beef Ambassador, we are also highly engaged in consistent and targeted education and training around the Canadian Beef Advantage (CBA); including engagement within the social media environment, media relations, culinary offerings, nutrition and related research and recipe development and education. And the work continues on branding and positioning of the Canadian Beef Brand Mark. Daily we are working to ensure that more Canadian beef is being featured, more often, with impactful messaging stemming from the CBA that will drive a deeper consumer understanding, commitment and resulting loyalty to Canadian beef. In September, we hosted our first Annual Forum in Calgary. A full day that included industry and market presentations, a beef industry panel discussion and ambassador-social media sessions was followed by our first Annual General Meeting. During the AGM, attendees heard reports from our board committees and elected the new Board of Directors.

Our Board for 2012-2013 includes producer and industry representation. Ten provincial association members have been selected as board members, with elections held for both Alberta and Saskatchewan representatives: Chuck MacLean (Chair), AB; Paul Sharpe (Vice Chair), ON; Grant Huffman, BC; John Schooten, AB; Jack Hextall, SK; Trevor Atchison, MB; Gib Drury, QC; Jennifer MacDonald, NB; Terry Prescott, NS; John MacDonald, PEI. Industry representation covers all sectors along the beef value chain: Dwight Greer, Eastern Meat Solutions, Beef Processing and Distribution (importer-exporter representative); Brian Read, XL Foods; Robert Bielak, St. Helens; Mike Kennedy, Cargill; Arthur Batista, Ecolait; and Scott Ellerton, Sysco Canada. Within the Board, four committees have been formed to oversee specific areas of business. Committees assume an active role in governing Canada Beef. Members are accountable to the board for fulfilling the mandates determined by the board and actively performing their assigned duties related to the committee’s business on behalf of the board. Finance/Audit and Program Performance Management: Scott Ellerton Planning and Priorities: Mike Kennedy Governance: Jennifer MacDonald International Beef Trade Access Policy Advisory: Brian Read Canada Beef Executive Robert Meijer, President of Canada Beef Inc. John Baker, Executive VP, Global Marketing Ron Glaser, VP Corporate Affairs & Operations Michael Shittu, VP Finance At Canada Beef Inc., our culture is such to have a healthy appetite for change. We are prepared to do what it takes to be relevant to industry, to be productive and valued. And we continue to listen to our shareholders, at our Annual Forum, through your provincial representative on our Board of Directors, or through our ongoing engagement, communication and collaboration with industry stakeholders and partners. We look forward to the coming year and the work ahead. Sincerely, Chuck MacLean Chair, Canada Beef Inc. Board of Directors

Canada Beef Inc. is an independent national organization representing the research, marketing and promotion of the Canadian cattle and beef industry worldwide. Its efforts to maximize demand for Canadian beef and optimize the value of Canadian beef products is funded by cattle producers through the National Beef Check-Off, which in turn makes it possible to access beef industry market development funds provided by the Government of Canada and the Government of Alberta. MA NITO BA BEEF P R O D UC ER S

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messa g e from

CANADIAN CATTLE IDENTIFICATION AGENCY Darcy Eddleston Board Chair

External Committee: Cattle Implementation Plan The Cattle Implementation Plan (CIP) is the industry’s roadmap to achieve a sustainable, effective and efficient cattle traceability system for Canada. The direction of this roadmap was endorsed by industry and governments at the National Cattle Traceability Summit in 2011 in Saskatoon, where important milestones were attained and consensus was reached to move ahead in the resolution of movement recording and overcoming premises identification issues. Working collaboratively with industry and governments, this committee continued to refine the CIP, received confirmed support from 17 Canadian organizations for the three CIP resolutions as well as developed a CIP costing sub-committee, a project charter and project manager scope of work. The costing project will assess three key areas of the CIP: 1) auction marts 2) feedlots and 3) other co-mingling sites (e.g., fairs, exhibitions, etc.). The expectations outlined in the CIP are being incorporated into the Six Species Regulation Amendment to the Health of Animals Act, which is currently under development by the Regulation Amendment Review Committee of which CCIA Board Chair Darcy Eddleston is a member. Working with AAFC, CCIA completed a project to modify the CLTS database to accept validated, provincially-generated premises identification number (PID) by early 2013. This high-level initiative addresses each province and territory’s position on

MBP member of CCIA board: Theresa Zuk

managing the generation of PIDs for their livestock operators and agri-businesses with co-mingling animals. As of October, Canadian livestock operators and agri-businesses in British Columbia, Yukon Territory, Manitoba, Ontario, Quebec, Nova Scotia, Newfoundland and Labrador, New Brunswick and Prince Edward Island will need to acquire a provincial/territorial PID in order to register their premises in the CLTS database. These CLTS PID updates are crucial because they will facilitate additional movement data to be recorded in the database from outside Alberta, and facilitate the needs of the West Hawk Lake Zoning Initiative. Tag Retention Project In 2011, CCIA, CFIA and AAFC developed and initiated a long-term tag retention trial to collect baseline data on cattle tag retention and readability as well as recommend solutions to enhance tag retention and readability. This trial was designed to involve animals from various geographical areas ranging from British Columbia to Ontario to ensure appropriate representation of farming styles and environments. To date, thousands of animals have been tagged with approved CCIA RFID tags with equal distribution of tag types/brands to each farm test site (selected based on appropriate handling facilities to optimize tag application and retention). Initial results show a high retention rate in young animals and a much lower retention rate in bulls, while the retention rate for cows has yet to be

determined since their tags are still being scanned for the study. The project’s 2013 reporting update will include anecdotal findings regarding tag placement and tag devices, so stay tuned for more information this spring. CCIA Field Representatives CCIA field teams continued to support industry and governments in 2012 by delivering CCIA’s full range of complimentary traceability support services, including: premises identification registration, account information updates, age verification, cattle movement and export information delivery and CLTS database-user training. The Future In 2013, CCIA will continue to advance the implementation and evolution of the national traceability system through collaborative and ongoing relationships with industry, provincial and federal governments and the CFIA. As a member of the Industry Government Advisory Committee (IGAC), discussions on traceability and collaborative processes with other service providers, CCIA is committed to discussing and working together on a multi-species national traceability system. Submitted by, Darcy Eddleston Board Chair

Canadian Cattle Identification Agency (CCIA) is a not-for-profit, industry-initiated and led organization incorporated to establish a national cattle identification program to support efficient trace back and containment of serious animal health and food safety concerns in the Canadian cattle herd. The agency manages the Canadian Livestock Tracking System (CLTS) database – a trace back system that maintains radio frequency identification (RFID) tag information, and is led by a board of directors made up of representatives from all sectors of the livestock industry.

MBP IS YOUR ORGANIZATION Manitoba Beef Producers promotes and defends beef producers’ livelihoods through a united effort. Your membership furthers our opportunities to achieve this goal. COMMUNICATION IS KEY

3 Contact MBP with issues that affect your operation. 3 Make your voice heard at district meetings. 3 Vote on issues by attending the annual general meeting. WE WANT TO HEAR FROM YOU. Please contact us today with your questions and comments at info@mbbeef.ca or 1-800-772-0458. 12

2 012 report to members


Manitoba Cattle Producers Association o/a Manitoba Beef Producers Financial Statements June 30, 2012


Independent Auditors' Report

To the Member Producers of Manitoba Cattle Producers Association o/a Manitoba Beef Producers: We have audited the accompanying financial statements of Manitoba Cattle Producers Association o/a Manitoba Beef Producers, which comprise the statement of financial position as at June 30, 2012 and the statements of operations, changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for Qualified Opinion In common with many agricultural marketing agencies, the Association derives income from fees charged to producers. The nature of these fees and the structure of the collection system prevent verification that all fees due to the Association were reported. Our verifcation of fee income was limited to accounting for amounts reported by the cattle dealers and recorded in the accounts of the Association. Qualified Opinion In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly in all material respects the financial position of the Manitoba Cattle Producers Association o/a Manitoba Beef Producers as at June 30, 2012 and the results of its operations, changes in net assets and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Winnipeg, Manitoba October 10, 2012

2500 - 201 Portage Ave., Winnipeg, Manitoba, R3B 3K6, Phone: (204) 775-4531, 1 (877) 500-0795

Chartered Accountants


Manitoba Cattle Producers Association o/a Manitoba Beef Producers Statement of Financial Position As at June 30, 2012 General Fund

Industry Fund

Contingency Fund

Research Fund

2012

2011 (Restated)

Assets Current Cash and short term investments (Note 3) Accounts receivable Prepaid expenses and deposits

Capital assets (Note 4) Due from Manitoba Livestock Cash Advances Inc. (Note 5) Due from General Fund

1,231,536 50,345 6,933

-

100,521 -

-

1,332,057 50,345 6,933

1,155,318 101,149 6,889

1,288,814

-

100,521

-

1,389,335

1,263,356

34,209

-

-

-

34,209

51,368

176,900

-

-

-

176,900

196,900

118,244

210,036

179,292

118,244

1,810,480

1,690,916

-

91,792

1,499,923

91,792

100,521

Liabilities Current Accounts payable and accruals Due to Research Fund Due to Industry Fund

Net Assets

240,592 118,244

-

-

-

240,592 118,244

158,647 87,500

91,792

-

-

-

91,792

91,792

450,628

-

-

-

450,628

337,939

1,049,295

91,792

100,521

118,244

1,359,852

1,352,977

1,499,923

91,792

100,521

118,244

1,810,480

1,690,916

Approved on behalf of the Board

Director

Director

The accompanying notes are an integral part of these financial statements 1


Manitoba Cattle Producers Association o/a Manitoba Beef Producers Statement of Operations For the year ended June 30, 2012 General Fund

Revenues Support Fees collected from producers under regulation Dealer commission Fees refunded Net fees collected

Other revenues Interest and sundry Project income Verified Beef Program Solid Cattle Manure project

Total revenues

Industry Fund

Contingency Fund

Research Fund

2012

2011

1,143,670 (33,074) (192,892)

-

-

-

1,143,670 (33,074) (192,892)

1,258,703 (34,718) (205,012)

917,704

-

-

-

917,704

1,018,973

19,792 53,481 -

-

2,132 -

30,744

21,924 53,481 30,744

24,559 61,739 395 -

73,273

-

2,132

30,744

106,149

86,693

990,977

-

2,132

30,744

1,023,853

1,105,666

Continued on next page

The accompanying notes are an integral part of these financial statements 2


Manitoba Cattle Producers Association o/a Manitoba Beef Producers Statement of Operations For the year ended June 30, 2012 General Fund

Total revenues (Continued from previous page) Expenses Amortization Bad debts Board meetings Brandon Research project Canadian Cattlemen's Association fees Canadian Cattlemen's Association special assessment (recovery) Carbon Lifecycle project Consulting and training Directors' expenses (Note 6) General manager Information technology Insurance Memberships in other organizations Miscellaneous Office equipment, supplies and postage Producer communications Professional fees Provincial promotions Rent Salaries and benefits Telephone Verified Beef Program (recovery)

Total expenses Excess (deficiency) of revenues over expenses

Industry Fund

Contingency Fund

Research Fund

30,744

2012

990,977

-

2,132

18,399 7,003 232,683 39,017

-

-

-

18,399 7,003 232,683 39,017

20,557 1,087 7,655 50,000 247,342 (11,165)

141,924 15,326 4,136 6,390 20,962 507 14,021 84,377 10,788 23,360 32,088 361,289 8,061 (3,353)

-

-

-

141,924 15,326 4,136 6,390 20,962 507 14,021 84,377 10,788 23,360 32,088 361,289 8,061 (3,353)

7,500 808 206,013 27,955 6,255 30,352 899 17,277 97,638 13,400 50,521 32,100 338,039 11,923 2,685

-

-

-

-

2,132

1,016,978 (26,001)

The accompanying notes are an integral part of these financial statements 3

30,744

1,023,853

2011

1,016,978 6,875

1,105,666

1,158,841 (53,175)


Manitoba Cattle Producers Association o/a Manitoba Beef Producers Statement of Changes in Net Assets- PREPARED IN WORD For the year ended June 30, 2012

Net assets, beginning of year, as previously stated Correction of an error (Note 7) Excess (deficiency) of revenues over expenses Net assets, end of year

General Fund

Industry Fund

Contingency Fund

Research Fund

2012

2011

992,796

116,792

98,389

145,000

1,352,977

1,406,152

82,500

(25,000)

(26,001) 1,049,295

The accompanying notes are an integral part of these financial statements 4

91,792

-

(57,500)

-

2,132

30,744

6,875

100,521

118,244

1,359,852

(53,175) 1,352,977


Manitoba Cattle Producers Association o/a Manitoba Beef Producers Statement of Cash Flows For the year ended June 30, 2012

Cash provided by (used for) the following activities Operating activities Revenues collected Expenses paid Salaries and benefits Interest income

Investing activities Repayment of advances to Manitoba Livestock Cash Advances Inc. Additions to capital assets

2012

2011

1,021,989 (524,644) (361,289) 21,924

1,089,316 (882,747) (338,039) 24,559

157,980

(106,911)

20,000 (1,241)

(18,746)

18,759

(18,746)

Increase (decrease) in cash resources Cash resources, beginning of year

176,739 1,155,318

(125,657) 1,280,975

Cash resources, end of year

1,332,057

1,155,318

The accompanying notes are an integral part of these financial statements 5


Manitoba Cattle Producers Association o/a Manitoba Beef Producers Notes to the Financial Statements For the year ended June 30, 2012

1.

Activities of the Association The Manitoba Cattle Producers Association (the "Association") is a non-profit organization established under the Statutes of Manitoba in 1978 (amended in 1983 and 1988). The Association is responsible for programs to improve the economic well being of the cattle and beef industry in Manitoba. Effective from January 30, 1989 the Association commenced collection of fees from producers on sale of cattle under a method determined and authorized by provincial statute. The current rate of fee imposed is $2 for each head of cattle sold. Effective December 1, 2006, a mandatory non-refundable National Checkoff levy was established at a rate of $1 for each head of cattle sold. A livestock dealer may deduct a commission of 6 cents for each head sold.

2.

Significant accounting policies These financial statements have been prepared in accordance with Canadian generally accepted accounting principles as issued by the Accounting Standards Board in Canada using the following significant accounting policies: Fund accounting In order to ensure observance of limitations and restrictions placed on the use of resources available to the Association, the accounts are maintained on a fund accounting basis. Accordingly, resources are classified for accounting and reporting purposes into funds. These funds are held in accordance with the objectives specified by the contributors or in accordance with the directives issued by the Board of Directors. Four funds are maintained: General Fund, Industry Fund, Contingency Fund and Research Fund: The General Fund is used to account for all revenue and expenses related to operations of the Association. The Industry Fund is used to account for unbudgeted expenditures to programs to advance the industry. The Contingency Fund is to cover outstanding liabilities should the Association cease operations. The Research Fund is used to account for expenditures in the areas of research. Capital assets Capital assets are recorded at cost. The cost for contributed capital assets is considered to be fair value at the date of contribution. Amortization is provided using the following methods at rates intended to amortize the cost of assets over their estimated useful lives. Method Rate Automotive declining balance 30 % Computer equipment declining balance 20 % Furniture and fixtures declining balance 100 % Leasehold improvements straight-line 5 years In the year of acquisition, amortization is taken at one-half of the above rates.

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Manitoba Cattle Producers Association o/a Manitoba Beef Producers Notes to the Financial Statements For the year ended June 30, 2012

2.

Significant accounting policies (Continued from previous page) Revenue recognition Check-off, interest and other sundry revenues are recognized when received or receivable. Project income is recognized at the end of the year in which services have been rendered. Measurement uncertainty The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Accounts receivable are stated after evaluation as to their collectability and an appropriate allowance for doubtful accounts is provided where considered necessary. Amortization is based on the estimated useful lives of capital assets. These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in earnings in the periods in which they become known. Long-lived assets Long-lived assets consist of capital assets with finite useful lives. Long-lived assets held for use are measured and amortized as described in the applicable accounting policies. The Association performs impairment testing on long-lived assets held for use whenever events or changes in circumstances indicate that the carrying value of an asset, or group of assets, may not be recoverable. Impairment losses are recognized when undiscounted future cash flows from its use and disposal are less than the assets' value. Any impairment is included in expenses for the year. Financial instruments Held for trading: The Association has classified cash and short-term investments as held for trading. Transactions to purchase or sell these items are recorded on the settlement date, and transaction costs are immediately recognized in operations. The Association's held for trading instruments are initially recognized at their fair value. Fair value is approximated by the instrument’s initial cost in a transaction between unrelated parties. Transactions to purchase or sell these items are recorded on the settlement date. Held for trading financial instruments are subsequently measured at their fair value. Gains and losses arising from changes in fair value are recognized immediately in operations. Loans and receivables: The Association has classified accounts receivable as loans and receivables. These assets are initially recognized at their fair value. Transactions to purchase or sell these items are recorded on the settlement date, and transaction costs are immediately recognized in operations.

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Manitoba Cattle Producers Association o/a Manitoba Beef Producers Notes to the Financial Statements For the year ended June 30, 2012

2.

Significant accounting policies (Continued from previous page) Loans and receivables are subsequently measured at their amortized cost, using the effective interest method. Under this method, estimated future cash receipts are exactly discounted over the asset’s expected life, or other appropriate period, to its net carrying value. Amortized cost is the amount at which the financial asset is measured at initial recognition less principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, and less any reduction for impairment or uncollectability. Gains and losses arising from changes in fair value are recognized in operations upon derecognition or impairment. Other financial liabilities: The Association has classified accounts payable and accrued liabilities other financial liabilities. These liabilities are initially recognized at their fair value. Transactions to purchase or sell these items are recorded on the settlement date, and transaction costs are immediately recognized in operations. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Under this method, estimated future cash payments are exactly discounted over the liability’s expected life, or other appropriate period, to their net carrying value. Amortized cost is the amount at which the financial liability is measured at initial recognition less principal repayments, and plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount. Gains and losses arising from changes in fair value are recognized in operations upon derecognition. Recent accounting pronouncements Canadian accounting standards for not-for-profit organizations In October 2010, the Accounting Standards Board (AcSB) approved the accounting standards for private sector not-for-profit organizations (NFPOs) to be included in Part III of the CICA Handbook-Accounting (“Handbook”). Part III will comprise: 

The existing “4400 series” of standards dealing with the unique circumstances of NFPOs, currently in Part V of the Handbook; and

The new accounting standards for private enterprises in Part II of the Handbook, to the extent that they would apply to NFPOs.

Effective for fiscal years beginning on or after January 1, 2012, private sector NFPOs will have the option to adopt either Part III of the Handbook or International Financial Reporting Standards (IFRS). Earlier adoption is permitted. The Organization expects to adopt Part III of the Handbook as its new financial reporting standards. The Organization has not yet determined the impact of the adoption of Part III of the Handbook on its financial statements.

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Manitoba Cattle Producers Association o/a Manitoba Beef Producers Notes to the Financial Statements For the year ended June 30, 2012

3.

Cash and short-term investments 2012

Current account, non-interest bearing Savings account, bearing interest at 1.95% Contingency fund deposit in savings account bearing interest at 1.95%

9

2011

278,596 952,940 100,521

124,073 933,071 98,174

1,332,057

1,155,318


Manitoba Cattle Producers Association o/a Manitoba Beef Producers Notes to the Financial Statements For the year ended June 30, 2012 4.

Capital assets Accumulated Cost amortization Automotive Computer equipment Furniture and fixtures Leasehold improvements

21,974 16,598 131,838 449

12,822 15,979 107,490 359

9,152 619 24,348 90

170,859

136,650

34,209

Cost Automotive Computer equipment Furniture and fixtures Leasehold improvements

5.

2012 Net book value

Accumulated amortization

2011 Net book value

21,974 15,357 131,838 449

8,899 7,679 101,403 269

13,075 7,678 30,435 180

169,618

118,250

51,368

Due from Manitoba Livestock Cash Advances Inc. The amount due from Manitoba Livestock Cash Advances Inc. is unsecured, non-interest bearing and without terms of repayment. As payment will not be expected in the next year, the account has been classified as long-term. The organizations are related due to directors in common.

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Manitoba Cattle Producers Association o/a Manitoba Beef Producers Notes to the Financial Statements For the year ended June 30, 2012

6.

Directors per diem and travel expenses Directors are entitled to remuneration of $150 per day (2011 - $150 per day) and the president $175 per day (2011 - $175 per day), funds permitting. The directors and the president are also entitled to reimbursement for travel and other expenses incurred by them in attending meetings on behalf of the Association. Payments made during the year were as follows: 2012 2011

Per diem remuneration Reimbursement for travel and other expenses Strategic Plan/Board Orientation

7.

59,102 75,043 7,779

95,724 110,289 -

141,924

206,013

Correction of an error During the year the Association determined that revenues and expenses were recognized out of the Industry Fund that should have been recognized out of the Research Fund. The balances for amounts due between funds and the net assets balances of these funds were adjusted to reflect the change. The net effect of this correction of an error was a decrease of $133,208 in due from general fund, a decrease of $167,500 in due from research fund, a decrease of $50,708 in due from industry fund, a decrease of $225,000 in due to research fund, a decrease of $75,708 in due to industry fund, a decrease of $50,708 in due to general fund, an increase of $82,500 in general fund net assets, a decrease of $25,000 in industry fund net assets and a decrease of $57,500 in research fund net assets.

8.

Income tax status The Association is exempt from income taxes as a non-profit entity under Section 149(1) of the Income Tax Act.

9.

Commitments The Association has entered into various lease agreements with estimated minimum annual payments as follows: 2013 35,400 2014 35,400 2015 34,950 2016 2,500

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Manitoba Cattle Producers Association o/a Manitoba Beef Producers Notes to the Financial Statements For the year ended June 30, 2012 10.

Employee pensions Employees of the Association participate individually in pension plans of a financial institution of their choice. The Association has agreed to match employee contributions to a maximum of 5% of wages but is not a party to the plans.

11.

Capital management The Association considers its capital to be the balance mantained in its Net Assets. The Association’s objective when managing capital is to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide programs that improve the economic well being of the cattle and beef industry in Manitoba. The Association sets the amount of capital in proportion to risk and manages the capital structure and makes adjustments to it in light of changes to economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Association may buy or sell investments or change the amount of funds transferred to the individual funds. The Association monitors capital on the basis of approval by the Board of Directors. During the year, the Association's strategy, which was unchanged from the prior year, was to protect the capital through maintaining low risk investments so as to rely on the interest and dividends as income rather than changes in market value.

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