Mad Cows and Organic Beef

By Rupert Jannasch

Production of certified organic meat has lagged behind the organic vegetable and dairy sectors, but recent headlines over mad cow disease give reason to assess the health of the organic beef market.

Until the publication of the National Standard for Organic Agriculture in 1999, production of organic beef in Canada was limited largely by stringent livestock production standards. Relaxed rules permitting the restricted use of conventionally grown feed and worm medications, bringing the standards more in line with those in Europe, have encouraged larger scale organic beef production.

Prions, the renegade proteins that turn a BSE-affected animal's brains to mush, have been linked to a human variant of the brain wasting syndrome, Creutzfeldt-Jakob Disease. The bovine form is caused by feeding slaughterhouse offal, particularly ruminant nervous tissue from the brain and spinal cord, to cattle. There is no evidence to suggest that humans can contract BSE from eating muscle portions such as roasts or steak.

Organic standards prohibit the feeding of animal by-products and slaughterhouse wastes to livestock. It is noteworthy that in the 1920s, the Austrian philosopher, Rudolph Steiner, the mind behind the biodynamic farming movement, predicted that feeding livestock with animal parts from the same species would cause the animals to go mad.

Has news of mad cow disease or Bovine Spongiform Encephalitis (BSE) in North America increased demand for organic beef? Beef producers across Canada report that sales are on the rise, but few believe BSE has had much impact.

Alan Stewart keeps a dozen Hereford-cross cows in Hortonville, Nova Scotia. He markets his beef by the side or box, as well as individual cuts at the Wolfville Farmer's Market. A 50 pound box of mixed cuts sells for $5.00 per pound.

"Demand is going up 20-30 percent a year," says Stewart, "but it is not directly related to mad cow disease. Most of my customers recognize there are fundamental problems with the conventional food system and how beef is raised. They think beyond mad cow disease."

Near Pincher Creek, Alberta, six ranchers belonging to the Producers of the Diamond Willow Range work together to produce and market organic beef. A portion of the steers from a combined herd of about 1200 cows are finished in a dedicated organic feedlot. Most beef is marketed through a distributor in Vancouver.

Coordinator, Larry Firth, believes the effect of mad cow has been modest. "A big problem," he says, "is that processing costs have increased because we can't get rid of the offal. Killing fees have increased. And we have the same problems as conventional producers getting rid of old cows."

One marketing challenge, says rancher, Janet Main, is that buyers typically want high end cuts. Having to sell front quarters at conventional prices means a reduction in organic premiums.

Premiums can be substantial. For example, lean, certified organic ground beef at small grocery stores and butcher shops in Halifax and Ottawa ranges between $6.80 and $8.00 per pound. In one Ottawa store, organic rib steak sells for $16.80 per pound compared to $10.99 for regular steak.

That organic beef is rarely sold by major grocery chains such as Loblaws suggests that the market is still fairly 'thin'. If prices for conventional beef were to collapse, the price spread between organic and conventional beef would increase. This could lead to downward pressure on organic beef prices.

At Beretta Organic Farms, Mike and Cynthia Beretta keep about 100 beef cows on their 800 acre mixed farming operation north of Toronto. All the animals are certified organic and young cattle are finished on the farm's feedlot. About four hundred additional head are purchased and processed at the Beretta's butcher shop.

Having a processing facility means Beretta Farms can sell the entire carcass including lesser quality cuts under the organic label. "Being able to move all the beef is the key," says Mike Beretta. "That's where you have to put your emphasis in marketing."

He believes, however, that the organic market may be close to a plateau. "There is much more supply now than in the past, and we're closer to meeting demand."

One concern is that consumers not lose confidence in beef. "We don't want them to eat less beef overall. A new customer may switch to buying organic beef, but they won't buy as much as they used to."

Although organic beef consumption is increasing, the market is still very small. Demand may well be spiked by news stories such as BSE, but the sector's overall health is still very dependent on the strength of the farm economy as a whole. The sad fact is, that as long as suppliers of breeding stock, local abattoir owners, and good neighbours are being forced out of business by the political fallout over BSE, the mad cow crisis may harm as much as help the organic beef market in the long run.

Rupert Jannasch, M.Sc., P.Ag. is a consultant for the Organic Agriculture Centre of Canada. Please send comments or questions by phone to 902-893-7256 or by email to oacc@nsac.ca.