PBRA Project History

The Purebred Risk Assessment (PBRA) Project 

The PBRA project, a significant initiative of the Candian Beef Breeds Council, began in spring 2005 and completed in March 2010. The project identified producers’ operational risks—and responded with risk mitigation strategies including new business tools and resources made available on the CBBC Producer Business Resources website.

A key element in addressing member-producers needs as they relate to risk and risk mitigation was the identification and characterization of the circumstances that purebred member-producers were facing in reference to trade, animal health, producer demographics, environment, business management practises, access to information, and genetics.

Through this project the CBBC sought to improve producers’ business practices, enhance their viability and build the long-term success of Canada’s purebred beef cattle sector.

The PBRA Project progressed through several phases that utilized the services of external service providers to undertake research and to create business responses, tools and resources to help mitigate identified risk.

Phase 1: 2006/07

Four key aspects were conducted in the initial phase:

  • an overview of currently available commercial perils insurance coverage
  • a national survey of CBBC purebred beef cattle member-producers to identify both current and long-term risks
  • purebred industry perils/risk assessment to identify, characterize and prioritize the peril/risks 
  • comprehensive communications strategy

CBBC engaged KPMG consultants to prepare the industry perils/risk assessment to identify, assess and provide an understanding of risks faced by the purebred beef sector in Canada.

This was accomplished, in part, through 15 focus group sessions in three Canadian provinces to identify the significant risks faced by the purebred beef sector, and the high-level processes currently in place to manage those risks. Session participants included a broad cross section of purebred sector stakeholders from virtually all regions of the country, either in person or via telephone.

In order to validate and further understand the identified risks, a facilitated workshop was held with several purebred breed association managers and certain members of the PBRA Project Management Team. The identified risks were discussed and clarified, and the participants validated the initial categorization and prioritization of the risks.

The seven identified ‘key’ risk areas were:

  • Value Proposition/Sector Relevance
  • Flow of Genetic Information through the Beef Value Chain
  • Product Pricing and Financial Services
  • Framework for Purebred Sector Business Model and Sharing of Resources
  • Inventory and Analysis of Producer Training Products and Services
  • International Trade
  • Communications and Messaging of Key Risk Activities

Complementary analysis by Ipsos Reid representatives included a survey tool to identify various and unique risks associated with producing and marketing purebred beef genetics. 7,500 surveys were circulated to active purebred producers; 500 commercial cattlemen were surveyed by phone to obtain customers’ perspectives of the purebred sector. 

Key survey results included:

  • Commercial producers strongly supported the purebred sector
  • Approximately one third of commercial customers automatically receive the transferred certificate of registration
  • More than 25 per cent of cow-calf producers were using one or more crossbred bulls in their breeding program. 
  • The average age of purebred respondents was 54
  • Average purebred herd size was more than 40 head
  • 64 per cent of the purebred operations had off-farm income
  • Only 25 per cent of purebred producers said they were in the business for profit
  • ‘Lifestyle’ was identified as a key benefit to being a purebred producer.

AdFarm representatives provided communications support in phase 1. They evaluated the current communications activities of the purebred industry in relation to risks and perils and provided recommendations to improve communications efforts regarding the management of risks and perils. They provided communication tools and a standardized guideline for communications activities to support the breed associations to ensure consistency of messages regarding the project.

Phase 2: 2007/2008

This phase expanded project research which indicated:

The purebred beef cattle sector in Canada is currently a decentralized group of individual breed associations and purebred producers operate without commonly agreed upon and supported goals and objectives. The sector does not have a common understanding of, or agreement on, the key risks it faces, the value that their product adds to the beef industry as a whole, or the appropriate strategies that are required to achieve success, or the mechanism to collect pertinent industry data other than breed specific information—to demonstrate the relevance and value of the sector. These issues are created, and to a certain degree compounded, by the fact that there is weak communication amongst, and a lack of coordination between, sector players.

Lack of capital has impeded the ability of the sector to renew itself and limited intergenerational transfer and new entrants. The lack of access to capital has been the result of poor return on investment, low liquidity in the sector, and limited supply of debt and equity instruments.

In response, CBBC committed to working with others to develop strategic business models and multi-faceted initiatives to strengthen the sector (including purebred producers’ business practices and sector viability) with ‘results focused’ activities in a variety of areas. It was decided that several of the risk mitigation strategy and tool development actions would occur with CBBC’s involvement and collaboration with private sector groups. Other efforts would be directed toward strengthening the value and ‘fit’ of government programs to provide the maximum benefit to purebred producers while helping support the effectiveness of these programs.

Strategic communications during this and the subsequent phase was developed and implemented by Nimble Communications. The scope included information sharing, awareness raising, producer and breed association engagement, media relations, and producer outreach and tool promotion. The communications helped to increase recognition of the genetic value and positive impact the purebred sector has on product quality and Canadian beef production viability.

Phase 3: 2008/2009

During this phase CBBC engaged representatives of Meyers Norris Penny to aid in the enhancement of existing—and development of new—risk mitigations tools and products for purebred producers in the areas of:

  • Access to debt and equity capital
  • Cost of Production, Product pricing and benchmarking
  • National Sales Reporting
  • Purebred specific perils/risk insurance products and services

A group of 70 producers from across Canada, representing 10 purebred breeds participated to share their insights and feedback with CBBC through on-line questionnaires that examined producers’ experiences regarding accessing capital, purebred cost of production, product pricing, sales, and insurance. Armed with a confirmed understanding of the challenges, risks and needs of producers, CBBC engaged further with industry stakeholders including debt and equity lenders and insurance brokers to explore options for new and enhanced purebred-specific products to aid in risk mitigation.

Through CBBC’s research and discussions with banks it was clear there was limited desire at the time to develop new loan products specifically for purebred cattle producers. In order to create opportunities for producers to access capital, CBBC directed efforts toward assisting producers to address lenders’ concerns and gaps, and to help producers better understand the lending process. CBBC created tools to assist producers in building their business case when approaching financial institutions for a loan:

Cost of Production. Product Pricing and Benchmarking Workbook
Purebred Sales Reporting Workbook

In addition, information on accessing debt and equity financing, a guide to meeting with a lender and links to sources of financing are also available on the CBBC Producer Business resources website.

In addition to helping producers to enhance their business decision-making, cost of production and sales reporting data tracked through the tools and submitted by producers to CBBC will help populate the national database in order to:

  • Benchmark the economic and genetic contribution the purebred industry makes to the beef cattle industry of Canada with estimated annual domestic sales, including semen and embryos, to be in excess of $230,000,000
  • Verify the value of purebred cattle.

CBBC is also developing a Beef Value Chain initiative to enhance the capture, and utilization of beef cattle genetic, production, and sales information

The web–based value-chain system is being developed and implemented through partnerships with industry and government initiatives in order to link to, and collaborate with, other data sources within the beef value chain including the Canadian Beef Advantage (CBA) project that is collecting packer and feedlot data. The CBBC-BIXS Beef InfoXchange System will launch late 2010.

Purebred beef cattle information and values as they relate to individual live animals, carcasses, production groups, genomics, and sales will be captured among other information, and utilized by individual producers to enhance production and business practice. The data will support CBBC strategic marketing and enhance purebred sector benchmarking. Significant aspects of the data will be available to wider stakeholders and the Portal structure, via the CBBC website, will enhance and streamline purebred producers’ access to extensive industry-wide information and reports. 

Ongoing work

CBBC continues to engage with Government and industry to enhance programs like AgriStability (previously CAIS), Advance Payments Program, taxation, and breeder co-op loans, to improve their fit to the purebred sector. Discussions continue with financial institutions to help drive the development of loan programs specific to the purebred sector. Similar ongoing liaison with insurance companies is hoped to result in specific coverage to mitigate purebred operational perils. In addition, CBBC is exploring business education opportunities for producers.

CBBC Acknowledges

The majority of risk mitigation tools and resources on the CBBC Producer Business Resources website were made possible through the work of the PBRA project and we thank the following for their guidance, encouragement and support:

Allan Marshall, President of CBBC and Chair, PBRA project

PBRA project Steering Committee- Doug Fee, CEO - Canadian Angus Association;  Neil Gillies, General Manager - Canadian Charolais Association;  Bruce Holmquist, Member/Industry Liaison - Canadian Simmental Association;  Gordon Stephenson, General Manager - Canadian Hereford Association;  Brett Campbell, Executive Vice President - CBBC.

PBRA Producer Feedback Group- 70 producers from across Canada representing 10 purebred breeds who shared their insights, suggestions and feedback through on-line survey tools and one-on-one discussions.

CBBC Breed Association members- who have endorsed and supported the PBRA project throughout its phases including sharing regular project updates with their producer-members.