The Canfax journey into world of price discovery By: Lee Hart

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Service clattered to its feet with Telex, now running with mobile technology

For a fledging Western Canadian livestock feeding industry in late 1960s and early 1970s, any independent means to discover the price of slaughter cattle was a very useful tool.

Five decades ago, a new system employing five Telex machines (sophisticated communication technology back in the day), scattered across Alberta, began relaying market price information from a few cattle feeders for central collection and distribution out of Calgary. The nascent system wasn’t perfect, but it was a huge improvement in price discovery over the existing practice of literally shopping a truckload of cattle to different packing plants to see who offered the best price.

Those Telex machines started clicking in 1969. It was the start of a service now well known by the Canadian livestock industry as Canfax. Today, 50 years and millions of cattle and billions of dollars’ worth of sales transactions later, Canfax remains a premier price reporting and price discovery service, and much more, to the Canadian agriculture industry.

“The industry has grown and changed dramatically over the past 50 years and the Canfax service has as well,” said Brian Perillat, who has served as manager and senior analyst with Canfax since 2010. “At the same time our fundamental purpose remains the same: provide producers and the agriculture industry with the best information on what’s happening in the livestock market today.”

Over the decades, the “intelligence” gathering of market information has significantly improved and expanded the reporting system. For example, the Canfax Weekly Report, which for years was printed and mailed out, can now, thanks to the Internet, be distributed to computers and smartphones almost instantly. The essence of the service — to provide producers with the best read on cattle prices at any given moment, along with an informed forecast of where prices might be a few months or a year from now — remains the same.

Canfax grew out of the frustration of a few members of the Western Stock Growers Association (WSGA) in the late 1960s looking for a better way to find the best price for market-ready cattle. The livestock feeding industry in Alberta was just developing. Traditionally, fed cattle were marketed through the live public auction system. But as more cattle were being fed and finished, more transactions were being conducted directly with packing plants. The three major processors of the day — Canada Packers, Burns Meats and Swift Canadian among others— had multiple plants in several major urban centres. Deals were made directly with the processing plants or their agents, so there was no mechanism for general or public disclosure of cattle prices at any given time.

Wyett Swanson, a long-time beef and grain producer at Provost, AB, recalled marketing days before Canfax. “We used to take a truckload of cattle into Edmonton and shop them around to the various plants,” he said. “A buyer would have a look, sometimes we’d offload a few head so they could have a better look. And if we weren’t sure about the price they offered, we’d load the cattle up and go to the next plant. That was the way it was done.”

About half a dozen of the WSGA members of the day figured there had to a better way, said Chris Mills, who served as WSGA secretary at the time, and later went on to be western manager of the Canadian Cattleman’s Association (CCA). In 1968, the American National Cattleman’s Association, having faced the same price discovery issue, established a Cattlefax service, which collected and distributed price information from its feedlot operators. The WSGA decided to develop a similar system in Canada based on the Cattlefax model.

The five Telex machines, stationed in key centres across Alberta, were the start of Canfax. At about the same time, a group of producers in Huron County, ON established a similar system there. Feedlot operators voluntarily reported prices paid for cattle to their nearest Telex operator. At the end of each week that information was collected at the WSGA Calgary office, with a report on overall market information returned to each Telex centre and made available to members.

It was cumbersome, but it was a start. In 1971 the Alberta and Ontario systems merged and the whole project was turned over to the CCA to run as a national market information program for producers in all provinces. Canfax was truly off and running.

Today, headquartered in Calgary, as a division of the CCA, Canfax is a self-supporting membership driven service with about 800 subscribers. As a greatly expanded service tracking cattle markets around the world, Canfax still relies on collecting market information from its members, and still produces “The Weekly” along with an expanded report menu that includes a Daily Snapshot Report, Monthly Trends Report, Weekly Slaughter and Grading Report, Monthly Price and Grading Report, Monthly Cattle on Feed Report and Annual Report. Canfax also provides weekly information to the Western Livestock Price Insurance Program, which is crucial in ensuring the viability of the Fed Price Insurance program. In order to further enhance technical and timely information services, Canfax created the CFX Pro Mobile App to provide even more market insight specifically for Canadian cattle producers. Canfax Research Services, established in 1990, continues to serve the agriculture industry providing data and analytical services on a contract basis and the Quarterly Report.

While Canfax has evolved, expanded and modernized, Perillat noted that Canfax analysts are always available to take phone calls from producers seeking information. “We get a wide range of questions from what the market is doing today, to discussing marketing options down the road,” he said. “We can’t advise anyone on what to do, but hopefully our best assessment of what the market is doing helps producers make informed decisions.”

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