What will save this turn of cattle feeding?

[shaney]

>

[Sawbones]

I am not as worried about this turn of the cattle sector as I am about the overall health of our industry. I need to simplify things to get a handle on them.
For me it comes down to the bottom line and that is profitability. If I'm going to complain, it has to be about the things I can change.
1) Don't complain about MCOOL and the legislation in another sovereign country as that is their right to put whatever flag they want on their product. We may win in the court but never in the marketplace as shown by hormone free to the EU or lumber issues in the US Take advantage of it and put your own flag on your product and let that product convince the consumer that it's the best available.
2) There is no free market when two companies control 90%plus of the packing sector and by default, the marketing of the product. There is no trickle down effect so you either play ball with those two companies or be ready to accept the consequences...or you develop an independent marketing system.
3) Lobby for changes that can occur
a) Change regulations that put the same rules in place for imported meat as we have to meet for Canadian cattle.
b) Put federal graders in some plants that are EU certified to get rid of the 20% tariff
c) Allow for the sale of meat and bone meal to non-ruminants from slaughtered animals as none of the 16 BSE positive animals would have entered into the food chain.
d) Discontinue inflationary disposal costs of SRM's and definitely lobby against the additional grant of the $30/head SRM removal to the packers as that is just another $30 million dollar gift
e) Lobby for right of payment to the individual for their birth date information as that is proprietary and in not a health issue but a marketing issue and the person providing that information should be compensated. Again by making it mandatory, it is a $30 million dollar gift to the packer and there is no trickle down effect.
3) Don't complain about market access
a) The EU is open if you comply with their wishes to be hormone free. Complain that the CFIA makes it almost impossible to verify those animals.
b) The Japanese are open to cattle under 20 months and with good management and marketing strategies, those markets can be filled.
c) The US is open to Canadian cattle but it costs the packers money to segregate cattle so therefore, the discount. If there was a US plant dedicated exclusively to Canadian cattle, there need not be a discount.
There is also no differentiation in the food service sector so if you found a hamburger chain..etc that wanted your product, they do not need to differentiate their product. We could buy and dedicate a US plant to our cattle.
It's past time for serious discussion

[wd40]

It's amazing how much some people get paid to read the past and throw darts at the future.

Hind site is and has always been 20/20.

The sad thing iss the same people who had "lead" this beef industry into the tank are still the ex-sperts.

I remember clearly hearing these people crying for "consolidation" 20 plus years ago, when we had "price discovery". Now we have consolidation and now they cry for "price discovery".

DA

[rkaiser]

So when do we take this thing on the road sawbones? No where near the exposure we need here on good old agriville and it's obvious that these truths are not going to be carried forward by any industry group. I saw somthing today about the Beef Information Center working to promote Canadain beef on Facebook. When will any of these very bright people see that promoting beef is only one more of many gifts that we give to the folks who buy cattle and SELL BEEF.

When Beef Initiative Group Canada went on the road, we stood in front of thousands of supportive producers. Not all of them are still around, but those that are left must be looking for some kind of solution????? This proposal needs the masses. The industry groups and the ones who have their own agenda's just aren't listening.

[shaney]

The reality is that beef demand is struggling and not
recovering as hoped in late summer. If demand is
going to become a systemic issue rather than seasonal
issue there is big trouble. Not saying that there is not
trouble already but it the industry needs some good
news once in awhile.

[kato]

Lots of good points there Sawbones.

I would have to disagree about the MCOOL thing though. The issue I have there is that it really is a contravention of NAFTA. I would say that if they want to break their word on a trade agreement and wrap it all up in a flag, then they need to reopen that trade agreement first and change it. Until NAFTA is changed to reword the definition of what is American, we need to keep up the pressure, even if it's just on the principle that you shouldn't back down to a bully. If we rolled over and gave up on this one, we've set the stage for more and more troubles just like it. I can't see us getting any more money in our pockets on this one though, because it's going to go on so long that it will seem like it's never going to end. But that doesn't mean we shouldn't stick up for what's right.

Lobbying for changes that can occur, now that's the ticket. I agree totally with all the ones you listed.

I would also add that we need to harmonize the inspection standards between provinces (which wouldn't cost much to do), and we should revamp the rules about where provincially inspected plants can sell beef. I've always wondered why beef from a plant in one province is not good enough for another province, and why it's good enough for sale in the local abbatoir storefront, but not the grocery store. It just makes no sense. Federal inspection should be reserved for international trade, and provincial inspection should be good enough for all beef sold in Canada, wherever it's sold.

[grassfarmer]

Lots of good points sawbones and others. I can't help but notice that the interview was built on the assumption that fed cattle prices are low because demand for beef is low due to the recession. Where is the proof? what is the average retail beef price in Canada for 2009 and how does it compare to 2008 or to 2002? My guess is that it might be a little lower than 2008 prices but still well ahead of 2001 prices when fed cattle were considerably dearer. I think this is another flawed assessment that conveniently overlooks the lack of competition which is our real problem.

[shaney]

grassfarmer demand is the issue. Consumption of
red meat is struggling bot necessarily the price at
the store. We have a lot of supply and consumption
is struggling. Boxed beef has struggled to move.
There could be a debate over whether this is a
systemic issue since 2005 or the short term reality
of economics.

I agree that lack of competition is an issue but I
think it is a separate issue than what was described
in the video.

[kato]

A lot of what's holding a lid on the price of beef is the massive mountains of cow beef in the system. Between beef producers in this country selling off at an alarming rate, we also have dairy farmers in the States who are culling an amazing number of cows.

I think that one fine morning, when that huge amount of cow beef has cleared the system, someone will wake up and say "Where did it all go? There won't be a big calf crop this year, and I think we're going to be short on supply!"

Then the road will be opened for price improvement. And when it comes it will be fast.

[perfecho]

Or more will just be shipped in offshore.
Supposedly we are importing more beef than we did last year at this time.
Kato, I personally have no problem with cool....it is some cattle people trying to make a change so they can make a living.....at least they are doing something. We didn't take advantage of the opportunity.....could have stopped growth implants, possibly tested for BSE, had a limit on feedlot size and medication restrictions and proudly labeled it "Canadian Made." We could have exported the crap out of our “cooled” beef. A “cool” program here, would at least allow us to buy our own age verified beef at our own stores, instead of cheaper imports while our best beef gets exported for a premium.
But, instead, we opt to complain about restrictions.......and from what I can see, their prices are no better than ours right now.
We have been led down this garden path that the only way to make money in this industry is to export big time....and yet the farming industries that are profitable do not. Before we started the major "export model", farm families made a living comparable to others. Farmers now subsidize the cheap food policy with off farm income, further debt and continual lowering costs. Which other sector in this industry contributes “donated” resources?
We have blogged about “doing something” on Agriville for a while now and other than some selling directly and Sawbones trying their model, nothing changes. A few of us have written letters, spoken to MLA’s, but there is no concerted effort to do anything else.
As long as we only “speak” about change, nothing will happen. Yes, prices will go up due to exiting, but not for very long. A cheaper supply will (or has) be (been) found….that is the “free monopoly way.” Until we get politically active, things will stay relatively the same.
Time for chores, feeding $100 hay to $500 cows……gotta luv it ;-)

[grassfarmer]

Shaney you had a typo in your comment which made it unclear to me what your reply meant. "Consumption of
red meat is struggling bot necessarily the price at the store. We have a lot of supply and consumption is struggling. Boxed beef has struggled to move."

Are you saying consumption is struggling but the retail price is still fairly high? If that is the case the answer is simple - processors and retailers cut into their ample margins, reduce the price a little and it will fly off the shelves. That principle too is simple economics.

[kato]

Perfecho, I have a problem with COOL. Yes, it is "some cattle people trying to make a change", but it's a group that does not speak for all cattle people in the U.S., and it's a protectionist move that has done harm in the U.S. as well. Not all, if any American cattle producers have gotten a benefit. In fact, those who lobbied for the law are not even happy with it now that they have found it is not making any difference in their grocery stores. It has not dropped the amount of imported beef there, and has not increased any returns to the producers. All it has done is make us weaker, and has made more money for those who have figured out ways to cash in on our disadvantage.

It's a bad law. It's just another nail in our coffin that we could do without.

I also agree that the export model of farming has been a disaster. That being said, the disaster has led to the end of competition in our packing industry. Like it or not, when the Americans go off our market, we get screwed. They are off our market right now, and look what's happening. We need that extra bidder, no matter where it comes from, to keep our domestic packers honest. Even if they could or would pay more for cattle, (which I'm sure they can),unless someone bids them up, they are NOT going to do it.

We need to revamp our entire industry to get away from this U.S. dependence, but in the short term, we need every bidder we can get for our live cattle. Other export markets buying our beef is not going to work back to more money for us.

[smcgrath76]

I think the problem with COOL is that it
changed not only the rules, but the
entire game and once again we are
playing reactionary instead of
visionary. We fought it until it was
law, and have not had time to develop a
Canadian premium product.
I think a big part of the suffering here
is by the fact that the export business
(read USA) was built on cheaper product
($0.67 dollar) rather than product
quality and innovation. Innovation is
hard to copy/replace/substitute, a cheap
product isn't and is at the whim of the
government of the day to add costs.

[smcgrath76]

I think the problem with COOL is that it
changed not only the rules, but the
entire game and once again we are
playing reactionary instead of
visionary. We fought it until it was
law, and have not had time to develop a
Canadian premium product.
I think a big part of the suffering here
is by the fact that the export business
(read USA) was built on cheaper product
($0.67 dollar) rather than product
quality and innovation. Innovation is
hard to copy/replace/substitute, a cheap
product isn't and is at the whim of the
government of the day to add costs.

[smcgrath76]

I think the problem with COOL is that it
changed not only the rules, but the
entire game and once again we are
playing reactionary instead of
visionary. We fought it until it was
law, and have not had time to develop a
Canadian premium product.
I think a big part of the suffering here
is by the fact that the export business
(read USA) was built on cheaper product
($0.67 dollar) rather than product
quality and innovation. Innovation is
hard to copy/replace/substitute, a cheap
product isn't and is at the whim of the
government of the day to add costs.