Cattle trucking

[grassfarmer]

On the Spring Creek/Nilsson deal isn't that a bit of a strange move? Why would NB be interested in supplying a high quality niche market? Not their usual mode of operation. Being more cynical is it a longer range plan to pull the rug from under the Lacombe processing plant and eliminate that competition?

[gaucho]

Sorry I can't help but throwing in my two bits on Spring Creek (SCR) and NB... The reality is SCR can not make their Value chain work with the cost of killing and boxing at Lacombe.... on top of that they landed some accounts like Safeway and Loblaws that are all about price.... NB is short of cattle to kill and so birds of a feather flock together.....NB wants cattle to kill and NB needs cheaper kill costs. Truth be told SCR or better yet Highland Feedlots can only get so much out of a Canadian Beef market and so its all about price... However have no worries about Lacombe Grass farmer Heritage Angus is keeping them hoping.... Export and domestic opportunities are coming in steady biggest issue is now finding enough cattle to meet our label claims and criteria.

[grassfarmer]

So this is really about the failure/dumbing down of a niche market/value chain? Bringing commodity prices to the value added sector - I can see NB filling that role but why are the retailers so price conscious on procuring a premium product? is to to pad their own margins or grow market share? I thought they always told us beef is a loss leader anyway so why the need to screw the supplier? As far as I can see this brand will go nowhere after such a takeover - if the result is to be little more than commodity price for the fed cattle entering it won't be long before cattle producers stop sending them cattle.
I certainly don't experience a shortage of money among consumers seeking our beef product so I don't really see why this niche product can't find a market at a price that returns a margin to the primary producer.

[gaucho]

Grassfarmer when you are selling direct and so you are selling with a retail margin in it for you.... Retailers commonly add 40 points to cover for their expected return and their mismanagement of their meat counter... the mismanagement is called retail shrink and includes all the marked down items and discounted product. The reality is retailers are always looking at their margin and they can make a lot more on the commodity produced product than the natural product because the commodity has lower buy price to begin with. Secondly don't blame the retailer... the consumer is who ultimately decides how much hey are willing to spend on food and 9 times out of 10 they will buy on price and hence why you still need to be competitive with a natural beef program.... that said you also need to find the right partners with which to market you beef and for me Loblaws and safeway are not it... but others have a bigger is better attitude and so that is why such deals get made. If you can sell the amount of animals that you say you d as beef... good for you grassfarmer... that said not everyone is in a population dense region.

[rkaiser]

What a good place to hide out and chat about beef marketing.... LOL a Cattle trucking thread. Bern and Kristen and the new kings of natural beef - NB will never find us here. LOL

We can call it mismanagement at the counter gaucho, but we all have challenges with management and even things that are out of our control (in our each respective minds) Our boys have cut a lot of throw away losses at the stores since we let an rather inept manager go, but there are still losses.

Employees and management can be put in to four categories. Smart and Active, Smart and Lazy, Stupid and Lazy, and Stupid and Active. Which on do you think is the most dangerous.

That being said, focusing on cancerous things like criticism, competing, or contending are not going to move us beef marketers ahead as fast as creativity.

The only people who are going to stop natural beef marketing to become commodity based are us. Keep moving ahead of those who would like to "compete" with creative ideas, and most of all price setting, rather than price taking. Let NB and their new partner flounder as they will with no true connection to the grassroots producer. This is our biggest advantage. Keep that producer in the limelight, pay him/her properly and respectfully and use him/her to step ahead of those who would like to divert consumer attention from their profit driven models.

I personally can not wait for a producer owned packing facility to give us that one last cost saving advantage that Spring Creek now feels they have. But wait is not the word. "Forge on Bravely" as on of my new cow lease operators keeps telling me. Stay ahead of those who would like to compete.

Come on down to the Calgary Stampede and have a dog or a smokie at the Second to None store at Weedickville on the grounds. If you can prove you are a direct beef marketer, I will cook it myself, and eat the bill as well.

[Kathy]

I'll be expecting you to cook my burger for me Randy. I hope to come in on the 12th to watch a good friends daughter compete in the Talent Show in the evening. If all goes well, I'll be there... sure like to see Kevin Costner and his band on the 14th... don't know if I can get away for that long... Les just had hernia surgery. Still have some stragglers calving. I absolutely hate the crowds, love the art show and enjoy the food.

On a side note, ie: stampede... wrote to them last year to suggest they consider that many of their horses could be experiencing health issues (leading to unexplained death in some cases)... due to the inhalation of all the smoke particulate from the fireworks every night. Cowboys and competitors going there with their stock, may want to keep their animals indoors during the fireworks show, and for a time after it, until the air clears. There is bad stuff in them, including toxic metals. I wonder if there is an increase in human health issues that could be tracked?

[gaucho]

Randy not to burst your bubble but your dream of a a producer owned packing plant will stay that. Making money in the beef business / branded beef program is not just about owning the plant.... its about knowing how to sell all the pieces of the animal from the cheeks to the tail and everything in between... its about finding the right value added partners and not just doing it all on your own... The plant is the way to the end and takes you to a new level to being able to sell your product at a different level... the level you take it to will however depend on marketing and selling a concept and brand identity.... this takes time, which I am quite confident in saying most producers will never invest long enough in to see a return.. they will by default stray from their track the minute someone offers them 2 penny's more a lb. That's what is the reality....best work with what resources that are available than trying to work on things that will stay a dream.

[rkaiser]

I guess we'll see gaucho. If you keep dreaming that this business is rocket science and there are only a few folks who can make it work - that dream will also become your reality. Keep it simple - follow some basic conscious rules and any plan will work.

Sorry Kathy, no burgers - just hot dogs and smokies --- and maybe a hot cajun one to take home to the patient.

Talkin about bands coming in - I heard that BTO is coming in incognito - takin care of yous guys business. He's gonna hit all the heavy metal concerts with his geiger counter.

Not to make fun of your die hard work Kathy, but honestly we are extremely fortunate to live in the part of the world we live in and we gotta have some fun sometimes.

Caroline Alberta has this steel guitar jam / dance tonight. You should tape up the old boys scrotum Kathy; and come out for a drive.

[gaucho]

I am not trying to portray or give the idea that no one else will pull something off but Randy your simplistic idea that it is all about a producer owned packing plant is getting a bit tiresome.... The fact is Lacombe is a producer owned plant.... in fact three swiss guys that got of their butt put a custom plant together, without government handouts and got somewhere rather than giving rhetoric. The price that we pay to kill is reflective of the costs plus a return for their investment... no different than how a producer run plant would have to run in order to stay viable. The reality is building brands is a endurance race and only so many will finish that race ... even less now that prices for cattle have come up.... the carrot does not look as good as when the prices are down.

[grassfarmer]

Gaucho I wonder if price resistance at consumer level is more applicable to "natural" beef versus grassfed? Is it just that bottom line there is more demand, or more rapidly expanding demand for beef that has not been finished in a feedlot, on grain? I wonder if hormone free, antibiotic free can only take you so far? I know of several other grassfed sellers who have seen the same explosive demand that I have and the prices we charge do not appear to be a constraint.

I agree to an extent on your population density comment - obviously the more people the more potential consumers but at the same time if I'm two hours from Calgary and you are ten hours away I'm sure you could find a way around that problem - it's not a deal breaker. There is an extra freight/transport cost for you but beyond that the playing field is pretty level - we both use the internet and email for sales, hire custom processors and you should be able to produce cattle cheaper because your land prices are less due to a more remote location.

I have leads on substantial demand for grassfed beef in Yellowknife and area if anyone wants to pursue that - again there are transport/provincial regulation challenges but the demand is there among all the healthy, wealthy guys in the diamond and resource sectors in the north. There are just so many opportunities if people have the drive and desire to pursue them.

[rkaiser]

Oh my - rhetoric, government handouts. No use going their bud.

First off, I have ultimate respect for Yvo and the boys and consider them the best custom option in Alberta at this time. And unless they are raising cattle and selling them through some unknown marketing scheme, I would not consider them a producer owned plant.

As for those simplistic rules that I would say apply to a beef marketing web that is producer driven and not just another comapany with more middle than foundation. How about ultimate respect for the producer.

What better way to respect the producer than to have him on board. Rather than talk about him/her as if he is simply a sellout waiting to happen.

I personally feel that the producer is the entity that needs utmost respect in a proper chain. To say that the race to develop and market a brand properly is has rhetoric written all over it. The only race in a game like that is for the bottom price.

The world is at our feet Christoph and you know it. Rather than whine about Safeway and Loblaws, look offshore or even state side where our competition has little interest promoting Canadian Beef, let alone beef raised and "packed" by producers.

If you would rather not hear about the "dream" to open a producer owned plant bud, don't read my stuff. I don't plan to stop until a plant is reality.

Oh yes, one last dream. That this very large producer owned plant, takes most of it's product offshore at premium prices to allow the grassfarmers and purecountries, and heritage angus boys to increase price for each of their unique and special product lines.

Just a bit more repeatable rhetoric to end this off Christoph,

Producer Owned Plant - Producer Owned Plant. Say it enoguh times and it will become reality.

Get your prices up bud. Yer beef is too cheap. you seem to have become the NB clone to the little guys.

[rkaiser]

Good point on the grass fed thing GF. And there are many more feeding opportunities as well as genetic variances that can identify a program as unique. Not rocket science, nor a race to the bottom of price.

All of which depend on the producer for success.

[gaucho]

Randy for your information our company is now exporting over ½ of what we produce to high end over sea’s markets… we are in the top 10% priced beef in these places behind kobe and wagyu beef. The reality is not all the cuts that come of a carcass can go there and so your marketing strategy has to be a blend between domestic and export. I am not whining about Safeway and Loblaw’s…. They are what they are because of a consumer in North America that has been spoiled with below cost of production food products. They value what they drive more than what they put in their mouths. From a business standpoint they are a dangerous customer to chase because their decisions can change on a weekend and the next thing they don’t want your product to sell on Monday or they will hold your company hostage in terms of the prices and so the only move you have is to lower cost of production… hence NB for SCR. You would think that Ranchers Beef experience would show you lesson learned… it was producer owned and had some big bucks and smart people behind it…. Why did it crash? Because it is an incredibly arduous and painful task getting a plant going and getting the markets and premiums for the beef that you need to make it wash. Do we need to talk about natural valley as well?
Canada Gold is giving a good run at it but maybe you should talk to Rick Pascal…. He’ll definitely tell you that it’s no cake walk.
They say that you must walk before you run and getting premiums for your beef does not happen over night… you need the right partner distributors and end users that will sell and tell the story and are as passionate about the product as the producer that produces it.
Last I checked was Armind Mueller not a producer, or how about Werner…. He had a dairy and decided to take this on…. it’s better that the guys running plants are not producers…. Makes you look at it with clearer eyes than rose colored glasses that you are looking through.
Somehow you have a problem when someone that owns a plant makes money…. I didn’t know we are back in the USSR?

[gaucho]

Grassfarmer I agree there are opportunities for grassfinished but till now not at a retail level.... trying to sell frozen beef there is like a kiss of death... As far as overseas, you will get compared to Uruguayan and Argentine beef and good luck competing with them.... I know SCR often undersells their beef and so if you want to make it work domestically you have to be prepared to walk away from customers that don't want to pay the premiums.... As far as wanting to take on Calgary customers directly.... I have no time left for that.... Between Heritage Angus, running a ranch and having time for the family there is no surplus

[rkaiser]

Glad to hear you are moving beef offshore Christoph. I knew you were doing some, but half your production; that is awesome.

I don't know where you are going with all of your talk about Rick Pascal,producer management and such. There is more than one way to skin this producer owned plant idea, and obviously, by your aruement that CPM is producer owned, you have some ideas of your own.

First you say that producers should not be running the plant and then you argue that Armind and Werner are producers. I think you are just ranting for the sake of ranting bud.

Of course it will not be a cakewalk to start and run a plant in Alberta, and marketing is the second most important thing behind producer support and creativity, however simply running it down with your twist on how it will fail, and how it is supposed to work, is as much a waste of time as my trying to convince you with a few sentences here that it will happen.

Like I said before, good on the CPM boys and good on you and Heritage Angus too Christoph.

Don't be afraid to take some thoughts from something other than your own mind though and respect your producers and keep setting your price - higher.

Do you not see the outside industry interest in Agriculture these days. The things that have been changing over the past few years have morphed the old BIG C plan and players are coming at us from walks of life that
make your ranting sound like very old news.

It will all be fine Christoph. You will survive and hopefully thrive with an open mind and progressive movement. And the rest of the industry will change as well. Don't get stuck telling the rest of us that we are wrong because that negative energy will cause you to miss a boat or two.

Have a great weekend and go sell some damn beef.

Cheers,

Randy