ABP resolution Re supply management

[gaucho]

Supply management and access for EU dairy products into Canada is a big part of the CETA negotiations. Is Supply Management a hindrance? - you bet 100% it is. The future of our plant in Lacombe is highly dependent upon being able to kill and process cattle for the EU market... so to is our brand. If we were dependent upon a domestic bee market I doubt we woudl be here very long. I am sick an tried of supply management guys talking about the future of their mega sized family farms... did you know that all the turkeys supplied and killed for the Ontario market come from 5 "family farms" What about negotiations with hte Asia Pacific PAC.. Sorry Kato and Grass Farmer but I don't know why you guys are so defensive for the spoiled brats!

[grassfarmer]

The problem with CETA is it's another very poor deal from Canada's point of view. Potentially give up a lot but gain nothing. It has been made clear that there will be no change in the EUs stance on hormone treated beef so no change there for the bulk of the exporting industry here. Same on the crop side - the EU will not drop their regulations banning import of GM crops. Is your branded hormone free beef under threat of being shut out of the EU because of the supply management sector? Is that spelled out in CETA?
As for the Asia Pacific club that's just New Zealand throwing their weight about on the dairy issue as they like to do. Tell them we'll drop supply managed dairy in return for NZ winters!

[gaucho]

Grassframer some times its nice being able to sell beef into markets where the big boys can't / don't want to go... ie no hormones to Europe... especially when you have higher cost in small packing plants and you want to differentiate your product so that you can recuperate your costs. If you last checked there are only 2 packers bidding on cattle in western Canada... is there something wrong with having market opportunities for others to grow their business... somehow it is fine to have supply management hinder trade deals? No one saying eliminate it but certainly its time it starts getting eased back.

[Happytrails]

First of all, give her hell Randy. You know they want it, they know they want it, so best luck getting it there.

Regarding b's comments I hope you are in supply management because otherwise you don't make any sense.

And gf the dairy industry only pays an ABP check off to market a by-product which becomes beef. ABP can't be expected to serve 2 masters (meat and milk). ABP's loyalty has to be to beef if a policy favors 1 over the other.

General comment on supply management.

It is GOOD for:

1. Producers who own quota.

It is BAD for:

1. People who would like to become producers (quota cost).
2. Consumers who must pay higher prices for affected products.

Don't have any credible data relating to the numbers of people in the good for/bad for categories. Suffice it to say that supply management is bad for a lot more people than it is good for. HT

[grassfarmer]

gaucho, Nothing wrong with folks wanting to break the packer monopoly on this continent and export offshore but you can do that now - you are doing that now - into Europe with supply management intact. Are your customers telling you their countries would allow more Canadian beef in if we did away with supply management? That's what I'm waiting for - until we hear that I don't think we should even be talking about throwing away a perfectly good system.
Maybe when we are talking about levelling the playing field with the EU someone should mention the Single Farm Payments their farmers receive? A farm with 150 beef cows still gets handed a cheque by their Government to the tune of @$75,000 every year.
How about ABP push to level the playing field in that regard? I'm sure you could make the case Canada could compete better in the EU beef market if they weren't getting that level of support? But we're not that smart - easier to beat up fellow Canadian farmers than go after the people whose market we are actually trying to sell into.

[perfecho]

This is a touchy one. Other than cost to get into the business, it really does work, however, as it becomes more expensive to start, it seems the only ones able to afford the quota, are ones already in it.
Perhaps, with the stability of income, there should be a limit on size, guaranteeing newcomers a chance at the market. Currently, you almost have to be born into a family of dairy farmers or come with large sums of money. I like the system that allows a family to flourish and have a projectable future, however it has turned into an "elite" system very much limiting newcomers.
As for limits to enter other countries, let’s do what is best for our country first, not because of any specific interest groups. Getting seriously tired of the "do this and they may do that" mentality......just have the best damn product and make them want it. Usually any barriers are due to some other reason anyway.

[cpallett]

HT your logic is flawed.

While supply management is good for people who own quota, it is also the reason that quota is expensive and hence the barrier to new start-ups. The perfect example of a supply and demand system at work.

Further, consumers who know anything about the effects of bovine growth hormone prefer to pay the extra costs. ask Cristoff why his European customers are willing to pay a premium for Canadian beef. The answer is quality. Please don't be in such a rush to allow my kids to be poisoned by foreign dairy products. Bad enough we cannot eat shrimp any more.

Seems I have been hearing arguments that we need to have all imported beef meet Canadian standards from the other side of some mouths on this one. Kids drink a lot of milk. Think about it.

Would you prefer that dairy farmers have to have an off-farm job just to feed their habit so that you could all be in the same boat together? Sort of a misery loves company thing.

Until a detailed wok-up has been done on the actual (not theoretical) benefits and losses of getting rid of supply management I vote for the safety of your kids and mine.

We should all be pulling together to bring all Canadian cattle producers up to the economic security level of dairy producers, not the other way around. Why doesn't the ABP call for Alberta to adopt the Quebec model instead?

semper ad meliora

[smcgrath76]

GF - I agree that there is a lot of
quota in the west (Rimbey, north of
Saskatoon, etc.) however as a proportion
of agriculture in PQ it is important
within PQ and the ag sector is very
vocal there. There are quite a few PQ
ridings and most majority governments
depend on getting a few of those.
I think that Canadian Dairies can
compete, even without the SM system,
however there will be a huge learning
curve and a lot of casualties along the
way. As I said before, I don't doubt it
is on the block, but it won't go in this
election cycle.

[gaucho]

GF... yes we ship right now under the 0 tariff rate quota... however under that system there are multiple companies in the EU that speculate and buy quota and then the legitimate importers have to buy that quota from the speculators, because there is not enough to go around ... thereby the 0 tariff is acting like Hilton quota... Secondly the quota which started out as a deal to compensate for the ban on hormone treated beef from the US now has Australia, New Zealand, Uruguay and soon to be Argentina and Brazil that will be able to deliver against it.... so there is less and less to go around Then there is talk that the quota will be based on a 1st come 1st serve basis ... so there may be time so the year no quota woudl be available. Finally under 0 tariff rate quota cattle must be on feed for a minimum of 120 days high energy to qualify even they may not need it... needles not very sustainable in a market where grain will continue to rise. Needless to say a bilateral trade deal for say 10000 tons from Canada a year at minimum would represent 75000 head of cattle per year... a legitimate market and enough kill to make plant like CPM stay quite viable. How many farms would that represent GF? Needless to say enough is enough with Supply Management dictating the negotiations.

[grassfarmer]

Happy Trails, by your logic:
General comment on high cattle prices.

It is GOOD for:

1. Producers who have cattle to sell.

It is BAD for:

1. People who would like to buy cattle.
2. Consumers who must pay higher prices for affected products.

See - it's all the free market at work, but lets call on the Government to curtail high cattle prices. Maybe change the system so there is easy access for cheaper, lower quality imported cattle that'll really help the industry here be "competitive".

[burnt]

Quit it, gf, you're gonna make their heads explode!

[kato]

There's an elephant in the room that's being forgotten here. And that's the lowly chicken. If beef supply management was turfed out, the poultry would be as well.

I don't know about the rest of you, but I don't think we need half priced chicken to compete against for in the consumer grocery budget. Just as the milk boards keep the dairy cow numbers steady, the poultry boards keep the chicken from the boom and bust cycle as well.

There's nothing that makes a juicy steak look like it's too expensive to buy like a sub dollar a pound chicken sitting in the next display case.

Another thing to think about is the tendency of governments to allot a certain amount of funding to agriculture. This means the risk management programs that cattle, hog, and grain farmers all too often have to call on. As of now, the supply managed commodities do not access agristability. If they were thrown to the wind, they'd be at the mercy of the same ups and downs of the market that the rest of us are, and they'd be sharing in that same fixed amount of funding. aka... less to go around, because we'd all have to share whatever funding there was.

As for quota keeping people out of the business, I don't know if an open market with it's uncertainty would make it any easier. How many banks would lend money to a startup dairy? The facilities and equipment alone are in a class that a few fences and some beef cows don't even come close to. And we all know how easy it is for a beginning beef producer to get adequate funding, don't we? What if you added a few hundred thousand for a milking parlour and all the other necessities? And with no guarantee of a profit at the other end?

These are just a few of the consequences of dropping supply management that need to be considered. Trade access is only one of many.