ABP resolution Re supply management

[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.

[kato]

perfecho, rather than limiting the size of existing dairies, there is another option. In Manitoba the egg producers have good system. When demand increases, rather than allot new quota to existing producers, they hold a lottery. Anyone who wants to get into the business enters their names, and the new quota is given away. This year it allowed three new producers to enter without having to purchase quota. It's simple, but effective.

[perfecho]

Kato, not sure of the answer, and there are probably many parts of a solution. But I do know we are losing small producers that are viable operations due to the high sale value of quota, although I do see value in the quota system. In our area, many of the dairies are moving to 300 plus cows. We have a dairy in our neighbourhood that every animal is in a barn all times of the year....not a fence on the place...looks gorgeous, however is this the way we were meant to raise animals?
Food production, in my little mind, should be more of an ethical philosophy than a dollars and cents issue...God gave us a great food source however we continually find ways of screwing it up! Mass production, mass processing and mass distribution is killing us...literally as well socially.
The bottom line is food is too cheap! When we throw out 30% and it only costs us 10% of our income to start with, there is a problem. Food and food quality should be valued; it is the basis of our being and should not be supplied by the lowest bidder. (Melamine is cheap)
I best stop my soap box speech now, but there are more important things than lowest cost....reliable supply which includes multiple producers, shorter supply routes, jobs kept in the community. Our system is getting very pretentious with its global focus, and I believe there a day we are going to wish we had done things differently.

[rkaiser]

Seems to me that hitting one group to benefit another is typical North American economics. That being said, ther are some decent arguements for both sides here.

From a total beef perspective however, we are once again focusing on E.U beef marketing to support removal of SM and I don't believe that remnoving SM would be the last way that the E.U. would try to protect it's position. Might sound good that they have given us a number like 75000 head, and that would help a fair number of producers if their value chain was geared for profit back to producer. I think that the E.U. quota system for beef will change no matter what and quality and branding (esepcially using the Canadian flag) will keep Canadian companies in the E.U. game.

Do we have to push the S.M. button to remove beef at a premium price from our country though? I think not.

First meetings in China support the enthusiasm of ALMA officials as well as everyone else who has been here and seen the opportunity. My God what a country. And wherever they are getting the money to do the things they do;I don't know and don't care.

Once the officials that we met heard us say that we were not here to dump cheap beef into their country and were realy after the (still) literally millions who can't quite afford Kobe but would love to have a quality "Canadian" choice,we were off to the races.

Visited a duty free port area with buildings available to set up a fab plant and start importing carcasses for our low labor cost friends to cut up the way they prefer. Would not even need the duty free deal if the boneless rule was not in place.
And just like the E.U.,the rules "will" change. Just like every trade deal however, if you don"t actually ask and have the ability to live up to what you want to do, talk is cheap. Sending Ritz or any other government or ABP/CCA official over here to China to negotiate change is like saying that another big company will dive into the E.U. unabated when the quota rules change there.Besides, the E.U thing is as much about the big boys conserving their captive North American supply of beef cattle as anything else in my mind.

Just wish I could speak the language better as it seems to take that second meeting with a number of beers and some real weird fish food to get my point across clearly.

semper ad meliora back atcha

[rkaiser]

Sorry boys and girls,and burnt,can't find the spell check on this mostly chinese tool bar...LOL

[kato]

Don't worry, your spelling is good.

You'll have to find a way to post some pictures when you get back. What an amazing trip to take! I'd be careful about that "street meat" though. ;-)

[grassfarmer]

I have word of an interesting suggestion doing the rounds in progressive dairy circles. To meet rising consumer demand for raw milk and also make entry into the dairy sector easier for new entrants a proposal is being floated that would allow someone to start up a dairy for up to 10 cows, without need for quota, with the milker being able to sell the milk direct to consumers. Now this would be regulated - the facilities would be inspected for cleanliness just like regular dairy operations so it would help make raw milk safer than it is today in it's illegal, underground existance. Ten cows doesn't sound like much but I've heard raw milk is in demand at $2.50/litre from consumers - even 5000 litres per cow at $2.50 = $1250 per cow so 10 cows might be $125,000 output!
The intent is that a producer could start this way but at the point they want to go over 10 cows they would need to buy quota like other dairy farmers.
I think this is a brilliant solution - it would probably increase overall milk consumption too but the toughest sell would be getting Government to change the regulation on selling raw milk.