Cow Prices Down, Hamburger Prices Soar!

[kato]

We've been saying all summer that there would be a great effort put out to drive the price of cattle down, but this is ridiculous. It's not quite what we had in mind.

[riders2010]

This mixed up carcass thing has been on my mind, so wondering do they just inspect every so often? Because if they do say inspect 1 in a 100 then maybe just one of other 99 could have something which makes the whole batch bad. Does anyone know how they do that.

[greybeard]

The small locals will have a snowstorm of new paper and regulations to abide by because we all naturally call for more government involvement. The big outfit caused the problem but this will result in more consolidation as the small 3 man shops can't do the paper

[grassfarmer]

Not so much a case of checking one carcass in every
10 Riders, they are just on too big a scale for that I
think. From the article I kato posted on the other
thread "Industry standards dictate that when a 375-
gram sample from a 1,000-kg container of trim
destined for ground beef tests positive, that lot is
diverted for use in cooked products or destroyed."
Also from that article ..."the 1.3 million kilos of beef
recalled" - wow!! thats over 1400 tons! gives you an
idea of the scale of the problem.

[gaucho]

Not to be a pessimist but I think NB will shut her down and HOLD govt hostage on paying for upgrades and then flip the asset... too many things stacked up against the brand now and with lawsuits and no end in sight of recalls and access issues to the US I say they will make a call to shut down operations... if you think I am nuts put yourself in their management shoes with what they have in front of them and the options they have with their US plants

[ASRG]

gaucho: I've heard that same idea from a couple of others.
Ask for gov. money to make some changes or they close. Once they get the gov money, turn around and sell.

Follow the neoliberal principal of "never let a crisis go to waste"?

I don't think Harper would be dumb enough to give them the cash....but our own little Alison doesn't mind spending the bucks.....and she'd get another chance to dress up in her "rancher clothes" for a photo op down on the ranch! She might even get to wear her cowboy hat!

[smcgrath76]

gaucho - I have thought that would
happen for years, but not so quickly
after BSE, but then opportunity doesn't
knock every day. The plant is a nice
control point on the system when you own
a lot of the infrastructure below. You
can control a lot of cows without the
investment in real estate and actually
owning cows (although they own plenty).
Of course, opportunities like this don't
come every day. As for the Feds, I can
see them paying a good chunk. How many
jobs are represented here. Good PR for
Canada's Economic Action Plan.
I can actually see them starting a
"shadow company" and buying it from
themselves at a discounted price due to
lowered brand equity.

[gaucho]

With BSE no single plant was implicated... it was an industry issue and a border closure,,,this is a Food Safety issue and there are clear players that are to blame and that can be seen to be blamed. The XL Brand has been toasted into every consumers mind and especially the big retailers that put confidence into using their products and have now had to deal with a nonstop recall. Costco, Walmart, Safeway, Lablaws do not take these things lightly, I'll bet I know who is negotiating with Cargill right now. Never mind the Canadian retailers I doubt they woudl get their US certification back anytime soon and for that matter Mexico and other countries have delisted them as well.

Add to that an impending lawsuit with clear infractions to procedure...Unlike most cattle guys these guys have other options with state side plants so my prognosis is pretty bleak

[Fransisco]

[ASRG]

Just wondering....what would happen to the cattle business if this plant went down permantly?
Don't think that couldn't happen. In the early nineties two of the most efficient modern plants in Alberta shut their doors permanently Canada Packers Lethbridge and Red Deer. They were profitable plants. The two "dogs" Lakeside/Brooks and XL/Calgary stayed (thanks to government bail outs). Canada Packers chose to close down rather than compete with the government "crony plants"-Cargill/XL/Lakeside.
Lakeside was a filthy worn out plant long before Nillsons bought it!