Cow Prices Down, Hamburger Prices Soar!

[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!

[gaucho]

I think we are at the appex of that happening

[grassfarmer]

I think life would go on ASRG. Cargill could move to
full production at High River and there is plenty
capacity in the US to pick up the slack .... and they
would if they could buy the fed cattle at a discount
which seems likely.
Over time we might or might not decide it's finally
time to own some smaller slaughter plants in western
Canada. The climate would be more conducive with
one of the two gone.
I think the decisions will be out of Nilssons hands
anyway - they were only ever two-bit auction
operators with ideas above their station. The Calgary
philanthropists behind them might have more say
what happens.

[ASRG]

Who are these Calgary philanthropists? I always wondered where Nillson's got their money.
There were rumors when XL swallowed Tyson Lakeside that they were a puppet for some big Brazil outfit?

[Kathy]

For once I'm not the pessimist! XL Beef will get recertified and go on as normal. No persons have died, and the ecoli from the steaks doesn't match the fingerprint of the ecoli from the XL plant.

Prices for calves and cows will likely be depressed from what might have been; but there is still a shortage of cattle, and supply demand will dictate price. Consumers will return to their old habits.

As for the big box stores like Safeways, they are hostage to these packing plants - they don't have any choice where they get their meat. As soon as XL Beef is back on line, they will be back buying from them.

What some have missed with this conveniently timed situation, is how it will allow for the "meat industry" to push for "irradiation of beef" (yuk, might as well throw it away)... and they'll keep up the pressure to mandate some form of an ecoli vaccine (forcing the cow-calf guys to pay for it, of course).

Since the ecoli problem is a result of high grain rations changing the pH of the rumen and causing the growth of the bad form of flor.... I don't see how an ecoli vaccine will stop the problem. In fact, it will probably cause all kinds of problems with the healthy flora in the rumen and some new disease will emerge.

I wonder why the grocery companies don't have some sort of insurance that would pay them for the recalled meat disposal, and then go after XL for the costs?

[paladin]

I think many of you are right. Food safety has always been the specter in the woods. BSE was a production/political issue, but this is the thing that has always had the potential for disaster and should send the shivers down our collective spines. How can it not? I am sometimes resentful of the way we’ve been pushed down this road. I don’t like that first line ranchers have been made to be the face of this crisis (thanks nanny Allison) when the real issue is the industrialization of the meat industry in general. While I’m long enough in the tooth to realize how things have gotten here, I am tired of defending certain practices in this industry simply because I raise cattle. I am also tired of the general North American consumer who wants to wear/eat Dolce-Gabana while paying Walmart prices.

We can’t all seriously drive by our local feedlots on a wet day and look at thousands of head of cattle in there with no bedding swimming in a sea of you-know-what and think that is right? No, I’m not blaming the feeders – I do understand the business model. We can’t seriously, pull into the yard at Brooks with a load of fats that we’ve raised and feel good about dropping them off there when you have more security there than at the G8, and the only people who will work inside are those who are coming from atrocities that we here in Canada have never witnessed or experienced (no, this is not a racist slight – rather a commentary on conditions are so challenging that we ourselves would not work in them, but are still viewed as preferable to truly horrifying conditions that many of them come from). We can’t seriously expect to beat the crap out of our small plants with legislation and regulation, while finding excuses for the inevitable issues that crop up when you are killing 4,000 head a day. We can’t seriously expect CFIA inspectors and CGA graders to be impartial when they are employees of the plant in question. We can’t seriously expect the Americans to be our well-meaning political canary in the coal mine with the current COOL situation. We can’t seriously expect that with the profiteering that goes on at the packing and retail levels our interests at the front line levels of beef production levels will be protected. We can’t seriously expect drugs and chemicals and “processes” like irradiation to bail our way out of a flawed production model (and this goes for chickens, pork and grain production as well). We can’t seriously think that segregating sectors of beef production and creating pricing winners and losers in this industry isn’t horrendously damaging long term (no, I’m not a socialist – rather an advocate for vertical integration at the very front lines).

What do I think will happen (for what it’s worth)? Lakeside will open again. The American’s will let them trade across the border again (uh, let’s not forget – food safety down there really is not really any better and there have been some spectacular failures in their system too). There will be government funding to “fix” the problems. Irradiation will be back on menu. Consumers will return to beef. And we will continue to raise cattle (albeit, with a little less $$ for our calves this fall). The feedlots will continue to buy (and the helpful pricing “correction” on feeders will help their margins with the impending pricey feed bill).

What should happen? Full paradigm shift. That’s what. Ladies and gentlemen, our “industry” is sick. In utopia, producers and consumers (who play as big a role in this situation as any one of us) need to question what’s really going on in every area and find a way to some middle ground.

Thanks for the space to vent….

[kato]

Well said.