Agriville Vote on Producer Ownership

[kato]

Oh.... what went wrong?

[grassfarmer]

A couple of points I'd query WD40 - You mention getting 50,000 producers to sign up at $1000 a time. According to the 2006 census there are only around 44,000 cattle farm, ranch and feedlot operations in the 4 western provinces in total.
Secondly you say numbers count more than money as far as Government is concerned which makes some sense but money talks too. $50 million would not make us a big players in this respect. 2004 figures indicate that the Tyson foods group had $34 billion revenue and $524 million profit. Cargill Foods posted $92 billion revenue and $2.75 billion profit. Now these are total group figures not only beef processing but it shows that we would still only be minnows in comparison. How does a producer owned plant compete when these guys decide to dump meat in front of our customers for cents on the dollar in an attempt to run us out of town? I do not believe we can succeed without some form of Government intervention to break the packer cartel.

[perfecho]

I believe with a lot of hard work, and the key to the whole endeavor, would be marketing. Marketing the fact of buying brand X, is helping your local farmers, brand X is hormone free, no antibiotics fed…show pictures of Cargill’s feedlot and pics of local farm families and their cows…….it can be done!
I just happened to read the last Safeway flyer…..don’t normally, but this one surprised me. It showed farmers/families, some co-ops and what they grew organically. It made the point of Canadian grown, for Canadians, etc. I do believe people are heading this way, and with the right marketing campaign, you could bust the big boy’s balls! It could be fun! Grab onto someone with a like vision, like a Safeway that wants to go down this road and team up for a start……the times are a changing and we can be leaders or followers…but we have to work together.
Look what is happening with CWB…split and conquer, everyone arguing about who is right or wrong, prices down because of CWB if you are against them, and prices down because of corn glut if you are for them…bottom line, prices are down.
I have been dreaming of doing something along this idea for a long time, but unfortunately believe that it won’t work because of producers….producers that say “it won’t work”, producers that are tired and don’t have the “piss and vinegar” to see it through. When you think it through, producers should have the ultimate control…they have the product, the product that many others make a good living on…but enough rambling…..it’s at least nice to daydream for awhile.

[Cedar]

Wow! Interesting thread! It's got me thinking in so many directions I don't know where to start! Perfecho you raise some interesting points. It seems to me we have been "brainwashed" to believe that we must get bigger and bigger all the time and compete with the "big boys".... on their terms! Their terms meaning we grow it, they steal it, they process it (and screw that up too) then charge the customer a fortune for it! But...maybe we're missing something here! Especially these days with distrust in big companies rapidly increasing and especially in the food sector. We need to take a closer look especially at the next generation and see what they are thinking! I have two teenage boys ... and they are telling me their opinions are not strictly their own, but they are seeing their friends opinions regarding food changing too! Junk food....big "no no" .... make you sick, maybe even dead too soon! Home grown, natural food....yum, yum... make you strong and healthy! (Homemade soup is a big hit around here and disappears very fast!)

OK, I'll try to quit rambling and get to the point: Here's what's rattling through this ol' brain right now: A vision of local co-operatives, a true co-operative...no need to link up with any Safeway or anybody else! Just start these businesses up on our own..how? where does the startup money come from? beats me! I'm just ramblin' on here! But the theory I have in mind revolves around starting small, going way up the value chain and keeping control of our product, and maybe even staying small!!!! Whoa...you say....too weird! Well, maybe! But imagine if we could all stick together in our local areas and supply many different products under one roof: (just think of all the products that could be taken to finish on a small scale in your area!) I'm "seeing" a store that could offer: arts and crafts (how many small communities don't have pre-Christmas sales? ..but people have birthdays all year round!), beef, pork, chicken, turkey, bison, veggies, berries, apples, maybe even locally grown flour and/or bread, restaurants serving only local food. A tough job to get all this co-ordinated? No doubt! But, food for thought....!?? But...as Perfecho says...marketing is the key! Marketing to the end consumer, that is. (That is something I would be very interested in getting involved in, by the way.)

Maybe we could meet, or beat, the "big boys" head on, just think of the cost savings by cutting out so many middlemen and the tremendous savings in transportation costs! Especially with fuel prices being what they are! (Just think...how ridiculous is it here in MB: we ship our barley and other feed grains to AB, we ship our calves to AB, ultimately pay all the transportation costs, and then they ship the beef back to us!!!!!!!! That is not cost-efficient...at least, not for us! Just check out the differences in the reported live cattle prices between here and AB! A Stunner!) This could really bring the "environmental types" on board too! All we need is the "piss and vinegar", a few producers with enough energy left (or even better yet...lots of producers with nothing left to loose...who would be willing to withhold production from the big players...ya I know, a very "tough call"), and the realization that we don't need to be huge to be profitable, we just need to stick together and market what we produce!

Yes, Perfecho...it's time ...or almost ... to "bust the big boys' balls...we just have to get together, but not necessarily one commodity over a huge area, maybe just various commodities (finished products) in a smaller area!!! People need to be able to make one shopping stop and pick up lots of stuff! i know I hate even having to go to 2 places anymore to shop...one stop would be best...but if I can get what I want and support "local yocals" to some extent by stopping at two places...so be it! It's actually kind of amazing how our local farmers' market (which has next to nothing to sell and only for a few hours each week) brings in the people! There's a reason for that!

Am I totally crazy thinking this way? Please let me know! I'm thinking if we could even market a small percentage of our production this way, we could regain some control and financial stability. (Keep in mind all these producer-owned plants that have tried to start up in the last few years.) Maybe we....primary producers...not just beef producers...need to gradually reclaim control or our industries!

[smcgrath76]

not to be pessimistic but the average age of producers is pretty high and generally speaking they have a lot of equity.
Packing plants are a long term investment with a long term payback. For example in our house, my father is supportive and encouraging investment but is not that interested in investing himself as he does not see a payback in the time frame he feels he will be farming.
Further, I think I would rather have a few committed partners (even several hundred) than deal with the masses.
I have tried to organize some initiatives to give producers the opportunity to invest in various value chains and the response has been underwhelming to say the least.
I think the dream of 50,000 producers owning their industry is a great vision, I just don't think that 50,000 producers share that vision. If they did then ABP and SSGA would be more supportive of producer owned plants.

[wd40]

Your rightg 50,000 producers don't shar the vision. However there might be
A:
1. 15,000 beef producers that BELIEVE. Times that by 2 - because husband and wife would buy. = 30,000.
2. Many producers have sons and daughtgers in volved - add another 10,000?
3. Service Industry - Ford garages, John Deer dealerships, local car washes and the list goes on and on and on, were all seeriously affected in 03. I had equipment dealers tell me that they would help their employees buy a $1,000 interest. I had the Alta. Chamber of Commerce ready to organize meetings at every chamber in Alta. and Would help connect with the Chambers in other provinces.

B: (packing plants have a long term payback) give your heads a shake. Cargill will NOT make those kind of inverstments unless their pay back in in 3 to 4 years.

B.1. In the 60's or 70's Bob Peterson had to disclose their books to the USDA in accusations of crooked business. They were of cource vindicated, however in a 8 year window of time they had 1 red month.

We could do it if we had ENOUGH WANT TO!

The wall in Berlin came down. Its people like Grassfarmer that never push on the wall.

[rkaiser]

Time to use democracy and vote. If their are not 50,000, then how many. And how many more than half do we need to say that we should go ahead. $1000.00 a piece and then a checkoff to really kick up the capital. First cheque goes out to buy Atlantic Beef. Second one to Ranchers at Balzac. Sounds like the third could be the Plant at Acheson Alberta which is stopped due to contractors not being paid. #4 could very well be the plant at Dauphin where we would likely get a shot of cash from the one province that has already taken the lead with a checkoff. Sorry to those who had the guts and put the bucks in to build, but at least we will try to put some money back in to these producers pockets where the new buyer - likely Cargill would like to steal some more.

Perfecho has the perfect marketing plan, but I also believe we could grab more exports with BSE testing for Asia, and Hormone free product to the E.U. We could give those boys at CBEF something to do but dream again.

Sean - If you think that ABP and SSGA are the voice of the producer - help me ask them one more time to run a poll on producer ownership with a checkoff and lets see where the bear shit in the buckwheat. I hope that your investment is in the Natural Valley plant - they are the only ones that seem to have a diversified plan and no sign of hopelessness at the moment. As far as the old fear of picking a winner or competing with someone with an unfair advantage - does anyone think that Atlantic of Ranchers or Acheson would rather compete with a group that actually wants them to survive or one that laughs every time the bank comes in.

If the time for the BIG C plan with some added twists is not NOW - when will it be? Can't wait forever folks.

Cedar - your ideas of starting small are all over this country and even all over this board. More folks than yours truly with marketing companies either operating or in the process of building. Should we all be afraid of a large producer owned entity too? Hell no. Bring it on. The money that some of us have invested is far more than a lot of folks have put into some of these private plant dreams. (other than maybe the big money boys at Ranchers Beef)

I see competition being encouraged again by a producer owned industry rather than discouraged in the current commucapitalist world of beef.

[smcgrath76]

Whoa up Randy. I said that ABP etc. are supposed to be the voice of the masses. Everyone is involved so no one gets a real say.
I think that we do need to leverage outside interest and investment such as equipment dealers, and other people in agribusiness as well as consumers.
Currently there are processors out there and opportunities to invest up the chain, but they really struggle to attract producer investment.
Why do producers feel comfortable spending $160,000 or more on a quarter section and not $25,000 or $50,000 on a processor? I don't know the answer to that one.
I think a lot of the initiatives out there now would wecome and could use a cash injection.
I personally think that Atlantic Beef failed because they did not have enough strong believers and they did not pursue the path less taken with specialty processing (natural, organic, etc). They are in prime time market (NY, Boston, Etc.) but may have missed the graph that shows how costs go down until you process around 1,000,000 head per annum. Small plants cannot compete on cost. They compete on quality and specialness of product.

[rkaiser]

Don't forget to start tagging them calves for E.U. export folks. Have to be done before six months of age. We are going to need seed stock to get this marketing plan to be feasible.

[grassfarmer]

I don't know who you are or anything about your business wd40 but I resent that last comment. As a newcomer to this country (<7 years) I feel I've done my fair share of trying to knock walls down. I have developed and built my own small scale (for now)direct marketing beef retailing operation. I was a member of BIG-C and helped organise their biggest turnout rally on their "tour", I have attended many producer plant proposal meetings, I had money in one before withdrawing it due to what I considered poor decision making. I have been active and vocal at ABP meetings and although at times feel like I am one of around only 10 people in the province attempting to sink that misguided ship. I am proud to be an NFU member and as such have had face to face meetings with two successive agriculture ministers at the legislature. I am currently heading up a community group fighting a fresh water oilflood project in my area and as such have met with the current environment minister as well as presenting a dossier to a member of the Federal standing committee on the Environment recently.

I fight a lot of things, but the main thing I fight is apathy. The apathy of Canadians and Albertans in particular shocks me - that is our biggest problem as producers wanting to change the system. I am constantly trying to encourage sleepy, Conservative Alberta farmers/ranchers to attend meetings, get involved and speak up for themselves. I am ready and willing to invest substantially in any beef industry proposal that would better the lot of producers. However I will not jump blindly into "dream" projects that ignore business realities however unpleasant they may be. I am a realist and carefully guard the sustainability and financial integrity of my 8th generation farm operation so that it may be passed on to the next generation.

[kato]

Cedar, you made a bell go off when you mentioned co-ops. I'm not sure how Alberta compares to Manitoba and Saskatchewan, but our rural areas are blanketed by co-ops already. Maybe this is an avenue to explore in the marketing of local beef? Our local co-op has a lot of customers who are very loyal and have been for years.

mmmm ... could be a good fit. Producer owned packing facilities combined with the network and distribution and loyal customer base of the co-op grocery stores.

Randy, please elaborate on the EU tagging?

[wd40]

Talking about Co-Op's
Co-Op's annual meeting in Red Deer unanimously past a resolutgion back after May 03, to actively persure building a packing plant. They currently own a Lumber mill or more, a oil refrinery and had $100,000,000 in the bank. A grocery retail chain to market meat and the Co-Op's executive squashed the resolution. I talked to the CEO's etc. They are Sask NFU minded. Someone please help Canada.