Perspective on trade

[pandiana]

I ran across this summary of US trade numbers and thought it was useful for me to keep things in perspective.
US is considered our 'best trading partner', yet they import more from Australia and exports are apparently negligible or non existant.

Canada imports nearly half as much as we export to our 'best trading partner'.

Mexico,pre BSE, was considered Canada 'next best market'. We now export 53,000Tonne whereas US has a NET export of ~283000 MT.

We need to give our head a shake and realize we have a long ways to go. If we have the best beef in the world, we need to do some selling.


US Beef Imports - YTD (MT)
Australia 249,610
Canada 233,900
New Zealand 152,448
Uruguay 109,177
Brazil 59,166
Central America 29,101
Mexico 15,663
Argentina 13,891
Other 1,556
864,512
US Beef Exports - YTD (MT)
Mexico 298,406
Canada 106,349
Eqypt 72,634
Others 71,566
Japan 39,770
Korea, Rep. 25,054
Taiwan 17,902
Hong Kong 7,784
Russian Fed. 148
639,613

Net US Imports CDN Exports (Tonnes)
-282,743 Mexico 53,000 Mexico
127,551 Canada 25,000



Source:  AMS/USDA, Des Moines, IA

[farmers_son]

The U.S. is the worlds number one beef importer, no question about that.

U.S. net imports of beef account for only 2.2% of total U.S. beef production.

The numbers shown do not include live cattle imports. Both Canada and Mexico have been shipping significant numbers of live cattle to the U.S. If you look at the numbers in the list it appears the U.S. is exporting a lot of beef to Mexico while importing very little however what is really happening is Mexican live cattle are being fed in the U.S and the beef shipped back to Mexico. Bio fuel and ethanol have given a price advantage to U.S. feedots and I would expect we will see more Canadian and Mexican live cattle fed in the U.S. in the coming years, with resulting increases in U.S shipments of beef back into Canada.

Prior to 2003 we were importing live U.S. cattle and shipping them the beef. In 2008 and the foreseeable future it will be the other way around. We grew to think of ourselves as a beef exporting country but we cannot export beef if the animals are leaving the country on the hoof.

The change in the value of the U.S. dollar, and the U.S. subsidy of ethanol production will force a change in traditional trade patterns between the U.S. and all its trading partners. It is very possible in the coming years that Canada will be importing more U.S. beef than we export to the U.S. unless Canadian feedlots and packing plants can regain some competitive advantage.

[rkaiser]

Amazing how some of these feedlots you speak of farmer_son are looking at adding value to our product rather than giving in to your predictions of the future.

If we are to sell more beef - we are going to need to identify our product as unique to the world. The path of assimilating with the Americans the way that ABP/CCA have beaten in to our heads is and was wrong. We will loose our export status if we follow that route much longer.

Guess what would make us unique in the world of export beef product?

[PureCountry]

Putting those little drink umbrellas in every pack of burger, and coupons for free tours of ABP's offices in every pack of striploins? Am I right? Do I get a prize?

Oh I know - for American buyers especially - one flu shot for every 100lbs of beef bought.

[DiamondSCattleCo]

Don'cha know Randy that its MUCH better business sense to lock yourself into one customer, forsaking all others? Especially when that one customer shows a propensity of protecting its own borders and importing from the absolute cheapest sources (of which we are not one). Not to mention currently having an economy struggling like a one legged man in an ass kicking contest.

So how about it Randy? Can I be your only customer for bulls? I realize I'm broke most of the time, and extremely picky about what I want, but it sure would make things better for you to have just one customer.

Rod

[jensend]

rod you forgot to mention that you are going to keep all your options open for sourcing bulls. no point in tying yourself to one supplier. i often wonder why farmers_son is so loyal to the americans when they don't care crap for him.

[rkaiser]

You also forgot Rod, that I will be promoting my bull sales right along side those other guys who do not have an industry leadership that regulates my actions.

[farmers_son]

There are live cattle customers and there are beef customers. The NAFTA market is our only possible export market for live commercial cattle.

During 2004 we were selling and exporting beef at world prices but our live cattle prices were at disaster levels. Without competition for our live cattle due to no live cattle trade with the U.S. the packers were profiteering at our expense. We were a captive market for Cargill and Tyson. We need access to competitive markets before we will get paid fair prices for our live cattle and that competition for our live cattle is in the U.S., not Japan or Asia, not even in Canada.

It is nice to export beef but I need to be paid for the live animal and our Canadian packers won't do it unless they are forced to in order to keep our calves from all going south.

[jensend]

and at the same time as the american buyers are 'competing' for our cattle other countries are shipping cattle and beef into the usa so we're captive sellers and they're not captive buyers. by offering tested beef offshore it would be another outlet for our cattle. what are you afraid of?

[PureCountry]

Change. He fears change, as the rest of the old boys in ABP & CCA do. Can't tell it any simpler. Everyone of them prove it over and over, no matter how much they try and veil it with excuses of this or that, they can't help the truth showing through in their own words. THEY FEAR CHANGE.

Ironically, change is the only thing that will save our industry, and our whole civilization. Remember the definition of insanity? Doing the same thing over and over and expecting different results.

We keep trying the same thing over and over as an industry, thinking the U.S. market will be the buoy that holds our nose above the water. All we need to do is take off the blindfold, let go of the buoy, and realise that we can swim all on our own, to any damn market we want to. Beef is traded all over the world between countries other than the U.S. and Canada, every damn day. Are we that narrow-minded to think that we cannot do that ourselves?

[cakadu]

There is an interesting book entitled "Change or Die" by Alan Deutschman (ISBN -10 0-06-088689-7). The book explains how when faced with the need to change, we rarely do, even though we have the ability to change. In fact, when faced with the need to change our behavior, there are 9 to 1 odds that we will NOT change.

The principles in the book can be applied to any facet of life and if we relate, repeat and reframe we can achieve positive change.

The change train has been bearing down on us for years in agriculture, yet it appears as though we steadfastly resist making the necessary changes to succeed.

What will it actually take to make us change?

[farmers_son]

I do not think it fair to compare personal change for example quitting smoking or going back to school so you can have a better job to change within an industry. Personal change may require psychological resources, but industrial change could easily involve financial resources that are beyond the means of the participants in the industry to meet.

Change is a very interesting subject and there is a lot written on it. One could easily make a career out of studying change.

Rather than phrase it as what I am afraid of it might be better to use the term cause and effect. If change is caused to happen what might be the effects of that change? If governments allowed BSE testing for marketing purposes what might the effect be. The packers, not “we” because “we” raise live cattle, might ship some beef to Japan and Asia. Emphasis on the might but it could happen. It might even slightly raise the price of our live cattle if you are very optimistic and believe the packers actually pass along profits to producers. Could anything else happen? Well we might loose the confidence of our domestic producers in the Canadian beef product. We could loose our live cattle access to the United States and as live cattle producers that would directly impact us. We could leave ourselves vulnerable to other non science based trade demands by Japan and other protectionist countries. And Japan might not buy as much of Canadian beef as people would like to think.

Our we could choose to change another way. We could age verify our beef and export the same amount of beef to Japan (or even more) without a BSE test with no potential of loosing our consumers confidence or access to other important export markets. On the balance of probabilities it seems to me that the age verifying is a change that offer more positive outcomes.

[cakadu]

Farmers_son, we could "what if" till the cows come home (no pun intended). The bottom line is that unless we try something different we will never know.

The book that I mention can apply to anything. Yes, industrial change will take more resources, but first and foremost there has to be the willingness to change. From what I gather in other posts, the ABP/CCA is unwilling to do things any differently, despite the fact that the very people they are supposed to be representing are asking for changes to be made.

Japan is a huge market that is willing to pay for what it gets. Yes, I do know that they are very particular about their products, but they are willing to pay to have their specifications met. Another market that we could tap into is the European market, if we were willing to dispense with the hormones.

Some of the potential solutions are right in front of us, yet what makes them so hard to achieve? Why are the producer organizations so reluctant to take the chance that they could work?

At first glance, there seems to be a whole lot more to be gained. What don't we know about or is the status quo the much preferred way?

Curious in the Country.

[farmers_son]

I agree that we could "what if" until the cows come home. The BSE testing discussion is a lot like a dog chasing its tail.

I would very much dispute that the people in the country are asking for the BSE testing for marketing purposes change. I went to our local ABP fall meeting and someone from out of the area did get up with a resolution for BSE testing but I think only the mover and seconder were in favour. Everyone else voted against it and there was a pretty good crowd.

What they are asking for is some relief from the financial pressure they are feeling and unfortunately there is no easy solution for that. Certainly BSE testing for marketing purposes is not the easy solution that those few producers are asking for.

[per]

Farmers_son if the Change of Die book is not at you library another book that might interest you is "Who Moved My Cheese?" by Spencer Johnson, MD. It takes a metaphorical look at the same subject and can be read in just a few hours. It is required reading in some boardrooms. I don't recall anyone saying that testing is the end all answer, just one more option for marketing our products. If you don't want to participate in the new environment we find ourselves in then please don't stand in the way of those that do.