CCA - Removal of KVD is a positive step for agriculture.

[smcgrath76]

Can't think of too much worse than a marketing board for beef. I do think we need to address competition, but tell me how much innovation, differentiation, value added has the CWB spurred in the last 20 years. We are still exporting commodity wheat.
1. A monopoly board would be countervailable. This means we are effectively stepping out of the export arena and thus have a few too many cows.
2. a board would require producer compliance to be successful and thus would stifle innovation. For example, if the CWB ran beef marketing, I would have to buy my calves from myself at the pool price, plus pay freight, in order to harvest them in a plant and value based program that I have personally invested in. That also goes for organic, grass fed, direct marketers, or any other attempt at value adding.
3. Why try to improve? A calf is a calf under a board system. Is there a seperate pool or premium for preconditioning, age verifing, etc.
4. A monopoly pool has monopoly power. Anyone who thinks legislators or CFIA wouldn't encourage that please step forward. They could demand age verification, or preconditioning and pay no premium at all, because that would be the required norm to sell.
I think my personal viewpoint is pretty evident here. I do think we have to address the issues with large multinationals and competition, but let me know if we are going to have a marketing board, so I can get out.
I would be interested to see what the proposed solutions to some of the issues I have with a board are. I have been known to change my mind before. A voluntary alliance of producers who market cattle together has much more merit in my mind (see Consilidated Sell). A value chain entered into in good faith by all parties who wish to enter is even better.

[DiamondSCattleCo]

"The policies you describe do not subsidise the consumer by providing him with cheap food - they subsidise the processing and retailing sectors by artificially lowering the price they pay for their raw materials."

Yep, exactly, and since the processing sectors operate more on a cost plus basis than they do on a bid basis, artificially suppressing input costs carries the same effect as reducing (or maintaining) retail prices. This phenomenon has been documented dozens of times over the years with the start of the welfare system in Great Britain back in the 1800s. Government economists are well aware that subsidizing inputs will put a downwards pressure on retail prices. Whether those retail prices drop or not is subject to other downward and upwards economic pressures of the time, but don't doubt for a moment that subsidies have a direct and measurable effect on retail prices.

SMcgrath,

I realize that the present CWB is not exactly a sterling example of what single desk marketing is capable of, but again they are hamstrung by politics and a border of governors who don't really seem to know what the hell they are doing.

However if you look into the past when the CWB was allowed to freely practice monopoly pricing, stockpiling, and any other practice designed to raise the price of raw product, you will see that it was very effective.

I'd like to see a single desk beef marketing board that would differentiate between "classes" of beef and NOT pool producer proceeds but rather operate strictly as a single point sales agent between cow/calf producers, feedlots and processors. I don't agree with single desk sales of breeding stock or anything along those lines.

Rod

[grassfarmer]

Sean I was very surprised with your comments - this is what I expected of western producers in general though. You jump to all the conclusions I expected based on opinions of what the CWB has/hasn't achieved. Most of them are not applicable to the cattle board I had in mind. Your later comments about a voluntary alliance are more in line with what I envisage.
1. A monopoly board would be countervailable. - would it? the US has had many attempts at attacking the CWB this way over the years to no avail. Why should we build our policies around WTO or NAFTA standards anyway? are you naive enough to believe that if we do others will also comply? We must fight and defend our right to trade but not by unilaterly complying with schemes our trade competitors would like to handicap us with. No need to give up exports. Trade agreements are not really about levelling the playing field for producers in different countries anyway they are about making shipping of product by transnationals around the world easier - so these imports can be used to de-stabilise the domestic price and supply raw materials to said transnationals at below the cost of production.

There is no reason why a board could not be set up along the same lines as the outfit marketing fat cattle in S. Alberta today - achieving better returns by uniting producers to fight a stronger sales hand with the packers. There are certainly opportunities to market a range of different product types eg grassfed, organic, hormone free. In no way does a central marketing board preclude this.
There would also be cattle sold of different grades and values so the incentive to produce better, and get paid for it would still be there. I think this proposal deserves further consideration, especially in conjunction with the B5(-1) group's current proposals.

[smcgrath76]

I am not oposed to a voluntary organization with a cooperative spirit. I appreciate how difficult it is to get like minded primary producers to sing from the same songbook. I have a problem with mandatory anything, and can see huge challenges in working with people who don't share the same spirit of cooperation.

[northfarmer]

so, there are people in the cattle business that would prefer to have some salary paid "beuracrats" sell their beef under a monoposny (the cwb is a monopsony as they by now means control the supply of wheat in N America never mind the global market of which 75 % of the production is epxorted to)......or better yet like the CWB where the majority of the export sales are made by agents of the board....the national grain cos, JRI, Cargill, Viterra...using their terminal and port facilities where the most profitable handle/blending rev they get is off the cwb trade......

we have almost $20 MGEX wheat and here in Canada Canola and Pea acres on the climb with wheat planned acres relatively flat and barley expected to be down even though corn is better than $5 and the supposed new crop malt quopte is close to $7...

grassfarmer, I do not agree with your perspective on the the CWB, but you make other excellent points, our food policy does not necessarily create cheaper consumer food......it does ensure that certain elements of the value chain make much greater margins....as long as producers, grain and cattle, sell a largely undiffrentiated commodity product the only way to maximize returns is through lower cost per unit of production......

I have cattle and grain, the cattle business margins are poor, grain is the best it has been in twenty years.....my plan is the inverse will hold true in time....there will be great value buying opportunities in beef in the coming years(we have not bottomed out yet???) and I will expand that part of my business and continue to move to a lower cost forage based cattle system with a differentiated marketing strategy....

as for removal of KVD, good on Ritz and do not stop there there are many more changes needed!!

[grassfarmer]

Fair enough northfarmer - we can agree to disagree on the CWB.
I don't know about needing "beuracrats" to sell our beef but I increasingly think that what we need as producers is someone to market beef for us (in partnership with us). Like many I have supported the idea that we needed more packing plants, and that we need to own them. I am now coming around to the idea that we maybe don't need to own the plants - we still need more for competition's sake but as a producer I can get cattle custom killed without a capital investment in the plant. A bigger problem to selling our beef is the marketing side - to be able to sell successfully into a monopoly dominated market is a tough job.

It's interesting that you too plan your future in beef around marketing a differentiated product, it seems nearly all the people working to change the system (re ABP/CCA, packer monopolies etc) - rkaiser et all are involved in this value added side of beef production. Ultimately differentiated production is good for those of us in it but it does nothing for the "commodity" sector. Surely there must be a future for commodity beef too? afterall it makes up the bulk of the market volume. So why then is it that the producers of differentiated beef are the ones trying to improve the lot of commodity producers? This just struck me as strange.

[Bez]

GF

You wrote -

Quote - Whatever you believe the time of rising food costs are with us - maybe a 5-10% increase in grocery prices over the next couple of years due to shortage?
End quote

No matter the price of food at the grocery counter - anyone raising cattle will not get a piece of the action.

As price takers, those in the cow calf business will take what they are told to take.

If they do not like it - tough tittie.

Can't do it? Then get out of the biz. Someone else will come along - or the import trade will take over.

Business is run by shareholders and boards of directors and such.

Profit is maximized by taking every penny and putting it to the shareholder in either dividend, share value or both.

Price takers - read primary producers - will never see a piece of rising food prices until they have a different system in place.

Do not EVER believe that the cow calf guy is important in the grand scheme. When the animal can be bought cheaper elsewhere, it will be bought, fattened and processed in that place. Already happening.

Food will then be imported. Already happening.

It is the power of the dollar and the demand of shareholders for profits that run the biz.

Plain and simple.

No matter what anyone says - the boys buying cattle to feed the kill lines that feed the grocery stores that feed the people - well and truly do not give one tiny loose runny shit about the primary producer.

It does not matter what they SAY - it only matters what they DO. And their actions speak loudly at the contempt they hold for the primary producer.

And that is buy as cheap as possible - period. When that producer fails, some other fool will try.

When there are none to deal with then they will either close plants or import - either way it will be done on our backs.

Food will rise in cost and the consumer will pay. And nothing will get to the primary producer.

Bez

[grassfarmer]

BEZ, not sure what all that was about - were you disagreeing with something I said?
As for the "Can't do it? Then get out of the biz...." if that was directed at me I can assure you I won't be getting out of the business any time soon. Our family has been at this occupation for over 300 years and I think it would be fair to say have survived some major ups and downs through that period. I'm not scared or intimidated by any johnny- come-lately corporate meat packers or retailers.

[rkaiser]

I think that the "Canada Gold" program addresses some of your commodity beef concerns grassfarmer. We simply could not get our heads around anything but a voluntary sign up.

Going to do more reading than writing for a bit here folks..... It's election time after all.

[Bez]

GF - you wrote - Quote

BEZ, not sure what all that was about - were you disagreeing with something I said?
As for the "Can't do it? Then get out of the biz...." if that was directed at me I can assure you I won't be getting out of the business any time soon. Our family has been at this occupation for over 300 years and I think it would be fair to say have survived some major ups and downs through that period. I'm not scared or intimidated by any johnny- come-lately corporate meat packers or retailers.

End quote

I can assure you it was not directed at you in the manner it might have been taken. Unfortunately comments can be misunderstood.

What I was getting at was the fact that primary producers cannot take advantage of increased food pricing - because they do not have control of their own pricing.

The fact remains that we are under the thumb of those who we sell to as we have no alternatives.

If we do not like it we cannot go to the competition - there is none!

Therefore we in this place would not ever consider selling to a buyer. They can pound salt. (After they have had a coffee) ;-]

To survive we have to develop our own markets which we have done here.

The primary producer is an endangered species.

Bez