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

[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

[northfarmer]

i know all of us cattle producers may find it hard to beleive, but this screwed up cattle cycle will finally works its way out......

it was only a year ago I was growing and selling low value field crops.....now look at the markets....dear grain will lead to dear meat.....

if the majority of the beef is marketed in a what would be termed now as a differentiated strategy, it is no longer differentiated...

my strategy on my operation is not radical....i will drive my strategy to own it to hopefully post finish, run large scale numbers to get capital and management efficency, manage overhead and feed costs to the best of my ability at all stages....this may also suggest direct or indirect participation in any new form of post finish value chain, retail/wholesale whatever fashion it may take....

anyone looking for a system where the standalone 150 to 200 cow/calf operation will pay the bills and not require off farm job or be a part of a horizontally or vertically integrated farming operation is just kidding themselves

the cow calf producer is still a key aspect of the beef business, always will be...the nature, strategy and scale in fice to six years will look nothing like it did pre BSE or now for that matter....

[grassfarmer]

Nobody would like to see a price turnaround in the beef sector more than me northfarmer but.. "dear grain will lead to dear meat" It may do but will any of that price increase be passed onto the producers of the beef? I think you are discounting the effect of the packer/retailer monopolies. Afterall with fat cattle prices extremely low this fall (around 74 cents 1 week?)were the retail prices of beef drastically lower? I think not. There is no fair relationship between cattle prices and retail beef prices and until there is I don't see our lot improving. It looks to me like cow/calf producers could see tougher times ahead given that the grain sector will drive prices of forages and summer pasture higher at a time when calf prices are very low.

[wilagro]

The report also indicated that the full removal of KVD would increase farm revenue by $60 to $200 million per year. In addition, plant breeders estimate that the value lost in existing varieties due to KVD restrictions is over $3.75 per tonne of production – equating to over $86 million per year.



“We applaud the decision by the federal government to remove KVD,” says Lynch-Staunton. “This will give grain producers more choice in the variety of wheat they grow and these new varieties will provide benefits and options to the livestock sector. Until now, Canada was the only wheat-producing country that used KVD as a segregation tool and it is time we found an alternative if we are to remain competitive in the global market.”
-
My prediction: This change away from KVD will produce little to no advantage to the cattle producer. This hype is just that...HYPE.

[northfarmer]

gf, I am well aware of the concentration of market power at the higher vlaue chains of the beef business....cannot see that changin any time soon...there are parallels to the grain industry though and look what demand and supply have done to this market.....

I only get pennies a loaf and pennies a beer for my grain, even when the wheat is now worth $15 bushel and malt barley $7.....

that would beg the question of why grain farmers are not flour millers and why they do not own malt plants...same reason there are not decentralized small scale packing plants with retail distribution chains.....not intending to oversimplify but i do not know how you will change this....

....but i do know this, as long as the packers do not own the cows they do not control the calves.........I agree with you that the shake out is not over yet, these high grain prices will drive more producers out of the business, hay and land for cows will be more money at a time when cattle returns are poor, cow numbers will drop, the cattle finnishing business in Alberta predicated on cheep feed will be reshaped.....

this over time will balance out with a much smaller North American cow herd....but alas these higher grain prices are global, many of the same forces will play out in other markets, soon it will be cheaper for them to import meat than import the feed to make the meat.....watch hogs to lead the way.......China will be at the door soon, it wil be cheaper to buy the pigs than to buy the feed.....they are running out of grain!!

lowest per unit cost of production will be the survival and profitablity key, no different than grain farming.....

as for KVD, the ability of producers to access new and better genetics, genetics that have been avalibable to out global competitors, ubridled by the grading factor critieria that exists in not other jurisdiction in the world, will lead to much higher yielding wheat varieties, this in turn will lead to greater supplies of wheat, this is a positive step not only for wheat growers but also for the feeding industries that would benefit in a the long term from greater supply....