Incredible

[grassfarmer]

Anyone spot the article in the AG-VISER titled
"Working the records - moving beyond production"?

"Farming is a text book example of perfect
competition" says Ted Nibourg, farm business
management specialist with Alberta AG-Info centre,
Stettler. "As an industry agriculture is made up of
many buyers and many sellers. In this world of
perfect competition it is difficult for individual
producers to earn more than a minimal return or
profit"
Nibourg says that as a result of this type of
competition, farmers are essentially price takers.

Wow, just wow.

[grassfarmer]

I see the whole article is posted here
http://www1.agric.gov.ab.ca/$department/newslett.nsf/all/agnw20944

[wilagro]

Good Lord..."essentially price takers"...self-evident for ALL of my life on the farm. We don't need some AB AG rep to spout the obvious.

Until farmers unite in some meaningful way in marketing it will always be the case of price take and price SCREW.

We did have a little bit of influence over grain marketing at one time but everyone knows what happened to that.

The AB government has NEVER encouraged farmer or rancher initiative towards marketing except for FOREIGN NATIONALS and their minions...and there they fell all over themselves assisting financially and legislatively. Remember the Taiwanese hog influx and the controversy that engendered. When Cargill went into High River they couldn't do enough for that venture as well.

[grassfarmer]

It wasn't being told that we are price takers that
amazed me it was that we are price takers "BECAUSE
OF PERFECT COMPETITION" part.

[perfecho]

It is laughable...until you pay bills, or your buddy in the oilfield tells you how much they make!
Always new farming was not the best business decision, but has been a lifelong dream...so I chased dreams for a while. We will likely do OK due to land prices in our area, however now everyone is in that boat.
My wife finally got tired of waiting to hook up a couple of sinks we had purchased....gotta plumber in for a few hours, over $800.......should have looked at the "honey do" list closer!
That's a least on commercial calf....

[wilagro]

Grassfarmer: Yes, that "PERFECT COMPETITION" is a bit strange...perhaps it deserves another press release to flesh it out in its interpretation and method of employment. Mostly, I'd say that it is just plain BUREAUCRATIC BALONEY.

[grassfarmer]

Again the point is missed... it's not that i'm bitching
about being a price taker. Its about the assertion by
an AB AGF employee insisting that perfect
competition exists in Canadian agriculture and this
causes farmers to be price takers.

Here is a definition of perfect competition:

"In economic theory, perfect competition (sometimes
called pure competition) describes markets such that
no participants are large enough to have the market
power to set the price of a homogeneous product."

Now can you see the problem with his assertion?

[wilagro]

grassfarmer: I see your point...you explained it well. It makes one wonder if these bureaucrats really live in the real world.

[littledoggie]

Another FLAW in the statement - "many buyers". Surely he's talking about somewhere else.

[grassfarmer]

Exactly.... I don't think it is the bureaucratic
gobbledygook of someone not living in the real world
though. Given the guy's position I think this is clearly
manipulative propaganda on behalf of the AB Gov.
designed to keep dumb farmers happy in their
ignorance while the corporate benefactors continue to
line their pockets.

[smcgrath76]

Gf - The way I see it is that part of the problem is that he is half right. Farmers
produce and sell in a perfectly competitive marketplace, but the buyers don't operate
that way. In other words, buyers are also empowered by the fact that they can find
willing sellers at extremely low price points. The justification for single point
purchasers (or double point - JBS, Excel) is always economies of scale, which at some
point can only be justified by ignoring the externalities of the business (offloading
hidden costs on society). This is true in more than beef.
There are some farms working together to market (eg: Grain marketing clubs, prairie
heritage) but in a lot of cases they are pursuing markets that the big buyers have
overlooked, or simply command a volume premium (transactional cost reduction) rather
than adding product value.
The solutions could be several - one direction - increase number of buyers - this is
tough in the current environment (speaking as someone who once owned part of a packing
plant.
Another direction - reduce the number of sellers - I initially was thinking of
marketing boards/clubs, but this is also happening naturally by attrition
Another option - choose to do something totally different - see Gaucho, Randy and
yourself as examples.

[rkaiser]

or - quit finding problems and listening to gaucho tell Kaiser to stop dreaming and wasting his time talking about a producer owned plant.

Still working on opening another plant boys and personally I don't really care how.

The BS that I want a plant to pad my pockets drips off my back like water off a duck by now.

I actually love it when I see other companies moving ahead in the natural beef sector and offering a choice to people, and children in particular that I believe need a choice. If that is as far as we can push it --- so be it.

If we took a collective (don't be scared my capitalist friends LOL) approach, we could do a lot more.

How come the word dysfunctional comes up so often these days with producers and believe it or not retailers and wholesalers; when Cam Ostercamp used it to the disgust of many, ten years ago.

The word now needs to be more like "perversely dysfunctional" and obviously oblivious to government. And many of the wonderful industry leaders who feed this "perfect competition" bull shit to these bureaucrats need to be ashamed of themselves. Seriously