Solution to America's M-COOL Problem

[grassfarmer]

Cedar, An obvious starting point is limiting the percentage of packer owned cattle they can slaughter. This does not take money it takes political will.
ABP passed a resolution seeking a 10% cap on packer ownership - we'll see if this gets taken seriously by the Government.
Another is to take a long term view of the industry by backing initiatives like that of Cam Ostercamp - to allow primary producers to "buy back" control of their slaughter capacity. Far better than the short-term bailouts we have been getting.
I read the Cattlemen magazine today and was amazed at their coverage of the ABP AGM last month. First they make the mistake of thinking "ABP" speaks for Alberta beef producers - it doesn't.
Delegates voted down a proposal to limit packer ownership of cattle to 14 days and the article states that
"feeders generally are in favour of this move whereas ranchers are against it as it limits the numbers of calf buyers at the auction." Well no one asked this rancher - we do not need packers buying calves - they are only going to get them custom fed anyway so ranchers would be far better off if the feedlot operatives turned up and bought the calves before selling fats to the packers. We must break this monopoly situation or we are all in dire trouble.

[cowman]

I get a little nervous when people start talking about limiting who can or cannot buy cattle at an auction. An auction sale is supposed to be about free enterprize...the highest bidder gets the cattle? Why put in rules too limit who can buy cattle? I suspect if Cargill/IBP/XL weren't in the market we would actually see prices going lower?
How is it that IBP/Cargill have got to the place they are at today? The answer is they are very good at what they do and others have a hard time competing with them! Sort of like Wal-Mart? This is just the way of our modern world?
If the ABP doesn't represent the Alberta cattleman, then who does? I mean everyone who pays the checkoff got to vote, right? If they chose not to, then that is their right? Now obviously I didn't vote in the ABP elections and I do not believe they have any right to exist, but I still have to pay the checkoff and I expect the delegates to at least try to do what they believe is right for the industry? And I do believe most are honorable men who believe in what they are doing. I also believe they have a mandate from the voters to carry out the job they were elected to do? Isn't that democracy?

[cowman]

Cowman, you are absolutely correct. It is no different than the low voter turnout in some municipalities during municipal elections. In some areas less than 25% ov the eligible voters turned out, and in my view if the rest of the electorate sat home on their backsides and didn't vote they abdicated their right to whine and complain. Same goes for ABP.
From what I see, early on in his term, Darcy Davis is doing a pretty fair job as Chairman of ABP.
I think that the beef industry organizations may not be on the same page with some issues so it will be interesting to see what they all have to say at the Beef Industry Conference in Red Deer in mid-Feb.

[grassfarmer]

Cowman - heroic defender of transnational corporations everywhere. I suggest you read "When Corporations rule the world" by David Korten to see how our modern world really works.
Reality is Cargill and Tyson didn't get where they are by being the most efficient and best in their field - they got there by exerting influence on politicians. These sharks were induced to come here by multi-million dollar bribes by our politicians yet when BIG-C proposes to get the same Government to bridge finance ownership of a producer owned plant where the producer will pay back all the money they are not interested. Problem is Cam and Randy (correct me if i'm wrong Randy;O))don't have multi million $ bank accounts to bribe the politicians with.
This whole exporting boxed beef across the border deal we have been doing since September 03 was a set up deal - set up between US and Canadian politicians in the pockets of transnational corporations - to extract even more wealth from primary producers than they normally are able to.
You only have to look at the revolving door in North American politics that sees retired politicians and ag ministers become directors of the big transnationals - clear reward for unfairly influencing Government policies to favour the corporations.

[farmers_son]

Cowman: I agree with your comments.

Grassfarmer: I agree with some of your comments, sorry not all.

I have not read the book you mentioned but I would say that economics rule the world. I agree that Cargill and Tyson did not achieve their market monopoly by being the most efficient in their field. Politics would have played a role, ruthless business practices would have played a role as well. I agree that the U.S. policies that saw Canadian boneless beef imported into the U.S. after May 20 were formulated to specifically benefit American interests in Canada while keeping pressure on primary producers who were being used as pawns in political maneuvering that involved a great deal more than BSE and food safety. When you say that retired politicians and ag ministers become directors of the big transnationals, I believe that happens more in the U.S. than Canada. Canadian politics is considerably different than in the United States. Canadian politicians of note and their after government pursuits include: Hon. Flora McDonald is Vice-Chairperson, Partnership Africa Canada. Joe Clark has been appointed to a teaching position at American University in Washington, DC. While Frank McKenna was a director of the Carlyle Group which among other things was involved in the U.S. defense industry, certainly that appears to be the exception.
You will not be successful approaching government for support for producers packing plants if you somehow believe government and the various ministers are somehow the enemy. We need to keep focused on who the enemy is. That is clearly the big packers, Cargill and Tyson.

[grassfarmer]

Farmers_son, I don't have a great knowledge of Canadian politics I must admit. I have read in posts on Agriville that Shirley McLellan was an ex Cargill employee and the fact that Doug Horner worked for Con Agra makes me leery. It's almost as if these are necessary qualifications to get the AG portfolio in Alberta.
I agree we need to " keep focused on who the enemy is " Shame that to this day no ABP person has come out and publicly said one word against the US Packer Corporations.
This current ABP garbage,echoed by Doug Horner,that we shouldn't limit packer ownership of cattle because it would reduce the number of buyers of calves and further reduce prices is obviously nonsense. Moving from a position of many competing feedlots buying calves to 2 packer companies buying most of the calves because they have either a stranglehold on the feedlots or they have financially ruined them can not raise prices.
How many of you would be happy to turn up at the auction to sell your calves and find only 2 buyers present instead of the usual 15-20? It's a recipe for disaster and that is where we are headed unless we fight it.

[rkaiser]

You are bang on with that packer ownership talk grassfarmer. After hearing what Horner said to you and Jon I took a letter along to our meeting with him and watched him read it during our BIG C meeting.
ABP/CCA has taken the BS aprroach of limiting buyers while, I beleive as you do, that packer ownership limitation would allow more feeders to be in the game.
If the ABP memebers who have adopted this approach were honest, they would talk straight about the custom fed cattle that they or their buddies depend on for a monthly cheque from Cargil or Tyson.

I wonder emerald which things Darcy Davis has done since taking the reigns that have turned your crank, or put some dollars in your pocket? Is it the statement he used to intimidate delegates at the AGM, calling a producer owned levy funded packing industry socialist.
Or maybe it was the way he descibed the need for BSE testing for marketing purposes as useless and unnecessary. Funny thing was his AGM and 4 Zone meetings passed a resolution contrary to his point of view.

Darcy received a letter concerning each of the above mentioned topics, and I still respect the man on a personal level,,,,,,,,but,,,, if we would all sit back and applaude rather than make an attempt to keep our Industry Leadership in line, where would we be. Every other democratically elected body has oppostion, does it not.

By the way, thank God Rick Pascal and his gang had the balls to stand up to those jokers at CFIA lately.

Packer ownership is a crucial issue, as is defining the role of CBEF and BIC in promoting and advertising BEEF, while the packers steal CATTLE from producers who pay a good chunk of the advertising bill. For almost two years now packers have benefited solely from over 6 million producer dollars spent by CBEF and BIC. No one can tell me that even though consumer confidence has shown an increase in consumption; one red cent has been passed down to the producer. Price has not been set by supply and demand for almost two years.
Dysfunction in the market has led to pissed away producer money promoting for the packers.

[SASH]

As much as I agree that we have to have more options as producers, I think we need to do it by building our own packing plants, not by limiting packer ownership. It would be difficult to blame the large packers for trying to control as many variables of production as possible. That is only good business strategy. We as an industry, should try to work on vertically integrating the cow-calf producers and feedlot operators in such a way that we can demand a certain price per pound rather than accepting whatever offer is made by the packers. The power of being able to set prices would allow us to make sure that we cover our costs of production as well as make a profit. What other business do you know of sells there product for less than their cost of production? If anybody is to blame for this situation, it is us as the producers for not being able to work together on these issues.

[gwf]

Is it possible that there is a contradiction in the restriction to ownership of cattle by packers? On one hand you want to restrict ownership by the existing packer interests and on the other you want producers to be in the packing industry. Would it all right for producer ownership of a packing facility to be exempt from the restriction of cattle ownership? Be careful what you wish for.

[rkaiser]

Well GFW producer packing ownership is certainly a hope, and we don't realy know what kind of rules may be adjusted for packer ownership of cattle.
The current situation is about all I can go on, and it is a complete and utter farce.
For anyone to say that packers are not mainpulating price with huge ownership numbers is out to lunch.
For years price has been influenced by packer ownership and this in turn has been a diadvantage for those feeders who are in competition for packer hooks.

I simply have no idea how things could, or will change if more Canadian plants are built, but what would really be wrong with packers staying out of the feeding industry and allowing more competition from feeders?

Good business maybe - unfair rules to protect the big guys maybe as well?