Solution to America's M-COOL Problem

[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?

[gwf]

The number of cattle that may be owned by the packers is a function of our present day marketplace. They may own a large number of cattle on feed now, but the cattle will finish and if the marketplace remains as it is now, they will replace the cattle for another turn, and so the cycle continues. You cannot blame the feedlots for feeding for the packers or anyone else that is prepared to pay the feed bills and keep them in business. If there are more ‘packer hooks’ than there are cattle to hang, is the reason for this imbalance in the ownership, or is it the ‘number of hooks’ available?

When Lakeside started, they had more cattle that they had kill space for and so their process of vertical integration started a long time ago. Lakeside/IBP/Tyson have always had a lot of cattle on feed both in their yard and in custom yards. In years past, they always had their own cattle to fall back on if the prices they had to pay were too high.

The number of hooks (and markets) available for our fat cattle, in my opinion has more to do with the prices of our fat cattle than the ownership.

Randy, I do understand your point, but in the real world we will never see a restriction on packer ownership of cattle., but we can make more hooks.

[farmers_son]

Limiting packer ownership of live cattle will not offer the solution that I believe is needed. The solution we need involves creating a mechanism whereby primary producers can have access to the value added market, boxed beef and beyond. At present producers have no significant access to that market other than on a small scale through provincially inspected butcher shops. Access to the value added market in a meaningful way is denied this country’s primary producers. Presently this country’s 13 federally inspected plants will not let a producer process his live cattle and retain ownership of the carcass thereby creating a government setup monopoly for the federally inspected plants. Cargill and Tyson have achieved effective control over the federally inspected packing industry by virtue of their scale and position as price leaders.

For some time now I have taken the view that there is little point attempting to fix the live cattle market, whether by restricting who owns live cattle or by other means. We need to create alternatives to the live cattle market to break the packer’s monopoly. To this end a number of producers, within the ABP and without such as BIG have been working to see producer packing plants established.

I would offer another solution if I may. That legislation be put in place that would require federally inspected packers to process live cattle for the primary producer while allowing that primary producer to retain ownership of the carcass which he/she would then market themselves, provincially, nationally and internationally if they so desire.

It is very wrong that when a producer sends his animals to Cargill to be slaughtered in a federally inspected plant that he is forced to sell Cargill his animals in order to do market them. That has to change. One way to create that change is to build your own federally inspected plants. Perhaps another is to require Cargill to slaughter your animal for a prescribed fee without the producers having to actually give up ownership of their production.

Just an idea.

[cowman]

The only problem with that idea is: Who prescribes the fee? Is it Cargill/IBP? Or the government? Cargill/IBP sure aren't going to let the government run the show...that you can count on!
And do we really want more government in our lives?
Packers have always owned cattle. Pat Burns probably owned more cattle than any individual in western Canada? And he used them to manipulate prices!
I believe packers are not complete idiots. They need the peasants to raise cheap cattle. If, by price manipulation, they can keep the cost down they have achieved the desirable result?
Rather than ripping the hell out of the packers, we should ask ourselves why we continue to invest our money and time into an industry that pays so poorly? We should approach this in an honest fashion and admit we are addicts to a way of life! And realize every "pleasure" in life comes with a cost?
Now the only real question you have to ask is "Am I prepared to pay that cost?"
I also believe BIGC has a "maybe" solution. Perhaps the best one I've heard so far...although I still struggle with parts of it!

[rkaiser]

In reply to GWF. I would agree that restricting packer ownership is probably a pipe dream. But something so blatently criminal simply makes me mad enough that I still want to keep it on the burner. Everyone likes to say "We did it to ourselves" bull shit. WE did not do anything, that was the problem. These pirates saw opportunity in our government rules and economic situation and used their immoral business practices to take advantage of every situation. If you call this good business, then I don't want to be a businessman. I am all for getting ahead in a free market world, but do it with a bit of respect and compassion.

Was thinking of the word capitalist the other day. To be a capitalist, do you HAVE to capitalise on someones misfortune.

By the way cowman, do you have to do the "I give up thing" when things look down. I am glad you support BIG C and please, don't give up on us.

We are making bigger and bigger waves with government these days. Good meeting with Horner and his deputy minister, who we all agreed could be a benebfit to BIG C. Cam sat with Wayne Easter in Brandon last week for a great one on one, and is heading for Ottawa to meet with Mitchell on Feb. 3. BIG C is certainly a buzz word in Ottawa, and our group has a fair sized honey comb to work with yet.