Solution to America's M-COOL Problem

[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.

[grassfarmer]

Cowman why are quitting or "hobby farming" the only options? Beef is a huge industry worldwide, consumption is huge and will continue. Producers will continue to raise beef - why shouldn't we be fighting to earn a living in this industry? There is plenty money in the long production chain from a calf being born on the Prairies to quality beef being served to customers somewhere in the world. We need to get a fair return for our investment and the work that we put in. Just as western ranchers overcame rustlers generations ago so this one needs to overcome a similar kind of thievery - by transnational corporations. That is why I am fighting anyway.

[grassfarmer]

rkaiser, sorry I haven't been on the site since the weekend but I do take exception to your question about what Darcy has done for me or put dollars in my pocket. I know Darcy and feel that he is a much better choice to head ABP than Arno Doerksen. Arno has a feeding operation as well as cow/calf, and from what I heard from producers around this area, the feeling was that he was not as concerned about the plight of the cow/calf operator as he should have been.
As far as dollars in my pocket go, I haven't made a cent on cattle since the ABP elections, sold my calves before that time and haven't sold any yearlings as yet, so any comments I made about the current Chair of ABP certainly were not based on his having helped put dollars in my pocket.
I have certainly supported many of your comments and ideas on this site, so your cheap shot at me was uncalled for.
If we as cattle producers can't comment to one another on this site about ideas and opinions without being the brunt of personal comments, then its no wonder that the industry is in such a mess.

[cowman]

Randy: I don't think I was saying "give up"...just be realistic? The fact is practically everyone involved in agriculture would be better off(financially) if they could get their assets into something else? Now I will admit land appreciation can be another story, but then is that really agriculture?
I also believe agriculture can be a very satisfying way of life as long as a person realizes they need to run a very tight ship and keep their costs in line. Let's face it, if you don't have any debt or expensive tastes you can still live pretty darned cheap? The old idea where the farm supplied a good part of the cost of living comes to mind? Raising your own food, providing some of your energy can really cut down the cost of living. Learning some basic electrical,plumbing, welding, mechanical skills can save anyone a pile of money? And basically learning the difference between what you need and what you want can be a very valuable asset!
Now while I am fairly tight I also have some extravagant tastes...I like to own really good tools and I like a new pickup and I like to eat out a lot!
I suspect if people would realize what they could afford and live within their means they wouldn't be facing this cash crisis?
I do realize many young guys have had to borrow big time to get into farming and that is a shame. I don't have a solution for that but surely the government could have come up with something if they expect any kind of future for agriculture in this country.
I am not saying IBP/Cargill didn't make some hay while the sun shone but lets not forget so did every other little packer and abbatoir in the country? The feedlots took one good hit for sure but I can't see that they are losing money right now with these cheap feeders and really cheap feed? I would think the profit on these steers might be fairly good? I hope they don't make so much that you might consider them immoral pirates, too?
I do support BIG C because they offer to put some checks and balances back into the marketplace. The only problem I have is in my experience, human nature can take over and a positive action can turn into a monster! For example they build a cow plant with a checkoff and the people running the show start to get ambitious and think they'll rule the world. They start to believe the checkoff is their right forever! Sort of like the people at the ABP? Or our various governments?

[rkaiser]

Good comments cowman, and I apologize to you emerald for taking that shot at support for Darcy Davis. Darcy is a big boy and can stand up for himself. He has also proven that he is a loose cannon once in a while, labeling people when he sees it will be to his advantage, and now coming out with a statement about testing for export markets when the delegate body says otherwise.

Don't worry about this smart ass ever feeling the power and using it cowman, I have my own business to tend to. My drive to become a founding member of BIG C was to try to help an industry in dire needs. All the while seeing an industry leadership living like they don't really want any sort of change.
My efforts will probably never end up as more than a bunch of talk, and never have or will end up with personal gain. I have already risked business by speaking out against those who are accepted, and expect to risk more before I am done. However, I still believe this industry needs some changes to survive, and kissing the ass of the USDA has to stop.

I do repect both of your points of view and expect to be criticised as anyone who speaks out should, including yourselves.

[rkaiser]

It would be a very boring world if everyone agreed on everything. I certainly support good iniatives within the beef industry, and hopefully some of your hard work rkaiser will make the industry a better place for all of us.
I do feel that a forum such as this is best utilized to promote good initiatives and ideas, and not to critize those who do put those opinions forth. There aren't many of us that are regulars on this site, but those that are, and I include everyone, have certainly given an indication of leadership, common sense and one hell of a lot of good ideas. While I may not agree with all of what is put forward here, I do recognize that those who participate are making suggestions that they feel will be beneficial to the industry as a whole.

[SASH]

rkaiser wrote:
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.

That really sounds like a victim mentality. How can you say to anybody what they can or can't do. How would you feel if the government told you that you couldn't own cattle or feed cattle or whatever. You would be up in arms and rightly so. All this whining about how the Packers are bullying the cow-calf producer and the feedlot operators will get you nowhere. I think BIG C and the other producer owned packing plants are a step in the right direction. However, I also think that we as producers need to limit the opportunities that Packers have to buy our product by funneling it through some sort of marketing board that would assure that everybody on the production side is making money on this venture. Until we as producers take control of our production and our pricing, this is going to be an ongoing problem.