Solution to America's M-COOL Problem

[kpb]

SASH, you are right on the mark with all your comments on this thread. rkaiser and several others on this site have an idea of free enterprise and capitalism that is strange to say the least. They complain like crazy about the feedlots and packers and call them pirates or immoral because these businesses are trying to make the most money they can. But you can bet they always want the most money they can get for their cows and want to pay as little as they can for their inputs.
rkaiser, can you not see how inconsistent your argument is? The packers have as much right to make as much money as they can, legally, as you do. That's just what they have been doing and, in fact, to do less, would be to be irresponsible to their owners (shareholders). When was the last time you took less than you could for a cow you were selling? And when was the last time you went to the hay seller and said you'd pay him an extra $10 a bale? But you think we should regulate the packers to control their profits?
As SASH suggested, a marketing board is the only way we will get control of this if that is really what we want. But I proposed that several times in the last few months and got shot down by guys like rkaiser. And, guess what, these guys don't like the idea of us having a marketing board to control our destiny because it's anti-free enterprise!! So it's no go to a marketing board because it's anti-free enterprise but it's use the government to control the packers because they're making too much money? C'mon you've got to make up your mind--you can't have it both ways. Capitalism isn't just something for the little guy--as I said before it cuts both ways. If you want to be a free enterpriser don't complain when someone else makes as much money as they can off of you.

[grassfarmer]

SASH, You say "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."
It's a fundamental right in a democracy to express your views and to protect your rights. I feel we have every right to make our case to Government about the abuses going on currently.
If the Government told me I couldn't keep cows I would be upset - how come when the Government told the Packers to open their books they were told to p*** off? - the fact that they are above the law bothers me.
You continue: "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."
How is that any different from what some of us "whiners" were proposing earlier in the thread?
If you do pursue this idea perhaps you will encounter the frustration we have with ABP and Alberta Government refusal to even consider any type of market intervention. But then again you would be falling into the trap of "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."
Bottom line, you critizise us but how are your ideas any different?

[grassfarmer]

kpb, I'm a capitalist and businessman but morals and ethics do exist in the world of trade. Some play by the rules, some don't. I think the idea that we are all on a level playing field in Agriculture is naive - if you choose to ignore the influence Corporate monopoly power has on the marketplace and how "legally" that monopoly was achieved you are turning a blind eye to what is really going on. That's your choice but eventually if it continues unchecked it will catch up with all producers - including the ones getting by for now by standing on the heads of others as the tide comes in.

[kpb]

grassfarmer, believe me I am not naive as to the ruthless nature of big business. I just get a little tired of the cow-calf guy complaining about getting taken advantage of by the big bad packers but, at the same time, wanting as much as he can in his own business. The plain facts are that capitalism is for everyone--the big and the little. It's all about making as much as you can and everyone should understand that. The packers have not done anything that is criminal that I've ever seen and have only been faithful to their shareholders. Ethically? I don't know that they've done anything wrong there either--is making the most amount of money possible wrong now? Or is it just wrong for the big boys?
I am in favor of a marketing board for producers for exactly the reasons you discussed in your reply to me--it would give us a large monopoly of our own to give us power to negotiate with other big boys. That's why we need it. A marketing board would not benefit me personally very much. As I've said before I'm quite comfortable making money right now in the current environment. But I agree with you, that the small producer is going to suffer under our current situation. And a marketing board is the only solution that will give them power. Capitalism and free enterprise is what gave me my ranches (from the ground up with nothing inherited)so I'm quite happy under the current scenario. But I also have friends that I would like to see stay in this business and they need to have a marketing board to give them selling power.
Again, if we want free enterprise, fine, but then we can't cry about guys, big or small, making a lot of money. That's what we are all trying to do.

[SASH]

It's not a matter of one producer standing on another producer. its a matter of producers working together. I, maybe, have a different point of view than some of those who never left the farm. My parents had registered Herefords when I was growing up. I left the farm and started a business in landscaping and excavation. If you wanted me to work for you, you paid what I asked or you didn't get me working for you. It just seems ludicrous to me that if I'm asking for $100/hr for a man and a machine and you are only offering $50/hr that I would work for you. It wouldn't even cover my fuel and maintenance let alone any profit but that's exactly how the cattle industry in Canada seems to work. Its nice to say that you like the lifestyle but I don't think I should have to pay for the privilege of checking my cows at 3 AM or starting my tractor when its 30 below. We have a commodity that the consumer wants, why can't we get a fair price. Its because of all these producers who accept these lowball prices. We've got to get everybody on the same page and stop undercutting each other so that we can make this into a profitable enterprise.

[gwf]

How would a marketing board change the price you receive for your cattle?

[SASH]

If we had a marketing board, all of the cattle in Canada would be funnelled through it. If the price offered wouldn't cover the producers costs and a reasonable profit, no cattle would be sold. That's why it would be important to have some producer owned plants along with this idea. This would take away all the undercutting and make sure that we weren't running at a loss. This is the same way any corporation runs. We set the price, we control production and marketing and eventually if we get really good we can integrate everything right from birth through feeding, slaughtering and distribution. We eliminate as many middle men as possible and keep those profits for ourselves. This is exactly what Maple Leaf does with its pork but we have to grab the bull by the horns and get this thing under producer control.

[BFW]

Sash, just wondering if you have thought through how this marketing board would determine how to price all the different types, weights,etc. of cattle and how would the flow of cattle to market be controlled?

[gwf]

SASH:
You indicated that if the Board did not like the price offered; the cattle would not be sold. Is that different than the present system. If we don't like the prices, we don't sell them. Or, do you think that a producer owned plant would just pay what you felt you needed?

[SASH]

The marketing board would send cattle to market in an orderly fashion based on predicted demand. My personal preference would be to see the cow-calf producer get a basic price per pound at the time of shipping and a bonus cheque at the time of slaughter depending on how the animal grades. This would motivate producers over time to move to genetics that give them the best money for the producing the kind of beef the consumer wants which would also add consistency to the product over time and eventually minimize those tough steaks that land on the consumers plate from time to time. For those who prefer grass fed beef, it would allow the producer to choose how their beef would be finished. Many who sell grassfed beef now just ship their excess to the auction where it ends up in a grain feedlot where the genetics don't match the finishing technique. As far as timing, cattle producers already all calve at different times of the year, but some co-ordination would have to be done to make sure that animals are finishing approximately when they will be needed for slaughter. This is alot of what the Packers are trying to control now, but we have the means of production and they don't yet. I understand that this would be a huge challenge in the short run but in my mind, if we want to be in this business in the long run, this is what we have to do. Otherwise, we keep plodding along with the Packers making all the profits and the producers taking all the risks. You can only run at a loss for so long and what happens when all the oldtimers and their money are gone? The banks won't invest in business that doesn't make money. I guess it depends on what is more important to you, your pride and your way of life are more important to you in the short term or the viability of your farm in the long term.

[SASH]

You indicated that if the Board did not like the price offered; the cattle would not be sold. Is that different than the present system. If we don't like the prices, we don't sell them. Or, do you think that a producer owned plant would just pay what you felt you needed?

Most people I know send their calves to auction eventually. Unless you are using futures to lock in a price, how do you not sell them. How do you think the guys who sold in the afternoon of the day they found that last BSE cow made out and furthermore, do you see a futures price right now where you think the average producer could make a profit? All I'm saying is that it seems to me that its crazy that the consumer is still paying approximately the same for beef as they were before BSE and the producer is making way less. If we had control of our production, we wouldn't be in this mess.

[rkaiser]

Talk about a bunch of talk out of both sides of mouths.

Tell me I am a whiner for not liking the way packers have taken advantage of the situation and yes "made vitims" of producers in Canada. Suggest that I want to control these trolls with some sort of ownership rules, and then jump on the supply management band wagon. Lets see you argue that one while saying the packers are your honest ethical angels. Hog wash. If you could simply leave it as two ideas to change the current dysfuntional market, I would leave it alone, but to say I am talking victimization is no different than what you have said.

Piss on the talk of limiting packer ownership, we damned well deserved to take what the packers gave for the past year and a half. They had no choice.
You win - Okay - If it makes you happy to support this type of business practice, good for you. And I hope you get a chance to screw somebody into the ground that hard to get ahead yourselves SAH and kbp.

I am not a cow calf guy SASH. I raise purbred breeding stock, and market my non breeding cattle directly into restaurants and meat markets in Calgary with a number of other producers.

www.westernrancher.com
click on CrossVenture Livestock

We have found a way to retain profit from conception to consumption without capitalizing on the backs of other producers, and without the left leaning supply management CONTROL measures that you seem to suggest.

I love the right wing/left wing bullshit that comes from conversations like this. Every one of us is a hypocrite sooner or later.

Like I said before, ideas for change are what is important now, and the utmost of these ideas is packing capacity.

Are you going to take on the ~SH~ role from ranchers.net SASH and come back with more words like blamer, and whiner; cause if you are, you had best brush up on your double talk whenever you get a chance.

[SASH]

I am not a cow calf guy SASH. I raise purbred breeding stock, and market my non breeding cattle directly into restaurants and meat markets in Calgary with a number of other producers.

Good for you, but how does that help the cattle industry as a whole? Basically, it looks like you have done exactly what I'm suggesting that the industry as a whole do which is control production from birth to plate. I can't see how expanding that to encompass all the producers would be bad for you.

[SASH]

Also, I never said that the Packers were angels. They are good business men however. The only thing that is consistent is change. Just ask all those Mom and Pop stores that got shut down when Wal-Mart moved in. You can't just stand around and say this is how things should be. Instead look around and see how things are and decide how you can best deal with it. Interesting that you say that we need new ideas and then shoot me down in the next sentence. I already said that BIG C was a good first step but we need to take our production back from the Packers. The window is closing and if they get to a point where they get the production integrated before we do, then we'll al just be Packer employees.

[rkaiser]

I guess that before I can answer that question SASH, I would have to ask you if your idea of supply management is like that of kbp. He seems to feel that we should manage supply so as to only supply the Canadian Market and to hell with exports. That is a point that I cannot agree on. Our Ag industry is far to dependant on all sectors working together to make a backward move like that.

Intergrated marketing, on the other hand is very do-able and, I will argue, could have been considered an alternative by the packers over the past 2 years.

All of these producer owned packing proposals, and especially the one brought forward through BIG C, involve integration and post harvest benefits for producers.

What is it that the controls suggested in a supply magagement proposal would gain us over simply retained ownership at various levels? For instance, if the producer decides to sell cattle pre harvest, he would still benefit from post harvest if he owned shares in the plant visa vi the BIG C prposal.