Here's a plan on how to own our industry

[grassfarmer]

Northfarmer, I agree with the point that Canadian consumers must not be forced into alternate protein sources as a result of higher priced beef.
However the quote you make that "with a captive market and distriution system and no competitive forces driving efficency to supply the domestic demand beef consumption would likley decline" is rather missing the point about "competitive forces and efficiency" The packer /retailer part of the production chain is concentrated in so few hands that they do not have to be very efficient at the moment - they can use their market power to force ever lower prices on primary producers rather than make their own operations more efficient. If you look at primary agricultural producers over the last 50 years they are by far the most efficient sector of the whole north American economy, who else could produce goods for the same price they did 20 years ago given the huge price increases on the input side?
I believe an example of competition not driving efficiency and leading to lower prices for consumers is seen in the North American milk market. Canada with it's supply managed dairy sector and perceived lack of competition generally has lower retail milk prices than they find in the US where the open market economy is making it very tough for dairy producers to survive.

I very much agree with your latter comment that the role of Government should be to regulate effective and fair competition - this would be my first choice solution rather than producer owned packing plants etc - unfortunately the Government shows no inclination to do so.

[PureCountry]

The day I trust government to regulate things fairly for the good of the grassroots producer, will be one day after the government gives any indication that they give a flying @#&$^#!!!! ABOUT the producer.

I agree with alot of the points you've made here gentlemen, but the thought of government regulating it makes me want to go right back to selling beef off the farm, or out of the back of the truck, and selling milk and butter for cash under the table. Less government involvement in a producer-owned packing plant would mean more producer benefits, in my opinion.

[cswilson]

Government involvement scares the crap out of me to be honest. As for dairies wouldn't alot of them be able to survive in a free market without having to pay out the nose for quota. Quota debt in feathers and milk is extra debt to service most producers could sure live without. I still think a loosening of the regs for provincial abbatoirs and small producer owned meat shops from town to town would be more viable. We have two family run shops in our town of 5,000 and they seem to compete with the two huge grocery stores we have also. Maybe something like a Tim Horton's concept-where the consumer would know that if he walked through the doors of 'Rancher's Pride' or whatever they were dealing more directly with the producer. Something like that I could see investing in. On a cow carcass-Cargill is the bear and the producer is the coyote-if we try and take the whole deal we'll probably get ate-but if we nibble away at the edges we can probably get full and the bear won't notice-in other words don't try and outbig them with government money-instead fly under their radar and chip away.

[PureCountry]

Not to pick a fight but, we wouldn't be in any control then would we? Just slinking around for scraps and crumbs - as coyotes do.

[northfarmer]

I should clarify my points further....when I suggested govt's role should be top regulate I am speaking to the issues around concentration of ownership and competition specifically......ie. they stopped bank mergers but not packer mergers, and there is more concentrtion in the packer industry than banking ...I am not supporting supply management and direct government control of supply and distribution.....I beleive a lack of effective competition and direct producer involvemnt in the value chains beyond the typical farmgate is why farmers returns are declining....getting farmers involved in the vlaue chains beyond the farm gate is key to returns improving....producer owned packing and retail sales could and will be viable but we then enter the realm where producers themselves may lack both capital and expertise.....coopetaive ownership structures have not proven to be the most efficient though can work....direct producer ownership is likley better if it can be done...IMHO

[kpb]

I appreciate the input on this post. I know the idea isn't perfect but it might be a starting point for more discussion?

A couple of things--I think PureCountry has it right when he says we don't want to be the coyote--the whole point of this exercise is not to get the scraps of our labour but the whole darn thing. We can have the scraps now--let's try to get as much profit as we can.

NorthCountry and others--I agree that government regulations are not ideal and some will not accept government involvement in our industry. But note that producers are not willing to invest in packing plants on their own--that has been proven by the lack of money put into plants during BSE and afterwards. These plants were crying for money and the producer did not step forward.

Now the plan I have proposed is voluntary--those who cannot stomach the government getting involved do not have to participate. They will be no worse off than they are now--still dealing with the big packers and the big feedlots for the export market.


I am not a fan of government involvement. But the plain fact is that the only way we are going to gain control of our product to the grocery shelf, over both the short and long terms, is through the help of government. This way we can set our price in order to make a profit on our product. Yes there will be a buy-in from producers and some debt there, just like the dairy guys. But the dairy farmers are the most successful in this country and I don't hear the consumer doing any crying about milk prices. If the consumer knows that by paying a price for beef that gives the producer a little profit, than the taxpayer will not have to pay farm welfare to that producer ever again I think the Canadian consumer will be on side.

Just my thoughts.

kpb

[cswilson]

The anology I was getting at was instead of trying to build a megaplant and get government involved to compete-franchise out meatshops and smaller abbatoirs to investors and hit a niche that the bigs aren't servicing. Like A Tim Horton's-every one the same size and you know what you are getting when you go in-use the same concept-a number of easily recognized purveyors of beef-spread the investment and benefits throughout the country.

[smcgrath76]

I like that idea CS. It is along the lines of what I think needed to be done with the regional plant concept.
It could potentially be started small (one or two locals) and grow from there.
The biggest challenge to our industry domestically is probably the regulation and interprovincial pissing match in terms of trade, certfication, foodsafety, brand inspection, animal disease, etc.
I think it matches up some of KPBs vision with less gov't involvement.

[cswilson]

It's easier to think a bit smaller and grow than to think tooo big and shrink. You have to crawl before you can walk-I think this franchise concept would be easier to attract outside investment too also. It's always nicer to float a new venture with somebody elses capital. Most of use are better at raising calves than we are at managing butcher shops and arranging venture capital.

[grassfarmer]

I'm not sure I understand this concept of yours cswilson. What you are talking about are essentially what I would call butcher shops - locally owned or franchised stores selling beef or meat only? These are what we grew up with in the UK, every town had one or two. How widespread are these type of butcher shops in Canada? do they exist in urban areas or only in some rural towns? In the UK they have largely gone the way of the dodo as most younger, and all urban consumers shop at supermarkets. Isn't this the case in Canada also? From what I read it seems that even the straight cuts of beef on the supermarket shelf are an endangered species to be replaced with prepacked "meal solutions" ie a tiny quantity of beef bulked up with some vegetables and sauce and charged at the same price per pound as a decent steak!

[cswilson]

Well the two we have here sell other stuff also-they seem to be competeing fine against the two big box grocery stores in town. If the concept was marketed right it would fly I'm sure.To build a megaplant to compete with Cargill you have to become just like them-then it's same s..t different pile for the producer.

[spudchucker]

No offense meant but I don't like the idea. You say that any young guy could just buy an older guys allocation.
I would like to milk cows again but there is no way that I could afford to pay the $30,000 per cow for quota. I small herd of milk cows these days is 40 which means 1.2 MM before I even put a cent into facilities, animals, land, machinery, etc.
This would go the same way and would ensure that only rich europeans and inherited farms could afford to be in the industry.
Too many of these policies (supply management) are meant to keep the status quo and protect old peoples retirement funds while keeping new entrants out.
Why make the beef business the same way?