Here's a plan on how to own our industry

[smcgrath76]

I honestly do not believe that retailers would cut their take. I think that the potential may be for producers to act as their own middlemen.
If you believe the retailer, beef is often used as a loss leader/feature to pull costomers into the grocery store.
I think this is one area that requires extreme caution as consumers are ready, willing and able to make rapid protein substitution decisions. Chicken vs. pork vs. soybeans.

[northfarmer]

good point on protein substituation....if such an operation was not operating on an extremely efficient basis domestic demand from consumers for beef may drop as protein can be substituted by consumers with alternative domestic or imported protein sources...with a captive market and distrbution system and no competitive forces driving efficency to supply the domestic demand beef consumption would likley decline unless all other protein sources were also covered under such a planned system.....frankly i cannot see that happening, nor do I beleive it should in a country with an ag industry that is ultimately dependent on export of food for survival and growth.

also....while global trading practices are not always fair and equitable hypocrisy on trade policy does not give Canada or other developed countries (EU/US) much credibility....closing our borders to imported beef products and then expecting to ship over half of our production to foreign markets???

the role of goverment in such industries should be to regulate effective and fair competition to ensure that efficency and productivity are rewarded to the indivuduals and investors ..ie. ranchers and farmers, not just the packers and other people in the value chain of the beef business or the food business in total for that matter .....

that being said, thinking outside of the box, as this thread is, is a healthy exercise and and the debate is good for our industry...IMHO

[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.