Borders closed or what?

[cakadu]

Great points Rip. It is going to be very tough on people and I just hope that we can all hold together and get through this.

Value Chain - in terms of comparing the horse meat industry to the beef industry is somewhat akin to comparing apples to oranges. The volume is significantly less with horses and would indeed be a fraction of the volume that is done in the beef business. What are they testing horses for versus what they test for with cattle?

The costs of testing every beef animal would be staggering. Again I ask, who is going to pay for it and who is ultimately reponsible?

[ValueChainFX]

cakadu you are right the compairison in numbers is not the same. However, when you compair apples and oranges at the end of the day they are still fruit.

So my suggestion is we review the industry needs and see what we can come up with. Knowing that when a horse kill in a plant is happening and testing can be done while the kill is happening suggests maybe the same type of system can happen with other animals. In a review we would look at the system equities and non-equities. We already know that within five years we are going to have to make changes, is this another component of what needs to be changed? Can we as an industry put some front line defenses in place that we can manage ourselves?

My personal thoughts are that we start where we know there is a challenge. In the plants we are almost always notified when a downer is coming in and in fact usually try to arrange to have these animals at the end of a day and if we can coordinate them so we do more than one at a time. I would suggest every downed animal be tested. At the moment even though we may think they are all tested I would think not!! They are all vet checked as usual and all go through the post mortum, but as far as lab work is concerned if the vet check is OK and the post mortum is OK ... maybe there is no lab test done.

Again I would suggest that if we are regulated as an industry and testing is required this is a government responsibility. I may add to this, however, as an industry participant I believe that it is also in our best interest to find a way to assist in this testing and work with the government to supply a system that is balanced and works. If this means training people ... we train them. If this means including a front line test lab in plants ... we include this.

It is good to question the cost of this, but we also have to look at the price if we don't do this! The money spent in the industry today may be used and directed for long term solutions and maybe not on bandaids.

More thoughts are good

[lonewolf]

Valuechain I really do not like to be negative but it seems to me that the gov will download this onto the industry and add yet another middle man taking yet another piece of change out of the producers walllets. At the end of the day will the consumer be willing to pay for all these added costs or will the ultimate cost be paid by yet another family farm leaving the horizen. I sure do not know.

[rip]

I think it is very safe to say that there will be much more testing required. Right now the cost is a little over $100.00 per test. This will cheapen as the amount tested increases. The problem to date has been the availability of labs and scientists to carry out the tests. This will change with the demand. Not every animal will have to be tested as anything under 30 months will not have the disease as it takes that long at least for it to manifest itself into cattle. The Government may pick up some of that cost but expect it to be passed onto industry. Of maybe as much concern is what to do with the waste and product which is now being rendered. If this is banned from being used as biproducts there will be disposal costs. Right now the cost is around $50.00 per head. Combine the 2 and if every animal slaughtered was tested we are looking at a billion dollar tab. Not something the govt is likely to pick up.

Will the consumer pay for it? Yes and no. They will still eat beef but on a much smaller scale. In other words the consumption will go down. This has already been proven as consumption has dropped in the past few years...demand was up but consumption down.

The only solution is to explore new avenues and ways of testing and disposing... thus we will improve the safety and consumer confidence in our product. In these ways our industry will be better, but will it be economically viable? This is the problem we have to work on and solve.

[ValueChainFX]

rip ... looking at the alternatives is what is needed today. A lot of the high costs of the tests are due to where they are tested and the value placed on these test (value as in cost of test profit, yes some businesses still work on cost plus)

As an industry we know this is coming, the question is who is going to pay for it, and most of the producers already know they are probably the main target to pay!!! However, I still believe that we can come up with a cost effective program that will have costs spread out across the supply chain and therefore not have to be paid by producers.

Beef consumption has been slowly slipping off for several years now, and not all of it is due to lower meat consumption just lower "BEEF" consumption. A marketer in the US told me, "The beef industry has promoted their product as a priemium product and have finally got their wish. People have the impression that the product is a premium product and instead of eating it twice a week, they are mow eating it only once a week!

Anyway, for those interested in looking at what a system that would work may look like, keep the ideas and thoughts coming. Mark my words we are going to be asked soon, what kind of system will work?

[rip]

Valuechain... I agree with you 100% that the alternatives and the costs will become less and more affordable as the numbers go up for the amount of testing... the question isnt even who is going to pay for it... we will in the end as producers...even if the government pays the tab it still comes out of our pocket as it is us who pays the taxes and the one thing the beef industry has been very good at it is paying our own way with very little government support... the bigger thing in this is making sure the right cattle get tested and in such a way that it is viewed by consumers worldwide.

Consumption has not gone down solely because consumption has dropped as you put it. It has gone down because world demand for our product has increased. Yes we have what people consider is a premium product and dont buy as much as they feel it is not something they can afford every day...but when you look at what demand is and realize that it is still increasing it makes more sense for me to produce 100 head and make the same as if I was producing 110.
We do know that the price is going to drop and if the consumer still has confidence in our product then consumption will go up... but will demand?? How much is the price going to drop?

And dont forget that consumption has not just dropped because of price. There is a growing number of different ethnics in our country and they have different eating habits. Our job is finding products that they want to eat. It is a much more complex formula than just pounds and price.

[ValueChainFX]

Right you are and the value around the ethnic communities is something we can work with well! Some of our best customers are in countries we have just recently been working with. But staying positive I do believe we can make our system work and the producer will be able to balance costs across the supply chain.

[cakadu]

Consumption has also dropped off because other meats have become just as cost effective to eat and they have been promoting them quite heavily i.e. poulty and pork.

I believe that skinless, boneless chicken breasts have been gaining in market share for quite a while now. Also, now that pork is much leaner and consistent than what it used to be, more people are eating pork.