Plan "B"

[Bruce14]

Clay Serby (Sask. Ag. minister) said today that it was time for the politicians and industry players to meet again and discuss the possibility of destroying 40% of Canada's cowherd.

What are your thoughts on this? Sad situation if this happens with all the hungry in the world.

[lonewolf]

I have been only farming four seven years and was nearly at the point where I could slow down subisidizing my farm operation. I started small and had planned on expanding by 25 to 35 % per year until I reach the 200 cow herd number. I was nearly 2/3 the way there on May 20. I have recently invested in major farm equipment and have substantial payments. SO I have little choice but to radically INCREASE my herd and hope like hell that I can sell my cattle at half of what they were worth a year ago. The only way I could reduce my herd is if the government would step up to the plate provide 0% interest bridge funding over 11 years. I don't need a hand out just a hand to get to where I am going>

[countryguy]

I will not sacrifice 1% of my cowherd.

[grefer]

I guess it is time to start talking about the what if scenarios.I am sure most producers, at least cow calf guys ,are just getting to the point where they are starting to see the writing on the wall.This has a the potential to be the most devestating blow I have had to endure since I have started farming,which was in 1976.It worries me even more when I have to rely on polititions to try and find our way through this.If 40% of our cow herd needs to be cut,this won't mean that we all have 40% less cattle.Some will survive this and many will not.Most likely,as in the grain sector, our young cattle producers and their families will get turfed along with alot of our future in rural Canada.

[grefer]

I certainly won't sacrifice even the old crock to satisfy a "D$#*" politician. I have seen too many of my compatriates sacrificed in the hog industry (small family farms) when the governments thought it wise to promote large factory barns, and the white collar investors that go with them. This is just the opening that the Government is wanting to make happen in the cattle industry. Lose the smaller operators, then let the lawyers, and oil barons of Alberta invest in new feedlots, etc.
If the government tells you to do something radical like culling for economics, look the other way, dig in and fight!

[dalek]

It depends how they want to go about it. You could probably cut the herd by 40% across the country without even touching the people who are actually trying to make a profit/semi-living at cow-calf, but I can't imagine the gov't would ever have the guts to take away people's hobbies.

[ValueChainFX]

As you all know the "Plan B" could not possibly meet the needs of the producer. Another example of looking at the producer as the scapegoat in the industry. I don't blame the political folks though, we have let them get away with this for years and they are basically out of touch with the agriculture industry.

But are we out of touch with what makes the agriculture industry work? We really do need to be looking at what we are importing into the country right now. Is there a way we can reduce those imports? We have neglected several markets right here in our own country. This is evident when we see 90 % of the organic market being supplied out of the US.(no matter what your personal thoughts are as to what organics are)Our politicians have been telling us all first to diversify, second to add value. OK fair enough, those that diversified are in worse shape than the beef guys at the moment! Many have been unable to even get a kill for their product and when they did they paid big time for it. To add value to your product and sell into a market you can grow you need a Federally inspected processing plant that will do custom kill. Oh my there are very few around and even fewer that can kill consistently or cut (fabricate) consistently.

"Plan B" here needs to see our government getting creative in controlling our imports (Lord knows some of the countries we export to have got creative)

The producers need to (in my opinion) pull together on a real solution for the long term. Are we going to have to cut back on our herds. Well I am sure like it or not some of the producers are going to be forced there.

Plan "B" is something that will help us make it through the short term with as few as possible casualties and take us into a long-term solution. Time to put our frustrations and negative thoughts into the most positive solutions we can find. This is going to cost us all time, money and energy. The government should be ready to give us a hand up to re-establish the infrastructure that will allow us to survive in our own country! (I am sure we will pay them back!)

[Muttley]

Serby is an idiot to suggest such a thing!!!

Promote the cattle industry one day and abandon it as soon as trouble happens.

[Bruce14]

Actually I doubt it was Serby's idea. This has been the talk for some time but it is finally coming out of the politicians mouths.

Unfortunatley without an export market of any kind something like this will have to happen.

[ALICIA]

As I see it do you all have the feed to keep every thing. I know I do not. Its the end of July and I am just starting to put out hay. 40% is just a number but if you's are not thinking clear, and get rid of some even at rock bottom prices you could loose every thing.
We do have feed lots in Canada, sell the cattle cheep for now, the feed lots buy at the cheepest price and they will stop inporting from USA and buy ours and keep what you can feed with out going deeper in with hay costs. And when the boarder opens, we will get back our prices, don't dig the hole any deeper.

[ALICIA]

May be I'm wrong but if you sell for 50 cents a pound and the feed lot guy sell for 75 a pound the stores are going to buy because it cheeper than the US then the customer is going to buy because its cheep so the demand will go up, our Canada's don't think our meat is bad they trust us we are all Canada and that does mean something. But we have to work together as Canada's and forget about the world trade for now and save our farms and ranches even if it means selling off a few cattle at below cost for now.If we loose our ranches and farms it will not mater if the boarder ever opens up. I think we can eat our way out of this if we sell for less, and look towards tomorrow
If I couldn't afford to buy beef, it sounds better to say I'm a Vegetarian. Lets get our beef market back.

[Bruce14]

Muttley. Actually the guy that made a completley idiotic statement was Jim Melenchuck (Sask. finance minister and ex-Liberal leader).

I heard him on the radio say that he didn't think BSE was going to have that large of an impact on Sask's economy. Uh Jim.... hello... it will have a huge impact. Cattle have had been the only bright spot even in 2 years of drought conditions.

Herd expansion has been charging on with a large number of Albertans setting up ranches in this province. Feedlots have been built and expanded. And guess what. If beef has to be sold at fire sale prices what do you think will that will do to the pork empire the gov't has invested in.

Oh I think you will see an impact on the provincial economy all right. Starting with feed barley at under 1.00/ bu. Some may call me a pessimist but I think I am simply being realistic.

On the radio I heard one talk show guy continually referring to this as the BSE 'scare'. Uh....yeah its a little past a scare.

[Bruce14]

Way past scare is a slight understatement ......... the impacts of this will be felt beyond the beef production and processing sectors for years.

There are several scenarios in my view ........ 1) the US opens up the border for boxed beef in early September; best case scenario. 2) the US establishes a set of critieria which we must meet in order to regain entry; a probable scenario given the political situation in the US - will probably be a one to two year tiem frame if no further cases of BSE are discovered. 3) US abides by the OIE guidelines of a country being required to be BSE free for a period of seven years prior to consideration for market re entry!

Each of the above requires a different strategy for individual cattle producers to manage their way through ......... but there are going to be some very significant changes as a result which are going to be consistent throughout.

One - bankers are going to be taking a very different view of cattle production .......... this situation has scared the living hell out of them ......... cattle may be be deemed a liability by banks ............ we may all be forced to operate on a cash basis!

The cost of operation has just increased ......... disposal of SRM is a cost the cow man is going to have to account for .......... it is approximately 20% of the offals in a cow ........... so now instead of being a credit, it will be a disposal and rendering cost which the processor will pass to the cow's owner ....... estimated to be $25 per head.

Identification and tracking of animals has moved from a optional catergory to non questionable ........... the present situation is compounded by the questions that are left unanswered ........ where did she really come from (presently it is suspected that she originated a specific herd, but there is a significant degree of uncertainity - hence the2700 head destroyed) ......, how was she infected???????? not a single clue ....even the CFIA report indicates that there is not reason to suspect feed!!

There will be skrinkage in the domestic cow herd .........all of the above factors will influence this in addition to the personal situations of the individual cattle producer. Many individuals are in tight spot financially due to the past few years and this fall even in the event of the first scenario that I listed will not be sufficient to help them through it. People are going to assess the risk as to high to be dependant upon export market for an outlet for 50% plus of our production and move back to a more secure position.

Plan B whether we like it or not is already under way. In many respects, we are on the train tracks.............so do we stan in front of the train or do we move with it ?........... I am moving with it .......... fewer cows, a cash basis and a low cost of production focus.

[lou]

Take your grain to the bank: to feed all
the cattle that are going to be going
to the bank.

[kato]

The cow herd is going to shrink, one way or another. As for the immediate future, we all need to start on our own Plan B's. A different one for each of us. Don't wait until the crunch hits....start now.

The thought of going to the bank scares me personally. I can't help but remember the price crash of 1995. That was scary, but it sure made us dust off our ingenuity. We got through it, and were much wiser for the experience.

Check out the balance sheet. Anything not needed? Equity available somewhere?
Think outside the box, as they say. You just may surprise yourself.

One of the most important lessons we learned in 1995 is The Banker is NOT Your Friend. Think for yourself.