Fact or rumour?

[ValueChainFX]

cakadu, you have the thought process happening. The $20 / $10 by 2010 program you are talking about figures we should have the extra capacity to process another 1ML head of Alberta cattle by 2010. As you have already pointed out the market needs to be there to accomplish this goal, we have discussed 2 points with the government on this plan; first point is, the plan needs to ensure the producer is able to make a profit on their production. The second point is, the market has to be there to take the production.

Many complex issues of course surround these discussions, but we all know we will not accomplish this without substantial industry investment. A research and development centre run by bureaucrates and academics at a cost of 11ML (to build) will not accomplish this (We asked the government point blank how this would put money in the producers jeans, Government reps told us they were hoping a trickle down effect would happen for producers) We suggested without real investment into the working components of the industry that Canadian agriculture will be off the map by 2010!

We are very involved in market surveys, study and strategies at the moment. Although I am not able to go into much detail at the moment, we do believe there are some very promising alternatives for our product (Canadian product) in relatively protected markets that could reach the goals set. Our forecast when applying these potential markets to the 2010 goal is feasible. (Although final numbers are not in yet and confirmation by an outside consultant has not yet been done)

Now that our boarder is open to the bulk of our product again hopefully some of the pressure will be off. But none of us should forget what this did to Canada and all of us should do them selves a favour and at least investigate alternatives.

[cakadu]

Which government officials were you talking with? What ways could we help to influence the way government policy is set?

I'm not worried about the production increase if the markets are there; I guess for me I cringe when I recall the big push for an increase in pork production to fill the Asian market and then that went bust. I'm not sure that the pork industry has recovered yet - I'm not saying that one incident was the sole cause of the problems plaguing the pork industry because they have had several difficult years since then, same as the rest of the livestock producers have faced i.e. drought, high feed prices etc.

I'm all for doing what will bring more to the producer, I just would feel better if there was some place for it to go!

[rodbradshaw]

The whole crux of the issue is that the primary producer receives very little feedback from the end user or consumer. Their main feedback is the price that they receive for their calves or other animals. If there is no great discrepancy from what the neighbour got for his or her calves, there is no preceived difference or desire to change. If there was a more true market signal given, there wouldn't be the wrecks caused by expanding for the sake of an expanded market, whether domestic or export.

The other issue is that there must be an alternative market or use as there will always be trade issues and non-tariff barriers erected if one becomes too successful in any particular market place.

[rsomer]

Yes, the Canadian beef industry did become very successful in the North American market, more because of the elimination of the Crow Rate than because of any benefit from NAFTA. I can see how politically this is a problem in the United States. I also see the Canadian oil and gas industry has done very well in the American market place yet I don’t see them looking to find alternatives in non-NAFTA markets. The concept that if a Canadian sector (beef and softwood lumber come to mind) becomes too successful in an American marketplace it will become the target of countervails and other trade actions is most interesting. Would an American based industry, fearful of trade actions from Canada, seek less profitable alternative non-NAFTA markets if they saw a danger of becoming too successful in the Canadian marketplace? Maybe, but if such were not the case than NAFTA is not working as was probably intended in the beginning.

The comment about the need for a more true market signal, other than price, is most thought provoking. Presently primary commodities tend to have unlimited market access with supply limited by unprofitable price levels. If we were to replace price as the true market signal then price would need to be substituted with the other market signal, limited market access. Would producers as a whole be better off... Wouldn’t primary producers have to become very, very much larger in order to lower the per unit cost of fighting for and retaining market access.

[pandiana]

rodbradshaw, rsomer: "Would an American based industry, fearful of trade actions from Canada, seek less profitable alternative non-NAFTA markets if they saw a danger of becoming too successful in the Canadian marketplace? "

I have a hard time seeing benfits to Canada that can be attributed to NAFTA. I agree that whenever we are becoming successful, we see intense lobbying by our American counterpart to limiting our export.
I would attribute most of our success in trade to the low Canadian dollar making our product better priced. Strictly financial.

[ValueChainFX]

cakadu we were talking to the highest level of the Alberta Government. On the political side and the bureaucrats. Also we have talked to the front line bureaucrats for the Federal government.

These folks seem to have been sold a bill of goods, that if we invest in production, research and the side of industry that takes our agriculture resources and prepares them for market we will be OK. We believe that if the producer is not able to pay their input costs they cannot sustain themselves.

It is important to maintain a balanced supply chain, this however, needs to be maintained from the producer all the way through! Our discussions with marketers indicate that the end users want to establish a closer relationship with food sources. This means, what when how and why of all the steps that helped the food enter the market place. Trade issues are something we are always going to have to live with and it is the nature of the marketing beast to constantly monitor and deal with challenges in the export markets.

Market signals from the end users, marketers and distributors are key indicators of a seamless sytem from farm to fork. In some cases as we know, it may take close coordination of the product from the farm, processing, holding, distribution to key centres, and distribution into the region to make a success into the market. Having the ability and the will to meet the needs throughout the supply chain will determine the success of the market penetration as well as the longevity of the market. Producers would not have to become much larger to make these things happen, they would however need to be much more coordinated. Coordinating the producer is not the easiest thing in the world to do, but I see them understanding the potential of a coordinated effort more and more each day!

As with most things we do, I like to find out what you all see as solutions in these times. I heard the other day that IBP will no longer be killing cows! Does anyone know if this is true? If it is true my understanding is that the
Moose jaw plant is on shaky ground. So if IBP will no longer being killing cows and the Moose jaw plant will not be killing cows, does anyone have any ideas on what they will be doing with their cows?

[cakadu]

Value chain - I find it most interesting and am curious to know about who is getting involved in your business venture and what prevents you from giving some names? The reason I ask is that as someone (and not just speaking for myself) who might become interested in what you are doing, without having some idea as to whom your potential investors, partners and members might be, how will I be able to make an informed decision regarding whether or not I want to become a part of things?

In many threads throughout Agri-ville, you have repeated asked for information to help you; I'm wondering when we might get more information to help us? I have also read many times where the system you are trying to establish is different from what currently exists; it's been my experience that a lack of information has plagued the system thus far - how can we close that gap and get transparency and openness of information flowing?

[ValueChainFX]

In the open forum of agri-ville I try to be very careful about names directly. However, the website

http://www.angelfire.com/folk/valuechain/ will give you all the information you are looking for as to who is involved and what the plan is.

The site has the plan outlined and the steps that have been taken so far. It also has contact numbers on the site.