Will the Canadian cow herd expand or contract

[ASRG]

What do you think?
My own thoughts are a bit more contraction and then basically stabilize at the lower level.
I suspect we will stabilize at a level where we will be fairly neutral on export/imports.....or maybe a bit below?
I see contraction due to an ageing population of producers(with few younger people replacing them) and possible higher returns for crop production? In addition government policy of more regulation, really poor assurance of government food safety, and general gov policy of ignoring and in fact hurting the industry?
When government refuses to take responsibilty for their massive failures (BSE, ecoli inspection) and sticks the cattle producers with the resulting losses, the message is sent very cleary....."we can screw up and you get to pay for our screwups!....and oh if you don't like it you can spend the next ten years suing us!"
This doesn't instill much confidence in the grassroots producer? When you know the government won't be accountable for the wrecks they create.....you need to realize you are on your own.

[15444]

Your telling me you were living in a fantasy world before today? Of course your on your own.

It will be interesting to see what happens with the dairy/poultry industries when they begin the process of dismantling supply management. I am doubting the full value of the quota price will be recognized.

Majority of the neighbours want to start winding down their cows in the next five years, or less. One guy that was expanding this year will be going the other way next year as he was just diagnosed with cancer. But when your 60 nowadays, all bets are off.

So I don't see any major expansion, in this country at least. Add to that, the major employer for this region is getting ready to shutdown permanently, and a lot of the 40-cow hobby guys will be gone.

In a sense it's kind of funny. The beef guys are mad at the government for screwing things up and not helping out. And the local paper mill workers are made at the government for not supporting their jobs.

Is it so hard to understand that government (particularly Conservatives) are not in the business of subsidization? They are telling the mill employees that the marketplace no longer requires the paper produced from that plant and that if you want to secure your pensions you better start using the court system to do it. Sounds familiar?

Honestly I don't want my money going to support the job of someone who doesn't realize that the world has changed, and no longer requires the product he produces.

So what does the average paper mill employee think of the beef guy?

[burnt]

We've been having the "succession talk" around here lately. A while ago, in reply to my questions around his interest in the farm, our youngest son's words were this - "I thought I wanted to until I saw what BSE did to you".

The true cost of the government's BSE bungle goes far beyond dollars and cents, although those of us who survived it would probably see that as the most obvious injury.

[grassfarmer]

I agree with your prediction of a little lower then
stabilizing. A position of being close to
import/export stability is a more secure place to be
long term. I don't think the Government handling of
BSE or ecoli really have much to do with the reducing
herd. If you look at the historic cow levels you can see
that the the anomaly was the huge ramp up of
production starting in the late 90s. Dependence on
the US market for exports was always going to get us
into trouble once the exchange rates swung from 60c
to $1. Having the border closure hid us from the
exchange rate changing but I think that was a big
factor. That and the whole corporate concentration /
captive supply situation at packer/feedlot level that
was initiated by the AB governments decision to start
a government selected, subsidized, processing
industry that was quickly able to dominate the
Canadian beef processing landscape.

[SADIE]

Well Said ASRG--

The Canadian cow-herd is still in a contraction mode. Grassroots cattlemen (the ones around me, the ones in the PFRA pastures with me have shared the same thought). They do not trust GOVERNMENT, they do not trust arms of the government like CCA, SCA or CCIA to keep doing this or doing that when they know now they were lied to in the first place.

A good example was the commercial show and sale at the Canadian Western Agribition in Regina. The barns used to be full of feeder cattle, open replacement heifers and then bred heifers. That commercial show and sale brought the crowds to fill the barns on Friday and Saturday ending up with the sale.

Did anyone go this year. I checked the entries on line and the lists were very short. Short sale also.

Anyone on agriville that can report this years action?

[ASRG]

grassfarmer: I do agree with you on the dollar thing to a large degree.....and yea when the Alberta government picked the winners and losers and basically stold the feeding/packing industry from the other provinces....that was not a good thing.
The 90's were a good time to be in cattle (at least in Alberta)! BSE destroyed a lot of things, not the least of which was the belief that the government was there to "help us grow and prosper"! Maybe I was stupid or something, but I truly believed both the federal government and the Alberta government wanted me to succeed and be a useful contributing citizen! I think that one disaster opened my eyes to what they really were....a bunch of scoundrels who should have been taken out behind the barn and shot!

[per]

"A trend is a trend until it is not." Warren Buffet

[SADIE]

OK per---What key issues would make the trend slow down and go back the other way.

1)A rapid reversal in the current grain pricing--could that be one of the biggest determinants?

Now list the others?

[per]

Just off to a meeting Sadie. I will consider and respond later. Several reasons though not the least of which is the $14 canola that you mentioned as #1. There are some pretty bright minds on here who will most certainly fill in the blanks.

[kato]

gf, actually the ramp up in production started earlier than the 90's. It started the day the Crow Rate died. I'm not sure if you were here when that happened, but it was a rail freight pricing policy that equalized freight on grain, no matter where in the Prairies it was grown. It put the three prairie provinces on even footing, and was as hated in Alberta as it was loved in Manitoba.

There are lots of reasons why the cattle numbers went from being closer to balanced with domestic demand to the point that we're being told we need to export to the world. And most all of them have to do with government interference in the marketplace. This has been going on for a long time, and changes according to the political agendas of the day.

First.. NAFTA. Political agenda dictated that free trade was going to save the world. In front of that, Canada, once again took the high road, thinking that the other co-signers would do so as well. So away went the Crow, and just about every other safety net and support system in place. All in the name of keeping the Americans happy so they would sign on. All under the delusion that the Americans would honour the treaty. All under the delusion that the agreement would hold water if it wasn't in Americans best interest. Silly us...

No Crow Rate meant damage beyond belief to the prairie grain growers east of Alberta. Oats shipped from Manitoba to the coast actually could end up with a bill for freight that was higher than the value of the oats. What do you do with $1.00 a bushel oats? You feed cattle.

Which brings us to..

The Alberta government getting into the game by doing whatever their large rich budget could handle in order to lure Cargill to the province. In order to have even more cattle to guarantee a supply for this big Alberta plant, they proceeded to outbid the other existing packers for the cattle. Money was tight, due to drought and poor grain prices, and it was hard to turn down even a small improvement in price.

Which brings us to...

The death of Canada Packers, Swifts, Burns, and a number of other Canadian processors. Most of the processing was done in Manitoba at the time, but that was now all gone. The Manitoba government didn't even make a sound when it happened either. The focus was on supplying the American market, over the Eastern Canadian market now.

Once the Canadian competition was gone, then the race was on. The dollar crashed. Could that have been influenced by the sad state of Canadian agriculture??? The Americans were on the market with their $1.40 plus dollar. The beef processed here was being sold in the U.S., so there was no harm done to the American processors we'd been blessed with. The price of grain was still in the pits, and the best option for survival was to expand the cow herd.

So that's what happened. It expanded. Looking back, there's a common thread here. This has nothing to do with supply and demand, and everything to do with political policies. Rules have been changed, economic pressures have been set up, and the final result is that corporate profits have been assured.

Was there an agenda? Maybe. Was it all manipulated? Maybe. At the very least, there was a directed effort by governments at several levels to make life easier for big business. Could we have stopped it? Maybe, but that would mean not falling for the divide and conquer strategy that has worked so well.

So here we are today, with a system that does not have our best interests in mind, or the best interests of consumers either for that matter.

So what do we do about it? I think we're at a crossroads.

On our operation, we're maintaining the cow herd, at about the same size, until we retire. After that, I expect some grain farmer will work it. Our sons aren't interested in being cattle producers either, for the same reason that burnt's isn't. They've both got good jobs, so why give that up for a life of uncertainty?

[dluther]

VERY,VERY well put Kato. THANKS

[ASRG]

Pretty good read on it kato, except I believe Cargill was opened in 1989 and the CROW was scrapped in 1994?

[grassfarmer]

From what I read the CROW was scrapped in 1993
and NAFTA came into force in 1994.

[ASRG]

You might be right on 1993.

[SCS]

Interesting topic, and comments, here is my short two bits.

Met a Chinese delegation who was on a fact finding mission going to Agribition, and did they want answers. Biggest was, how can we get Canadian beef? Second one was how do they set up a farm to export the meat to China. They love our beef they ate in Canada!

What is the road blocks, trade issues with Governments.

What is our road blocks higher prices, the above and Government competeing for feed stuffs in the ethonal and bio diesel. If true that the US will be self sufficient in fuel supplies by 2017, and their economy continues to fail, that support will diminish.

SCS