Plan B

[rsomer]

To confirm just how bad my memory is I believe Tor Wigemyr's partner was Garnet Altwasser.

[cowman]

Rsomer: If you are a qualified auditor do you do any work at it? Or would you if you became qualified?
This definitely is an up and coming thing and I would think a growing opportunity for a career. I imagine the pay would be pretty decent? Might make more sense than running a bunch of 10 cent cows?
In regards to IBP. They have a long history of being a pretty sleazy outfit! Many times accused and found guilty of predatory business practices, violations of workers health and safety, and unsanitary conditions. Lakeside wasn't much better! And leopards don't usually change their spots!
Meat packing is a pretty dirty business! If most people could see what goes on they would be shocked!

[pandiana]

I read the article you referred to above, and yes it was quite enlightening. However, it still does not explain your statement ". Canada cannot easily duplicate the trading relationships these competitors have in the global marketplace. What I am suggesting is if you wish to export beef products to Japan, China, South Korea you will be more successful if you are based in the United States, rather than Canada." What is so special about Australian trade relations with the world that we cannot pursue similar avenues?

[rsomer]

Life’s journey takes us down many paths. If the farming thing doesn’t work out I need a Plan B that involves off farm work. As I tend to doze off if driving long distances driving a truck is not an option for me. Auditing, land agent work, management consulting are some things I have got lined up if it comes to that. As well, if my son or daughters decided to farm it might help if I can step aside and do something else if it means they can farm. I nearly ended up taking courses in the U.S. to be a Certified Organic Inspector but the courses got canceled and it never happened. So one never knows.

Running a bunch of 10 cent cows lets me be home with my family. So far farming has kept us fed and clothed.

My wife once had a job inspecting boxes of beef livers being loaded out of Lakeside destined for Peru. She got to tour the plant and see everything but the slaughter floor. Some of the remarkable things she saw were the "head table" where people were removing the insides of the heads and barrels of pickled anal sphincters. Everything from blood to guts was gathered and prepared for sale. She mentioned workers on platforms that moved sideways and up and down cutting the carcasses in half as they moved down the line. Lots and lots of government inspectors everywhere and everything was very clean.

I would expect the business side of the packing industry is very cut throat, to use a bad pun.

[rsomer]

pandiana: You are correct. The article, although interesting would not explain my observations on international trade. My observations suggest international trade revolves around give and take rather than being simply a matter of marketing. I look at Japan and see Japan supplies 3% of Canada’s imports at the same time as 2.2% of Canada’s exports go to Japan where Canada has about 2-3% share of total Japanese beef imports and I see a connection. Likewise the United States is Japan’s number one export partner and when the U.S. threatens retaliatory action against Japan if Japan doesn’t accept more U.S. beef, suddenly the U.S. has 50% of Japans beef imports. I look at Australia and see 19.7% of Australia’s exports are destined for Japan while 13% of its imports come from Japan, and Australia has the other 50% of beef imports. I see a correlation.

Canada is tied into NAFTA. NAFTA is our trading relationship. Canada cannot just change this relationship to have 13-20% or more of our trade with Japan instead of 2-3% even though doing so would probably open opportunities for more beef exports to that country. Because we are in a NAFTA trading relationship with the U.S., that pretty much fills our import market. 2.2% of Canada’s exports go to the EU and 3.2% of Canada’s imports come from the EU. We do not have the room in our economy to go out and import additional goods from Europe to match the 21% EU exports that Australia accepts although doing so would probably give us leverage when it came to exporting our beef to the EU.

What is special with Australia’s trading relationship is they have more trade with more countries while Canada which trades mostly with one country. Our trading relationship with the U.S. should have given us an advantage when it came to exporting beef into that country, but we are constantly getting the message that the U.S. doesn’t really want our beef and Canada should go hunting for markets globally. The only way I see for this to be successful is if Canada breaks away from NAFTA and starts trading with the world again, for instance like Australia does. Because trade is not just about exports, it is about imports too. Until Canada breaks away from NAFTA, Canada must defend our NAFTA right to export our beef and live cattle into the U.S. Producers need to be aware that Canada’s ability to export beef into the world markets is hampered by our NAFTA relationship with the United States. My opinion.

FYI my numbers on trade come from the Central Intelligence Agency web site at http://www.cia.gov/cia/publications/factbook/index.html

[ValueChainFX]

It's fine to take into account any of the traditional values and avenues of marketing. It's fine to say governments control global marketing and we must have the US as our strongest partner. My suggestions here are for each of you to take the (your) thoughts and ideas to a new level. Go beyond the traditional and find the possibilities! New and successful marketing comes from thought process and we all have the seeds for this process in our background and knowledge base. I never suggested I have all the answers, in fact I suggest "You" have most of the answers. When I say "YOU" that means a combination of many people putting their thoughts together in an aligned process.

We Can market our product anywhere we want to! If the conditions are right and we are able to meet those conditions, if not we look elsewhere. We can never neglect partners such as the US, but if we can't get into the US we don't just close our eyes lay down and wet on ourselves.

I do talk to as many people as I can, I try to use my experience in the industry and come up with a path to follow. I take an action component and do hands on work to reach the goals I set. These goals are based on the needs (as I see them) of the industry as a whole, understanding that a long-term plan needs the support of the industry. Duplication of success is not a bad thing, duplication of the short falls in the industry is. If we think for a second any plan "B" will take on the big guys and yield success we are fooling ourselves. The present plan I am working on, builds infrastructure back into some of the rural communities, is designed to put skilled labor back into the industry, put extra dollars into the jeans of the primary producer, and supply products and services that are in demand around the world to partner consumers. I for one don't see this as a bad thing!! I have many guru's that have made light of some parts of the plan but on the same note have had those same guru's that have taken the time to study the plan come back and ask to become partners with input and involvement. Any long-term solution will take time to put in place, and there will be challenges. But another day in paradise molds a flexible set of choices into something that can benefit us all.

I just believe that rather than spend time looking for all the bad points of a plan we should recognize the plans challenges and make it better, work on the good points and help implement them. Use your energy to make things better rather than saying it won't work and justifying your position of why it won't work!

[rsomer]

ValueChainFX: Points well taken. I believe I recall you said you have been working for 5 years to market your product to Japan. My observations suggest to me that you would be more successful with your enterprise if you were based in the United States or Australia. Any comments?

[cowman]

rsomer: I think you have the right idea. Don't put all your eggs in one basket! Always have options.
One of the real sad things I see is the guy who has never done anything but farm! That's all they know, that's all they care about! When the day comes to quit they have a hard time adjusting!
Life is more than going round and round in a field or following some old cow! It is nice to be able to stay home with the family but the day will come when the kids are gone and then you might just decide you want a change? Believe me strange things happen when you hit the old mid-life crisis! You look at life in a totally different way! You seem to have a good attitude and have positioned yourself with some options. More farmers should be doing that?

[pandiana]

rsomer, regarding your comment that "Canada cannot just change this relationship to have 13-20% or more of our trade with Japan instead of 2-3% even though doing so would probably open opportunities for more beef exports to that country. Because we are in a NAFTA trading relationship with the U.S., that pretty much fills our import market." are you saying that without NAFTA we would not have a heathly trade relationship with the US? It occurs to me that as long as we have something they want at a competetive price trade would continue rather more unfettered by trade rules. I realize tariffs and protectionist policies would still be their but we would have more wiggle room to pursue other avenues.

[ValueChainFX]

rsomer Your question "would I be more successful if I were in the US and marketing in Japan?"

I have to clarify for you, I was marketing Canadian Beef, but the company was a US based company! How much influence this had over the success of the marketing I'm not sure. I can say that the program was very successful and based on the relationships and efforts to make the product exactly what they wanted. There is a segment of the Japanese market that prefers Canadian product, the challenge is getting the volume of the product they want and getting the type of product they want.

I would suggest, that our ability to market to any country will be based on our ability to build relationships based on partnerships, filling the orders with product meeting the customers exact needs and doing that every time we ship.

Would it be easier from the US? Well at the same time as I was marketing from Canada, our US sister plants were marketing to the same customers, I believe we had less challenges than they did. We had less claims, and more customer participation in working with new products and inspecting products being shipped.

I enjoyed working with the Japanese and feel we could build strong stable markets there with the right products.

[rsomer]

Thanks. How do you explain the U.S. having approx. 50% share of Japan's import beef market and Canada having 2.5-3.5% market share. Thats a big difference. Even considering the differences in size of our respective industries we should have at least 5% of the Japanese market. Plus our white fat is what the Japanese are looking for, at least before BSE.

[ValueChainFX]

rsomer the major share of the Canadian exports to Japan leave through Cargill. This company has a small export component to Japan in comparison to the plants in the US (their sister plants). Also most of the beef (prime) from Cargill is shipped south to Fort Morgan breaking plant (a Cargill sister plant). This beef goes down upgraded and how much goes to Japan I'm not sure.

There are others that ship to Japan, but in comparison small quantities. There are some 20 plus US plants that ship to Japan. So my suggestion is, that if the Japanese had access to more Canadian beef they would probably take it. This is an assumption on my part based on past interest in Canadian beef interest from the Japanese buyers.

I would not suggest for one second that there is no politics going on there, but those politics I believe are based on two critical factors. The first is the quantities to fill the orders need to be taken from a product pool with only the right type of beef for the Japanese customers. Second, the company shipping the product has a primary interest in serving their company which is US based so the US company controllers would call the shot as to what goes, what stays and what quantities make up the mix!