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[rsomer]

Yes, it will be very interesting to see how the U.S. government treats their cow calf sector during this crisis as compared to the Canadian approach. Although Canada’s single case of BSE became our crisis and the American’s windfall, this time it will not be America’s problem alone, we will be affected too. Whatever happens to their market will happen to our market.
As for Canadian support, beyond the $159 on 8% of cows, our producers are being told to look to CAISP, a program which I believe many producers will find is not going to pay out for them in 2003. Year end feed and grain inventories will be higher than year end of 2002 and livestock inventories will be higher too because producers have been unable or unwilling to sell cows into a very depressed market. Increased inventory levels will tend to reduce CAISP pay outs which do not calculate decreases in inventory value.
Although over $600 million went to support the feedlot industry, most of it multi million dollar cheques to Alberta’s 130 large feedlots, the Canadian support to the cow calf sector has been more restrained. Cow calf producers will be facing a cash flow crisis in 2004 when the smaller cattle cheque from fall 2003 does not make it past mid summer.
Even if normal north south trade resumes we are looking at market prices much lower than we are used too or were expecting. CAISP is not going to save many producers who have no margin left after years of drought. At some point the Canadian government is going to have to stop treating the BSE crisis as a normal market situation and realize it is a disaster and provide funding on that basis.

[cowman]

While I agree with your assessment of the situation, I question if the Canadian government has the funds to bail out the cow/calf sector? Or the political will? I believe something like 80% of our population now lives in cities larger than 75,000. Do you really think they will want to give up much to bail out an industry that is percieved as a bunch of millionaires?
I suspect we will get little help unless people start defaulting on loans to the banks and then you will see a payout to cover the bankers losses but that is about all.
I suspect when the dust has settled we will see another 10-20% of our producers gone. Just a speeding up of a process that has been happening for quite some time.
This whole thing hasn't worked its way through yet. The hog business is going through a pretty ugly time right now too, due in a large part to the BSE crisis. I think we are down to about 1600 hog producers in Alberta. How many can weather another year of negative profit margins?
Eventually every part of our local economies in the rural areas are going to share the pain. The machinery dealer, the farm supply store, the grain farmer, the vet, the auction marts, the rural municipalities. I think things are going to look pretty grim over the next few years for rural areas.

[boone]

cowman: Further to taxpayer subsidization of the cattle industry, if I can play devils advocate here. Has coming to the rescue with funds to shore-up feed supplies in 2002, which drove up feed costs not only in Alberta but Sask. and B.C. and did not force the hard culling that would have taken place at a stronger pre-BSE market price. And as we see this years bailout of feedlots (integrated slaughter facilities) where, when I ask the rank and file small operators it did not put much green in their wallets. Now is government able to out think natural occurrence of markets. Or is a pro business governments meddling just as inept as a knee jerk socialist regime? Will more hands on help at this time?

[boone]

OOPS, the silence is deafening, perhaps I should explain D-advocate Oh well, it's nice to know you all can see where your bread is buttered. And by the way my cattle investment is draining away too.

[cowman]

boone: In a ideal world we wouldn't need help with subsidies. In the real world they are a necessity or else we just wouldn't have any agriculture in this country. Take grain production as one example. What is crop insurance? Isn't it a defacto subsidy? If not then let Mutual of Omaha supply it?
I do understand what you are trying to say, I think. No subsidies. Let the winners rise to the top and the losers sink. Eventually the winners come to a position where they can control the marketplace and thus become profitable. Which is okay in theory but pretty ugly in practice!
All business and labor in Canada is subsidized, if you will. What is Unemployment insurance, what is Workers Compensation? For that matter what is medicare? We're all on the government tit to some extent.

[boone]

cowman, you are absolutely right and I'm as much a part of it as any. I threw it out there to force a look at how we respond to crisis and whether it really has a sustainable influence or is it more distortion, I'm very familiar with the other reality in this industry. Besides some of the fearless leaders of the cattle industry also have short memories and I like to have it on record here. The fact that the large players scooped up the lions share of last federal payout needs to be dealt with however.lol

[cowman]

boone: How did the government come to the resue to shore up feed supplies in 2002? I must have missed that one! It seems to me it was mostly Ontario farmers?
It was pretty ugly around here and a lot of guys packed her in. Looking back on it I wish I was one of them!

[boone]

cowman, I was talking about the per acre drought payment announced by your ag minister summer 2002. We found as soon as it was announced the trucks and balers started showing up in Saskatchewan, clear to the east side. Don't get me wrong here it was good for every feed seller including corn suppliers:<) but was it good for Ab. taxpayer looking back 20/20 I wonder. Our guy let it all burn up to little dry sticks before he made a decision. Believe me your minister was putting her people first and I told her so last winter at a marketing meeting.

[cowman]

The per acre drought payment deal was fairly scant as I remember but last year every little bit helped! The really big winners were the guys out in the desert who had pretty well depopulated anyway(about 5 years of drought will do that!). They need something like about 100 acres/cow and a good part of it is lease land. But they still got the same amount per acre as the areas where you need two acres to run a cow. And surprize surprize guess who is the MLA for the desert...Shirley McClellan! Which I'm not really knocking as those old boys have a tough time out there!
The fact of the matter was it was ugly! The government had to do something or there just wouldn't have been a cattle industry in central and eastern Alberta. As it was we lost a huge number of cows and a lot of people lost their life savings trying to hold on. It is a pretty dismal feeling when you realize you have nothing to feed your cattle, no money, and are about to lose everything you worked for all your life. I often wonder why our mental institutes weren't completely full!
And the along came Mad Cow...?