Nero Cowboys

[rusty1]

Nero Cowboys – we are like Nero who fiddled while Rome burned. The Canadian Beef industry’s huge problem is that our beef political structure is run by cow calf producers. Take a look. The CCA is predominately cow calf producers; the ABP is ruled by cow calf producers. 30,000 plus cow calf producer have a much larger and louder lobby that do 400 feedlot operators. The average size of the cow herd is what, 35 head or is it 60 head now. Now the wining sniveling press that’s prevalent around a few cull cows per producer. Pity Pity – who got enormous prices for their calves this last fall?

You all need to take a trip to Calgary, Strathmore and Picture Butte, sit down and have a cup of coffee with a feedlot operator.

Yes the feedlot operators got some aid packages this past summer. Ask them how long it took to get the money from the system. Ask them how much of that aid the packing industry got. Ask them how many of the total yearling on feed this fall belongs to the packers. Estimates have it around 50% to 70%. One feedlot operator told me recently that he still has 50% of the inventory he had on May 20th. while the packers keep current.

If you understand the feedlot industry they at least re-cycle their dollars into every auction mart in the country. And the calf sellers go and buy quads and quad cabs with their money.

Mark my word the independent feeders are going to stop paying the big dollars for feeders simply because they don’t have any more right now to spend. So if the current trend continues, one of the things you will see is 2 – 3 packers feeding (and I might add) buying your calves, and owning the feedlot industry. Price discovery will disappear and you will be pawns of an oligarchy.

[boone]

rusty1 I hear what you are saying, but have been told the integrated lots to the slaughter house were uncharacteristicly light in the pens by the time the announcement was made May 20th. Is that more whining or observation? Small feedlots are not the target of derision from what I hear.

[cowman]

I don't believe there are a lot of people ripping the feeding industry, especially our small local feeders? They are in a tough situation just like the rest of us?
If the CCA and ABP are cow/calf dominated then why are just about all of their policies geared for the feeding/packing industry? Example- blue tongue?
Did you get enormous prices for your calves last fall? Did you go out and spend all that loot on a quad or a new fancy pickup? The prices I got barely paid the bills! Guess I must be doing something wrong?

[ValueChainFX]

rusty1 your point is well taken and the finger pointing can go on, the challenge in the industry as I see it, is that we the front line of the industry need to find the checks and balances to take back our industry. At the end of the day we will have a new face, like it or not it has already changed. Our efforts now need to be focused on how we make this face work for the long term. The issues will not be solved at the same level of thought process that has put us here. So keeping this in mind we need to be looking at the alternatives. To date I have seen "NO" alternatives coming from the boys at the trough?

[cowman]

But valuechain, you know the boys at the trough only respond when they have to? Politics seems to be always a game of catchup? Don't worry when the public starts to realize that our food is not safe you won't be able to stop all the concern from our politicians!

[Horse]

The way I see it is not so many yr ago the producer owned the cattle they fed except mabey a small feeder ass loan then come big feeders and they needed lots of capital so they went to the banks and to the packers and started locking in very small proffits now guess who owns them.Only about 30 yr ago there was lots of 300 hd lots and they fed thier own calves and bought a few to use up mostly thier own feed but as always some got greedy .
Can any one show where the advantage to this is.
As for who controls the agenda the A C C was set up to look after the leasew holders in the province and we all know they have nothing to do with beef and all to do with mega resource revenue . Has anyone except a lease holder had control of the A B P .

[rusty1]

"the integrated lots to the slaughter house were uncharacteristicly light in the pens by the time the announcement was made May 20th."
Word on the street from some very reliable and connected connections was that there some some huge "sell offs" days prior to May 20th.
I know one very connected feedlot group was quite down in numbers because one packer had told them to feed their own cattle. However I don't believe any of the packers feeding are ever short when they wish they were long, or vis versa.

[bombay_43]

Rusty1- Ever heard the saying “If you’re not part of the solution, you’re part of the problem”? Well think it over. Trying to point fingers at another sector of agriculture in order to minimize your own problem, will not help! I am not certain what you think that the CCA or ABP did for the cow/calf sector! I have still not seen one cent! Promises are getting very difficult to live on! We need to support one another, instead of tearing each other down. I don’t recall anyone blaming the feedlots for BSE!

However, we would not have need for feedlots if we did not have cow/calf producers. No feedlots…no beef industry. No pork producers, no need for barley growers. Want to buy your bread from USA, we don’t need to grow wheat! Poultry could also be purchased from the USA, Brazil, or any other country. Same goes for every other sector in agriculture!

As long as we are blaming each other for our problems, we forget where the real problem lies. Cheap food policy! Always was, and until we all stick together, will continue. Either that or eventually crumble, then all foods will be imported here. At what cost??? Who will determine food safety at that point???

Incidentally, many of us back ground our calves and sell them in the spring. Yes, I know, hind sight is 100%. We all should have sold last fall! Frankly, I did not think the markets were as booming as you seem to imply. I heard some farmers took a licken. It all depended who was buying when you were selling! The market never did stabilize.

Also some of us have herds with 200 or more cows in order to maintain our obligations. (more, now that our culls were kept on) Show me someone who can exist off a 35 head herd, as you mentioned. Not unless somebody handed you the farm on a silver platter! Better do some more figuring!

Horse: You keep making reference to lease holders making “mega resource revenue”. I realize you think you know what you are talking about, but you too are pointing the finger in the wrong direction! Who opened the door to buying and selling leases? You too can own a lease! Phone AFSC and ask a loan representative what a reasonable amount to pay for grazing lease would be. I did! It is ½ the cost of deeded land. Now add municipal taxes, lease fees, the fact that the control of what you do with the land, eg: clearing, seeding, etc. is left up to the government, how many head you can graze, liability for anyone that gets hurt is your cost, fencing through muskegs and land that you wouldn’t dream of fencing, responsibility for weed control is the lease holders, including any thistles that blow in from somewhere else! Revenue from oil companies, get split so that 1/3 goes to the lease holder, the remaining 2/3 goes to the government. Any revenues that exist prior to you buying the lease, all goes to the government, and you receive no compensation. I have a trap line on my lease. We live 20 miles from town. The trapper built 3 cabins on it last summer, no permission needed. Newly cut quad trails through out my lease makes it really easy to get in and out with any of my beef if you so choose! How can I control my investment if I can’t control who comes and goes? Maybe there are leases that have unfair advantages. I have heard of them also, but don’t paint everyone with the same brush! Come to the other side and see how green the grass really is!

[cakadu]

My problem is that I don't know where this "cheap food policy" is or where it is written. All I do know is that for some reason, we have bought into it and it has hurt all of us. To my knowledge, it does not exist.

The EU says that they have subsidies for farmers because they don't ever want to go hungry again - well, they haven't been hungry since the war and that was long enough ago too.

Unless and until we learn to work interdependently, we are doomed to go around and around. I'll ask - how is is working for us?

Somewhere along the line we have bought into the cheap food policy, the we are feeding the world policy and lord knows what else. We don't feed the world - we feed those who can afford to pay (and even then those prices don't meet production costs).

At some point, we are going to need to drop these policies and take a look at what is really happening out there. We keep pointing fingers at everyone else - including the government. It's been my experience that when you point a finger - there are 3 pointing back at you.

How do we start to change things? Gone are the days when the money came freely with no strings attached or no real accountability. We need to be able to objectively measure how we are doing, keep trying to make improvements and change what doesn't appear to be working.

[cowman]

What is the "cheap food policy"? Well it was never wrote down anywhere but it does exist.
Take Europe. They could have what is called an "expensive food policy"? I think the average European spends something like 35% of their income on food? And Canada/US something like 9%? Why is it like that in Europe? Well basically they value their farmers as the keepers of the countryside! They are willing to pay to keep a vibrant rural population.
How do you keep prices up? Well how about not letting in any imports? Or restricting them to the point where your native farmers can make a living? Aggressively market any excess through export enhancement programs and move towards more set asides if production is too high.
All designed to make your farmers viable because the general population sees some worth in a countryside. Obviously our public sees no worth in us. We are nothing more than a nuisance and it is reflected in our government attitudes.
I do believe that a supply management system could have worked for agriculture if it was done right. The buying and selling of quota should not have been permitted, because that basically ruined the whole system.
It is tough to do anything in Canada because we are so close to the USA. The Americans have this myth that they are the great heros of free enterprize when in reality they deal off the bottom of the deck and use their muscle to force other countries to take their products. In fact the US and the mafia act very much alike!
Consider the case of corn in last years drought. Landed in Lethbridge for something like $2/bu.! Now we all know that was a scam! Then they turn around and slap a tariff on wheat? And then have the nerve to lecture us about free trade and free enterprize!

[cowman]

On the lease question. A few years ago(when Klein tried to do the end run around the leases)the lease owners were recieving a net income over and above all grazing/lease fees/taxes of $37 million dollars. The income came from exploration fees from the oil companies. Kleins attitude was that leaseholders were only renting the grass and were not entitled to the exploration fees. At that same time I was renting some private pasture and I will note I never got one cent from the seismic that went over that land(or expected any).
But the courts have ruled that grazing leases are real property so that isn't the situation here. But the fact also remains that the people of Alberta are losing $37 million a year by having cows on those leases. So what is the solution? One solution might be that the government expropriate the leases at fair market value? Then lease out the grazing rights(and only the grazing rights) for say a five/ten year period? To the highest bidder on a tender system? I remember the debate when this system was suggested. One old rancher complained that that lease had been in his family for close to one hundred years...the reply was that maybe it was time someone else got a chance!

[bombay_43]

On the lease land topic:

Several years ago, the issue of who was responsible for fire fighting costs came up within our municipality. A bylaw was implemented ultimately making quote: “the owner of the property where the person in possession and control of property which is the situate of the incident if not located on the privately owned land” responsible for costs incurred by the fire services. That means grazing lease holders are responsible for fire fighting costs on property they control.

The bylaw goes on to state “where the fees or charges are not paid upon demand by the M.D., then in default of payment, such fees or charges may be charged against the land as taxes due and owing in respect of that land.”

How many more fires do you think would break out on these pieces of lease if the grass and weeds were not grazed down every year? That would be an added expense to Alberta tax payers as well.

For those of you who do own grazing leases, it may be worthwhile to check what regulations have been put in place in your municipalities! I for one am not too happy being responsible for someone elses negligence on my lease!

By the way, even the trapper on my lease holds no responsibility, as it is me that pays the land taxes.

Free country as long as we do what they say!

[kato]

I'm not so sure that it's a "cheap food" policy exactly, it's more a matter of having a system controlled by huge corporations who's sole function is to generate profit, and keep up the share values. All they have to do is have a smaller profit than the quarter before, and their shares take a lickin'. Imagine, if they show a loss! Therefore, if there is a loss to be endured, it must be passed on down the line until it hits the spot where the losses will be absorbed.

The top of the heap is commited to profit, while those at the bottom take the hit for them. We are independant, and answer to no one but the bank, so as long as we are willing to soak it up, and the banks are willing to give us the money to keep banging away, things will not change. They will give us the rope we need to hang ourselves as long as they are reasonably sure they can recover their losses. If not, the plug gets pulled, and our unsecured creditors take the hit. These are generally other small businesses who are also at the bottom of the pile. Do we see a trend here?

The 'big'at the top collect the profit, and the 'small' at the bottom take the real risk, and cover the losses.

The real question is "How do we change this picture?"

[cowman]

kato: In Europe I am sure the big corporations rule the roost too? Government policy is what drives a sustainable agricultural sector. A classical example is our dairy and poultry industries. Government policy(supply management) has allowed these industries to flourish while other sectors have languished? And in reality hasn't Europe got a type of "supply management"? I mean they basically produce all the food for the EU while limiting imports? Their export problems are being slowly taken care of by set asides and targetted subsidies?
Balancing supply and demand eliminates distortions in the market place. In other words it gets rid of the boom bust cycle, supplies affordable food, provides a reasonable profit for everyone. It provides stability for everyone. And a wide open free market will never be able to do that.

[Horse]

To bombay it always comes up when leases are mentioned that lease holders are responsible for all of these things such as fire liability ect the last time I looked I to am responsible for such and I do not have the luxury of free rent or 5 -10% of going rate . Just show me anyone that gives thier annual lease payment to thier renter on free hold land.
Take last yr when ralph and co gave $4 per acre on uncultivated pasture on these 40 acre per cow leases thats $160 per cow ,not bad for land you dont own.
As for value of leases the A C C did a study on values and came up with a sale value amounts to what the lease cost as compared to what it will produce in essence the leases are to cheap on an A U M bassis but they wouldnt publish it because it look bad for lease holders os they charged $20 for the report that we as producers paid for in the first place .
If resource revenue from a lease are an intregal part of a lease why is 2 identical 1/4s the same price when 1 has 2000$ revenue before you even put a cow on .
There is 6000 lease holders out there that has a very substantal advantage over the rest of us it is hard to compete. A few months ago there was talk of a cow cull mabey if we just got rid of the welfare cows the rest of us could hang on.