CBC last night?

[cowman]

On the National last night they had a show on BSE. I thought it was pretty decent and informative. They were definitely not alarmist or anything.
I was particularly interested in what had happened in the UK and how it has all washed out over the years. It basically devastated the industry but today beef consumption is way up to the point where they can't supply the demand! Also impressed by how the British government has paid their farmers a decent compensation package instead of hanging them out to dry! Too bad our governments don't seem to have the will of the Brits?

[kato]

I thought it was a good show too. Interesting how they skirted the question about the price of beef in the stores, wasn't it?

Apparently, if you have a cull cow in Britain, she's tanked and you get paid by the government. We can only dream.

It was also interesting to see what tracks they are taking in the tracing process. It's the first time they've mentioned herdmates of the 1993 cow as being suspicious. I hope they succeed in tracking the source. Life would get a lot easier for us if they could.

[ivbinconned]

"Too bad our governments don't seem to have the will of the Brits? "

Leverage...thats all we need to create the will! But you don't have any when you live in a colony.

Do you think Pauls ships will be hauling stuff to Iraq. Is that why he was all smiles. His issues are being resolved.

[grassfarmer]

I missed the show Cowman but this comment you made should be in context "It basically devastated the industry but today beef consumption is way up to the point where they can't supply the demand!"
Pre BSE the UK had a healthy beef export industry (not as large a % exported as Canada though)as well as being self sufficient in beef. When BSE hit consumption dropped 60% overnight AND a lot of the beef still being eaten was being imported. A packer cartel also took the opportunity to screw beef producers when we were unable to export (quite like what has happened here) Over several years these factors conspired to shrink our beef production base considerably. Beef export markets reopened in the late 1990s but to date the extra costs involved have made this price prohibitive and there is virtually zero exporting happening. In 2000 the UK was only 70% self sufficient in beef. In 2001 the Foot and Mouth outbreak happened which resulted in a huge mass slaughter which further reduced our production base. So today UK beef farmers are struggling to fill beef supply, given that they have a reduced herd to produce from. Government policies penalise herd expansion as subsidies are now all geared to reducing production. They are not getting rich either as retailers use their import of foreign beef to hold prices down. Although compensation has been paid on all OTM cattle since March 1996 (because they all get incinerated) this is going to be wound up in the next few months which is causing farmers a lot of worry.

[cowman]

Well grassfarmer you obviously know more about it than me. I can only go on what I hear on the news. But I am amazed that there is one cow left in Britain after all the wrecks they've had. Now do you think we can weather a five year ban, with a lttle foot and mouth thrown in? Say ten years of the prices we now get, without some massive government support? I don't think so.

[grassfarmer]

Yes, Cowman I believe we could survive 10 years with $200 cull cows and fats at $83 - but there would be less cattle, less operators and less wastage. Hopefully it won't come to that but we found in the UK that you can survive by adapting. I am not currently spending $1100 on bred heifers as some people are - carrying on as before in the face of reduced income isn't a great idea in my opinion.

[Horse]

Well grassfarmer I hope you start putting on seminars to live on 200 $ culls and 83$ fats and I will be one of the first to sign up I hope it comes with a guarante.

[cowman]

Grassfarmer:What do you think your heifers cost you? I made it to a few bred cattle sales this fall and the going rate was around that dollar a pound. If the price dropped much below that the packer buyer was right there picking them up. So I guess if your heifers were in that 1100 lb. range then they really did cost you $1100? Now if they weighed less that is another story...900lb.=$900
Personally I've always found that heifers under 1000 lbs.in the fall tend to give me a lot more calving problems unless they are bred to a really easy calver. And then you end up with a dink calf that isn't worth a lot in the fall...and I like to sell calves in the fall. Maybe if you background them they work out better. I do keep my little calves over and I make some money on them but I'm not sure if it is really worth all the hassle.

[grassfarmer]

Cowman, I didn't actually buy heifers in as I retain my own replacements (and i'm not going to get into what it costs to produce your own versus buying in)the point I was trying to make is that many ranchers have spent too much money on overvalued breeders this year despite the BSE crisis.In the early weeks of June cow calf pairs were making $1300 and feeder cattle hardly dropped at all. Now that feedlots seem to want to buy feeder cattle at @80c/lb (ie the same as fats) perhaps ranchers will start to cut their costs too. Maybe $7-800 is plenty for a bred heifer and $500 for an older cow given that cull cows seem pegged at $200 for the meantime? What happened before BSE is now irrelevant - we have to adapt to current market realities.

Which packers were buying bred heifers if they were just under $1/lb? Fat heifers last Nov/Dec were making 78-84c/lb weren't they?

[cowman]

I believe if you check the prices you will see a sharp price spike right around the end of October? I don't think the cattle buyer could ever touch the bigger better heifers as they all went back into breeding herds. Most of the ones he did buy were on the lighter side under 1000 lbs. which probably meant they were going back into the feedlot for a few weeks. Feeder cattle were very strong at that time.
I know you look at home raised heifers a different way and price them accordingly. But the fact is if she was worth $900 cash on Oct. 30 then that is what she was worth! In fact because she was a "feeder" she was worth closer to $1.10/lb.?

[ianben]

BSE changed things here big time. Grassfarmer is in Canada, we keep next to no beef cattle, lots of others have gone out of farming altogether.

It was hard to adjust to the new ball game. Some farmers seemed to think it would go back to how it was before and kept paying high prices for all stock too long.

Consumption may be back but prices are not at pre 96 level.

BSE keeps being found slowly round the world making cheap beef available for import.
Government program was not to save farmers but keep possible contaminated beef out of food chain. Cost of removal verses possible cost of lots of people with nvCJD. 7 years on and looks like risk must be gone as one day soon all cattle will be safe they say.

Will there be a market for this beef which had to be burned yesterday but is safe today?

Of course there will be at a price and so prices will fall all round.

No good news with BSE.

[cowman]

And Ian consumption actually went up in Canada...around 60%! Of course the prices to the farmer tanked and prices to the consumer are right back up there. But you are certainly correct when you say things have changed and will never be the same. And if guys like grassfarmer can make a go of it with $200 cows and 83 cent fats then all the power to them.
So what happens to the rest of us? Do we plow up our land and start raising grain? But wait a minute...thats why we got into cows! Because we couldn't make any money raising grain!
The good thing is most of our farmers are just about at that age where they should retire anyway! And I guess the young ones will have to learn to live with $200 cows and a less lavish lifestyle? And I guess many will go broke and have to go to work at Walmart for minimum wage!
As you say BSE is not pretty.

[kato]

The worst thing about all this, is there's really nothing left in agriculture in Canada that makes any money. That's the main reason there are so many cattle in the country. It was the only thing left with any potential.

Pig prices are in the tank, as are sheep. There never was much money in grain, at least in the last few years. Who's going to go out and spend hundreds of thousands of dollars on equipment to get into that, anyway. If I had a quarter of a million dollars, I surely wouldn't be spending it on a combine!

The diversification experiments are blowing up in everyone's face, too. Elk farmers around here have no markets, and have so much red tape around their industry, that they can't even reduce their herds. They need a DNA test costing over a hundred dollars, even if they put an animal down on the farm. They aren't even allowed to do it themselves, they need a vet to do the job. Then they need to find a way to dispose of the animal. It's really nasty. They have no market, and no way to get out without going broke doing it.

The PMU people have been doing well over the last few years, but they have been totally decimated this year. Operators who have been raising horses for 30 years have been told they are no longer needed. They are at least getting a buyout and compensation from Ayerst, but they are also watching their really good heavy bred mares selling into the States for a hundred dollars apiece. These were four thousand dollar horses last year. There are fall colt sales here where you can go and watch literally hundreds of purebred Belgian colts go through the ring, all looking alike, from one owner, on one day. It's an amazing thing to see. It's also all over.

I hope our government sees just how close Canadian agriculture is to collapse. Don't be too hard on the supply managed commodities...they may be the only ones left.

[cowman]

kato: I think you are exactly right. We have been reduced to where basically there is nothing left. Where I live you see a lot of people going into berries but how many berries can you sell? When too many get into it the prices will probably collapse. The start up costs are steep and there is virtually no infrastructure in place to process and market the product. Besides it takes about four years before you start to produce.
Do you think there will be another large exodus out of agriculture? Or just the same slow erosion that has been going on for some time? The cattle industry isn't viable right now and it looks fairly bleak for the near future at least. The hog business is ruined and I think we are down to something like 1400 producers in Alberta.
Perhaps the farmer of the future will be either a hobby farmer or a large corporate farmer.
In the county I live in the vast majority of the farms are cow/calf. Now a lot of these farms are of the hobby variety...which doesn't necessarily mean small! I know of one guy who has 500 cows and couldn't care if he ever makes one red cent(oil money). Is that what the future holds?