Feedlots and bankers

[cowman]

Over on one of the American web sites there was a discussion on the feedlots in southern Alberta. The one guy had a buddy, who worked for a bank, who told him the banks were all just poised to shut down the feedlots. Claimed all the banks were waiting for someone to make the first move and then they would all pile in and take those feedlots down! Do you think it has come to this? If feedlot alley goes down who will buy our calves? The sight was www.agriculture.com

[jensend]

http://www.canada.com/news/agriculture/story.html?id=939BCBEA-4301-4B6D-BC56-5D6A50577D30

here comes the train

[rsomer]

Who will buy the calves? I do not forsee the banks closing the feedlots down, they don't want to own them either. Worst case scenario, the feedlots will still be there but will be owned by Americans or the two packing plants. I think Pascal and friends are looking for more of that government money.

[jensend]

rsomer - are you suggesting the feedlot operators have orchestrated the drop in prices over the last six weeks to get gov't. money? i would like to know who has bought the 10,000 head paskal has sold. probably see larger per centage of captive supplies purchased for very little and that spells a wreck for the cow/calf guys for the foreseeable future.

[rsomer]

I was suggesting the comments made to the press by Pascal and others are motivated as much to influence government support as to merely inform the public. That is fine, everyone does it. However the risk of the banks foreclosing is over stated.
I would think the people who buy the weaned calves are the smaller lots, the backgrounders, not the 10000 head plus feedlots who buy larger calves for finishing. The backgrounders did not receive a multi million dollar government cheque like Pascal and unless they receive support this time around there is real reason for concern about who is buying next years calves.
Pascal and the 130 other mega lots like his can be owned by Americans as well as him, makes no difference to the industry. It will be harder to deal with the loss of the thousands of backgrounders and smaller finishing lots who are providing competition in the marketplace.
We haven't heard much from the backgrounders scattered around Alberta and Saskatchewan. We need to, the industry is bigger than Rick Pascal.

[rusty1]

rsomer - you just flat don't have a clue. If youre going to spout of about whats going on in feedlot alley then you best get in you quad-cab and go to Picture Butte and buy a round of coffee and get a reality check. One of the reasons youre not hearing from a lot of backgrounders is that they didn't have any cattle when May 20th hit. Most sit empty in summer. The other reason is alot of them can't afford to ownd their own cattle so they background for the big three packers.

[cowman]

I knew Rick Pascal long before he was a big feedlot operator. He used to be an order buyer...and I always made it a priority to go around and thank the guys who bought my cattle! I found him to be a very down to earth guy who was enthusiastic about the business he was in. He was young then so maybe he morphed into this wicked feedlot owner or something. But I don't think so. I like to think I am a fairly good judge of character and I will tell you I saw a man who was a pretty straight shooter! And I have found that most people who are straight shooters as a boy remain that way and most who are SOBs also remain that way!
It must be totally frustrating to see everything you've ever worked for go down the drain...something maybe we all can understand?

[rsomer]

cowman: I don't know Rick Pascal. He probably is a nice guy. He has put himself in the position of being a spokesperson for the feedlot industry and as such has become a symbol of the large mega feedlot operator. When I refer to Pascal, I am referring to the large feedlot operator in general, not Mr. Pascal personally.

rusty1: I guess I don't have a clue. If I had a clue I wouldn't have a feedlot full of backgrounded calves that I need to do something with in the next while. If that makes me clueless then the large mega feedlot operators must be monumental idiots.
I however have not lost 75% of my equity because I managed my risk differently than the large lots. That is not to say that the large feedlot should get the lions share of government support, and all would agree that is what has happened.

The beef industry is not going to be the same after BSE as it was before. I question whether there is a place for large feedlots on this side of the 49th parallel, post BSE. Once the border opens to live cattle trade, Canadian lots will not be competitive and there will be a lot of calves of all weights and sizes move south. Yes, there is a train coming. It is the train of change.
Given that government funds are limited, there are going to have to be some decisions made about what sectors of the Canadian beef industry should get the government support. I question whether coughing up to a billion dollars to a handful of large corporate businesses like the 130 mega feedlots in this province will turn out to be a wise investment if it is made at the expense of the rest of the industry.

My opinion for what it is worth.

[cowman]

rsomer: I do understand that Rick has become a spokesman for the "mega feedlots" and thus is open for some criticism. I don't question your ethics in this situation.
I think we all need to understand that this is a "Wreck" we all are going through and I also understand my local 5000 head feedlot has not gotten much support from our government, not nearly what the "mega" feedlot has got! The blame lies with the government, not Rick Pascal!
I think I can also understand your frustration at not recieving some kind of help for your backgrounded calves...I am in the same boat to a certain extent!
That being said, we need to look at the big picture and realize we are all in this together! If feedlot alley goes down we enter a new world. A very different world than what we have been used to over the last several years(and not a pretty world?)?
Change is always difficult(maybe more so for us older types) but it is always there! I hope that things will turn out alright for my fellow farmers and I hope they can survive.

[kato]

We background a few every year. Less this year than last, and it will be less next year. It's getting to be just too dangerous.

A lot of guys in Manitoba buy one or two hundred calves every year to background. They also saw contracts torn up in their faces last May. They weren't worth the paper they were written on. These guys are the only competition the big boys have, and they are losing their appetite for it.

A few years ago, in our neighbourhood, which was not supposed to be big cattle country, we could have put about 3 or 4 thousand head together with no effort at all, just by calling six neighbours. Now there are only two of us left, and we've got less than three hundred between us.

Backgrounding really big groups of cattle is going to be too hazardous in the future, especially when contracts aren't enforced, and there are no safety nets. The risk is too high. Smaller operators, who could absorb a crash may pull through better, but would they want to even attempt it? What's the incentive?

[cowman]

Cows have been getting scarce in my neck of the woods for quite awhile but they are thick as fleas in west central Alberta. They had a tough year last year and the word is they need some feed.
A lot of cow herds disappeared around my area in the drought of 2002. Like an idiot I culled them back hard but didn't get rid of them. The winter of 02/03 was fairly tough and we were scraping the bottom of the barrel to pull them through. Just made it and presto...Mad Cow.
The guy up the road had about 20 cows that he unloaded in Nov. He never got much for them but he never had any feed, so figured he'd had enough of cows! Now with those cows gone I have to drive about 5 miles to see a cow! All the little acreage type guys who owned a few head are cowless now.
There was a guy who lives up on the river who ran close to 1200 cows a few years ago with two sons. Now they have 150 somewhere in Manitoba(sent them out during the drought) and they are all hauling manure for a custom outfit. Rented their grass out to Weiller and Williams(cattle buyers).

[gopher]

I share some of the opinions that are expressed here regarding the effect of mega feedlots on the industry. The feedlots in this area (feedlot alley) have become so large that the general public thinks that feedlots are the whole cattle industry. The feedlot owners are always crying about their losses and how many jobs their creating and how they are the back bone of the economy here. It's no wonder the public know very little about the cow/calf producer or back grounder. That's also why most of the support programs favor the feedlots. One has to ask " are feedlots necessary? " They are not very friendly to the rest of the cattle industry because they are so large and organized they get together and control the price we get for our calves and what they will pay for silage each year. Some of you said change is in the wind ---- lets hope so, maybe back to good old times when the buyers came to the ranch to bid on a pen of steers and business was done on a hand shake and the whole cattle industry was alot better off!! I know this will never happen but I can dream --- so reply and give me the gears.

[Horse]

Gopher I cant agree more I am like you and the old indians that say I long for the old ways.
There was a time when you seen cattle you knew who owned then it was the farmer but we have let the money men in (ie) bankers and big money. Now we have nothing but intrest and contracts to keep us leaning into the grindstone.

[cowman]

Well I remember the old days and I'm not too keen to return to them. Seems like it was a whole lot of work?
My grandfather would have been considered a fairly large farmer in his day and it seems like they worked from dusk to dawn 6 days a week. All pail and fork work! Now I don't know about you but I don't even like forking the bulls some hay anymore! I guess I've gotten pretty lazy?
It was a good place to grow up though. We had about 200 cows(plus 12 milk cows) fed out all the yearlings, raised about 30 bulls, had a whole slug of hogs, chickens, turkeys, ducks, dogs, horses, cats! Grew seed grain and grass seed. In fact I guess it was just about as diversified as you could get! Five families lived there...it was just about like a hutterite colony!

[cakadu]

I would hazard a guess that most of the general public has no idea at all about how their beef is produced and who is doing it or controls most of the marketplace. The same would apply for other meats as well.

All the general public pretty much cares about - or at least cared about - was that it showed up in the store on those trays at a price that was considered reasonable.

It could be that more of them are beginning to care about the safety of their food, but the majority seem to be buying anyway.