New money rumour

[rusty1]

Thanks cowman - you hit the nail on the head. Opinion is one thing - but to be so dogmatic about something as gospel fact without the fact is perposterous. Yes the packing houses syphoned off a huge part of the aid as got to chose whose cattle got slaughtered. But if (i've said it before to rsomer) he needs to go down to the Picturee Butte area and have coffee with some of the feeders. The feeders around Calgary are way too connected to Cargil to get the straight goods there.

[rsomer]

rusty1: I see no reason why the cow calf sector should keep its mouth shut when cow calf producers have been very seriously hurt by BSE yet the over $1 billion dollars in government support has been directed to the feedlot sector ignoring the cow calf operator.
If you believe I am missing a lot of information please enlighten me. What facts do I have wrong? That 33 feedlots control 58% of the feedlot industry in Canada. Or that these feedlots would have received the majority of the government support? It is difficult to know who owned the majority of calves in the feedlots on May 20, the 33 feedlots or the two packers, but based on the squealing the feedlot industry is doing it seems reasonable to assume they owned quite a few and they have received generous government support on each and every animal. Probably support on some animals that did not even exist.
I know that even though I owned cows and calves on May 20 I haven’t received one red cent of government aid yet individual feedlot operators would have received millions and that is the point of my comments. Although the entire cattle industry has been dealt a serious blow by BSE only one sector of the industry, the feedlot sector which is controlled by a very few individuals, has received substantial support by government. That is a fact.
Government support for agriculture is limited and it is important that these limited funds are distributed properly. When I see the most of the $1Billion dollars in government support going to only 33 feedlot operators while little or nothing goes to the remaining 90,000 cow calf operators that does not seem fair to me. If you take exception to my point of view that is your privilege. My old man taught me to stand up for what I believe is right and I am doing that.

[johnboy555]

rsomer is jar head................last summer some feedlots got up to 400 dollars from govt. per head, then got 500 dollars from market, which only left them about 5 to 600 dollars in the red. This guy is out of business in one turn. I feel for you rsomer as to your ignorance of the whole situation.

[rusty1]

I don't diagree that the problem is a industry problem. But you're numbers are way out of balance. I don't know for sure the numbers but I do know that the 3-packers who had the option to sell their own cattle when appropriate got the LIONS share of the aid packages. The CRUMBS went to a lot more than 33 feedlots, probably closer to 150 feedlots.
You're way out of balance in the big picture. I might remind you that most of the aid money that was received by feeders was re-spent to buy calves from the cow calf producers at INFALTED dollars because they had to bid against the packers with pockets full of money in order to keep their staff (and families) and cash flow their silage through their system.
I might add that if anything needs to be donw at the cow calf sector. The stupid bankers need to stop the fear mongering and "WORK WITH THEIR PRODUCERS" now like banks had to with the feeders since may. My son-inlaw's (who is very solvent with his dad) banker told him there was no way he would lend him any money now for $600 mother cows. And oh yes that same banker would lend him $1600 per cow a couple of years ago. Where' the cowboy logic?

[cowman]

Well I suspect the bankers are nervous? I don't think I would lend anyone any money to buy cows right now either? Would you?
We need to hear some positive news for a change to put the bankers back in a more friendly mood? Our government has not been very helpful at getting anything done that might encourage them? I mean it's getting close to a year now that the border has been closed and the cow/calf sector has recieved zero support? Should we expect either some cash support or a concentrated effort to get that border opened? Do you think it would be a reasonable expectation that they should be doing something?
How long will our government continue to dither before they realize they need to do something to either get that border open or start depopulating the Canadian cow herd?

[kato]

Our banker has been so much help that we are taking our business elsewhere. We've had it with this "give them an umbrella when the sun shines, and take it away when it rains" attitude.

When there is a new loans officer in the branch every two years, how is it possible to expect them to see anything more than 12 months down the road? That is the main problem I see with the big banks. The guy knows he's only there for a couple of years, so whether you do real well in four years is of no consequence to them.

[rsomer]

Rusty1: How much of the government support went to the 33 feedlots that control 58% of the Alberta feedlot industry or the 130 feedlots that control 80% of the Alberta feedlot industry or the 2 packing plants is not the point I was trying to make. I was trying to point out that $1 Billion dollars or more was paid to a very few in one sector of the beef industry while the 90,000 cow calf producers have received nothing to date and can only expect to receive very little help with their cull cows which amounts to $15 a head on their cow herd in the future. And nothing at all for the calves which were on the cow May 20 as compared to the estimated $500 per head paid for the feedlot calves on feed as of May 20.

I was trying to point out that the cow calf operator has been every bit as affected as the feedlot producer on an industry wide basis and much more so if you factor in the government support for the feedlots. And as you point out this is an industry problem but as I am pointing out the government aid went to only one sector of the industry.

I have put some numbers together to illustrate. Source is http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/sdd6247?opendocument

The weighted average price of a 1200# fat steer in the four months leading up to May 20 was $1401.86 per head. The weighted average price of a fat steer from May 20 to February 15, 2004 in Alberta was $847.27. A difference of $554.58. That is a huge loss. But government support would have covered most of that loss leaving only approximately $50 per head that would have come out of the feeders equity.

But that is only part of the story. The change in the value of the Canadian dollar had a dramatic impact on beef prices during the period of time between May 20, 2003 and February 15, 2004 that our governments made up the shortfall in market prices for the feedlots. If we include an adjustment for the Canadian dollar we see that the picture is a little different. The before May 20 fat price would then be US$ 949.68, the May 20-Feb 15, 2004 price would be US$634.89 for a loss of US$314.78. In U.S. dollars government support would amount to US$370 for a net BSE gain of US$55.21. A tidy profit after government handouts of $72.64 per head Canadian if the feedlot had hedged the Canadian dollar and I think they do or they should have. As such the feedlots have been overstating their losses in order to extract more government support.

No matter how I put the numbers together the feedlot sector was fully protected from the impact of BSE while I see that the cow calf producer was not.

Supporters of the government largess to the feedlot sector tend to point out that cow calf producers received better prices for their calves last fall then they thought they might the day after May 20. But if you look at rail prices during the October November period when the fall weaned calf sales were on you see that the average price was $143 rail grade or $1072 for a fat steer with an expectation of higher fat prices in the New Year when the border opens. The feedlots were not doing the cow calf operator any favours buying their calves last fall, they were looking to make good money on each and every one. Feedlot operators are businessmen who carry a sharp pencil, not philanthropists looking to do the cow calf man any favours.

[johnboy555]

like i said JAR HEAD

[pandiana]

What is a jar head?
Easy enough to call names, not so easy to come up with a researched and documented opinion.

[johnboy555]

don't u read the comics?

[kato]

I know there is one big difference between the average cow calf producer, and the average owner of a big feedlot.

The average owner of a big feedlot very likely won't lose his home and get kicked out on the street if he goes broke. Heck...he probably won't even lose his boat and motor home.

Cynical? Moi?

[johnboy555]

cow calf dudes need a real job

[johnboy555]

The boys at Cargil and Tyson would love to read this thread.

[kato]

I expect they do.

[rusty1]

rsomer -You said "No matter how I put the numbers together the feedlot sector was fully protected from the impact of BSE while I see that the cow calf producer was not."
That's pure BS.
I'll say it one more time - either you live with you're head in the sand or you have blinkers on. I dare you to go to Picture Butte and say that over the loud speaker at the hockey rink, on in the coffee shops - I guarantee you'll only say it once, cause they would carry you out on a streacher. You wouldn't know what hit you. I listened last night to a retired feedlot opporator tell us how they have lost all their retirement savings just to keep their staff. And they aren't the only ones - check it out for you're self or shut up. The people in that town are living in total fear for their future.