Cull Cow Plants

[cakadu]

I know that there has been lots of talk recently about starting up cull cow plants, new-gen coop plants and producer owned plants.

I am all for the producer getting their fair share of the value out of what it is they are producing and would very much like to see whatever the value might be distributed far more equitably down the line than what it has been for the last 50 or so years.

What I'm trying to get my head around is where all this meat will go that is proposed to be processed? If our major markets are still refusing to open their borders, then where are the new markets going to open up?

There is only so much hamburger and steak that can be eaten domestically and consumption will only go up if the price of that meat is lower than what it is at the supermarket, otherwise, what would be the incentive for them to buy it? Consumers being what they are, they want it cheap and they want it safe.

Once the cull cow numbers are reduced, what happens to the plants that were processing them? How do some of these plants that are being proposed envision passing the value down the chain?

How is the money going to be managed in the new gen coops? There have been several of these new gens that went under and had significant legal problems because of the way that the money was managed.

What steps are in place to ensure that these new plants won't just become a "dressed up" version of what we already have?

Again, I am all for them, I just wonder how they are envisioned to avoid some of the challenges that producers are currently faced with.

[bombay_43]

Why aren't we setting up plants to produce the one product that takes up an entire isle in the supermarket?

PETFOOD

Wouldn't our old culls support such an initiative in the long run? Maybe it can't be done because we have an agreement to buy from the U.S.?

Just seems to me, that is an untapped market in Canada. A perfect place to put our culls!

[rusty1]

What's the matter with canning alot of it so it can be shipped to Biafra etc. instead of sending billions in foreign aid. Then I suppose if I were a Liberal I'd know why.

[cakadu]

Bombay - I think there are several pet food plants in the works or recently started - not only here in Alberta, but in some of the other provinces as well.

The raw food pet diet is catching on and is growing in popularity. I was in a natural dog food store in Calgary a couple of days ago and I was amazed at the varieties that are now in there.

There was beef, chicken, lamb, elk, bison and ostrich.

The people have opened up a second store in Calgary, so there must be some optimism that is going to continue to grow.

The pet market is one of the fastest growing trends in North America (if not globally) where pets are treated like members of the family and the sky is the limit as to what will sell.

Myself, I draw the line at brushing my dogs teeth, but there are many who do.

It will take imagination and determination, but it could work. I've often wondered myself why we don't see many more Canadian brands of pet food than we do.

[magpie]

Agree Bombay 43! I read the ingredients on a lable of dog food and found corn and or wheat and or barley, meat and bone meal, soybean meal and the rest are vitamins, minerals. Now it seems to me that the bulk of the ingredients of this particular dog food are cereals, as they list most ingredients first. Are dogs not carnivores! I assume if the producers owned a plant, the formula would change. Again some of the little changes that could help bottom line

[cakadu]

Magpie - if corn meal, gluten meal, or wheat show up in the first 3 ingredients of the dog food, then more of it ends up on the ground than stays with the pet, if you get my drift.

I shop for those pet foods that don't have those so that I'm not paying for filler.

Using the culls this way is one way to ensure that the supply is being used up.

[magpie]

Cakadu those are good hard questions we must answer before going ahead with any insight on how to solve this problem. What should happen I think is a task force of some sort to seek out whether or not there are enough consumer interest or markets, if you will, to support a plant that would supply to their needs. Also are they willing to pay more for the needs that they are requiring. The organic industry is a good example of how they went from selling in farmers markets to commanding shelf space in some of our largest supermarkets. I’m not saying we should go organic but some thinking outside of the normal box is warranted. There are markets such as Europe which want hormones free,90% of consumers in Japan want their beef tested according to survey. I don’t understand why we can’t fill these markets if we had our own plants. There is a plant in the states that is now testing all beef. Would this not be placing more value to the product in which the consumer is willing to pay for assurances? Even if the border opens shortly we should still venture out and seek these lucrative markets, so as to not be so dependant on one. Do we want a bunch of smaller owned plants in every province or one that is state of the art to capture efficiencies owned by prairie wide producers. A cow/calf producer is a cow/calf producer no matter where his or her farm or ranch is situated.

[cakadu]

Magpie you are right on the money. I don't see why it couldn't happen even after the border opens.

There are markets that will not or cannot be explored right now because the mainstream will not change in order to address the concerns in those markets. Take your hormone-free beef as an example. The Europeans want it that way, yet because of the way we think we need to feed in order to make any margin at all in this country - whether it be the feedlot guy or the cow/calf producer - it won't happen any time soon. That is an opportunity waiting for someone to reach out and grab it. Certify it hormone-free throughout the entire chain and who knows where it might go?

Another area to explore is using feed that has no animal by-products in it whatsoever. I personally believe that it is the only way to start opening up new markets and to ensure our own domestic supply. We don't feed animals to animals destined for the food chain, no matter what the source of it is.

Find those markets that want something specific and fill them. You don't have to go global, you can act local, but you need to do the objective background research before you get too gung-ho on it. It is a step-by-step process.

You don't go head to head with the big guys - you work around them. The smaller and more innovative you are, the better able you are to read and respond to the (ever-changing) market signals.

In other threads have come glimmers of hope about this whole BSE crisis having a silver lining - I firmly believe it can and will have one.

[ValueChainFX]

Real New Gen cooperatives have very special ruels to follow, so do value chain concepts (the value chains that take in the whole supply chain). Some of the new gen coops are designed to take advantage of the producers, the answers to the questions should be asked to the ones serious about building plants! Those folks have talked to the marketers and I am sure on not going to go head to head with the big guys! There is no need to as the lucrative markets for the small plants are there, believe it or not in Canada and yes some export markets as well! Are they the only answer to the cull cow challenge, I would not go that far, but one way or the other the producers will only be held hostage for so long before they fight back!

[cowman]

The fact of the matter is if the border opens up tommorrow and cull cows went back to a normal price the smaller new plants would struggle to get any animals. About two weeks ago D1 cows were 65 cents US(which works out to over 84 cents Canadian) and if border was open there would be a steady stream of cows going south.
Some how if we expect these new plants to survive they must be protected? Maybe put an export tax on live cows to the US? But not on manufacturing beef? That would keep the new plants viable while not limiting the market price for cows?
It does little good for anyone to build new plants until we make some fundamental changes. Otherwise Cargill/IBP will break the new plants as soon as the border opens which will just mean a lot of wasted money? The government needs to legislate some fairness and protection into the system?

[magpie]

Cowman how do we achieve this protection for the plants? Do we go thru our associations? Or do we set up a lobby group of influential well known cattle producers with the interests of the cow/calf in mind that can’t be bought off, and have them align themselves with the people that can push the buttons to achieve this. If Mr. Speller is a listener like they say he is and with an election coming up maybe we should dangle him the carrot like we have seen before but we must as a collective group be sure of what we are asking.

[cakadu]

The system will only support so many smaller plants and competition will eventually even things out. If too many of these small plants get built, then the inefficiencies will start to take hold.

I know that one is proposed for the Hanna area - how many can afford to take them all the way out there? How many will be processed and how many will it take in order to become profitable.

Cowman is right about one thing - the more smaller plants we get into service, the more chance there is for a divide and conquer scenario. There is also the consideration that by the time you got all the regulations dealt with and the plant built, the border could be open.

One of the more difficult challenges with a new gen co-op, as I have read and understood it, is that when the marketplace is better than what the co-op will pay you, then people tend to choose the higher price, regardless of what arrangements have been made. Not all players in the co-op do it, but it can sometimes be enough to cause serious difficulty, no matter what rules are in place.

If you're not intending on selling outside of the province, then a custom kill is likely far more economical and sustainable in the long run and you can set it up so that you get the information that you need from the processor and your customers. I know it can be done because we do it now.

I'm not entirely convinced that building your own plant is the way to go - depending on what it is you are trying to accomplish. I know that some plants have been in the works for literally years now and they have still not laid brick one nor have they secured the financing in order to come near to doing it and don't even get me started on dealing with the regulations.

The policies and infrastructure (not necessarily bricks and mortar) have to be changed in order to allow for easier access to the things that smaller, innovative players need. I am a firm believer in this and will continue to push for it.

Establishing the trust in your relationships is critical and it is no easy task, although it can be done if given enough time and the right people are in place. It takes a strong vision, dogged determination to see it through and enough credibility to gain momentum to see it develop.

I am all for it and if done with the right people - the sky is the limit. I saw Seabiscuit for the first time last night and that Tom Howard - the owner - had a never ending supply of optimism and drive. That is the type of person we need to provide the leadership for so many things.

[grassfarmer]

Cakadu - is the Hanna plant you are refering to the one being built by the Biggs of TK ranch at Coronation? It is featured in the Producer this week. These people have their heads screwed on and will make a sucess of it i'm sure. They are niche marketing an excellent product and have experience in the field.

[cakadu]

Yes, that is the one I'm referring to.

It has taken quite some time for them to get it all together, but from the article it sounds like they are moving forward.

[pillypillsner]

god bless america