Industry exposure

[blackjack]

Cakadu is on the money once again! As an industry we need to find the market for the packaged product before we build the packing plants. Are the markets in our major cities like Montreal or Toronto flooded with beef? Where are the packing plants going to sell their product? These are the serious questions that needed to be answered first! What is going to stop the big packing plants from doubling up their capacity?

As far I am concerned the only one that should be building another major packing plant (IF NEEDED) is our ABP or CCA. The only reason is all producers share in it because of the checkoff!


We need to leave the small marketers like Cakadu , Kaiser , NERVES to do their thing because if we all switch to trying to market our beef locally we will end up cutting are own throats price wise!

[nerves]

Blackjack go to your local fast food restaraunt or IGA or what ever grocery store is near your and try talk the manager into let them sell your beef. These stores are under contact to be supplied by guess who. So while you build your packing plants you might as well build your own grocery stores while your at it. The big corporations control food period not just beef. If you wait for the times to get better and when the border opens we will all live happly ever after then as far as I am concernd you cut your own throat as a price taker. Has any ever thought about if you support your local small packer that maybe they well expand. They are business men to.

[cakadu]

Nerves, I'm actually glad that you brought up the point about supporting local packing plants. Yesterday I heard about producers who were lamenting the fact that the local packing plant had closed down. Yet, when asked why they didn't support him, it became readily apparent the reason they didn't was because at the time they were getting 2 cents per pound more from the conventional system. Yes 2 cents was enough to get them to go elsewhere.

In some respects that is why I have been saying to go slower, work with what is already there, get a system in place that WORKS in practice, not just in theory and then worry about expansion and going whole hog. They say that in order to be able to operate the plant, you have to have triple what the actual plant will cost you to build. If the plant is going to be 5 million, then realistically you need 15 million because you aren't going to be at full production and capacity right away.

I don't know how many of you have seen a program called Beef Inc., it was on the knowledge channel a couple of nights ago and it was about the big 3 in the beef business - ConAgra, IBP (Lakeside in Alberta) and of course Cargill. It was all about how we got to where we are and the amount of clout that these packing plants have. There was a lady from the Kansas beef producers (I think it was that group - don't quote me on it) and she was talking about how the packers cannot put much pressure on the retailers, so they put the pressure on where they can and that is with the producer.

If there are some 2 million beef cattle that go through the system in Alberta every year (and this number could be conservative I'm sure and if someone has better numbers, please feel free to share them) and the packers are allowed 10% ownership (never mind the feedlots that custom feed for the packers) that would be some 200,000 cattle if my math is right. How many days slaughter capacity is that for them? How long could the packers actually go without having to buy cattle?

I found the program to be very informative and gave a reasonably good picture of what was happening. Cor van Raay was interviewed and my spouse felt that best statement he made was the fact that the feedlots evolved to the point that they have because the consumer wants cheap food. I certainly agree with the last part of the statement - the consumer wants cheap, high quality safe food - and the emphasis is on the cheap.

The best way to add value is to differentiate your product from what is out there in the mainstream. Niche markets do not by definition have to be small and in fact some of them do quite a lucrative business AND they do it with food safety and quality in mind at all times.

I heard an interesting statement one time "we are trying to eat elephants, while choking on ants."

[ValueChainFX]

NeRves, welcome to the discussion. I see you enter right in with both feet . You may think this is what is happening, but the fact is our provincial plants are in very sad shape. If you are happy with what is working for you, that is good, keep doing what you're doing. Visual inspection will show you we have a long way to go (unless you listen to the provincial government). The Federal system even in the big plants is very well monitored and they keep accurate records in a very well laid out HACCP plan.


Most of the people in these forums agree the system needs to be improved. To improve them we need to recognize the inequities and deal with them. As usual each person has a choice and there is no need to change or become involved if what you are doing is working and that keeps you happy.

For those of us that are working to improve the system, positive input helps a lot.

[cakadu]

In what way are the provincial plants in sad shape? The odd plant may be lacking, but that will be taken care of next year when they all have to be at a certain code - we may see some provincial plants closing their doors, but I would say that many of them are functioning very well and producing safe products.

To say that all provincial plants are in sad shape and that they will bring the entire meat industry down is misleading at best and erroneous at worst. If there were problems at the local provincial plant - which by the way we use and have used for 10 years, - believe you me, we would hear about it. We have 5 local papers in our area and that news would spread like a grassfire on our drought-striken prairies. With all of the things plaguing the meat industries right now i.e. BSE, bird flu and lord knows what else is going to strike next, do you think anyone could cover up a potential threat? In recent years, the majority of meat recalls have come from federally inspected plants with high volume.

There is the potential for contamination whether you are federal or provincial and being of a certain standard does not preclude or exclude one from this potential. People get sloppy, shortcuts are taken, repetiveness breeds contempt, take your pick. Things happen.

When a major plant has a meat recall, you might loose certain customers, but they manage to retain a large enough share that they can continue on. Direct marketers and the provincial plants cannot afford a loss of any degree. I daresay at the provincial plant where the meat processed is sold over the counter and they get to know their customers, they do everything they can to keep their business prospering, which includes keeping customers happy. Many of these businesses grow by word of mouth - which is a double-edged sword - do good and you'll benefit, do harm and you're dead in the water.

If I didn't have trust in my provincial abbatoir, I wouldn't be using him - period - I would find someone I did trust. The relationship we have built up is a good one, it functions and we have both benefitted from it. It works well for us and we don't plan to change anything at the present.

[nerves]

Valuechain I have two very good friends that have been doing this all their lives one sets up big plants and shows them how to be efficient. The other has worked the floor of these federal plants for sixteen years, and to this day he will not eat weiners. I have heard some stories from these two that would make you shake your head. I also know that a small plant can be shut down in a instant untill the problem is solved try that at a big plant. As far as direct marketing goes we had a tv crew within an hour of set up. The local newspaper the next day, the phone won"t stop ringing from people asking Questions. The local grocery store flyers came out today the price of beef in the stores dropped a dollar fifty per pound on steaks and roasts, in the city we are selling. I think they are worried if this catches on they are in trouble. We hear nothing but good things and the urban population is behind us we need to show them what quality meat is and I feel there is only one direction to go.

[blackjack]

nerves... don't get me wrong I wish you all the success in your marketing venture! I think you would agree that your local small packer would expand only after he/she found a market for their product . How much processed meat could there be sold locally ? I could be wrong but where is the labor source going to come from? What is the extra freezer space going to cost? As you know there is learning curves in all businesses so I'll watch from the sidelines for a while!

[ValueChainFX]

Cakadu, Your little red faced icon indicates you're irritation. As someone that has sat on government developed industry-representing bodies, I guess I would be a little red faced at the performance of some of these groups as well in the past few months. This is not intended to be nasty or insulting to you or anyone else that has taken time from their families to try to do what they can for the industry. It is intended to point out, just how out of touch some of these groups are with the plight of agriculture in Canada and around the world. Developing leadership is not a function of conforming to the bureaucracy that holds information and deals what is called “Agriculture money” to people that don’t allow the government strategy of “Trickle down to the primary producer” (the trickle down is a quote from a senior bureaucrat) in fact, I would liken some of these groups as receivers of what the program “Beef Inc.” referred to as soft money that supports the bureaucrats and the groups that act as a buffer between the industry and their office. Leadership is a function of both listening and providing action steps to achieve goals and strategies that assist those you represent!

Knowing a little about some of the peoples back grounds both from their profiles here in agri-ville and from their comments throughout the years on agri-ville I would suggest they have the experience and background to see beyond their personnel thought process and review alternatives to what is an obvious industry challenge that will require an industry solution. The industry does not belong to the government, nor the groups that have been suggesting they represent the grass roots “Primary Producers”. In saying this however, mediation/negotiation, understanding and building strategic alliances including collaboration with all sectors is essential to ensure these groups return to their mandates and become “Real Partners” in building solutions. Networking, team building and the establishment of fair and equitable value throughout the supply chain will only come from those that are open to the needs of the industry as a whole and not those that feel they may need to protect systems and functions within those systems that are less than effective. Rural development, environmental stewardship and sustainable agriculture all go hand in hand with this development, many of the issues in these areas have been a direct result of centralization of rural infrastructures into the urban areas. People from around the world have formed their own networks outside the influences of the status quo thinkers to formulate strategies and plans to address the challenges faced today in Canada and around the world.

The industry both farming and the agri-business (from the processor to the retail) are full of negative stories as to the safety issues, the personality challenges, market distortions, and peter robbing paul! The fact is simple, the markets are out their, again from “Beef inc.” program, the world price is the lowest possible price in the market. If this is what you want and are happy with than good for you, keep doing what you are doing! There are also markets that are virtually untapped, or what you may call niche markets and even what is now a commodity market that is open to working in a value chain system. Unlike many industry proposals a strategy that involves reengineering an industry is developed with a network of many individuals working with groups, carefully developing a strategy that builds equity for all participants.

If anyone believes this is some kind of personal attack on them or anything they believe in, my suggestion is ignore the above comments and be happy you are successful in what you are doing. It is not my intention to make anyone in the industry angry, on the other hand if the hair on the back of your head is prickly maybe you should investigate some of the discussed issues closer and keep the comments coming and enforce issues we all need to address.

[cakadu]

Look again at the icon value-chain. It is not the mad icon you believe it to be but rather the one that implies amazement that the comments could be made in the first place.

The time for rhetoric, motherhood and apple pie statements is over. Many of the questions I am asking (and others are asking as well) should be answered so that people can make sound business decisions and know that they are getting the information that they need in order to make those decisions. Having something tied up in the planning stages for several (or more) years is not necessarily moving toward action. Yes, I do know how long it can take to put a value-chain into place. Yes, I have sat on government, non-government and volunteer committees to try and get things moved ahead - some of them rural development committees because I am very concerned about what is happening in the rural areas.

A blanket statement about all provincial plants being in sad shape needs to be backed up with some sort of qualifier for making that statement. Show me what some of these shortcomings are and let me decide for myself how the provincial plants are failing. To come to the table and say that something is bad without also bringing forward suggestions for improvement or at the very least reasons for making those statements is not being productive nor positive.

When people dodge the questions or say that the people asking them are just negative, don't understand etc., I wonder about what it is I'm not being told and what is preventing them from giving logical answers. People need to provide answers to the questions and just maybe they will find more support than they ever knew they could have. My personal philosophy is that I don't want to make assumptions, so give me information.

I believe that there is room in this business of agriculture for all manner and sizes of operations. If you can make a go of it with what you are doing then I am glad that you've found a way to make it work. Since I became involved in agriculture I have pushed, advocated,lobbied and worked toward helping the producer find ways to get more in their pockets for the products that they work so hard to produce and I will continue to do so. There are government policies - written and unwritten - that I don't agree with. When the growth strategy called for 20% more production by 2010, some of us have been there asking where this additional production was going to go. Post border shutdown, it is a good thing we weren't there yet. With the biggest cattle numbers in history right now, we are going to be faced with enough problems as it is. By the same token, there are some programs and policies that I can understand.

The questions asked are intended to give me a better understanding and I hope others get a better understanding as well. I'm glad that there are folks out there to help me with another viewpoint because there are so many ways to look at something. It also gives the opportunity to walk in someone else's rubber boots and know where they are coming from.

[nerves]

caduka excellnt post these are tough times and through shared information maybe we can find answers to help us find our way. Our backs are to the wall how much longer does one sit on the sideline? Why should we put our trust in a system that is distined to keep falling apart?