They just don't get it...

[The Don]

Just got my October copy of the MBP Cattle Country. In an article on the front page it quoted Ralph Eichler as saying. "Anybody who started selling off herds to make ends meet but wants to stay - we want to reward them by saying , lets help get your numbers back to where they need to be because a lot of them were sustainable prior to the drought."
Well he / they need to check the numbers that Manitoba Agriculture has provided in the prior years. I think the Manitoba Ag cost of production numbers for as far back as 2015 have shown a negative return for the cow - calf producer.
Year over year negative returns does not mean a sustainable business in my view. I look at the Manitoba Ag numbers as not extremely accurate. I think the continuing trend of dropping cow - calf operations is a more telling statistic.
Before I get on a rant...
I do agree with Ralph Eichler they need to support the cow - calf sector... I don't agree with the way they want to distribute the funds. Distributing the money on a formula on percentage of feed costs or paying to relocate and return the cows seems logistically complicated and impractical.
Why would they not distribute the money directly to the producers on a per cow basis? Apparently they have 52.5 million for herd rebuilding. In 2019 there were 419600 beef cows on operations in Manitoba (according to Mb statistics). If you paid that 52.5 million to the producers they would get $125.00 / per cow. The total package is shown as $155 million. If you distributed the whole package on a per cow basis that would be around $369.00 per cow. Easy, cost efficient and uncomplicated to do.
What are they thinking...?

[DaneG]

It is sure a nice and warm feeling the government wants cow/calf operations to stay! These are the same pricks that tripled crown pasture land rent and did away with unit transfers.

[GDR]

It is sure a nice and warm feeling the government wants cow/calf operations to stay! These are the same pricks that tripled crown pasture land rent and did away with unit transfers.

What are unit transfers?

[GDR]

Just got my October copy of the MBP Cattle Country. In an article on the front page it quoted Ralph Eichler as saying. "Anybody who started selling off herds to make ends meet but wants to stay - we want to reward them by saying , lets help get your numbers back to where they need to be because a lot of them were sustainable prior to the drought."
Well he / they need to check the numbers that Manitoba Agriculture has provided in the prior years. I think the Manitoba Ag cost of production numbers for as far back as 2015 have shown a negative return for the cow - calf producer.
Year over year negative returns does not mean a sustainable business in my view. I look at the Manitoba Ag numbers as not extremely accurate. I think the continuing trend of dropping cow - calf operations is a more telling statistic.
Before I get on a rant...
I do agree with Ralph Eichler they need to support the cow - calf sector... I don't agree with the way they want to distribute the funds. Distributing the money on a formula on percentage of feed costs or paying to relocate and return the cows seems logistically complicated and impractical.
Why would they not distribute the money directly to the producers on a per cow basis? Apparently they have 52.5 million for herd rebuilding. In 2019 there were 419600 beef cows on operations in Manitoba (according to Mb statistics). If you paid that 52.5 million to the producers they would get $125.00 / per cow. The total package is shown as $155 million. If you distributed the whole package on a per cow basis that would be around $369.00 per cow. Easy, cost efficient and uncomplicated to do.
What are they thinking...?

An ongoing subsidy doesn't make cow/calf sustainable either. I'm not sure how to fix the profitability issue. What I constantly see is guys paying too much for cows, last spring bred cows and heifers were close to $3000 here. Then guys try to outbid the neighbour for pasture, lots of guys paying $1.50 to $2 a day. Either people think they are making good money on cows or they view it as a romantic or nostalgic idea to be a cattle rancher.

Supports to the feedlots (I would say packers too if the situation was different)may more directly help cow calf. Encouraging cow calf just makes more calves to fill the same market meaning lower calf prices.

[DaneG]

Unit transfers was the ability transfer crown lease land to a purchaser when they bought out a ranch’s deeded land and headquarters. The elimination of this has made several operations not a viable size without the leases, there is an auction process for the right to rent the leases for 15yr term but there is no guarantees that the purchaser of the deeded land will get them at the auction, which in turn makes lenders very cautious.

[The Don]

GDR
Trickle down economics does not work.
There is a need for growth (or just replacement of retiring producers) in the Canadian Beef Industry.
The American Producers who filled the Canadian Feedlots this past year received about 46% of their income from the American Government. Wasn't there a bunch of American dairy cattle that took most of the pen space a couple of years ago? No need to pay a true cost of production to the Canadian cow - calf operator if the feed lot is full.
If there is to be a Canadian source for calves then there needs to be support from the Canadian Government(s). However the Government has been told that the Cow - calf producer is making money. The y have been told by CCA and others that the cow -calf sector is doing well. The statistics of dropping producer numbers tells a different story.
With the high cost to produce bred cows / heifers I don't think $3000.00 is too far out of line. But that starts a much bigger discussion.

[Blaithin]

I know of several feedlots that feed purely American dairy calves. Generally from Texas, bottle fed and weaned Stateside, then shipped up here for finishing. 10 years ago they were all stocked with Canadian prairie calves, now they’re straight black and white.

If feedlots can do that and obviously have a larger profit margin, then it’s just going to drag calf prices here down.

[GDR]

GDR
Trickle down economics does not work.
There is a need for growth (or just replacement of retiring producers) in the Canadian Beef Industry.
The American Producers who filled the Canadian Feedlots this past year received about 46% of their income from the American Government. Wasn't there a bunch of American dairy cattle that took most of the pen space a couple of years ago? No need to pay a true cost of production to the Canadian cow - calf operator if the feed lot is full.
If there is to be a Canadian source for calves then there needs to be support from the Canadian Government(s). However the Government has been told that the Cow - calf producer is making money. The y have been told by CCA and others that the cow -calf sector is doing well. The statistics of dropping producer numbers tells a different story.
With the high cost to produce bred cows / heifers I don't think $3000.00 is too far out of line. But that starts a much bigger discussion.

$3000 is too much for a cow that is worth $1200 when she loses her calf or when she raises a calf worth $1200 and costs $600+ to feed for a year. Plus the odd death loss. If your answer is that calves should be worth more then so should your cow.

Not sure how a trickle down policy doesnt work yet paying primary producers and therefore encouraging more supply to the same market will help the situation. Not trying to argue just saying.

Feedlots dropping like flies in our neighborhood and they aren't coming back.

Not sure too many calves will be coming North this year, would think they will be heading South looking for cheaper corn.

[shtferbrains]

At the $1000/hd profit packers were making they will be running the lines at capacity.
JBS paid $100 million for Brooks incuding 70,000 hd feedlot and 6600 acres supporting farmland.
They will profit that much in about a month at current margins.
Appears to me our current packers are going to take all they can out of the market. Does that indicate they don't see it as sustainable and not worth sharing any profits to keep the producer side of the market healthy and growing?
They don't seem to have to worry about US producer profits as the government tops ot up.
No longer any competition for cattle supplies worldwide the majority of the time.
All they have to do is pay just enough to ensure adequate supply.
Total control from about 4 companies boardrooms worldwide.
If governments subsidize the producer they ARE subsidizing the packer as the producer continues supplying cattle at less than the cost of production.