First Thing Monday Morning

[rsomer]

A note about U.S. District Court Judge Cebull. It is not election time for him either. Judge Cebull was recommended for U.S. District Court Judge by Republican Montana Senator Conrad Burns and Republican President George W. Bush made the actual nomination for the federal judgeship. The nomination was confirmed by the Republican majority U.S. Senate.

I would question whether we have gotten nowhere by pounding the "based on science" aspect. Canada was exporting beef 4 months after the May 20 positive BSE cow. That was based on science. It could have even been quicker if the politics at the time between the U.S. and Canada had been different. I think most would agree if it were not for the Washington Holstein we would have been exporting live cattle to the U.S. before now. Canada has managed quite well in the last eleven months. We are exporting beef to a number of countries, the U.S. and Mexico and others as well. The International Review Panel’s recommendation was for the most part favourable to Canada. Other than Canada not having sufficient packing plant capacity to slaughter our own production and being too dependent on live cattle exports we have done quite well.

I think the U.S. sees very, very clearly that if the border doesn’t open up real soon that there will be a dramatic and rapid shift in packing plant capacity from the North West U.S. to Alberta and the rest of Canada. That is the real threat that is being made to the U.S. that will get the border open. If Canada were to threaten 100% testing if the U.S. doesn’t open the border to live cattle that would be perceived as an empty threat by the U.S. The recent comments by Shirley McClellan that no beef should leave Alberta to the U.S. except in a box is an effective threat to the Americans as it offers a realistic future of the beef industry if the border doesn’t open in the very near term.

If the U.S. looses its packing plant industry in the North West U.S. they will have no one to blame but themselves.

I note the comments to the effect that those that feel the border will open soon are fooling themselves. I guess there are a lot of fools out there because there are buyers purchasing all the feeder calves that have been coming onto the market. The markets in Canada and the futures in the U.S. all seem to anticipate live Canadian cattle entering the U.S. market sooner rather than later.

[grassfarmer]

There were a lot of fools buying the same feeder calves last December only to unload them in February when the banks were leaning on them.
Yes, rsomer I hope the border opens soon but I'm not staking any of my money on it.

[grassfarmer]

I love it when our government officials try to take credit for the open border to boxed beef. Especially when they say it was based on science. Simply a matter of money and greed. An opportunity for the three big American packers to steal cattle from Canadian producers. I guess things could have been worse for the big three, and ultimately for the producers if we had no exports, but a different scientific approach could have changed things far more dramatically and could have produced profits for producers as well as packers.

Great to hear that you are so sure we will have open and free access to the American consumer once again rsomer. Do you really beleive that the packers have not taken advantage of their position and ravaged the Canadian Cattle Producers? Do you think we should just go back to business as usual when this is all over?

[blackjack]

grassfarmer... since you have seen the results of BSE in the old countries ... I think I'll take your advice and stay out of the buying market .

[rsomer]

Canada’s crisis is not the same as Great Britain and comparisons will lead to wrong conclusions.

Of course the packers have taken advantage of the lack of competition. And it won’t be business as usual when all this is over, if that is this month or next year as some suggest. Changes will take place but there will still be cows grazing the grass. It appears that government is committed to a feeding industry in this country and risk protection schemes will be put in place to manage further crises. Some changes that are coming are a livestock insurance plan and no doubt increased packing plant capacity in Canada. How much packing plant capacity is increased will be determined by first how long the U.S. delays opening the border and how effectively the risk of feeding cattle on one side and killing the animals on another side of an international border can be reduced through insurance plans, safety nets and other risk management strategies.

Yes, another BSE cow could be found in Texas or Saskatchewan, Ontario or Washington like last December. That is the new reality of the beef business. Still, just about everyone believes the border will open some time, the question is when. I hope the border opens soon too and I am staking money on it.

[whiteface]

Rsomer, it sounds so good the way you say it, I only wish you were the one making the decisions and we'd be out of this by now. Just tell me this, exactly why are we still not moving live cattle across the border if the situation is really as you say it is. Another question I have is really how long can you afford and are prepared to wait? What if you have more grasshoppers than grass this summer? and if you're in that good of financial shape and don't mind waiting (maybe forever) to cash in on all the money you stand to make when ( and if ) the border opens, I've got an awfully good and very expensive (although only worth barely a grand a piece at today's prices )herd of Nationally acclaimed purebred cattle that would be an absolute steal for you. Interested? You could make a killing...Balking? Yes and I know why, we all really aren't that confident of an open border and cattle eat - every day, chopping into profits like grasshoppers...
I'm not in your face with this rsomer, I would just like for all of us to have a "Plan B"...and then to put it in action sooner than later because "Plan A" ( the open border ) is really not getting us out of trouble. And incidentally, I don't want to just give them an open border anyway. They made tons of money at our expense, only to just resume to "business as usual" I don't think so. Now we make money with their rejected Japaneese market maybe at their expense. What goes around comes around.

[rsomer]

Why is the border still closed to live cattle? Because they found the Washington Holstein. The U.S. is moving forward with their regulatory requirements at a pace that is slower than we would like but the process is still moving forward. After December 2003 I thought there would be an announcement on opening to live cattle before May 20, I see nothing substantial to change that. I am not worried that we haven’t received the good news yet, even though I wish it were so.

How long can I wait? How long I can wait depends as much on how much hope I still have on the border opening in time. If I did not see the border opening until November, I would let my calves go now but I am more optimistic than that. As for the cows, we were able to keep all our cows through the drought of 2002 so I am confident that I can see my way through. No doubt if we were to have a repeat of 2002 (drought and grasshoppers) with no improvement in the border situation it would be brutal. I know the industry is working on a Plan B, hope they never have to go to it. Although I am a huge fan of producer owned packing plants, that is a long term solution that offers no help for 2004 other than the threat to the U.S. that in the long term they stand to loose their Northwest Packing Plants to Canada if the border doesn’t open soon. It really is anyone’s guess if Plan A (the open border) will happen in time to get us out of trouble but I believe it will.

Balking at buying your cows...well I am doing good to hang onto what I have got. But there are people with money to invest in a risky venture and there are opportunities out there right now like we won’t see again after the border opens. I guess the rich get richer, and the poor, well, they just keep on farming. :--)

[whiteface]

You are and amazing person rsomer, I'd love to meet you. My hat is off to you, I sure appreciate a good argument and one who stands by it. I do sincerely hope you are right, I don't especially want to part with my cows, even to someone as together as you are.

[blackjack]

rsomer.... We have a major problem since Judge Cebull ruling ... packers have quit buying... the momentum that had been building in the feeder market has again been thrown out the window...how long will it take to get the market to where it was a week ago? ... anybody buying cattle in these uncertain times as far I'm concerned would have better luck with their money in Vegas !

[kato]

Well, with all that has happened this last week, at least someone is home in Ottawa. I sent Paul Martin and email, and darned if I didn't get a response THE NEXT DAY!

Not that it will make much of a difference, (oh cynical me!) but at least someone read it.

This is the reply I got.


On behalf of the Right Honourable Paul Martin, I would like to thank you
for your e-mail regarding measures to assist cattle growers affected by
Bovine Spongiform Encephalopathy (BSE).

You may be assured that the Government of Canada will continue to do
everything that is necessary to ensure the safety of Canada's food
supply and to help Canada's beef producers regain access to foreign
markets. Work continues toward re-establishing the the normalization of
trade in our beef products.

Given their responsibilities for this issue, I have taken the liberty of
forwarding copies of your message to the Honourable Bob Speller,
Minister of Agriculture and Agri-Food, the Honourable Pierre Pettigrew,
Minister of Health, and the Honourable Jim Peterson, Minister of
International Trade, who, I am sure, will also appreciate being made
aware of your views.

Thank you for writing to the Prime Minister.


P. Monteith
Executive Correspondence Officer
Agent de correspondance
de la haute direction

Isn't that something? You gotta love an election year! LOL

When I wrote to Roseanne Wowchuk in January, it took until last week to get a reply.

As for the markets this week, I think it's safe to say that the market is going to resemble a rollercoaster ride more than anything for the next while. You just have to try and guess when to get on and when to get off!