First Thing Monday Morning

[rsomer]

Blackjack: What the packers are up to just underlines the fact that we still don’t have a functioning market place for our beef and that the market is characterized by no competition for available supplies of fat cattle.

Check out the Boxed Beef Report at http://www.canfax.ca/cbbr/pdf/cbbr040503.pdf.

Also the National Carlot Meat Trade Review at: http://www.ams.usda.gov/lsmnpubs/weeklyblue/2004/wb050104.pdf

[rsomer]

rsomer. I've looked at these boxed beef pages and see nothing but record high prices. Is this what you are refering to. This pirating of Canadian beef has been going on since last Sept.and prior to that they profited from the 400 million. Our Ag minister keeps telling me that they need the extra to cover costs like losses of ofal sales, increased labour etc. etc.
There is no doubt, and has not been from the beginning, that the big three packers have fixed prices, and taken advantage of Canadiand producers.
How can we fight back when our government wants to back them. What happened to the inquiry? Are we scared of companies that have more power than most countries governments including our own?

[ianben]

BSE alters the market and it becomes over produced.
Thats what happened in UK anyway and perhaps even more so in Canada It would seem.
Normal market forces still operate though.
Over supply means lower prices, just look at hogs.
Testing, open border, more killing capasity will not mean better prices if continue to produce/offer for sale more than the market will stand.

How many have calved less cows?

Here in UK we kept farming by getting out of beef.

Here we had the guys who where convinced some magic forulae would work or export market would make all the difference. It never happened. The clock cannot be put back.

Your market is way over supplied.

REDUCE PRODUCTION it is the ONLY solution.

I wish you all the best BSE is very cruel.

[kato]

It's true, but I think as soon as there is a way out from under them, a lot of guys are going to pack it in. You'll probably see the cow herd get a lot smaller in the next year or two.

I also still maintain that the threat of testing is the only way to get any attention down south.

The USDA backed off on opening the border to bone in beef today. Apparently they have been letting it in since last September! Did you guys see any improvements because of it? I sure didn't.

[whiteface]

Ianben, I really appreciate your comments and maybe we are a little overstocked...maybe. The thing is though that Japan DOES want the meat - if only we would TEST!!! Am I the only one that gets this, can't be, we're all smart people, what the hell am I missing that everyone else seems to understand? I think nothing. We don't need to put them in a pit like cowman says (although, I appreciate pretty much all your comments, cowman!) and we don't need to kiss US' butcheeks either. Definatly kato a "threat" or a test itself is required to wake the Yankees up but more so, for us to maintain our dignity, export markets and the surplus itself. Who else do I need to rattle to get our cattle tested, I'll call anyone!

[cowman]

Whiteface: While I very much agree with you that the test is the solution, I also understood a long time ago that it just wasn't going to happen!
All our cattle organizations and government agencies are in agreement...NO TEST. They go even further in not even allowing a private company to test(Creekside)! Now I would like someone to explain to me how this can be?...It reminds me how far we've let our rights and freedoms slip back to the government? I mean they tell us what we must do and what we mustn't do?
Ianben is right. We are oversupplied with cattle in this country...but kato is also right...if the price improves(and maybe even if it doesn't) there are a lot of old boys looking to bail! And I think that is probably a good thing? Personally I am amazed at the number of people who want to work for nothing or even pay to work!
The return on your investment in cow/calf has always been pretty slim. Now some here think they can do very well with 80 cent calves and $150 cows and thirty bu. of barley...and hey good for them! They can have it.

[rsomer]

rpkaiser: I check out the Boxed Beef Report and the U.S. site, Carlot Meat Trade, because I think it provides a more meaningful view of the market than whatever price the Canadian packers are paying or not paying for fat calves on a particular week.

Pirating of Canadian beef is the way I look at it too. The Canadian packers are seeing an average increase in value of 38% on Canadian beef the minute it crosses the border destined for their U.S. divisions. And for certain retail prices in Canadian beef counters still do not reflect what they are buying the beef for from the packing plants. That is not to say that I think we want to see lower retail beef prices, just that someone is making a lot of money at our expense. I too have wondered what happened to the inquiry.

I don’t think in Canada we have the laws to really make the packers, and lets not forget the retailers, pay fair prices and charge fair prices. We depend on competition to manage prices and the fair allocation of profits throughout the economy and until we get the competition by regaining access to U.S. buyers of our product, or build our own packing plants, we are going to see problems like we saw this last week.

[whiteface]

You're right cowman, I fully realize that all government officials say NO TEST. This is where I'm really in hope mode I suppose. Depressing as hell. But I also don't want to kill all our cows just to let Australia, Brazil and the USA ( whenever they feel like it) take over the world demand for meat (and likely profit like we could). I definatly feel we've become too depndant on exports (not having killing facilities) but only because the market was there and incidentally hasn't gone away we've just been legislated to stop and are left holding the cows to feed until they finish playing their political golf game. By the way I don't think any of the same legislators are going to buy out our cows either, pit or no pit. You're solution is certainly a "faster" one, I just can't handle the waste of meat especially since some good ol boys want out anyway, the cow herd will be reduced quite a bit whether I, or anyone wants it to or not.:-)

[ianben]

Maybe a little overstocked?

If packers are paying low prices it is because you are offering more than they are willing to buy.
There is no rule which say how little or how much a person can make on any deal. People will only eat so much beef at any price.
You are suppling more than they can handle

If it is like it was here price is the only way to limit supply.
If the market went up one week there was double on offer for the next month.
Beef came out of the woodwork for years.Guys who had refused to take the first loss and the second hoping the miricle would happen and thing would go back to normal.
It doesnt. Today is the new normal.

Have you any idea of your numbers out there?

Bred culls held over feeders massive calf crop. Sounds dire to me.

You can look to others to blame US packers governments but it wont solve the numbers.

You guys are the only ones who can make it happen
If you wont shoot the cows you could reduce the calf crop by selecting only the best to rear.

60/70/80% making a profit is better than 100% making a loss.

With an open border and sales to Japan it would seem to me you still have too many cattle in the next year.
Without and people having to sell! Well now could be the good times.

All the best BSE is a b*****

[whiteface]

An interesting perspective form someone who has actually been through it. Your view point is appreciated.

[cowman]

Ianben: Sounds pretty dire to me, too! I suspect there were one hell of a lot of calves born this spring in western Canada....one hell of a lot of calves!
Unfortunately, I get ripped quite often here if I suggest anything like getting supply back in line with demand. A lot of people seem to think it is sacriligious to talk about killing off a bunch of worthless cows that nobody wants.
I actually hope they are completely right! But in the meantime I will have to do what I need to do(in my own cynical mind) to protect my interests. Maybe we'll be talking next year about what a complete idiot I was? If it happens I can live with that!

[cowman]

If it's all about supply and demand, why are we still exporting record supplies of boxed beef to the USA where demand is stronger than ever, even with export markets closed.
There is a short supply of beef in North America, due mainly to the Atkins diet, and the drought stricken states that have dropped numbers of breeding cows.
Exports to Asian markets are on the verge of exploding, except for BSE.
A smaller cow base in Canada would not hurt potential for future sales, however linking supply and demand to our current marketplace is off the mark.
We are not blaming the US packers for BSE,but they are, without a doubt, taking advantage of a stifled system by cashing in on a very lucrative, demanding, US market.

[rsomer]

Ianben: In North American we do not have a supply and demand problem. Consumer demand for beef in both the U.S and Canada are at record levels. I believe per capita consumption of beef rose last summer to levels not seen for something like 30 years. For Canadian producers, the problem is simply that the packing plant capacity to slaughter our live cattle is on the U.S. side while our cattle are on the Canadian side. The expectation is that the border will open in the near future but if it does not increasing packing plant capacity in Canada would solve the problem. There is absolutely no reason to decrease the cow herd. Canada has been exporting large quantities of boneless beef to the U.S. and Mexico as well since last September. The markets are there for our products. Our market is not functioning normally but that is because the closure of the U.S. border to live cattle created a bottleneck between the primary producer and the consumer which resulted in a few packing plants having no competition for available supplies of cattle so they are able to control the market to their advantage.

[ianben]

rysomer
In UK we where the same everthing was fine till one day 19/03/96 an BSE could be transmitted to humans.
Our cattle where going to Greece and France.
Those markets have never come back even though they also now have BSE and the borders are open. 12 months is a long time and people have to make other arrangments.

Your prices are low, The border is shut, You do not have the capasity for boxed beef, Japan will take time. You have no idea how much prime beef/cattle is out there. BSE finishes the cull cow trade for ever. Give the kids a burger and nvCJD

N America might not have a supply problem but for sure Canada has in the next year at least.

I did not say you should reduce cow numbers but try to rear only the best calves.
Get some idea on numbers and everyone cull 10/20% of poorest before they eat and cost.
Then a least if the border opens you will not bring US price in line with yours today.
Cos that what I see happening and the folks in US too.
The border will open when your prices rise to nearer US levels.