Depopulation

[cswilson]

Well I hate to say it but alot of farms and ranches will be in the pit while we wait for borders to open and plants to be built. It's not a food safety issue I'm getting at-it's a no market-no feed-no hope deal for alot of people. Face it the earliest we will see a new plant up and running is two years. Too late by any stretch of the imagination-don't you think the politicians would be getting a bit of prssure to do more if something like that happened.

[rusty1]

mrwilson - I know full well the despondency feeling. However, our research show us that we could be killing by the fall of 2005. And if everyone helps a little bit, we can start to take back our "birthright". History has many storyies to show that but you need a "populace movment" to make it happen. There is hope when we band together and realize how much we need each other. If we havn't figured that out yet then we havn't hurt bad enough yet.

[rsomer]

Cswilson: I agree. It really is as you say "not a food safety issue, it's a no market-no feed-no hope deal for a lot of people" We are really seeing that frustration and lack of hope boil to the surface. The challenge for producers is find solutions and ways to reach government without loosing the support of our consumers. We really need our consumers support and the support of the general public, who by the way are one and the same. Negative publicity like video of cows being dumped in the pit or someone dumping dead cows in front of the legislature or parliament does not help sell beef. It is gross and disgusting. It does not build sympathy or support for producers hard hit by BSE.

I for one cannot last until a packing plant gets built. I do think if we don’t start now then even more time will be lost but that is not going to save me. I will survive but I am going to get hit hard financially if the border does not open real soon. That said a massive cow cull is not going to help short term either. It would take a very long time before there was any positive impact on our markets at all, especially after the initial consumer backlash. If we reduce our herd size the U.S. will simply move in and replace those feeders with their own.

Solutions are really hard to come by. Perhaps the immediate benefit from getting busy with the packing plants is that it would certainly make the Americans sit up and take notice that they were going to loose their North West packers, with the resulting impacts on the U.S. economy and workers. U.S. news coverage of Canadians slaughtering our cows and dumping them in a pit would not be helpful to seeing the U.S. accept more of our beef.

[cowman]

With all due respect rsomner, the fact is that border is "unlikely to open?" Yes, killing cows in a pit is ugly, and I doubt our lily livered governments would ever go for it. But the fact is cows get shot in the head everyday and that is the beef industry! Call it reality TV in a big way! I believe the Canadian consumer needs to be dragged into the real world?
The bottom line is we need to realize that things have changed? We have NO real export markets and we won't for the fore seeable future? So what can you do? The Canadian consumer hasn't backed away from beef...in fact prices are right up there? Supply that market and too hell with the rest! Don't forget less than twenty years ago we were a net importer of beef!
We need to get real on this issue? There will be NO test! I've got to acknowledge the valiant effort of people who think that is an option...but quite frankly it just ain't going to happen!
So to get our supply in balance with the demand, what do we have to do? Kill one third of the cows! No other really sustainable option? That is just how it is.
We either kill them now or they will eventually starve anyway. The cow business isn't necesaarily very pretty, or politically correct?

[rusty1]

rsomer - We believe that another real reason to get involved in a producer owned packing plant (subject to a sound plan) is this. If a sufficient number of producers and stakeholders sing up, put their $250 or $ 1000 down and become members, say lets dream a little, maybe we garner 60,000 members from the western provinces. We would be a stronger lobbey to sit in the halls of govt. than we currently have. They have admitted that (govt,) there have been significant $ put in private industry in the past. And they were burnt with Peter Puck and all the little fractious groups that have bent the ear of our current govt. in the last 12 months have only selfishly protected their own turf and now our govt. is confused. Therefore we need one focused producer group on a mission to deal at least with one significant issue and large enough to be noticed. They would not bde able to ignore a group of 50,000 to 100,000 citizens on a mission.
One might argue that ABP is that group. Let's remind ourselves of how many producers actually voted in that process.

[poorboy]

rsomer and rusty1,

What is a producer owned packing plant going to do to help save the industry? It is not going to increase meat sales at all, and that is where the problem lies. If we have more animals offered for sale than we have buyers, we have a problem. The old supply and demand economics comes into play. It says that price will decline until supply drops. Yes the US packers are fleecing us, but it is only because we are offering more animals for sale than they can sell, so they don't have to pay more. A producer owned plant will not help this. There is only so much market available for our beef right now, and the packers are filling this market. Even if the price of beef at the supermarket dropped, it would not increase meat consumption long term, as competing products like chicken and pork would eventually have to drop in price also, in order to keep their market share.

The only answer is to either increase demand or reduce supply. Since we can't increase demand without the border opening, then we should reduce supply. There are two options here, we let the chips fall where they may and we lose 1/2 of all the cows in Canada, or #2 the gov't buys the cows at a good price and either ships them as canned beef to a 3rd world country, or buries them locally.

Letting the chips fall where they may, will cause lots of farm auctions, divorces, and people jumping off of bridges. Option 2, will I think be very well supported by the public if it is explained as the only answer to an oversupply problem. In no way will food safety be a reason for depopulation, rather a drastic measure to take to correct a supply that is twice a big as the demand.

And yes, if the border opens in a month, we will have high prices on 1/2 of our herd size. In general on a cull, the older more unproductive animals will go first, so we will be sitting with a younger more productive herd if the border should reopen.

So in my eyes, a producer owned plant will put more money in farmers pockets for the 1/2 of the beef that we can sell, but it won't do anything for the other 1/2 that is oversupply and growing larger every day!

[rsomer]

Poorboy: It was my understanding that there are markets for all the bone out beef from under 30 month of age animals that we can get slaughtered. This beef is and has been moving across the border since May 20, 2003. Markets are tighter for cows but our consumer is still eating our cow beef or we really would be hooped.

Cowman: I do not know about dragging the Canadian consumer into the real world. There is some things about the cow business, especially around disposing of animals and packing plants that just about turns my stomach. Maybe it is better if consumers image of the cattle business does not go beyond the nicely wrapped packages of beef in the freezer section.

You said the border is unlikely to open. According to the Boxed Beef Report the market is starting to digest the fact that cattle may not cross the border this summer. What I am starting to digest is that we just have no way of knowing when the border is opening, could be this month, after the election, don’t know. I do have extra animals around because I kept everything that was walking rather than give it away. Kept the all the replacements I possibly could because it was pretty uncertain about letting them go into the market. I did not seed any canola but put more barley in for feed. Hope it rains.

A lot of what happens will depend upon drought and available feed and pasture supplies. You are right when you suggest governments probably won’t go for depopulation. They probably will consider assistance for feed and pasture, loans, maybe more handouts. Too bad they are not considering financial assistance to packing plants. A simple thing like the plants being assured of financing rather than taking months or longer to arrange financing themselves would really speed up how soon these plants could be built. I have heard stories of how fast some things got done in the WWII as it was in the nations interest. This is in the nations interest too and if the national will was there we could have packing plants by year end.

[poorboy]

rsomer,

I do not think that bone-out beef was allowed to cross the border until some time after BSE was discovered May 20,2003. That is part of the reason for the huge drop in prices last year. I recall that is was in Sept. or Oct when bone out beef was allowed to cross the border.

My sources in the industry tell me that there is no more market for bone out beef at the present time, so having an extra packing plant will not provide more meat demand, but just spread around differently.

At the current time, a packing plant for cull cows may be justified. The US won't allow plants that ship beef under 30 months of age to kill cull cows in the same plant.

One of our other problems in Canada is that we typically calve in the spring and have the bulk of our calves hitting market from April through July. If the border does not open we need to change so that we have a more even marketing of cattle throughout the year. Be it more backgrounded animals or calving at different times. This used to occur more often 20 years ago, but with the big US demand, it didn't pay to background animals in last 10 years so most calves went right on feed.

Either our demand needs to rise for beef or our supply needs to drop. If you are correct, that we can increase beef sales by building our own packing plant, then by all means lets get going. Personally, I do not think that the numbers on this are there, but just a good job of salemanship. If the beef sales can't be increased then we need to reduce supply.

No matter which path is correct, it is important that we start on something, as soon as we can, or else the problem of over supply is going to get worse and worse. Just throwing ad hock aid money at the industry is doing nothing to help with the long term problem.

[kato]

There's one part of the depopulation scenario that needs to be addressed.

What happens when a few thousand (or million?) acres of hay and pasture are broken up and planted to grain? You don't have to drive very far from our yard to add up about 8 to 10 thousand acres alone!

Remember why this cattle expansion happened in the first place? THERE WAS NO MONEY IN GRAIN!

The ONLY reason that the grain farmers in Canada are no longer on the brink of bankruptcy as they constantly seemed to be for a few years is that we have done for them what the depopulation of cattle will do for us. We reduced supply, and made it possible for those still in the grain business to survive.

Ask a grain growing neighbour if the canola market can handle another million acres?

The grain industry doesn't even have the infrastructure to handle the extra grain that would be grown. All the small elevators are gone, and the rail tracks are pulled out.

We are not in this alone. We need the help of the grain industry. They stand to lose just as much as we do if the cattle industry goes down.

Our rural economy evolved into what it is with a lot of pain and hardship along the way. Do we really want to go through that again while re-inventing ourselves as grain farmers who will go just as broke?

[whiteface]

A VERY good point to consider, kato and one that I certainly hadn't thought of since I don't grow one kernal of grain but of course am strongly affected by the industry just the same. A great number of people have been affected directly or indirectly by BSE and we need as many of them as possible banding together to create the solutions needed to hold us together. Most of which DO NOT include just whining and waiting for a border to open that sure looks like it will be an awfully long time yet, but working toward pounding the crap out of the people "above us" that will give us funding to build and/or legislation to test and market and get ourselves out of this mess. We don't need handouts necessarily, we need freedom to make choices for ourselves.