BIC-C policy

[grassfarmer]

A thought occurs to me regarding the BIG-C organisation and promoting our cause. I know we are very much pushing to get this thing moving particularily trying to break this border ban by seeking new markets overseas, but what happens if the US border does open? Not that I expect it to any time soon, but if it did presumably the idealistic men of R-Calf would be up here buying Canadian feeders as quick as they could load the trucks. Our feedlots would be unable to compete given their current financial woes and we would lose feedlots faster than we are now. End result we would become even more dependant on the US market for shipping both fat and feeder cattle to. Perhaps BIG-C needs to be raising this angle to get producers to wake up and get behind this movement? We need to have enough killing capacity to ensure every beef leaves this country in a box - and primary producers need to get an equitable return for producing the product.

[smcgrath76]

We've heard plenty of talk about the short sighted approach Rcalf has been taking. Risking the smaller slaughter facilities in the Pacific North West for the sake of prolonged higher profits due to the closed border.

What about, as grassfarmer suggests, the short sighted producer groups hell bent on one solution only "OPEN THE BORDER". Yes, I would agree that the feeder cattle will head south, as competition will be fearce from the boys with the greenbacks. A divided industry in Canada will see no need to support our local feedlots, or packers.
I wonder if Cargil and IBP will find enough cattle to kill in 2006 without bringing them back up from Montana after the smaller packers there have gone under.

If the feedlots, packers, and industry leaders could look beyond the old ways, they could see the benifit for everyone in expanding new export markets, and possibly testing to achieve that.

This is not about destruction, it is about construction. Construction of plants to value add, construction of markets that ARE availble, all we need is a new sales approach. And construction, from the grass roots up, of a new beef industry in Canada open to freedom and ideas in our everchanging world.

[whiteface]

R-calf members apparently have been buying Canadian feeders for months, placeing them in Canadian feedlots and as the bunch of stupid, short-sighted hypocrites that they are, all the while they rally to keep the border closed, they know damn well there's a real possibility it will open and they stand to make a fortune (with Japan too ) once WE start testing and opening markets. Damn straight the US will compete fiercely for our calves, let them, finally, we don't HAVE TO sell them to the US, that's the cow-calf producers choice for a change where they choose to market their calves. We like some of our feedlot operators, we can sell privatley to them, for however much we feel like. Its all about choices, some that we have and some that we need. Other option is: US don't get them. Period. WE solved our problem, WE get to say if WE feel like dealing with them this time. OUR TURN! THEY'RE OUT! They're going to squirm big time real soon. They know how serious we are and how we're getting our politicians in a corner and we're ready to have an entire revolution over this whole adventure, they won't want to get left behind and I'm sure we'll get thrown a lot of bones in the comeing weeks over "border openings." It's bullshit, don't believe a word of it, they don't want to have their hand forced, well sorry, too late, goodbye, go home, where the hell were you when we needed you, when we were talking about "science?!" Sorry, we moved on, we're taking care of US for a change, then maybe we'll talk to you... :-)

[InAHurry]

Posted by Whiteface:....Damn straight the US will compete fiercely for our calves, let them, finally, we don't HAVE TO sell them to the US, that's the cow-calf producers choice for a change where they choose to market their calves."

Perhaps if you are dealing with a known buyer directly ... but what about those that sell through public auction - open market - high bid is new owner? A smaller producer who can't fill a pot or one who's location somewhat restricts marketing (preferences) how do they control who the buyer is through the auction ring via order buyers, who sometimes buy under/for corp., ltd., inc. names which gives no indication of where the buyer is from.

I don't respect the R-calfer's who are (presumed) owners of cattle in our feedlots but you can't make the proposed bidders sign a waver saying they are residents of Canada and Canadian money is purchasing them. I don't disagree with foreign ownership of cattle but do disagree with that ownership if they are R-calfer's who believe in their leader's opinions and policies.

Frustrated you bet ... we still have our 2003 steers and in 4 mths time we may be marketing our 2004 steers. How would we/ could we seggregate or designate bidders and buyers. Every bid is added support to marketing. Competition supports a stronger market and right now I don't think we (the cow-calf producer) are in a position to stipulate who our buyers can be.

I would like to think that 100% testing would solve our problems, but lean to the what if's ... what if we find another BSE? There is no guarantee that those foreign purchase contracts will continue. Even as we sit on a pen of 2003 steers I can not arrive at an opinion that I am comfortable with - to base our family's future operation on. I do agree with the increased slaughtering facilities especially for older cattle and Canadian owned. Presently, I don't think we can compete with the prices we would have to pay for "processing", adding value to our product south of the border - just by looking at what the US cattle market is compared to our own. Not an overnight solution or deed to achieve but we have to 'add value' on Canadian soil by Canadian owned facilities. I am not Anti-American I am supporting the "shop at home" theory on a larger scale. Our beef, boxed and processed can be competitive on a world scale if the proper steps are taken. Just as we've sat to long waiting for the border to open we can be over hasty. I don't want our producer groups and organiztions to turn into another R-Calf. I believe R-calf's initial policies were valid reasoning, but their 'quoted' lies and unethical transactions (buying CDN cattle) leave a bad taste in one's mouth for overzealous groups.
Thanks for reading my rant ... I mean my opinion!

[whiteface]

Inahurry, I realize a smaller guy who sells through the auction cannot necessarily decide where his calves go, higgest bidder, end of story. I was more addressing the point that if any of us ( and I'm just a little shit too so one hundred of me wouldn't even add up to an "us" ), but the bigger "us'", if they were concerned for their friends in the feedlot industry, that was my solution, to simply "look after your buyers" as always seem to be the better policy. I rant too, you were kind enough to read my rant, I'm just thinking that the States to me is not looking too much like any kind of potential buyer that we need to place our bets on or worry about them competing with the feeder industry here, I'm thinking the feeders make their money back with the packers, if the money is being paid for the calves, most lenders will keep them a float and so on. If the Americans bid, I think we all win, including that good for themselves only R-calf group that, yes, I'm pretty sure that I read that a bunch of them had feeders in Canada. Might have been Rick Pascal that confessed, but again, I'm not certain...I was so infuriated at learning this I forgot to make a note of the writer. Sorry. Thanks for listening to my rant. :-)

[rsomer]

If the border were to open...First there is no guarantee the border will open to feeder calves. Might only be for fats destined for slaughter. Once the border opens feeding cattle in Canada for the North American market will be as competitive as it was before May 20 except for the price risk that is now recognized from the border potentially closing again. I believe the industry is looking at ways to manage that risk.

It has been pointed out that the logistical side of the beef industry might not instantly be able to ramp up to transport the numbers of live cattle that will be on the market the next day.

We are beginning to see that there are feedlots and there are owners of feeder cattle and they are not always one and the same. No reason why our feedlots won’t be full, the cattle in those lots just might be owned by Americans. Owning calves in Canadian feedlots is an excellent hedge for American feeders. The Canadian packing plants will continue to own feeder cattle as before.

I am curious about your term "killing capacity". There are some that are not lobbying for packing plants as they think they could not compete with the big packers but instead are lobbying for killing plants that would get the cows dead but do little marketing as the animals would be disposed of in some fashion. Is that what you are referring to?

The only way producers will get an equitable return for producing the product is if producers vertically integrate further up the value chain so as to realize more of the net returns of the beef product. Everyone knows the industry will have changed as a result of BSE. The days of making a living selling weaned calves may be gone forever. Canadians actually have an advantage here because we have gone through enough bad times we will be receptive to change. American producers may tend to think it is life as usual for them after BSE but their industry is going to change too.

[cswilson]

I'm afraid we might be seeing the hatching of the 'Lesser Northern R-Calf' right before our very eyes. My operation has a ton of equity to get back and my cattle will go where the money is no ifs or buts. I dealt with lots of Americans before it closed and I will after I'm sure. Protectionism is protectionism whether north or south of the 49th-you gotta remember that R-Calf is a very small minority of American cattlemen. Any plants built will have to be competitive financially. I think though if we decide to 100% test the Americans will open the border before we get it under way-they won't want us getting that advantage on them.

[grassfarmer]

rsomer, you say "Once the border opens feeding cattle in Canada for the North American market will be as competitive as it was before May 20 except for the price risk that is now recognized from the border potentially closing again. I believe the industry is looking at ways to manage that risk."
How can the Canadian industry possibly be as competitive as it was before - we are at such a huge disadvantage against the US - their cow/calf men have prospered, feedlots have prospered and their packing plants in Canada have tightened their stranglehold grip on our throats every day this crisis lasts.
What kind of thing can the industry be looking in terms of risk management? - if there are any ideas floating out there perhaps someone could tell the Canadian Government and beef producers because it seems to me no one has any clue how to provide "risk management" in the current scenario.
I do not see further ownership of the Canadian industry by Americans as a favourable scenario - look at how we are suffering from our reliance on them just now.
When I said "killing capacity" I meant capacity to slaughter both over and under 30 month cattle for human consumption. I really hope we don't need to go down the herd reduction road and feel that getting behind the BIG-C movement now could result in us getting access to other markets - our best chance to not have to reduce the herd.

With the status quo I can't see how the producer can get a shot at a better return from "integrating further up the value chain" - with Cargill and Tyson that is not in their plans - we are doomed to get peanuts if we let these immoral multinational corporations hold the balance of power.
As for Canadians enhanced ability to change because we have been through hard times - I've always found change easier in times of healthy bank balances and cool heads.

[rsomer]

A Price Risk Insurance Plan that could help manage basis risk for Canada feeders is being investigated right now.

Whatever the future brings it won’t be the status quo.

I agree we don’t want to go down the road of herd reduction.

I continue to believe the U.S. will be our dominant market and what is wrong with that? The U.S. is the number 1 beef importer in the world.

Our feedlot industry is here because of cheap and plentiful supplies of feed and forage. That competitive advantage is not forecast the change post BSE. Yes the Americans have access to sources of equity and capital for financing that Canadian feedlots have lost. But the basic competitive advantage of climate and feed remain. The American cattle industry has been in decline for years and that decline is forecast to continue. I don’t like to think of Americans owning any of our industry but the reality is they have owned the packing plants and a lot of the feedlot cattle for some time. I do see our fat cattle going south when the border opens, not so sure about the feeder cattle though which would be positive for our feedlots.

Once the border opens, whether that is next week or next year, we will instantly have sufficient packing plant capacity and new packing plants will suddenly have to compete with the established Canadian plants and U.S. plants for available supplies of cattle. We are between a rock and hard place. In order to save our industry while the border is closed we need to make changes to survive. Yet those changes may become white elephants after the border opens. There are no easy solutions and so much depends upon the timing of the border opening.

[grassfarmer]

Perhaps a re-read of Cam Ostercamp's work would be in order? It convinces me that falling back into the old routine of being low cost commodity suppliers to the American market will take us nowhere - the multinational Packers are shipping more boxed beef into the US than they have ever done in history yet fat cattle in Canada are bleeding red ink and you can't sell your feeders.
Surely we need to back somebody with the vision and belief to build a sustainable beef exporting industry in Canada? Producers must grasp this opportunity to control their own destiny or accept that they will be locked into a future of prices below cost of production while the American Corporations laugh all the way to the bank.

[grassfarmer]

This mandatory testing idea may be somewhere between that rock and that hard place. It may not as well, but it certainly deserves the look that Shirley and the gang at ABP will not give it.

What the heck is protectionist about looking for new markets when our current buyers don't need us cswilson?

How is it that everthing is supposed to work rsomer? The border opens to live fats under thirty months, which leaves us with the cull cow problem. Feeders stay in Canada with American buyers and costom lots. Piss on the purbred guy, and suddenly the boxed beef trade raises a concern for domestic market product.

Sounds like there's a few bumps to iron out yet.

But blame that on BIG C for distracting from this very much thought out and organised plan.

Sorry for the sarcasm once again but it has been a tough week staving off attack after attack from people with no more of a plan than that of BIG C.
No more knowledge, and a one track mind when it comes to selling product for Cargil and Tyson.

[cswilson]

Welll this "I won't sell to those evil americans sounds protectionist to me'. Isn't it kind of hypocritical to dump on these americans who are owning cattle on feed right now. They added cash to our market-they filled pen space and paid their feed bills. I'm sure not everybody with cattle up here belongs to R-Calf. Bashing Americans really is like kicking a pig it doesn't do any good and it just irritates the pig. Our beef is in Ottawa and Washington not with our fellow ranchers across the line.

[rsomer]

Cswilson: Well said. I do agree with grassfarmer when he points out that continuing to ship live fats and feeders to the U.S. is not in our best interest long term. And I agree with the need to establish sufficient packing plant capacity for our production and optimistically suggest we even aim for capacity to slaughter some U.S. production.

Being low cost commodity producers to the U.S. will take us nowhere but being low cost commodity producers to Asia will take us nowhere either. That is where it becomes necessary to vertically integrate further up the value chain so producers can share in more net profits. Has nothing to do with testing and everything to do with owning the animal longer right up to the box.

The problem rpkaiser refers to is caused by lack of packing capacity, not choice of markets. It would not make any difference if our two packing plants were shipping all their beef to Europe or Japan instead of the U.S. They would be ripping us off anyway. Until they get some competition either from the U.S. packers by the border opening or else Canada ramps up its own packing plant capacity that problem will continue, there is nothing to keep their bids for our cattle honest.

I do not think it would even make any difference if we even reduced our cattle numbers to meet our present packing plant capacity. It is not a supply problem, it is a problem with Cargill and Tyson being monopoly buyers of our product and they will never pay us fair until that monopoly is broken or there is some effective market intervention that injects some element of fairness into pricing of live cattle.

[rsomer]

Of course it is a matter of packing plant capacity. But don't try to tell me that increasing market potential to countries other than the U.S.A. would not help the monopoly situation we are in. Cargil and Tyson are American owned companies and will not expand there market to Asia on their own. Yes America will always be our most lucrative market, but making it our ony market will only continue our dependence problem.

cswilson - it's easy to jump from one side to the other on this site. A week or two ago rsomer threatened my bull sales if I continued to show support for R-calf. My points were a lot like yours, no fight with producers, just policy.

Of course we need packing plant capacity, and I hope like hell that it comes in the form of Canadian owned packers with the guts to look outside the norm to offshore markets that do, and will have the money to compete with the Americans (Value Added or not).
The goal of the industry in Canada should be to learn from this crisis and not go back to the controling monopoly driven system that we had prior to May 20, 2003. If you want to call that an idea to protect our producers, so be it.

[grassfarmer]

Well said rsomer,"it is a problem with Cargill and Tyson being monopoly buyers of our product and they will never pay us fair until that monopoly is broken or there is some effective market intervention that injects some element of fairness into pricing of live cattle."
I stood up at a public meeting back in February and said that we had to break this packer monopoly before they broke all of us. I was shot down by the ABP representative who condemned any talk of doing that to the packers - we all had to work together and wait until the border opened. Are the ABP finally beginning to get the message?