An Alternative Solution

[rsomer]

Please consider this before accepting BIG C and testing as the solution to our BSE crisis. If you look at BIG-C’s wish list you will see there is nothing that would offer any help for the industry in the next two years. I am sorry but it is true. We need something done now, two years from now is way too late.

BIG C is advocating more packing plants, and I agree that is needed but we all know they can’t be built in time to make any difference before this falls calf run or even the fall after that. It will take 1 ½ to 2 years minimum to get enough packing plant capacity built to do any good whatsoever. Whether or not testing will open new markets for those plants is really a bridge that doesn’t need to be crossed until then, 2 years from now. Certainly 100% testing or mandatory testing does not offer our producers any solutions right now. We have markets for all the beef we can get killed but we cannot kill all the live cattle we have. 100% testing is an interesting debating issue but we need to realize it doesn’t offer any solutions for this year or next. I believe that is indisputable.

There are only two things that offer a solution for the here and now. Of course we all know one solution, open the border to our live cattle. That will happen but when is anyone’s guess. In the meantime our industry is facing financial ruin not because of any loss of our markets but from a loss of fairness and competition in the meat packing industry. Unless and until the border opens to live cattle so we are again part of the North American beef industry, the two big Canadian packers are in a monopoly situation and they are squeezing our industry dry. I also believe this is also an indisputable fact.

It is becoming very clear that there is little our governments or industry organizations can do to open the border to live cattle. I am sure if Canada had any influence on the opening of the border it would have been open by now. We have invested far too much faith in the border opening and we waited and watched while the packers sucked all the profit out of one of our nations most important basic resource industries. This has to stop and stop now. Not two years from now but right now.

So what is the second solution? We need to realize that we are dealing with a market failure. It is not normal supply and demand fundamentals that are causing our cattle to be the lowest price they have been in generations. Our market place collapsed as a result of our access to the packing plant capacity we needed being cut off by the U.S. government. We have sat back far too long and waited for that access to be restored. We now have to take the bull by the horns and deal with the outrageous price gouging of the packers who are profiteering from this crisis at the expense of this country’s 90,000 beef producers. While building more packing plant capacity is a solution we need to realize the industry cannot survive intact for the 2 years it will take to see that happen. Industry and government need to step in and establish a reasonable profit level for the packers that would allow enough money to flow down to the producers so they could survive until longer term solutions can be put in place. The packers are entitled to a profit but they do not need all the profit. We need a reasonable basis level established based on the U.S. market. Feeders could then hedge their cattle, they could purchase calves with some confidence, money would flow to the cow calf operator. In short the market would begin to function. At it stands the packers are arbitrarily setting a market price that bears no relationship to the market they are selling our beef into. This needs to be stopped.

Time is running out people. Yes BIG C is offering producers its view of solutions for the future. Yet there won’t be a future for far too many producers if we cannot solve the immediate problem of unfair pricing of cattle by the two major packers. It really, really needs to stop. This message has to come from producers themselves and what better time than in the last week of a federal election. Someone in power needs to step up and commit to fix the problem of unfair packer pricing by mandating fair prices for our slaughter calves based on a reasonable basis level off of the U.S. live cattle futures. That is what needs to happen and it needs to happen today not tomorrow.

[cswilson]

Well put-now how long before someone calls your cows skinny lol. I agree with you on this one-time is of the essence.

[kato]

OK.... I think that's a super idea! See what comes out of constructive bickering? LOL Innovation, that's what.

Now we need to find a way to get it done. These are extraordinary times that need extraordinary solutions.

For whoever is going to the next BIG-C meeting, how about bringing this up and having it added to the agenda?

Meanwhile, the rest of us can take this proposal to EVERY other organization as well as EVERY candidate in the Federal election.

It is an idea that all can agree on, I would bet. (Except maybe the packers, and I'm sure we wouldn't want to hurt their feelings, would we?)

I'm not sure of how the logistics would work, but it's sure worth shooting for.

Time is of the essence though, we've got until next Monday.

[grassfarmer]

rsomer, absolutely agree with you that packer profiteering from a captive market is the problem here - everyone in BIG realises that.
Immediate action is needed, as you say, to give any hope of more than disasterous fall sale prices. This is why the BIG series of rallies is crossing the country - to mobilise apathetic beef producers to lobby government to step up to the plate and act. Only by having thousands of people attend these meetings can we persuade the government that beef producers need action. Sadly at the moment government goes to ABP seeking direction only to find they can give none because the ABP is paralyzed by the packers holding the gun to the heads of feedlot owners on the ABP board.I pity these ABP reps and it is the producer members who must get off their butts and get this intolerable situation resolved.
Talking now of lobbying politicians to get their attention ahead of the election is not going to work - they have had no ideas or solutions in the last 13 months so I don't think they can do much between now and next Monday. Perhaps if they hadn't wasted the first year hoping the border would open we would be further ahead?

[pandiana]

It really disappoints me that there exists this adversarial approach to this problem.

More than ever before we need to consolidate our energies. For the life of me I cannot see where the difference lies between the general direction that you are espousing and that of BIG-C with the notable exception of 100%, mandatory or whatever testing. What BIG-C has, rsomer, that you do not, is a very large audience of interest. Let's use this to the advantage of all.

I agree that testing is non-issue until packing facilities exist as I have stated many times in previous posts. Having said this, let's concentrate on what we have in common. Let's see if we can get through a couple of posts without the "T-word".

Your proposals are sound,rsomer. I don't believe we have to worry about crossing t's and dotting i's at this point. The details will be worked out as the story unfolds. We need all the energy available concentrated towards getting the powers that be noticing that we have a little problem here. Let's take advantage of the election to get the ear of anyone who will listen. I'm with grassfarmer on this one.

[rsomer]

Good comments from all. I am not so sure about the packers having a gun to the head of feedlot guys, they have a gun to all our heads. Yes BIG-C does have an audience and with that goes a big responsibility. We have to be careful that the various organizations are not just peddling hope but offering real solutions that have a real chance of being implemented. I do agree that we need to consolidate our energies, if the industry could get behind one or two solutions and pursue it we maybe actually get it done.

[whiteface]

I personally believe with everything in me that it is the testing (sorry, yes I know we wern't going to bring that up ....) but really, I beleive the testing is our barganing tool. Period. Especially with the States, they don't want it, WE want the border open, today please! Take the meat or we test and go elsewhere and then they don't have to take it, ever, @$%#$%#$ 'em, whoever it is that says no to the border being open, I'm so tired of waiting for them, let's move on. You bet rsomer, I'm all for those packers being accountable for their outrageous profits lately and I hate myself for even saying so since I am so right wing and free enterprise, that's why I came to Alberta to escape the NDP of B.C. that was sucking us down the tube back in the early '90's. I love being here, I love being able to make as much money as I'm capable without giving it all away to rediculous hard-luck stories and now here I am as one of those hard luck stories. I have no idea how to vote on Monday and I want something to give so badly on this issue of BSE and blocked markets I've become a not very nice person to live with ( just ask any one here!). Border open is our best immediate solution, lets hammer them with testing, we need a solution, if the US isn't part of the solution, then they're part of the problem and as part of the problem they are going to find that WE WILL do something about our problem which does not include signing ownership of our lives to them. Short term, no border, sure lets get all communist and make the packers share their wealth. My biggest problem with this is that while it would help me in the short term like anyone else, it doesn't build a society in which any of us is encouraged to make it big or get rich. We keep cheering for all the "little guys" but in reality any one of us would love to be the "big guy" that is bitching about how much income tax we pay rather than how we're getting "screwed" by the "big guy." Everyone would rather be a boss than an employee. Long term, as a nation, I want us to be our own boss. To be a wealthy, prosperous, independant country, starting with all of us not going down and being owned by the states, making the packers look after us briefly, since we look after them, right now and opening more faciliteis in which to create healthy competition, more plants, testing, whatever, but never mind being owned by someone else. Please y'all don't climb all over me for my political views, I realize this is a touchy subject for some, it's just my view.

[rusty1]

I know it's not a short term solution however it would be one small step in the right direction. A little help from a lot of people, being you and me your neighbor and ag business man in town. Get behind the Northwest Cattlemans Alliance @ www.cowboylogic.biz

Here is the opportunity for us all to make a real difference with out alot of effort. But do you have enough want to?

[rsomer]

Whiteface: I think everyone would agree with your heartfelt sentiments.

I saw a news report this morning where the federal government is going to clamp down on pawn shops charging too much for money they lend out. I am not sure there is any difference between that and the government clamping down on excessive packer profits so our industry can survive.

As it is all the money is flowing to the packers. Even if the government provides some more support for producers it ends up in the packers hands. I look at how much of the $400 million in Alberta government support went directly to Lakeside Farms and I just shake my head. Lakeside never lost a dime on those calves, it was just a paper transfer from the farming side to the packer side. There must be some way to stop that. In a functioning economy, the benefits and profits flow both ways, distributing wealth equitably to all the market participants. That is not happening now but it could if we had a functioning marketplace again. We won’t have a functioning market as long as the packers can carry on price fixing.

I personally would be more in favour of some arrangement where the packers made money but the producers made money too by establishing some reasonable basis between the U.S. futures and the price we receive than to have my hand out again for more government ad hoc programs. Establishing a fair price for fat calves is better than more government handouts. It would work for everyone

Sure everyone wants to be a boss but that doesn’t give them the right to be a pirate. How long do we let the packers suck our producers and the beef industry dry? A year, 18 months, 2 years? Billions of dollars have been sucked out of the producers hands and into the pockets of the big packers. We really can’t afford to let the packer monopoly operate any longer.

[rsomer]

Lots of questions could arise from this shorter term fix rsomer, but I will assure you that if you get back to me with a question or proposal concerning packer margins, it will be on the adgenda at tonights BIG C forum in Olds.

I wrote a letter to Shirley last fall presenting a case for margins tied to the American fat price, and I would dig it up for you if you like. Her answer revolved around supply management crap which meant very little, and I was after all one producer voiced.

The topic of quota would certainly need disscussion with supply and demand problems.

Could you address this and send me something before 6:00p.m.rsomer?

[rsomer]

Might not make it for tonight, but this topic has been discussed at BIG C forums, and certainly will be in the futre. Many other things have also been dicussed, like cowman's cow kill and support for the hard work most, if not all ABP members do.

If we could all see this as a grassroots movement with producers needs in mind, it could become a stronger voice. Continually tearing apart one issue will get us nowhere.

You have to admit that without this controversial issue we could be on the sidelines with Ranchers for free trade by now.

Thank you for showing a tiny bit of give rsomer. Testing does need to be discussed as evidenced by the one point the moron made on the other thread, and yes it is more geared toward those who survive, but changes happen quicker with numbers and support.

[rusty1]

Lets put our retoric where it counts folks. The two main packers are adding more capacity at breakneck speed. If we don't focus on our own plant we will fall further into surfdom. We aren't asking for alot, and you all know youre participation in NWCA would pay itself back with youre first calf crop. Physically we could be running in 12 to 14 months.

[rusty1]

Talked with Bob Lowe last night with the Alberta Cattle Feeders Asoc. He, and a couple other members had drafted a proposal regarding tying packer margins to American slaughter prices. They felt it would not move forward without legislation and it was hard to argue that Cargil and Tyson would simply give a portion of their profits to the producer.

Don't give up on this one rsomer, everyone I spoke with, along with yours truely would dearly love to see you succeed.

[BWC]

I am new to your site and I can tell already I will be here quite a bit in the future. The one point I wish to make is BIGC"s agenda onlt includes one word that CBEF, ABP, and the CCA refuse to get their heads around....TESTING. BIGc"s approach at all of their gatherings has been not to attack these groups , but to bring to their attention that their are a large number of producers out there that would like to hear another line other than "science says we don't have to" . rsomer is right in his statement that many of the items on BIG C 's wish list will take some time , but your basis idea most certainly will meet with widespresd approval, as long as it does'nt lead to supply management somewhere down the road. The need for other organizations at this point in this crisis is surely debateable... but in this case I truly believe that BIG C has got other industry leaders to take a look at a plan "B" if you will, that in reality did not exist. Everyones ideas have some validity the task is now for all cattlemen to come together and drive our collective and productive ideas down the appropriate throats , before it is too late for many of us. As an industry, right now we don't have time to fight amongst ourselves only time to help ourselves.
BWC

[kato]

Welcome to Agri-Ville, BWC.