An Alternative Solution

[rsomer]

Rsomer, read the post of whiteface, just above and you will see where my post was directed. I did not feel that the statue idea of whiteface's would boad well in your view of me and my BIG C-rack.

I said before that you should be jumping all over this idea to tie profits to producers. Once again, it would not be another government bailout program directed at producers, but going to packers. You seem to find a way to add or leave out words you attach to BIG C.

[rsomer]

Packer margins before operating costs averaged $565 per head last week. The packers sell AAA Light carcasses are selling for $1.87 a pound. The packers pay producers $1.18 a pound flat rail minus discounts. That is over $500 a head right there without anything for offal, hides and byproducts.

The real crisis in the Canadian beef industry is the packer monopoly keeping all the industry profit. If a mechansism was in place to see even some of the excessive packer profits move down through the value chain to those producing the actual product, producers could survive until the border opened and Canada built its own packing plants.

Industry has a window of opportunity to approach the packers and work out an agreed upon basis level that could see this happen before Martin forms his next cabinet and government.

But after that I would hope the committee looking into excessive packer profits reconvenes and finishes the work they left off when parliament dissolved.

We can't go on any longer looking for the faintest sign of the border opening to provide hope to the industry. We need a made in Canada solution.

[jensend]

exactly, you only have a healthy industry if profits are distributed throughout the production levels. packers and feedlots think the key to their prosperity is to ignore this reality.

[BWC]

Good morning crew. In talking with a member of the ACFA testerday he told me that indeed a basis pricing proposal put foorward by the ABP is being researched as we speak and is expected to receive CCA approval by Fiday. I will stop short of quoting numbers for fear of botching them. Apparently the proposal has a sunset clause included in it. This certainly will create a market for calves and feeders for the period of the program. The big hurdle for this proposal will be if it passes GATT, and WTO regulations and be considered trade green. Even if tis comes to pass all of the people working towards change in our Canadian cattle industry must not give up or give in on projects to expand our packing infrastructure and other regulations strangling the producer. This is probably the best possible quick fix but it is only a quick fix. This again will be coming out of the taxpayers pockets, and it had better be extremely well thought out because sooner or later the consumer and taxpayer will grow impatient with these bail outs.

[kato]

A floor price would be spectacular, but not without danger.

Before they brought it in there would need to be safeguards of some kind, but I can't imagine what.

This would test the good will of our American based packers. If they are the true pirates they seem to be, when faced with paying a fair price for cattle, I have a bad bad feeling that the kill availability will be severely reduced.

The packer cattle are going to be jumped to the front of the line, and workers on extra shifts will be sent home.

The reason they are going full tilt right now is to stock up while it's cheap. Their American plants are not making nearly the profits as these ones are, and our cheap beef helps balance their books.

Either that, or the border will magically open, because the gravy train will be stopped.

If the worst happens, at least we will be able to have a government who has seen first hand just how ruthless these big corporations are.

Maybe they'll believe us then.

I can't believe how cynical I've become.

[kato]

Once again we would at least have hope that this plan would push the door open, even a little bit. A lot better than sitting on our ass, or tearing down the plan with a bunch of negatives.
I need to see some sort of quota system being attached to this plan to keep away from the favor system.

I am afraid that from my personal perspective rsomer, BIG C will likely not participate any more than through our limited knowledge and input.
BIG C is not an organization of people with administrative money coming in , and needs to stay focused on one or two innitiatives to stay viable. If I, or any other member of the BIG C core group hear any valuable information from our forums concerning packer margins, we will surely pass it on to you folks at ABP, and would be pleased to be treated the same with information about being allowed to test for BSE if markets ask.
Good luck and keep us posted.

[whiteface]

Very good "what ifs" that you suggested kato. Please don't consider yourself cynical. I think of you, like many of us, are once bitten, twice shy, you know like we do how they operate and are thinking one or two steps ahead. Maybe you'll get a job as one of their advisors since you have the ability to predict to the letter how they move once they've squeezed you from the job you love. Not cynical at all, realistic, and maybe you're a survivor after all this because you're one of the few on to their little scheme. Keep all of us informed too 'eh?

[whiteface]

On second thought...... Maybe we need to fire up some roadblocks that need to be addressed. Maybe rsomer is right with his challenges to testing. It has surely driven me to study more and jump the hurdles.

Has there been consideration for a quota system, or some way of making this thing fair to every feedlot or fat cattle owner.

Has anyone considered that Cargil and Tyson may simply laugh in our face like they did when the government asked to open their books.

I was chatting with a good friend who works directly under Brian and Lee Neilsen the other day. He somewhat kiddingly mentioned that we should all be kissing the ass of the packers for actually helping us out by killing our fat cattle. I somewhat kiddingly mentioned that I would kiss their ass if they paid a realistic price for the cattle instead of the pumped UP price of 70 cents. 10 cents would be the realistic price, as there is no demand, and no competition.10 cents would show their true colors and they would not look like hero's as his eyes see them. Then and only then would I kiss their ass. I then asked him to see if Lee would be interested in running a plant built by producers, as Cam says, the farm dogs would never do the job of the fox. And this is just a little fox compared to the frikkin hyena's down the road.

I think that selling a plan to take away profits from these pirates will never fly. When is parliment set to convene, and which political party do you think would have the guts to legislate something like this?
But once again rsomer good luck.

[grassfarmer]

I'm confused, I thought all the talk of fixing a fair "basis" meant that the packers would be forced to pay above a set price for the cattle. In reading the post above by BWC I get the impression that a basis would be fixed and the Government would spend our tax $ making up the difference. Surely this is not what is being proposed??

[kato]

I'm just going on what I have observed in the past.

These are people who have no concern about the welfare of those who supply their product. If we all go broke, they'll just bring in American cattle to feed.

If you try and get inside these guys heads, and see it from their perspective, it really isn't that hard to figure out.

They have rules.

Rule #1. Make money
Rule #2. If someone tries get between you and making money, stop them however you can.

Corporations have no consciences. They pursue the bottom line, no matter what. I saw on a TV program a couple of weeks ago about how a psychiatrist put the corporate mentality through a psychological assessment. It came back as "psychopatic".

Definition of psychopatic behaviour

Glibness/superficial charm
Grandiose sense of self-worth
Pathological lying
Conning and manipulating behaviors
No sense of remorse or guilt
A very shallow emotional affect - they display emotions they don't really feel
A lack of empathy for others
They are parasitic - they live off of others
They do not accept responsibility for their actions - another caused it
Their criminality is diverse

Essentially, they violate social norms and expectations without the slightest sense of guilt or regret in order to take what they want and do as they please.

Now, doesn't that sound familiar? And it's not just in the meat industry either.

We've all seen the big game played.. big corporation shops around for the government, be it city, province, or country that is willing to give them the best deal to convince them to set up shop there. They get tax breaks, infrastructure, all kinds of government funds. Then after a while, they start shopping for a new place, and look for offers to move, and incentives to stay. It's a great big scam.

If we are to keep one step ahead, we have to know WHO we are dealing with. I bet if someone from Cargill read this thread, the first thing they would say would be "OK then, we won't buy your cattle."

We've gotta stay sharp here...our future depends on it.

If we know ahead what they might do, we can DO something to prevent being burned yet again.

(I think I watched too much X-Files. I may have inadvertently become a profiler. LOL)