Impressive crops?

[rsomer]

Cakadu: You are overlooking the fact that Canada did have a competitive beef industry prior to BSE and we will have a competitive beef industry after BSE. Your comments to the effect that we are not the world’s least cost producer of beef, while true, does not explain the reality that at the beginning of 2003 Canada was the world’s third largest beef exporter. (See: http://www.statpub.com/statlivenov03.html ) Obviously if we were not the world’s least cost producer then we must have achieved our competitive advantage some other way, I would suggest possibly by offering a differentiated product also by having preferential access to valuable markets. Our historical trading relationship with the United States, which is the world’s largest beef importer, gives Canada a distinct competitive advantage over other countries who do not produce a product specifically tailored for the North American market place as we do.

We will not be the most competitive in every market but we can be most competitive in some markets. BSE could actually end up working in our favour as I expect with more testing BSE will be eventually found in every beef producing region of the world. This would be a disadvantage for grass feed beef which tends to be older before coming to market as opposed to grain fed beef which typically is market ready well before 30 months of age.

My sense of the Canadian beef industry before May 20 was that it was doing very well. Lots of shiny new trucks and stock trailers at the auction mart parking lots. While it is always possible to figure your costs so you appear to be loosing money there was a lot of money being made in all sectors of the beef industry in the years leading up to 2003.

The fundamentals of raising and feeding cattle in Canada has not changed and within the foreseeable future we will regain our access to the North American marketplace. I expect that within a relatively short period of time, just a few years, consumers and the media will loose interest in BSE. Although that is not to say that the industry will not face new challenges we will meet those as well. Canada remains a good place to raise beef, not just because of climate, but because of our infrastructure, and our stable economic and political environment.

[grassfarmer]

rsomer, I agree with many of the points you raise and I don't have the experience to comment on judging the health of an industry by the amount of shiny new trucks at auction marts pre 5/20/03.
It seems glaringly obvious though after reading thorough works by Cam Ostercamp and the NFU that the "advantage" that allowed Canada to export large quantities of beef was achieved by the multi-national packing companies screwing beef producers down to unsustainable margins. This caused the treadmill affect of producers running more cattle to stand still - the myth of "efficiency". Are we happy to be in that position again or are we going to get off our backsides as an industry and create a real "value chain" with an equitable share of profits?

[cakadu]

Competitive for whom, rsomer? Fancy accounting aside, which sector of the beef industry was making consistent money? Cow/calf, backgrounder, feeder? The last 2 or 3 years have been hard on producers - drought, floods, grasshoppers, no feed, no money to buy really expensive feed, and this year just a simple no money for anything.

It's easy to drive shiny trucks and fancy equipment, but a lot of that was bought with borrowed money and payments do have to be made. Does that imply that you are doing well if you can afford to make all of your payments?

The fact of the matter is that we cannot and should not be looking to one market solely for our exports. If we learn nothing else from this whole fiasco, it should be that, don't you think?

Yes, we may be the third largest exporter - for now. We always seem to want to keep ignoring the fact that there are the South American countries that are going to flood the market at some stage and they are prepared to give customers what they want.

As you are probably more aware than a lot of us, all of our exports to the US make up around 10% of their domestic supply. Realistically, do they even need us now that they have signed with Australia?

I shudder to think that we would even want to have business as usual pre-BSE!