Any Business Would Do the Same?

[rsomer]

In the U.S. Enron rips off its stakeholders and its executives get put in jail. Martha Stewart does jail time for her irresponsible behaviour. The packer behaviour we have seen in Canada since May 20 would not be tolerated in the U.S. We all know that. The manner in which the packers have conducted themselves is not normal business behaviour. Most firms conduct their business in an ethical manner, mindful of their responsibilities to their employees, shareholders, stakeholders, even industry. Profits are made by finding efficiencies, developing markets, bringing innovation into the marketplace. The profiteering by the two American packers is not normal business and to suggest it is is an insult to business people everywhere and those that support a free market economy.

[rusty1]

I do have to disagree with something rsomer says. Opening the border may not be a long range solution either. I have in my hand a document that comes right out of a US packing room board room meeting memo. It clearly states that the only US packers that want the border open are the ones that hold most of their interst in the North West. It also states that "1,000,000 head of live fat cattle and 140,000 head of feeders (2001) only represent 2 to 3 weeks of slaughter capacity" for them.

They really don't need us for anything.

So lets close our border from the north side, fix our own problem at home!

[BFW]

I'm with you Rusty1! Close them from our side and that will be all the motivation we need to increase slaughter capacity here.

[rsomer]

Another comment if I may...Clyde Beddows, CEO of Westjet apologized yesterday for the behavoiur of vice president who had resigned over allegations of inappropriate business practices. Beddow’s apology is an example of a responsible corporation that attempts to conduct its business in an ethical manner. Most businesses are ethical.

Yes corporations do exist in a dog eat dog competitive struggle but therein lies the very point. The two packers are not competing. The American packers are conspiring to fix the price paid for fat cattle in an economic crisis created when the U.S. cut our industry off from the competition we depended upon to keep our marketplace functioning. It needs to be said over and over again until the message get through, the actions of the packers do not represent normal business behaviour. Their actions acting as a monopoly are nothing short of collusion and price fixing that should not be tolerated in any free market economy. Whether it is foreign owned packers or any other business such unethical business behaviour should not be tolerated or permitted in this country by either consumers or producers.

Our problem is lack of competition as much as it is oversupply. Until competition is put back into the marketplace the problem will not rectify itself. Until then we cannot just sit back and say the criminal actions of the American packers in this country is normal business practice.

[Horse]

I may be wrong but I think the 2 packers are happy to see the border stay closed because they can use the profits from the canadian plants to fofce the plants in the northwest out of business and have an north american monopoly , sounds devious but doable, or is it just my mind playing tricks again.

[blackjack]

BFW...I don't care how many feeders or packer guys you put on the boards...but I sure do not have to agree with it...I have one question for you... maybe big packers are not the only problem maybe our big feedlots have just added to it... it won't be long afew will control the feeders...BFW...I dont' know what size of lot you have and really don't care... but as a small independent backgrounding lot the big boys want us out whether you want to admit it or not...

[cakadu]

Rsomer - it may not be right but they are being told they did nothing wrong.

When the price of feed skyrocketed 2 years ago and those of us that had to buy feed had to pay outrageous prices for it, did it matter to the sellers of that feed that some may not be around to purchase it next year? No it didn't. People with feed to sell just kept jacking the price up and buyers had two choices pay it or get rid of your animals. Buyers were ripped off and greed took over. (Not that you could really blame sellers who saw an opportunity to make a great deal more profit on what they had to sell.) How many sellers did you know say that they would set a reasonable price because they wanted the fellow across the road to be able to buy from them next year? Was that normal business practice?

Based on your reasoning, rsomer, when prices for feed go way down, then buyers should say to sellers that they will give them more so that they are around next year to grow it for them. In a perfect world it would work like that, but we are not in a perfect world.

Point being that people are what they are and some will take advantage of a situation. Do we like it - no. Is it reality - yes.

Are the packers taking advantage of the situation? Yes, of that there is little room for doubt. Your examples of Enron and Martha are indicative of how bad business ethics have gotten. With the case of Enron, it was an intent to deceive; with Martha, well, she's Martha and doesn't have to live by the rules for the little people. Are Cargill and Tyson solely responsible for the border remaining closed - I doubt it.

Let me ask you this - if and when animals start to trade at reasonable prices again and you are offered $1600 for your cow/calf pair, but it only cost you $1200 to raise the cow, are you going to say well it only cost me $1200 or would you to take the $1600 ?

Don't get me wrong, I understand your disgust and indignation at the situation. The magnitude of the status quo is beginning to rear it's very ugly head. We are captives of a situation that only 14 months ago, most were able to tolerate and considered normal. Only now do we know better and want to make changes.

[ALICIA]

Cakadu is right any business will do it and do. Farming is a business even if it is a life syle to us.
My next door neighbor is selling me hay because he has 25 acreas, and he will not use the hay for his horses because it has alfefia in it. Last year his hay got rained on once and he charged me 15.00 a bale for a 4x4. His tractor has a hydrolic lift so I get him to stack the hay under my shade because my tractor just has a spring load bucket. So I didn't say any thing. This year his hay got wet 5 times and he baled it damp. When he called I sayed I didn't want it because I know it got wet 5 times. He started to get angree and I said oka I'll give 10.00 because I'll use it before it gets to bad like right away. I put it away from the barn and just the other day I felt inside and it was still wet but it didn't seem to be hot, not sure way but anyway I just did it because I need him to help me pile my hay, he's charging 100.00 this year. So he set the 100.00 fee for helping me pile my hay so next year I will be in a position that I don't need his hay.
I sold two 3yr old and one 4 year old and a 2 year old today, to a man that is going to but a few cows on his farm because cows are cheep. He gave me 2400.00 for 7 females (good breeding stock) I had just been to the sale barn and seen the prices so I want to cut down so I let them go. Then he wanted the reg. papers for them, I said NO you payed beef prices, you got beef cattle. After I look up to see what it would of cost me to reg. them into his name with the hereford ass. and the cost would of been 234.70. Thats the price of one cow. He got good breeding stock but he still wanted more. Thats just the way it is, when I go into his hardway store I pay the price on the drill and I don't get a package of drill to go along with the drill, I have to pay more.
The customer on the street is not supporting the beef farmers, they are just buying more beef from us because we are selling it cheeper then the store is. Just try and sell it like the store prices and see what they say. Most people know its just political and they are going to jump on a deal when they see one.
I don't know of any one that wouldn't like a good thing cheep.

[cakadu]

After reading a couple of articles on the Auditor General's report (Globe and Mail and the Journal) I noticed that there were 3 packers named - Cargill, Tyson and XL, yet XL isn't being named in these posts.

Surely we aren't to assume that it is okay for XL because it is a Canadian company? Granted, the two US packers have made far more and got far more of the crisis money, but XL is still making the profits too. If it is bad business, then it is for all 3.

Playing devil's advocate and taking it one step further, should XL stop buying cattle and selling boxed, boned beef into the US because it is unfairly taking advantage of the producer's situation here in Canada?

[cowman]

The packing business isn't any worse than any other business! They see an opportunity they'll go for it. Do they ever look down the road and consider how they are destroying their suppliers? NO. Business looks no further than the quarterly report. If eventually they lose their suppliers they either find new ones or move on to other more profitable ventures. Big money doesn't really care how it makes its money.
How are IBP/Cargill/XL any different than Esso/Shell/BP?
The fault lies clearly with our federal government for not having any laws in place that protect the consumer or supplier from these guys? Wolves will always be wolves...their nature doesn't ever change...but our government can put in some safeguards to protect us from the wolves instead of actively opening the gates to let them in to feast on us?
Until the laws are changed to allow a fair market to function, what is the purpose of producers owning packing plants? Watch and see! As soon as there is a new kid on the block watch how they are targetted for elimination? Now a producer may be super loyal to his own plant but the big boys will undersell his product and eat a big loss just to break him! They've done it countless times before and they'll do it again?
They had Stan Schellenburger on TV last night in a little blurb about the "proposed" Ranchers Choice plant he is part of. His comment about the frustration with both the federal and provincial government doing almost nothing to aid their plant, was very revealing! Martin makes big announcements everywhere...but doesn't do anything! Then Shirley McClellean mouths off that they can't do anything because it is federal money that is needed! I guess Alberta is so poor they can't chip in a few million to get the ball rolling? I mean oil hit $44/bl. yesterday? Probably the one day increase in royalty payments would have built the darned plant!
And so the politicians continue to dither and nothing happens! You can almost bet though that good old Ralph has some money tucked away to give out to the peasants? Of course we'll have to wait a few months for that announcement...until we're closer to an election? Ralphs going to buy us again!
Some of you guys pushing for a plant in Saskatchewan should realize, in all likelyhood, you're not only going to be competing with Cargill/IBP but probably with the Alberta treasury? It may not be right, but it is good politics?