Changes to the Way the CWB Contracts/Buys Feed Barley

[charliep]

Just a note to highlight changes the way the CWB will be handling CWB contracts/buying feed barley. See:

http://www.cwb.ca/en/news/releases/2004/080904.jsp

Changes to feed barley.

1) Two pooling periods in a crop year.

2) Only guaranteed delivery contracts.

3) Ability to cash purchase.

A crummy international price is still a crummy international price. Todays PRO of $127/t in Vancouver ($80/t in Alberta) is an accurate signal of Saudi business. Still no deliveries to the CWB under this scenario. What will be interesting to the cattle industry is their ability (if they choose) buy from the cash market to satisfy specific sales. Will come from the grain companies via tendering as the CWB does not have the ability to go direct.

Also hearing of some frost in North East Alberta. Hopefully mother nature doesn't hammer us with an early frost.

[cakadu]

Kato, there are many things to be concerned about regarding the opening of the border, not the least of which is this.

The time for clinging to the "life raft" of an open border may slowly be loosing air.

A friend and I were talking this morning about the implications of both Cargill and Lakeside increasing their slaughter capacity. That alone does not bode well for a border opening soon.

The impending election in the U.S. will and has been having an impact on an open border.

The question is, what are we going to do about it? Are we going to continue to sit and wait and hope, or are we going to start taking steps to help ourselves?

[jensend]

if your interpretation is right kato then i think the crap will hit the fan with aafc, cca, cfia, abp, etc. i would add that i looked at the same posting as you and immediately though the ncba was putting an optimistic spin on the negotiations. we've seen that over the last month and when the japanese give their interpretation it generally doesn't seem as hopeful.

[pmckenna]

One of the problems with the latest US election (presidential) is that there is always one. Senate, House, State Gub, State Senate, State House, Fireman, Judge. They continually rotate, so internal politics gains the minor hill each time.

One would think that the eventual demand for protein would pull things back our our way on demand side. This is very good for us, as there is a preference for beef. Consider though, what we are dealing with if the end result is loss of appetite. Chickens and hogs have more reproductive gain than cattle.

I'm pretty sure that a co-ordinated industry will keep the ball rolling.

[whiteface]

I can't actually believe ANYONE still has border opening hopes. The packing plants expansions have absolutly SEALED that border shut for who knows how long. What I want to know is, we have ALWAYS known the States weren't on our side, if it ever came to blows, and it has with being left to hang over the Japaneese market but what I just can't get, help me out with this guys, is REALLY why do the Japaneese view our meat as different from U.S. We know its not but why do they think it is. Did the States threaten to bomb them, like they do everyone else? I just don't see how we are being left out of this? Is it that we were honest with our first cow and then an American found a CCIA tag to slam in another and now Japan figures Canada is diseased just because the States are lying? I have no hope for this border opening to the south but I'm not okay with the lying states to get away with the prize when our beef is as good or better (because we're honest) what's the deal? Give me your opinions.

[Joe-2]

Hunker down folks!! This is going to get worse before it gets better,if you ask me.America has made it abundantly clear that CDN. beef and cattle are expandable in terms of NAFTA.As long as they can still get what they want out of Canada(energy,oil and gas,electricity)us lowly ag producers can go suck it.How much more evidence do you need??USDA,NCBA and the rest of them are only pretending to be "our friends" and letting that piss ant outfit R-calf do the dirty work and take all the heat for it.SO BE IT.I asked this question before;"Just how is it that pissy little r-calf so effortlessly made the mighty USDA roll over and play dead??".Read between the lines and you can find hypocrisy in virtually everything anyone from the States says.Lets face it,as far as the Americans and our own governments and industry organizations are concerned WE ARE EXPENDABLE!!!Get used to it and do whatever you have to to survive.Our governments are likely to offer us a token payout and more debt this fall when the carnage starts.Don't take it.Don't spend or borrow 5 cents more than you have to.
A friend of mine posed this theory to me not long ago;let's tear a page out of the American play book.Shut down all beef imports.Take us to court if you don't like it.This will eat up at least some of our production.At what price?Who knows?Does it matter???You want a mass cull?? If the government won't come up with a buyout a closed market will cut numbers soon enough provided no outside interests can screw with it.Some will survive and some won't.I probably won't but it is absolutely insane for us to keep on producing this many cattle at a loss for all of us and for such a gain for Tyson ,Cargill,and lets not forget those good old Canadian boys Nillson Brothers.
Will our gov't ever have the parts to stop imports??? NO.Will they stand up to the Americans to save the livlihoods of 2% of the population who for the most part don't vote Liberal anyway???HAHAHA ya right!!
Hunker down boys and girls because I'm pretty sure that we are screwed at least for the foreseeable future.

Anybody else hear a rumour about Cargill,R-calf members,a two day custom kill and retained ownership of boxed beef heading south??
Ask me if I'm pissed off!!!

[rusty1]

I've said before, our 1 million head of traditional fat live cattle south bound and 140,000 head of feeders (2002), amount to 3 weeks of their capacity. Are we important to the US - go figure.

We can do it ourself.

[stettlerab]

We all deserve to angry. If I could introduce some facts.
1) In Canada there is enough beef to meet the countries needs. Even if half of the cattle producers went broke there would still be sufficient supply. The government has done quite a bit for us considering the situation.

2)The US needs our oil right now. Nafta or no Nafta, if they did not need our oil they would not be importing it.

3) The US does not need our beef. They have enough of their own. If they needed our beef it would be a different story.

4) If the US exports to Japan, that may use enough American beef to once again trigger a demand for imports to the US from Canada.

5)When they need the beef they will open the border. They will buy our cattle, feed them US corn and sell them to Japan. And make money from it.

We (Canadians) really are a small player in all of this except for our supply of oil. Remember the Americans own the oil companies. It looks pretty hopeless doesn't it.
How many cattlemen are able to pay their fuel bills right now. It is going to be a real tough summer.

[grassfarmer]

All very depressing, if familier stuff to me having gone through the UK bse fiasco. It seems to be the way with BSE - just when the situation can't get worse ... it does again and again.
But Canada should not be in this position - we've only had one case of BSE where the UK had tens of thousands.
As I told an ABP rep at a public BSE meeting in February (and got shot down for my remarks) we need to break these packers before they break us - I think we just have to step up the pressure on them somehow - what have we to lose now?

[rusty1]

Good news - Good news - it's election time this fall. Let form a new party -Cattleman's Anonymous. Maybe the grain guys would join too.

[cowman]

In the end America will probably have the clout to force Japan to take their meat. If we are the sacrifice to get that done...then they'll surely do it?
I think the time has come to forget about the export market? Get our numbers in line with our domestic needs and forget about a fickle and often crooked export market?
Of course to do that we would need a bold leadership and the fact is we just don't have it! Immediately cull one million cows. Stop all imports of beef from any country who refused to take ours. Expropriate the two American packing plants at fair market value and put in a transmission team to run it until it could be farmed out to a co-op type of system. Would that be possible? If the government decides to build a highway through my front yard they have no problem expropriating my property, so in the "national interest" why would they have a problem expropriating Cargill/IBP?
Of course this won't ever happen! Unfortunately all we have are politicians...no statesmen!

[cowman]

I'm always a little leery when the CWB changes things. The provision to enter the cash feed market is one?
How fair is it to the feed grain buyer when you have an entity like the CWB being able to outbid others, on the backs of a government loan? For instance they sell a feed shipment to some God foresaken country that can never pay the loan back? And then write it off?
This happened often in the past, why would anything be different?
In the short term this kind of deal looks very good for the grain farmer, but in the long run what really happens is you lose the "real" customer who actually was paying cash? Instead you have a mountain of IOU's from a bunch of bums who can't pay! So the taxpayer picks up the tab! This is not really very good business?

[bward]

Right now we are exporting tons of boneless beef into the US market. This alone is helping to balance US demand and keep the US cost of beef from exploding. I have heard that a simple 4 ounce steak sandwich in the US has gone from 4.99 to 8.99 and these kind of prices are making consumers back off. We need to stop sending ANY beef across the border. Stop all exports completely and then sit back and watch the fallout.The result from this will have them scrambing to fill orders and the price of their beef and cattle will rise so high that importers of US beef will look elsewhere for supplies. The policy should change so that they either take all our beef products or they get none. I am sick of being a patsy for them selling them our high quality beef at a loss.

[pandiana]

Everything looks rosey in the US. We are not even registering on their radar. It will take no time at all before the US herd expands to fill the 10% void in production. Unless we have a unique product we will have nothing to sell.


http://www.qtinfo.com Friday August 6, 2004
QT Livestock Outlook

QT Early CME Livestock Calls
Cattle: lower
Hogs:lower
Bellies: firm


QT Top Livestock Stories
- In a Futuresline interview, Dr. Wayne Purcell of Virigina Tech Livestock Instititue, remains optimistic about the cattle industry over next 4-6 yrs. Sees product demand remaining high & continuing to increase. He expects herd expansion over next few years therefore keeping animals off the market.
- In yesterday's Futuresline interview, Dr. Wayne Purcell, said he expects hog prices to be remain on a positive trend. Dr. Purcell noted environmental restrictions are curtailing production by large entities, and expects producers will not soon experience unprofitable levels.
- Australia July beef exports slightly under June but still well over yr. ago, 1st 7-months of '04 beef exports 510,222t up 5.5% on yr. mostly on a sharp increase to Japan.

[stettlerab]

Cowman
Reducing our production to half is not going to help if we do not have something to replace that income with.

If the grain situation was expanding many cattle producers could break up their grass and leave the fellow with the rougher land to produce cattle at a lower price. That would work. but grain prices combined with the cost of farming is not an attractive option.

Without a replacement for exports to the US, natural competitive forces will force the price down as land owners with grass will be forced to do something to harvest their land's productivity.

Some grass that was used for pasture will be cut for hay, forcing the price of hay down. Essentially without a way to market the productivity of our land prices will decline in many areas. Maybe we should start producing honey. There seems to be a market for that. Cattle producers are used to getting stung anyway--)

Basically our country depends on exports.

Really what we need is to double demand for beef in this country. That is impossible.

Reducing the cow herd to half will cause our prices to drop dramatically in the near future and the surplus of grass and productive capability will mean that the prices will stay low.

One reality in Canada is that we have a lot of productive land. Without markets for our land productivity we will compete ourselves to death.

We need to produce and sell beef. There is not a great problem in producing the beef, but selling it is difficult.