Lee Gunderson of Alberta Beef Magazine has put together this one page solution for the Canadian cattle industry. This is compliments of his consultation with Scott Lees of Soderglen Ranches and the well known Canadian Dr. Bob Church. Both have thought through our complicated industry position to date and both feel this one solution could fulfill many needs simultaneously until a fully functional market for cattle is restored. - 8/27/2004
Here is a one page solution to the BSE crisis.
Here is a one page solution to the BSE crisis. Compliments of my consultation with Scott Lees of Soderglen Ranches and the well known Canadian Dr. Bob Church. Both have thought through our complicated industry position to date and both feel this one solution could fulfill many needs simultaneously until a fully functional market for cattle is restored. We have all been ‘walking the floor at midnight for the past year’ like Ben Thorlakson, looking for a way out of our predicament. We must acknowledge the feds are unlikely to put political/trade pressure on the US. We must wait until elections are over in Alberta and the United States. Admittedly, the Alberta Government doesn’t want to go head to head with Cargill/ Tyson competing with them by building a packing plant because it could be a billion dollar boondoggle similar to the MagCan plant at High River. Further, construction and planning and staffing would take up to two years. The Alberta Government would rather be seen as 'enablers' of private initiatives to cope with the slaughter processing capacity solutions. We cannot match the deep pockets of the Tyson/Cargill monopolies especially since they are expanding capacity. Further, it would lead to direct competition with those new plants already proposed and under construction.
Anyone who has ploughed through the 22 page CCA proposal recently released at www.cattle.ca will note our domestic slaughter capacity should
peak around 2006 and reduce our dependence on US exports to around one million head per year. This lengthy document hits on all the issues with some long-term solutions to complex problems. It should be noted that flexible strategies and government policies will be needed until some degree of certainty and normalcy returns to our industry if it ever does: this applies to taxes, income deferral and cash flow to producers. It sure becomes a complex mess trying to sort out who needs help and how much is needed and is fair. We're in for an economic storm of sorts.
Simply put we need to dramatically reduce the Canadian cow herd to address our current oversupply problem. A good way to help ourselves out of this abundant supply problem, and of course others may dispute this, is to effectively reduce the size of the cow herd until some sort of border normalization occurs, or until we have a fully functional marketplace for our livestock: i.e. supply and demand meet each other at such a point that stability and profit are found for all sectors of the livestock industry.
1. All cattle, (young or old, with a head, four hooves and a tail) that producers want to voluntarily surrender could be brought to special holding pens at your local auction market across Canada.
2. Order buyers and auction markets would be paid (gives them cash flow) to assemble/brand/ and pay for the culls (OP brand for out of production). Let us use an arbitrary figure of $300.00 FOB the market. This will give producers some salvage value for cattle they no longer want to feed or whose reproductive life has ended (heiferettes; etc.) This could also apply to crippled animals, injured bulls or distressed calves etc.
3. CFIA would have access to all the heads available that they need for testing. And we would have a rational, orderly and voluntary exit from the Canadian cow herd of several million cows over the course of the next year or two. If too many cows come, lower the price paid. If not enough cows come the surrender price could be raised. The subsidy paid would be realized by primary producers, it would be immediate, it would be fairly paid to those in dire need of liquidity.
4. Those animals that have salvage value: bologna bulls, cows for grinding etc. could be processed and those that have no use in the human food chain could be used for bio-converters for fuel or be disposed of according to further plans CCA is exploring.
This simple plan will accomplish several goals at once: attrition of the cow herd (voluntary supply management)...cash flow ....heads for CFIA....orderly exit strategy... it is a supply management solution which addresses the real immediate issue (oversupply) without throwing more hundreds of millions at band aid subsidies which do not address key issues. Nor is this to diminish CCA's strategy, at least they have a broad master plan which takes some bold steps. PLUS: the payment goes immediately and fairly to the primary producer. This eliminates a lot of tax filing and deferrals and lost time.
Lee Gunderson
Here is a one page solution to the BSE crisis.
Here is a one page solution to the BSE crisis. Compliments of my consultation with Scott Lees of Soderglen Ranches and the well known Canadian Dr. Bob Church. Both have thought through our complicated industry position to date and both feel this one solution could fulfill many needs simultaneously until a fully functional market for cattle is restored. We have all been ‘walking the floor at midnight for the past year’ like Ben Thorlakson, looking for a way out of our predicament. We must acknowledge the feds are unlikely to put political/trade pressure on the US. We must wait until elections are over in Alberta and the United States. Admittedly, the Alberta Government doesn’t want to go head to head with Cargill/ Tyson competing with them by building a packing plant because it could be a billion dollar boondoggle similar to the MagCan plant at High River. Further, construction and planning and staffing would take up to two years. The Alberta Government would rather be seen as 'enablers' of private initiatives to cope with the slaughter processing capacity solutions. We cannot match the deep pockets of the Tyson/Cargill monopolies especially since they are expanding capacity. Further, it would lead to direct competition with those new plants already proposed and under construction.
Anyone who has ploughed through the 22 page CCA proposal recently released at www.cattle.ca will note our domestic slaughter capacity should
peak around 2006 and reduce our dependence on US exports to around one million head per year. This lengthy document hits on all the issues with some long-term solutions to complex problems. It should be noted that flexible strategies and government policies will be needed until some degree of certainty and normalcy returns to our industry if it ever does: this applies to taxes, income deferral and cash flow to producers. It sure becomes a complex mess trying to sort out who needs help and how much is needed and is fair. We're in for an economic storm of sorts.
Simply put we need to dramatically reduce the Canadian cow herd to address our current oversupply problem. A good way to help ourselves out of this abundant supply problem, and of course others may dispute this, is to effectively reduce the size of the cow herd until some sort of border normalization occurs, or until we have a fully functional marketplace for our livestock: i.e. supply and demand meet each other at such a point that stability and profit are found for all sectors of the livestock industry.
1. All cattle, (young or old, with a head, four hooves and a tail) that producers want to voluntarily surrender could be brought to special holding pens at your local auction market across Canada.
2. Order buyers and auction markets would be paid (gives them cash flow) to assemble/brand/ and pay for the culls (OP brand for out of production). Let us use an arbitrary figure of $300.00 FOB the market. This will give producers some salvage value for cattle they no longer want to feed or whose reproductive life has ended (heiferettes; etc.) This could also apply to crippled animals, injured bulls or distressed calves etc.
3. CFIA would have access to all the heads available that they need for testing. And we would have a rational, orderly and voluntary exit from the Canadian cow herd of several million cows over the course of the next year or two. If too many cows come, lower the price paid. If not enough cows come the surrender price could be raised. The subsidy paid would be realized by primary producers, it would be immediate, it would be fairly paid to those in dire need of liquidity.
4. Those animals that have salvage value: bologna bulls, cows for grinding etc. could be processed and those that have no use in the human food chain could be used for bio-converters for fuel or be disposed of according to further plans CCA is exploring.
This simple plan will accomplish several goals at once: attrition of the cow herd (voluntary supply management)...cash flow ....heads for CFIA....orderly exit strategy... it is a supply management solution which addresses the real immediate issue (oversupply) without throwing more hundreds of millions at band aid subsidies which do not address key issues. Nor is this to diminish CCA's strategy, at least they have a broad master plan which takes some bold steps. PLUS: the payment goes immediately and fairly to the primary producer. This eliminates a lot of tax filing and deferrals and lost time.
Lee Gunderson
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