fatherson... rpkaiser... bfw...

[grassfarmer]

http://www.beef-initiative-group.com/

Hey cowman and kpb. When you have a moment, could you read the packing plant proposal Beef Initiative Group is backing.

One of the reasons we all believe is holding up investors, is the proverbial black ink in the business plan. The proposal to build a plant with producer money generated from a levy gets around this issue to a certain extent. Ranchers know all about risk. And the risk associated with $3.00 per head to put another large player in the marketplace rather appeals to me.
What do you guys think?

[kato]

I'm sure no one will believe this, but I believe the day will come when the big multinationals will lose their powers. It may not be today, or tomorrow, but it will happen, of that I have no doubt. There is a life cycle to expansion that we have seen over and over as long as history has been recorded.

In the past it has been the expansion of nations into empires. Now it is the expansion of small corporations into huge ones that span the globe. Just as empires are not sustainable, neither are these multinationals, over the long term.

Sooner or later, cracks appear, and then it all starts to come apart. I don't know what will start it, but it is bound to happen. Remember Nortel? Formerly considered invincible...Or back a few years ago when Chrysler almost went broke? It's not that far fectched of an idea.

Maybe the border should stay closed. That way we will get on with re-inventing the Canadian cattle industry in a way that has a better long term picture for us. Just going back to doing business like before is only going to get us kicked in the butts again.

If we go through this whole debacle without coming out of it any wiser, what a waste that would be.

[kpb]

rp kaiser, I read the Beef Initiative Group proposal several weeks ago and will re-read it as you suggest. I think the idea of a $3 levy to build a big, competitive packing plant is an excellent idea with one condition--it must be protected until it can show an operating profit. In other words, either the producers who own it must be prepared to answer a cash call in the first few years if necessary or the government must protect the plant until it can get up and running. Either way, to me, is fine and once the plant is running then I think, if it is big enough, it will be competitive, again, if the government enacts legislation that is favorable to domestic plants. I am not interested in niche markets or speciality plants---if we really want to own our own industry surely to goodness we can get together to build, own and get the good management in place to run a large domestic plant. We need government help to support, nurture and protect this plant but is this not what government is for? As far as the comments about monopolies having a fixed life and waiting until they whither and die I must say that I find these naive. There are certainly examples of large companies going bankrupt or having financial troubles but the economic history of the last 50 years is not towards small but, rather, towards large, dominating companies. I think that anyone who thinks that the Wal-Marts, Cargills or Citi-banks of this world are going away is living in a different reality than me. The only way these companies are going away is if they are bought by even bigger monopolies. History shows us that empires don't last forever but none of us, individually, are going to be around to see the end of these multi's.The only thing these powerful companies respond to is something more powerful--if we respond as a group, with the support of our government, we have a chance of changing and benefiting our way of life. Grassfarmer, I am new on this site but, in defence of cowman, I agree with much of what he said today and believe it is best to go into something with a realistic view of the way the world works. There's no sense us building all sorts of domestic plants that are doomed to failure. I do not believe there is a hope that the multi's will, through their own good will, let these plants survive. They only respond to a greater force than themselves. And finally, grassfarmer, if cowman did propose a cow cull in 2002, it's just too bad we didn't all follow his advice, isn't it.

[grassfarmer]

kpb, If you allow me to extract a couple of sentences from your paragraphs I can show what I want to seehappening. In reference to new plants "I do not believe there is a hope that the multi's will, through their own good will, let these plants survive. They only respond to a greater force than themselves" - exactly right. As you say " The only thing these powerful companies respond to is something more powerful--if we respond as a group, with the support of our government, we have a chance of changing and benefiting our way of life." exactly right again . The last sentence totally baffles me though - you wished we had culled the herd in 2002? why would we ever wish to have destroyed our livliehood? our factory if you like? If people don't like any sector of agriculture that is their choice but I cannot understand these guys who seemingly want to pull the whole industry down because they are no longer enjoying it or finding it profitable. I'm the eigth generation to farm in our family and the point I was trying to make is that although individually none of us last for ever, primary producers (family farms usually) are what agriculture has been about for hundreds of years - these mega corporations are insignificant in terms of history. There are millions of farmers around the world - but only one Cargill, one Tyson Foods we outnumber them and we can defeat them.

[grassfarmer]

Was reading over the packing plant proposal myself and realize, due to your statement kpb, that nothing is mentioned concerning the first two years of operation. The bridge financing needed to build this plant would include operating funds for those first years. The levy would be on every animal sold; just like the ABP levy, with the exeption of packer owned cattle (which we hope becomes less anyway) This money would pay down the bridge financing over time - - - the rest is explained very well in the paper.

One bright note to announce. The Deputy Premier of Saskatchewan stood up at the last BIG C producer meeting and proclaimed that his government, along with the Manitoba government would supply funding for a feasability study on this proposal.

I like the fact that this proposal is being tweeked at these meetings by the very people who will be part of the good and the challenging aspects.

[kpb]

grassfarmer, you and I are just about on the same wavelength here, I think, but our answers to the current woes differ. We are in agreement that the multi's will only repond to a greater force but I think that force has to come in an organized fashion--namely from the government, which is supposed to represent the people, and from industry groups which represent us. The individual rancher has no power with the big packing plants. In regards to my last sentence, it was flip I admit, but my point is not that the whole herd should be culled but rather what a better position we would all be in if we had sold some cows prior to BSE. I, too, have a strong sense of history and it grieves me more than I can tell you to see good men with 100-year farms in my neighbourhood having to get jobs to support their families. That is simply not right. And you must know that while there are still lots of farmers and ranchers in Canada there's a whole lot less than there were 50 or 100 years ago. That's because many left the farm because they could not make a living. And that was because we all bought into bigger being better and more being more profitable. As long as we pursue these policies we will lose more and more good farmers and ranchers. We do not need more cows in our herds, more acreage for our grain or more hogs in our barns. What we need is a decent secure price for what we produce so that you and I and our good neighbours will still be here in another 100 years. That's what really worries me and that's why I think we need a restructuring in our industry. Grassfarmer, we both have a high regard for our industry and a pride in what we do but I recognize that we cannot continue along our current path and expect good results in the future.

[cowman]

Grassfarmer: Mr. Negativity here again! Actually I wish I had sold all my cows in 2002...wouldn't have seen an asset base shrink by 66%...but hey, you roll the dice and learn to live with it.
Is it such a terrible thing to ask questions about some of these packing proposals? To ask how come one plant needs over $300/cow capital investment while another needs $50? I have stated very clearly the one at Pincher Creek looks like a winner and they are building it not still talking about it! I think that one can survive even after the border opens.
I have also stated I believe in the basic concept of BIG Cs plant although I'm not completely sold on the idea of a mega cow plant or the location.
I do believe the Canadian cattle business is due to turn around...and it won't be all roses but it sure will be one hell of a lot better than losing our shirt!
For me the cow/calf business comes to an end Jan.1/05. That is the day I transfer ownership. I still intend to run some grass cattle.
I wonder how I got this reputation of being so old? I still haven't seen my 50th birthday. Still work seven days a week!
Anyway have a good day...I have to be 80 miles away when the sun comes up and I still haven't loaded the trailer.

[blackjack]

...thanks for the reply bfw... like so many other producers who watch the packers take the profit out of the system it justs seems hard to want these reps on our organizations...I do agree with your comments that us producers need to do what is best for our own families as there will be better days ahead...good luck bfw...

[cowman]

I will also point out the BIG C plant concept is a long way from fruitation? But RPKaiser sold me on the basic concept. Now if he can ever convince the rest of the industry is another question!
Another point that sold me was the fact Grant Hirsche is one of the proponents. Grant is an excellent businessman, way beyond his ag pursuits, and understands how to make a dollar and when to be bold in his endeavors! He gets things done!

[cakadu]

If, and I stress if here, the packers are the bain of the industry, then wouldn't that old adage, keep your friends close and your enemies closer make some sense when it comes to the ABP? I'm sure what would be the worst case scenario has been described here when it comes to the packers getting to run the show, but anything is possible, plausible is another matter. Should the restrictions be so tight as to limit the producer owned or domestically owned plants from having a voice? I don't really have an answer, which is why I'm asking.

Seems to me that in discussing the entire chain from the producer through to the retailer, the biggest problem is that signals out in the marketplace aren't making it back to the producer. For example, if a certain cut is doing well, then information isn't making it backwards to ensure that this can be replicated. Now, I have heard that there is nothing from the packer and that there is nothing from the feedlot. There appears to be a bottleneck somewhere, but just exactly where is anyone's guess.

Biggest problem is that the producer isn't privy to this information and that is a large part of the problem as near as I can tell.

[cowman]

Well Linda, I think the market signals are fairly clear. For example: The market wants that moderate sized animal that marbles and grades AAA? Or in other words they want ANGUS? They don't want Simmental or Charlais?
It is pretty amazing how fast the cattle industry picks up on this considering? Doesn't take too long to see the Sim bulls go down the road and a black angus out in the pasture?
Of course you will always have the old diehards who refuse to change? You see them every fall with their straight bred herefords...getting 10 cents a pound less than everybody else!
You have to be able to see and understand what the market today wants, not what you think is right!
Now if you inherited the family farm or have a half dozen oil wells or are using your farm as a tax writeoff, then I suppose it doesn't really matter? But if you want to max out profits you have to produce what the market demands?