SOUTH AMERICA

[STOUT]

Posted by elmo on Nov-8-04 10:04am


I received a written solicitation to re-establish my membership in the National Cattlemen's Beef Association (NCBA). I decline to do so. The NCBA and I are on the opposite sides of virtually every marketing issue facing the livestock industry that exists. In my opinion, the NCBA better represents the interests of Cargill/Excel's CEO Warren Staley, Tyson/IBP or the Canadian Cattlemen's Association than it does mine as an independent U.S. producer. Opposition to the Death Tax is always a big talking point with the NCBA. It's always seemed ironic to me that they are more worried about protecting estates than they are about creating them. They are mistaken that the inheritance tax is the primary threat to cattlemen's estates.







The NCBA has opposed Country of Origin Labeling (COOL). Oh, they spin it around like politicians that they support voluntary COOL but meat processors will never voluntarily close down the gold mine they are mining, buying foreign meat at foreign prices and selling it represented as U.S. product for U.S. prices. Tyson/IBP's U.S. cattle feeding partner, Cactus Feedlots, is joining with an Argentine company to eventually feed 200,000 cattle in South America. That's just the beginning of what's going to develop in new South American livestock production relationships as they integrate with U.S. companies. Global meat production potential has barely been scratched in places like South America where Brazil took the lead as the world's largest beef exporter this year. Cargill announced that they bought controlling interest in Seara Alimentos, Brazil's third largest poultry and pork firm for $130 million. "Seara is a natural extension of Cargill's worldwide poultry and pork processing business," said Sergio Barroso, president of Cargill in Brazil.







That's right. It's a natural extension of its integration of global procurement that will, in the not too distant future, be feeding US consumers on a regular basis who won't know where the meat they are eating was produced. The plan is for US meat integrators to outsource much of their beef, poultry, and pork procurement to overseas producers.







Work is being done at the WTO to open market access and history predicts that we will give market access that is greater than what we will receive. Ten years down the road the ability of U.S. meat processors to access foreign production importing it into the U.S., buying low, selling high, is worth billions of dollars to them. They are fighting implementation of COOL so aggressively now because they want to operate this gold mine at full capacity when the trade mechanisms allow them to. They are protecting their ability to put the machinery in place. COOL would force them to identify meat imports to U.S. consumers. Consumers may still buy it but usually at a different price, crimping the profitability of the deception.







That's the big picture and the NCBA has too small a perspective to grasp it. I've been to Brazil. I know what their plans are. I also know what plans U.S. integrators are working on and it will ultimately threaten the future of U.S. livestock production more than rural activists protesting citing of new facilities. The failure to implement COOL is a greater threat to U.S. cattlemen's estates than the Death Tax and the NCBA lacks the capacity to comprehend the risk. The NCBA undermines the estates of cattlemen every day with virtually every market policy they promote. Current cattle market circumstances are that supplies are not as tight as they were, beef demand is not handling production like it was and the market is not performing like feedlots would like. Without the beef demand dynamics we've come to count on, we can't kill as many cattle as we need to relative to the supply of market ready cattle.







One reason for the depressed beef product market performance is imports. Some still perceive that because the Canadian border is not open to live animals, it's closed. That's not the case. Canadian beef imports to the U.S. were up 23% so far this year. Beef is pouring south from Canada because they can't export it anywhere else.







I was under the wrong impression that the global beef export trade had shifted around with more beef from countries going to Japan that would otherwise be exporting it here. That's not what's happened. U.S. beef imports from Argentina were up 4% thus far in 2004. Our beef exports shut off as a result of BSE fallout, but our beef imports surged, attracted by high U.S. prices. The attraction is cheap meat from overseas that can be sold for U.S. prices, represented as U.S. products. The first 6 months of 2004 we imported 1.8 billion lbs of beef but exported only 155 mln lbs. Our beef trade deficit has mushroomed into something that's damaging our market.







The NCBA, of course, doesn't want to require these imports to be identified, in fact, they want to open the border to Canadian live cattle too while refusing to sell Japan BSE tested beef like the Canadian's reportedly now plan to do. NCBA President Jan Lyons claims the organization represents 230,000 US cattlemen. Make that 229,999 without me.


















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ncba elmo Nov-8-04 10:04am

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Re: ncba CattleCo Nov-9-04 6:30am

Re: ncba.....NEWSFLASH, for elmo MRJ Nov-9-04 1:37pm

[Cattleman]

These large encompassing cattle organizations try to look out for the good of the industry. The COOL system would cost the beef supply chain in the U.S. a huge amount for no benefit because you don't have any type of tracking system down there. Australia would benefit very nicely as they stamp all the Australian label on all of their beef!! Is COOL to support the Aussies? Even they think the U.S. is crazy to go ahead with mandatory COOL.

Argentina Imports increase, well you guys need the beef, you have shut of the Canadian imports, so you import it somewhere else. SO closing the border doesn't really help you, it just helps some other country.

The system is way to complex to expect the closing of one border to not have reprocussions world wide.
It is these narrow minded views of R-Calf that make it look so rediculous.

[STOUT]

BORDER will open,mcool will help the canadian cattle man as the quality of their beef is well known,packers dont want m cool for obvious reasons......good luck

[cowman]

I'm not just too sure how the mandatory COOL legislation in the USA is supposed to work? Does this mean when I go into a steakhouse in Great Falls(that's in Montana for all you Americans who went through the US school system) and they bring me a sirloin it will have a little sign on it that says "USDA beef"? Or "Alberta Beef"?
If that would be the case then I'm all for it! Don't like that old corn fed beef, myself.
Personally I think mandatory beef labelling of ALL beef is a great idea! Both in the USA and also in Canada! Talk about brand recognition!
Of course the USA would have some problems as they don't have any kind of real traceback system in place? Maybe you should get that fixed first? Not much sense putting the cart before the horse?

[STOUT]

working on the M ID,cowman,wheels turn slow over here.But the day will come when border opens ,M ID will be in place and so will M COOL.......good luck

[Cattleman]

I think you are right stout, but just wondering if you really believe Mandatory COOL would be a good thing? If yes, why? I can see the chicken producers liking M COOL. I would be interested to see how they are saying M COOL will be a good thing for cattle producers.

Thanks

[cowman]

From what I understand Of COOL it only applies to meat going into the grocery store? So if you looked on the shelf in the meat counter the roasts,steakd etc. would be labelled: Eg. "Product of Canada" or "product of USA" etc.? The steakhouses/restaurants wouldn't have to label it at all? Or MacDonalds...obviously not?
I wonder just how much this COOL law is going to cost and who will be paying for it? The producer? the consumer? the government?
I also wonder just how loyal American consumers would be to the "made in the USA label"? Seems to me, whenever I go to the states, that there are just as many Toyotas/Nissans around as in Canada?
Maybe instead of trying schemes like COOL to keep out Canadian beef you'd be better off trying to get your government to limit imports? So far it seems they really aren't listening to you? You've played this silly game to keep Canadian beef out while your own government has been opening up the floodgates to Australian/South American beef?
You Americans need to understand that we are one market/one economy? We are your biggest trading partner and you are ours. We have similar values and similar desires. We are not your enemy!

[STOUT]

IM in agreement with all you posted cowman.M COOL WILL BE GOOD FOR CANADA FOR THE REASONS YOU STATED,quality of canadian beef is well known,case in point.AMERICAN house wives will drive across town to get canadian bacon nothing less will do.........good luck COWMAN

[cowman]

I don't think you and I are very far out of touch on our thinking Stout.
But I do wonder just how much mandatory COOL will cost? How much per head do you think it will cost you per animal?
Of course to have COOL you have to come up with a national ID, right? It actually didn't cost us all that much up here considering the benifit we recieved. Unfortunately just about the entire cost was shoveled off to the cow/calf producer, but isn't that usually the case?
People up here get all defensive when they hear the US is going with a COOL law, because they have been told it will be a disaster for our live cattle prices. Personally I think it is a very good thing and something we in Canada should be doing too.
R-CALF has got a bad name up here because they have been portrayed as destroying our industry. Personally I agree with a whole lot of what R-CALF says and I don't blame the US cattleman one bit for looking out for his own interests! The fact is if the shoe was on the other foot we'd be doing the same thing!

[farmers_son]

Can mandatory COOL work within NAFTA? Is that what NAFTA is all about? Why not label oil and gas as product of Canada and product of the USA?

Mandatory COOL is just another example of how countries (not just the U.S., we do it too) and industries want the benefits of trade to increase access to lower cost inputs, goods and services but seek protection from trade from importers who are more competitive. Maybe it is human nature to want to have our cake and eat it too but government have a role to ensure fair trade takes place.

Is it fair for the U.S. to take our oil and gas but put legislative barriers in place to limit Canadians access to the U.S. beef market? Is there any real benefit if Canada were to turn around and do the same to U.S. beef. After all the U.S. is Canada’s number one beef importer and continues to be even with BSE. In 2002 the U.S. exported beef products to Canada were valued at US$286 million .

Canada’s imports of beef to the U.S. only accounted for 3.9% of beef consumption in 2002 and in 2003 2.7%. And Canada is the only nation that continued to import U.S. beef after a BSE positive was found in Washington December 2003.

I am amazed at those producers supporting mandatory COOL who think that any benefits from COOL will trickle down to them. The only thing they will see is the cost.

[STOUT]

FARMERS SON I am amazed that you cant see the thousands of metric tons of cheap beef being readied for the american market,from south america as I am sure you understand supply/demand.M COOL will benefit canadian beef it will diferentiate it from lesser quality south american beef......good luck

[farmers_son]

Please do not insult our intelligence by saying that mandatory COOL is about South American beef. It is about Canadian beef, Mexican beef and keeping that beef out of the USA or at least out of the retail freezer.

You clearly target Canada as a reason for depressed beef prices while suggesting if beef imports could be reduced domestic US farm gate prices would increase due to supply and demand. If you had been through the same crisis we have you might begin to gain some appreciation for the fact that supply and demand really has little to do with the farm gate price of fat cattle. That your packers are fixing the price of your fat cattle just like this side of the border.

Viewing Canadian imports as the problem just diverts attention away from the real problem of packer control of the industry and the inability of the grass routes producer to extract a fair price from his/her production. This problem is common to both the USA and Canada.

Sir, I think you are barking up the wrong tree.