Those Poor Dairy Guys

[kpb]

Bez and Cowman, I agree completely with your comments regarding quotes but I'm afraid the chances of a quota system for the beef producers is next to zero. I have been suggesting a quota system for our industry though many different threads on this forum with very little support.
In my humble opinion most cattlemen are just too darn stubborn and proud to get out of their own way.
If we really want a sustainable, producer-owned industry, it's quite simple---run it like the dairy guys where we contol production and own the processing facilities. Like I said in a previous post, ask the government to support a cull of excess cows through a subsidy then leave us to supply the domestic market. It would be cheaper to the government in the long run than all these crazy programs.
That's it fellows--it's a way to get ourselves a decent living for a long time to come and a way for us to get off this boom-bust treadmill and all work together for a solid indistry future. But my bet, Bez, is that there will be a lot of people taking shots and not too many supporting a quota system. All I can say is that it makes me laugh to watch everybody moaning and complaining and organizing rallys to get more government support for our industry and crying the blues about the producer not getting a decent price for the product or being used by the packers AND at the same time not wanting a quota system because it's anti free enterprise.
You guys are going to have to make up your minds sometime--if you want free enterprise than you're going to have to swallow it when the packers get as much money as they can out of you or when you have to take low prices because there's a glut of calves on the market. Can't have it both ways--capitalism cuts both ways.

[Bez]

kpb

Hear! Hear!

Bez

[cowman]

The fact is any kind of quota system isn't ever going to happen in beef. Whether so-called voluntary or government sponsored? The new trade rules would make it impossible? If you tried to match supply to demand in would come the imports!
Of course the dairies are getting larger and the smaller ones are packing it in? Is there any industry in North America where that isn't happening...especially in agriculture? But don't forget that small dairy farmer is walking away with a pretty decent check in his pocket? Not sure what quota is worth but a couple of years ago a dairy farmer neighbor told me his quota was worth $9 million and he milks around 300 cows, so I would assume quota is worth in that $30,000 per cow range? If that is the case then that small 40 cow dairy farmer has quota worth $1.2 million? If that is correct then I would definitely say yes, the dairy farmers got it right?

[Bez]

cowman

Quota is roughly $27K per animal / kilo of production

I am sure if my estimate is off there will be someone here who can provide a definitive answer.

Bez

[dalek]

Ontario $28251 per kg in December, I think Quebec was $28150. That's per kg of fat per day, roughly one cow but it varies a lot. For example I know farms averaging 45 kg of milk a day at 4% fat which would need 1.8 kg of quota per cow.

[cowman]

So I have a question?
Say the price of feed goes up in a given year? Does the price of milk change to reflect that added cost? Or in the case of feed being cheap...does the milk price go down?
I have to say that I believe supply management always made sense to me. Matching the supply to the demand always seems more sensible than just over producing so you can lose more money.

[cowman]

I heard somewhere that there is a huge glut of powdered skim milk in this country, and due to regulations it cannot be sent to countries that can use it, which makes absolutely no sense to me !!

[cakadu]

The way I understand it cowman, there are pricing formulas that are reveiwed at least yearly and in this past year they have made 2 attempts at increasing the price due to the BSE crisis, this last one being successful. The pricing formula is zealously guarded and you could probably get the cell phone number for the Pope much easier than the average joe could get the dairy pricing formula. I know the consumer rep saw it once in 16 years and she has never seen it again.

When feed costs go down, they don't make an application to lower the milk pricing formula - it is basically like anything else - once the price is up it rarely, if ever, goes down. That is precisely why their margins are essentially set and why the supply managed groups are the only ones to consistently have positive margins. They may not be big margins, but they are still present.

[farmboy1]

Yes, the price goes down as well. 10% in the last year. Also, that huge glut of solids non fat? Who do you think pays storage? The producer, of course. Drags the price down even more. The last price increase was wholly swallowed up by this. Fact is, the price has not kept up to inflation for the last several years. Talk to the people who got out 10-15 years ago. Get their take on the dairy industry today. They are happy to be out. Yes, the dairy folks have a more secure income. However, only the good managers or those exiting the industry get ahead. Why complain, though? We're all doing what we love to do and have made choices. However, the producer does NOT get their fair share unless they are in Quebec, supply management, or both. I have this same discussion with my father-in-law frequently. I am in dairy and beef, and he is beef. His same theory was listed above. Massive de-population and then slam that border shut and move to supply management by whatever means necessary. He's in his 60's. That's a big leap of faith for him- and all of us.

[cowman]

I notice around my area there are very few old dairies left. The old dairy farmers got out while the going was good! The new dairy farms are mostly wealthy Europeans and they have built new and very iimpressive operations.
Was talking to one young Dutch dairy farmer who told me his barns cost $2.5 million, cows and quota over $600,000 and 3/4 of land $1.1 million! Of course he had sold out in Holland for $6 million so I guess he still has a few bucks to play with? My only question is if he had $6 million why would he want to lose money milking cows? I guess he was buying the lifestyle or something?

[kpb]

farmboy and bez, It absolutely makes me scratch my thinning head of hair when I see the opposition to a big cull of cows, shutting the border and supply management as farmboy's relative suggested. Does this not make a lot of sense to everyone as a way to gain control of every aspect of our business and, at the same time, giving everyone a decent living? And, cowman, you and I usually agree but I have to say that this proposal is at least as realistic and practical as the idea that all of these shiny new packing plants are going to compete with the multi's.
This is the way for all of us to get off the government dole. I don't want to hear any more talk from so-called free enterprisers about more government support. It doesn't wash with me--why not bite the bullet and create an industry that we really control not one that is controlled by outside forces. Don't talk capitalism and then whine about the free enterprise packers ripping you off.

[cowman]

kpb:Actually I was all for a mass cull right from the start of this thing, but it just isn't going to happen? No political will and no producer support.
Supply management in beef cattle can never happen. Our trade deals just don't allow it? Dairy and poultry were exempted...but for how long?
People who propose any kind of supply management of beef do not have the support of any politicians or commodity groups? What would your MLA or MP say if you asked him about supply management for beef? I wonder what the ABP or CCA would say if we ran that idea by them? And don't forget the ABP is the official elected voice of the Alberta cattle industry?
How do we close our border to American beef? Do you think they might be just a bit upset and retaliate against other trade items?