Industry Consultation on Livestock Marketing and Brand Inspection Laws

[cakadu]

wd, I agree with you that we all need to get out of the box and stay out of the box so that we can reap the benefits of what it is we are producing. If I'm reading what you've posted correctly, it is that instead of producers working together and getting a plant going, it appears that at least one plant is being set up by what appears to be a sole practitioner?

Your objection is then that producers are just setting themselves up to "take" whatever price is being offered?

If it is in fact an Albertan who is setting up the plant and not an Albertan as a front for something else, then isn't the increase in packing capacity a good thing? Not knowing all the details of what is going on, it is hard to make comment, but I would think that if this plant would allow for producers to retain ownership of the cattle and sell to it directly and cut out all the middlemen then that would be better for the producer. Of course, that would imply that cattle producers would want to retain ownership.

There is no doubt that there has to be changes to the way things have been done. There won't be any different results without change.

[wd40]

kpb - to sit back is to commit tresion, if not suiside. My inlaws would tell me us Canadians are gutless.
I wouldn't let my childern or grandchildren grow up thinking I capitulated while I had breath.
If I read any history books, every empire fell sooner or later, and I believe I can make one small contribution toward that change.
So if you would kindly SHUTUP - in your wollowing, at least quit infecting others who might still hope or more out.

[wd40]

correct me if I'm wrong - ConAgra is Swift. Their very large feedlots in Colorado and Kansas just got bought out in a hostile take over by Smithfield (Packerland) who is playing hi-stake poker to shut out Swift out of the market. It's working. The Swift plant in Greely just announced that they were shutting down their plant in Greely because the feedlots that they where rellying on to supply they with cattle now won't ship to them. (sleepen at the switch).
Smithfields goal is to gain enough presence in the Contiental North West (Canada) to further draw the string around the throats of the IBP plants in Washington and Idaho.

[rusty1]

Way to go WD40-
There is one very good reaon for us as producers for taking back control of our industry (which we can) is it pays more. Argiculture across the continent from lettuce to fish are making it happen. (BUT I WANT TO BE A COWBOY AND CHEW TABACCO)
If you examine the US scenario - there are a multitude of small 750 to 2000 hd per day packers springing up focused on producer supply chains and nich marketing.
The big packers can't go there. Their so big they don't even see the opportunity, all they see is Walmart.
I stuck significant time and energy into a initiative and we are totally confident that we could survive.
If we can get the right cattle we have the market prepaired.
The 2 giants here only want to focus on their export to US or abroad, so they have really ticked off the domestic markets.

[cowman]

It is a good thing that some individual wants to set up a plant in Lethbridge, whether he is Canadian or American or whatever. Obviously he has probably done his homework if he is investing his own money? Probably he is already involved in the meat business? I can only applaud his initiative and the city of Lethbridge for doing all it can to assist this private enterprize.
One of our local small abbatoires is looking at building another plant. This guy has his feet on the ground and knows what he is doing. He is going into this venture with both eyes open and not on a whim. He will add some capacity to the system and be viable whether the border opens or not...and yes he probably will make quite a bit of money!
I do believe this is the type of operation we should be supporting? One that is built on the concept of free enterprize and profit instead of one that milks the taxpayer?

[cowman]

Again, cowman your wisdom shines through ! I am sure that the city of Lethbridge realizes the opportunity for spin offs to their economy if the plant goes ahead.

[farmers_son]

As there is government money available for anyone starting a new packing plant, I would imagine the entrepreneur in Lethbridge is milking the taxpayer too.

Having given the matter some thought I do not believe more packer capacity is the answer at all. More packer capacity is needed, that is for sure, but it is not the answer. What the producers needed throughout this crisis and in the years to come is an alternative market for their cattle. That alternative market is not the live cattle market with just another packer to phone. Cargill and Tyson will continue to be the price leaders in the Alberta live cattle market no matter how many new packing plants are constructed and no matter who is the company behind them, small player or Swifts or some other major player.

What producers need is an alternative to the live cattle market and that alternative is the wholesale beef market, boxed and value added. That is how we add competition to our industry by creating the option of selling into a different market, not by simply having more places to sell into a live market. That is the purpose of producers building their own packing plant, to create the opportunity to sell their product based on the more stable and market driven wholesale price of beef, allowing them to capture the real value of their product while adding value at the same time.

Grassfarmer’s visit to the Legislature highlighted for us a grim reality in the beef business. Even government is powerless to do anything to fix the live cattle market. Limit the major packers ownership of live cattle to 10%? Can’t do it. Why can’t the government do it, because the packers have such control that all they have to do is reduce the kill for a couple of weeks and lower the price of fats and the feedlots are on their knees and the government will have to come out with another ad hoc program. We have to realize the live price of cattle in this country and I suggest the U.S. as well will continue to be manipulated and fixed by Tyson and Cargill and the price leaders in the live cattle market. The answer is to create an alternative market for cattle, the wholesale boxed beef market, not to try to try and somehow fix the live cattle market. It is beyond repair.

Can we do it? We have to do it. We really do not have a choice. Even if the border were to open we all have seen that it can close again. Is it going to be easy? No, but necessity is the mother of invention and producers are a resourceful lot. Wishing and hoping that the live cattle market is going to give us a fair return and reflect the actual value of our beef product if we only have more places to offer us a live fat price is unrealistic. We need a market outlet that lets us participate in the boxed beef, value added market, and that place is a producer owned packing plant.

We need an alternative market for our production so we can finally get a fair return.

[gwf]

Farmers_Son: Your assessment of what has to be done is very much in line with the proposal that has been promoted by the Beef Initiative Group. I firmly believe that this approach is the only one that will have any meaningful change to the stability of the Livestock Industry, but I will be very surprised if it ever becomes a reality in Alberta. Saskatchewan and Manitoba producers are more likely to accept the concept. If we continue to rely on governments to provide solutions, I think we will be waiting a long time. The Alberta government through their “Industry”, the ABP, sees the solution as the planned increase through expansion of slaughter capacity by the US based (foreign owned plants). If producers see this as the salvation, then we just have to wait, and our problems will be solved. On the other hand, if we do nothing, we will just have more of what we have had on the past, subject to the border staying open at prices set in the US, and no hope of capitalizing on the opportunities that may exist in other markets.

I heard recently that there are over a thousand slaughter proposals on the table across the nation. If they are all dependent on governments to some degree the government has a very difficult task in deciding which ones are viable and which ones to support. It may be fair to say that 99% of them are not feasible and will not survive. So the next time we say that the government is not doing enough, think seriously, what you think they can or should do? Should governments provide financial support to all proposals?

[gwf]

my understanding is that there are in excess of 250 proposals for plants in Alberta alone.

[cakadu]

GWF, the absolute last thing we need is the government trying to pick yet another "winner".

I couldn't agree more with the assessment that we need alternative markets and I do believe that BIG C, rp, and rusty among others have mentioned on numerous occasions that this is what they are trying to accomplish.

We cannot and should not be continuing to rely on a market that takes 80% of our product, no matter what that might be. The way we have done things in the past has not really worked for us, so the time is right to change.

For a very long time now some folks have been referring to farming as a business and that being the case, the business has to do what it can to stay viable; in other words, change.

Are we ready to do as WD suggests and move out of the box?