Industry Consultation on Livestock Marketing and Brand Inspection Laws

[cowman]

The Alberta government has also been critisized for not being more "active" in supporting the various schemes to build producer owned packing plants? Is that a bad thing or are they being fiscally responsible to the Alberta taxpayer?
Do we really want the provincial government back in the business of owning a bunch of white elephants? Have any banks come out with a recommendation on any of these plants, other than a report they are "extremely high risk"?
I would suggest that if any individual wants to put their money into a risky adventure then that is their right, but our governments should not be putting taxpayer money into schemes that have little chance of success?
I believe when this whole BSE thing is over with we will have a fundamentally different industry. For one thing I think a lot of small cow herds will be gone. I suspect there is a whole bunch of people who are just waiting to go if they can get a decent price for their cows? Also a lot who will have dug themselves into such a deep hole financially that they will have to quit?
And as in every other branch of agriculture it will be"get big or get out"...so where we used to have 10 or so small guys raising 1000 head of cows, we'll now have one guy with 1000 cows.

[farmers_son]

I agree our beef industry will be different after BSE. And you may be right we could have fewer smaller producers but all indications are that the Canadian beef herd will be larger post BSE than before. I would also suggest that primary cattle production will be considerably less profitable after BSE than before. And that is precisely why the status quo won’t work. Producers will be forced to look for ways to increase their profitability. There simply won’t be enough money in selling weaned calves to make a go of it as each sector further up the value chain passes their costs on down to the cow calf producer while maintaining their margins for themselves. Some producers will quit but others will seek solutions and the obvious solution is to keep ownership of that product as long as possible thereby accumulating the profits margins that will continue to be there down the line.

If the banks consider packing plants to be extremely high risk I wonder what they consider primary agriculture? Quite a bit of risk there too. There will be risks but there will be profits and risk can be managed. I am not aware of any producer packing plant proposal that suggested the government own the plants. I don’t think that will happen, I don’t think that should happen and I don’t think that will happen in any other province. The government is involved right now in that they are providing support to the planned expansion of the major plants. And certainly government, federally and provincially have been involved in the BSE crisis to the tune of Billions of dollars in ad hoc producer assistance. Which is more fiscally responsible, continue to dole out billions in subsidies or help producers participate more fully in their own food industry so they can find free market solutions to the problem of chronically low primary agricultural commodity prices?

Cowman, you say the government should not put money into plants that have little chance of success. You would probably also say that government should not have assisted producers struggle through BSE, that they have little chance of success either. But letting agriculture collapse is really not an option. Alberta needs agriculture and Canada needs agriculture. It seems harshly unfair that farmer/ranchers be denied the opportunity to slaughter and market their own beef product while being forced to sell live cattle to multinational players who capture all the profits for themselves.

[farmers_son]

I agree that it is not fiscally responsible for our Provincial government to fund slaughter plants with tax dollars. I feel that where the government can help is with feasibility studies expertise to assist in the development of business plans etc. A slaughter plant is a business where shareholders will either make money or lose it. Producers have several options at this point to invest in slaughter plants that already have done a lot of homework and have excellent business plans in place. I guess that I am of the opinion that the individuals that stand to gain the most are the ones that should take the leap of faith and put their money into these facilities. I realize that producers don't have a lot of ready cash these days, but if they are in the cattle business for the long haul they have to weigh their options as to what is the best way to add to their bottom line in the future.
We seem to go in waves as far as enthusiasm goes in the cattle industry. When Bush was here for a visit we were all on a high thinking that the border opening was just around the corner, but as the end of our year rapidly approaches and we see what our bottom line was for '04', I think we need to focus on what steps we can take to stay viable without the border open, and either get on the band wagon to get slaughter capacity built or weigh our options, which may include getting out of the business, getting an off farm job or just folding our tent and walking away, and for some, I am sure that is a reality .

[farmers_son]

Just to be clear, I did not say government should not help fund plants with tax dollars. I said government should not own the plants. Feasibility studies are needed but as others have said, "producers can't afford to pay attention, much less invest in packing plants." Ways need to be found to offer average producers equal opportunities to participate in value added production.

[rusty1]

well said farmers_son - if alot of people would put in a little money, (not so much as to hurt christmas shoping either), we could become "price makers", if producers want to fold their tents into greater surfdom then we truly are in a sad state of affairs.
The moment is here, the opportunity is ours, we and no one else will decide what the future of the beef industry will be. Not Govt, nor another multi-national, but we have the option to make that course correction now. Who's along.

[rusty1]

rusty1, for some folks reality is having to walk away from their farming operation. I don't intend to suggest it would be by choice.

[rusty1]

I feel total empathy for any who will have to walk away, a result of the poker game being played! I've totally lost my business since May 20th, at at 57 it's darn hard to bounce back. But I'm still fighting mad and will fight till my last breath to help our beef industry and ag community to "CHANGE COURSE".
It can be done "IF WE HAVE ENOUGH WANT TO.

[rkaiser]

Sometimes I wonder if those who have the want to, could just get together and force the apethetic to gain something.
I am not a big supporter of Unions, but is it not amazing how the Union in Quebec, after simply taking union dues, is now putting money in the pockets of their producers.
Mandatory ABP checkoff in Alberta hasn't done much about putting money in producers pockets, but a mandatory levy linked to shares in our owned packing industry certainly could.
Maybe even tying this money raising venture with some of the existing proposals which have that one main problem is not such a bad idea.
Could we start this thread up top again, seems to be of sustantial importance.

[intr3est]

Hi all, never posted here before, but have been following a few threads for the last couple of weeks, and wanted to add my two cents on this one. If i understand everybody correctly, we agree that we need new markets, a value added product, and an investor(s) that will progit, but will not gouge. Wanted to throw an idea out, and see what happens. What would happen if we (Canadian producers, Government)approached the Japanese about owning a plant in Canada? No ownership of live cattle, but able to specify criteria for purchase, including management, genetics, or whatever. If they want to test everything in "their" plant, let them. Why does foreign ownership, always mean US ownership. Anyway, I'll leave it at that for now and see what is thrown back my way.

[rkaiser]

Hi intr3est, good comment.
Dont' know about any other groups, but I can tell you that Beef Initiative Group has begun a nice correspondence with the Japanese Embasy in Edmonton. Three physical meetings with more to come. Conversation has been more about management than ownership, but like everything BIG C does, we are open to ideas.

[intr3est]

Rkaiser
just seems that an idea like this seems to cut out one middleman, the large packers. With control over the end product, just what they want. they except some risk. They have said we are far ahead of the americans with identification etc. I say, strike when the iron is hot, beat them to the punch. I'll even run a massage service for beef!