The Big Lie

[kpb]

pr_fire, It's true that the U.S. needs us in a small way right now but to think that they need us more than we need them is patently ridiculous. Our industry is in a state of crisis and has been for two years because we lost our biggest customer. Do you seriously think that we will bring the U.S. industry to its knees by what?--keeping the border closed?
If we do not have access to our biggest customer we will continue to suffer, continue to grow our domestic herd and ultimately get low prices for our commodity. It's an absolute red herring to say the U.S. needs us--I've been hearing this from all the cattle groups for almost two years and it makes me sick. The U.S. will get along just fine without us, just as they have for the last two years. Oh sure there's the odd time they'd like our cattle but they'll get it from somewhere else or do without and just take the higher prices (supply-demand) if need be. We've got a vastly inflated view of our own importance in the scheme of things. We need them a heck of a lot more than they need us. Haven't you learned that from the last two years? And if you think closing the border when they want to open it is going to benefit us, you live in a different reality than I do. We've got a heck of a lot of cattle here with no where to go.

[cakadu]

It's important to remember that the US signed an agreement with Australia with respect to beef imports from that country not that long ago. If the US is looking to fill a bit of a hole right now, they probably don't have to go too far to find what they need.

[pr_fire]

kpb, I calve over 2300 commercial cows and have herd of 540 purebred cows. I have also found my own markets for my beef over the past 2 years. I am doing better now than ever before. Sure my international sales of live purebred animals have stopped, I now sell more semen and embryos than ever once thought possible. I also work in the finance industry mainly involving Can/US trade. I work with US & Canadian government officials on a daily basis. I base my comments on statics that I deal with every day. Canadian producers have made them selves believe they need the US. Our domestic demand for beef and beef products in Canada out weighs our supply by over 35% We have new packing plants going up as we speak, if the border is open, these plants will not be able stay open.

I get out and promote my beef daily, not sit and bitch about what needs to happen. All the smaller producer needs to do is take a good long, hard look at the big picture. Do some market research and a little number crunching and you will soon figure out we don' need the US, it just takes some creativity. We are just getting back on our own feet with out the help of the US we just need to continue to be self reliant. Purebred prices are up above average simply because we have steered our marketing aproach in a different direction, promoting our genetics instead of our live animals. The US does need us more than we need them. Shelf prices are higher than ever because their domestic demand out weighs national production by over 60%. I doesn't take a genius to do the math. They are currently slaughtering as light as 600lb heifers because they have no other choice. If we keep it closed after they open it, all restrictions will be lifted within a year and all cattle will be able to cross regardless of age. All the stats prove, the US needs the border open to slaughter cattle. If we keep it closed, they will open it to all cattle just to get the feeders and slaughter animals.

Get creative, we've lasted 2 years and things are starting to get back to normal. Another year or two won't do any further damage. If the media were made keep their mouths shut, markets would have never went as low as they did. Think about it!

[intr3est]

I'm still wondering what would happen if Canada tested everything. Would we gain the Japanese market back and some of the amount that the US had been selling into Japan. Of course the US would not be far behind. We could then almost guarantee a safe supply of beef and create new markets in process. We also wouldn't need a mass cull. Correct me if I'm wrong, but I've heard it said that the amount of beef (live and boxed) that we export to the states is a about equal to total US exports. I haven't been able to find accurate numbers for 2002

[pr_fire]

If Canada were to test everything, I do believe we would acquire some of the Japanese import market. Japan imports are 14% of the total World beef trade, US is 32%. All we have to do to sustain our own market is reduce imports.

Beef imports represent a substantial proportion of the Canadian domestic meat supply. Over the past three years, bovine meat imports represented almost 30% of the beef consumed in Canada. Imports are largely prime cuts of boneless beef and veal or portion-packed products for the hotel and restaurant industry.

Notwithstanding the export ban, Canada was obliged under international regulations to continue to allow red meat and livestock imports into the country. This meant that Canada was unable to introduce an import ban policy on these products to help address the domestic oversupply.

Under the North American Free Trade Agreement (NAFTA), there is no restriction on the import of red meat and livestock from the United States, Mexico and Chile. As a member of the World Trade Organization (WTO), Canada is also obliged to accept negotiated quantities of beef from WTO countries.
Under the WTO obligations, Canada has a tariff rate quota (TRQ) of 76,409 tonnes for non-NAFTA fresh, chilled and frozen beef per annum. Imports entering Canada within this TRQ quantity are duty-free, while imports above this quota are subject to duty. The tariffs are punitive and very little beef enters Canada unless it is duty-free. The Minister of Foreign Affairs and International Trade, however, may authorize supplemental duty-free imports of non-NAFTA beef over the TRQ level.

By the end of July 2003,duty-free imports for non-NAFTA beef had already exceeded the annual quota by almost 30%. The primary sources of these high imports were beef products from the European Union, Uruguay, Argentina and Brazil—countries all subject to the TRQ. At the end of July 2003, the Canadian government announced that it would not authorize any further supplemental duty-free imports of non-NAFTA beef, but still continues to do so.

[pr_fire]

Canada's exports to the US accounted for 65% of total US imports to cover domestic demand.

[cowman]

Pr_fire: Are you saying we could eat all the beef we produce here if we didn't have any imports? I thought we were a net exporter?
When the federal government scrapped the CROW I thought we increased our cow herd to the point we had to export?
I always assumed that was how it was, but now you are saying we could basically eat our way out of this mess?

[intr3est]

pr-fire, I agree with you that we have to keep our domestic consumption up and our imports down, but with the all the news lately, I'm still wondering if testing everything might not be a bad idea. I think these last two cases are getting the consumer paying a little more concern. a recent poll on on news website
http://www.canada.com/news/agriculture/index.html

How concerned are you about BSE in the food system?
47.00 %
Not concerned
27.86 %
Moderately concerned
25.13 %
Very concerned

[rkaiser]

Wow pr_fire, some pretty interesting ares to explore.

Randy Kaiser here, Beef Initiative Group Area rep, and also a marketer of my own beef, albeit on a smaller scale than you. 210 purebred cows with all nonbreeding stock going to a vertically integrated market in Calgary, and bull customers tied in to the program as well. Our group currently markets about 15 head of fats a week through restaurants and specialty meat shops.
I would agree that the fat cattle sold are fetching better prices than we ever have, but what the hell are you doing with your cull cows?

Anyway, I would like to discuss this unlimited import of American beef thing with you. Are you saying that we are selling cheap prime Canadian fats in a box to the USA through Tyson and Cargil, only to turn around and buy it back in a different box, less the low end cuts? What kind of tonnage are we talking here? How can this be with pricing etc.?

I am all for keeping the border closed and changing policy in this country, but we certainly need the policy changed NOW.

Beef Initiative Group Canada has always supported BSE testing to unlock export potential, but we have run into a wall called the ABP/CCA. What is you position or influence with these guys?

Beef Initiative Group has also continually harped that we are far too dependent on the American consumer, and have tried with all of our might to convince government to bridge finance a project to build 1 or 2 huge packing plants that would be owned and paid for by the producers of this country by way of a levy on every animal sold. This levy would become a share in the plant once paid down.These plants would be set up with BSE testing, and be prepared to ship all, or most of their product to offshore markets.

I would imagine that with the sheer numbers of animals you have, and the success you have acheived, you must be involved in some type of packing initiative. Do you see merit in producer ownership, or do you beleive Canadians with money are the ones who need to step up to the plate and put a boat in the water beside Cargil and Tyson?

[intr3est]

Just thought I'd through some numbers out here: Canfax #'s. (#'s are metric tonnes)

Canadian Consumption 2003: 748mil (23.4 kg. per capita x 30 million)
Canadian Production 2003: 1,145 mil.
Canadian TRQ's: 76 mil
(If I've made any mistakes in the numbers or my calculations, let me know.)

So, if we did not import or export anything we would need the consumer to eat about 13.2kg more per person! Put another way it would be an additional 57% of what they are eating now. I don't think we can eat our way out of this problem, unless the immigration department has a busy year!