Corporate question

[SASH]

Got a little off track with that last post. I guess if you look at the packers, although they may have been making record profits from their Canadian income stream, they were losing money in the US. How is this different than the farmer who is losing money on his barley and hoping to make it up on his wheat? As far as them taking advantage of you, if you were getting ready to send your cattle to market and expecting $600 a head and one of your down on your luck neighbors came by and offered to give you $400 a head for them, would you sell them to him? Probably not. You would probably try to get as much for them as you could. This is exactly what the packers are doing. As far as a marketing board goes, it would help the producer by making sure he is making a profit on his animals and help the packer by giving him forward pricing on the cattle they are intending to buy which takes out alot of the risk and adds more certainty to their income stream which in turn makes their stock price go up. I know it sounds like a funny looking thing but I'm convinced that if the producers don't set this up, the packers will work at integrating it which would be much worse for us.

[farmers_son]

SASH: You said “Ethics and business are mutually exclusive... If you are expecting corporate business to be ethical, you must be living in a dreamworld.”

I believe that people who can explain away questionable ethics in others will have no trouble justifying their own lack of moral values. The Golden Rule “Do onto others as you would have others do onto you” is still one of the foundations of our society. Those who would justify the actions of Cargill and Tyson would probably have no problem do the same themselves if they only had the opportunity. The very fabric of our society is built upon moral and ethical business, religious and political values and expectations of ourselves and others. Yes, we are all human and sometimes fail to live up to the standards we should but to suggest that business has no ethics surely casts suspicion upon your own values for we all conduct business.

Arguing that business and ethics are mutually exclusive is an indefensible position. The actions of the big packers is nothing short of immoral, unethical and illegal. In the cattle business today as yesterday a man’s word is still worth something. The Golden Rule means as much now as it ever did, in business as well as personal life.

[SASH]

Arguing that business and ethics are mutually exclusive is an indefensible position. The actions of the big packers is nothing short of immoral, unethical and illegal.

I don't know what your background is that you would say that. Let me tell you, however, that I've been in the corporate world and am no longer there mostly because I couldn't get my head around the way the people who were getting ahead in that business conducted themselves. Again, I'm not defending anybody, I'm just saying that this is the reality of the situation. When I was in university, 'The Art of War' and "The Marquis de Sade' were mandatory reading. This is what business training is all about. How to get ahead and show no mercy. Why do you say the packers are unethical, immoral and illegal. What debt do you feel that they owe you as a producer, and really as long as they are making money, what concern is it of theirs if you go bankrupt. There are always going to be more people out there that will supply them with the product they need whether it be from Canada, the US or the third world. Tell me, when the packers get to a point where they are losing money are you going to dig deep to help them out and if not why not you seem to expect them to do it for you. Good Luck.

[grassfarmer]

A word that I don't think has been used in this thread is exploitation.
Exploitation is something that needs to be considered.
I was not joking when I said children in the third world are sold to "sweat shop" factory owners producing goods to be consumed in the developed world. And don't bother telling me these kids should be thankful they have a job and food to eat. This is slavery - how ironic that US corporations are perpetuating slavery in a modern world.

This is what global trade and corporate business are about - screwing the bulk of humanity so that the riches of the world get into a tiny percentage of the world population.
We also have exploitation of natural resources - water, timber, fossil fuels. The most "successful" corporations are the ones who are prepared to be the most damaging to the environment - again using up the worlds resources to make personal profit for a handful of individuals. Who gives them the right to do that?
If you can defend the corporations in these situations SASH you truly belong in your former occupation. Strange how anyone with these values would finish up a farmer - assuming you are a farmer.

[SASH]

If you can defend the corporations in these situations SASH you truly belong in your former occupation. Strange how anyone with these values would finish up a farmer - assuming you are a farmer.

For the umpteenth time, I'm not defending anybody!
I consider myself to be more of a small businessman than a traditional farmer. I would rather spend my time trying to find a way to keep myself in business through this crisis rather than sitting around bitching about how things aren't the way they should be. I will agree, however, that getting away from the farm for awhile has given me a little broader perspective than those who have never left. For what its worth, I agree that the third world shouldn't be exploited and that we are very wasteful of our resources in North America. But this is another of these 'should be's' that you dreamers tend to come up with. I'd like to hear what your solutions are to help out these third world people. Do we leave them alone? Do we create a welfare state for them? Do we try and let them get their economy up and running by creating jobs for them? The last one is what we are doing but it will take years possibly decades before they get up to an acceptable living standard. The thing is you are talking about countries that are basically pre-industrial revolution. How long did it take us to get from that state to where we are. The first assembly line production started back in the late 1800's so at least a hundred years. Again, I commend you for having a conscience about these things but how from an economic standpoint are you going to implement this Utopian vision that you have for the world?

[rkaiser]

SASH - You say that you would rather do something than sit around bitching like some of the folks you have labeled dreamers on this site.

What is it that you are doing?

What have you learned with your corporate experience and University education.

You say you are not here to defend the packers unethical theivery yet any time anyone uses words like that you jump all over them (me).

You can call what the packers have done since the border opened to boxed beef in Sept. 2003, legal all you want, but I call it piracy. How in Gods name was price established over that period of time. It had nothing to to with a functioning marketplace or even capitalism for that matter. It can not be compared to any of the situations you mention, which are all based on some semblence of market supply/ demand.
For all we know Cargil phoned Tyson one week and Tyson phoned Cargil the next to decide what to offer that week.


I hope that your small business/ farm is doing as well as ours has been these past couple of years, since I have no corporate experience nor University education.

If you have any questions about my operation, I would be more than happy to give you a tour, I have been taught since I was a child that speaking out for what you believe in takes a name, and I am proud to say that I hide behind nothing. Not very corporate, but that me - Randy Kaiser (403) 946 - 0228
Crossfield Ablerta Canada.

[kpb]

SASH has pretty much, once again, summed up the salient points of this argument so I won't repeat them. But I do have two questions and one comment to those who think the packers acted unethically or illegally.
My first question is why were prices for feeders so high before the border opened to boxed beef but after the first BSE finding? If the Canadian market was controlled by two or three packers, and was not functioning in a market-driven manner, as several of you have said, and if the packers are all a bunch of pirates why was anyone bidding more than, say, 10 cents a pound? If Cargill and Tyson were acting illegally then surely they could have collaborated to offer next to nothing.
My second question relates to writers who have said the packers acted illegally. What have they been charged with? If nothing, then why not?
My comment is this, there are many people who are shareholders in big corporations--these are ordinary citizens who expect these corporations to act within the law and make as much money as they can. This is a reasonable expectation and until the packers are charged and convicted I believe they have acted within these parameters.

[rkaiser]

I will answer your first question kbp, but the legality issue is all yours. I think they did act within the law.

As far as feeder cattle prices, may I suggest the eternal hope and optimism of the average farmer, along with tax implications which saw a need for farmers to either spend their money or give it to Ottawa.
Couple this with packers who now knew (as of Sept.2003) that they could be part of a functioning marketplace once again. They could now recieve American market prices, and force Canadian purchasers to pay for their product at that American price. Feeder cattle prices were thus established.

When I talked of establishing price kpb, I was talking about fat cattle.

My question to you is - How has price for fat cattle been established since the border opened to boxed beef in Sept. 2003?

[kpb]

rkaiser, yes, I think you're right in your assessment of why feeder prices stayed relatively strong. What I meant to ask is why fats stayed as strong as they did, after the first BSE and before the border opened to beef? But actually, as you point our, the same question could be asked now. The basis right now is, I think, about 24 to 28 cents. We know that there are only two or three packing plants buying so why is the basis up there? Shouldn't these packers be paying as little as they can (like next to nothing) for the fats? I don't know the answer to your question--it's one I would like to figure out too because it seems obvious to me that the packers, with a virtual monopoly, are paying too much???

[rkaiser]

Have a good story about this fat price establishment.

I have a very good friend from High School who has worked with Nielsen brothers for about a hundred years now. He has done everything from managing the market at Clyde to publishing their newspaper to touring Japanese officials through the plants in Calgry and Moose Jaw.

We have a half dozen discussions a year about the good old beef industry, and share a jug of beer whenever we get a chance.

One of our discussions led to establishment of price, and I believe it concerned the cow/bull market more than fats, but both are arrived at the same way these days.

He suggested that I should be kissing Brian Neilsen's a$$ for even offering 20 cents for cows. (This would relate exactly the same for an offer at the time for fats from Cargil or Tyson.)

I suggested that I would kiss Brian's a$$ if he were to offer the real price of maybe 1 or 2 cents per pound, or simply take the cattle from me for nothing. In that situation there would be complete transparency. The 20 cent per pound charity that Brian was supposedly giving me would then then be exposed for exactly what it was. A price to stay under the radar of the law, and a price that was substantial enough that ass kissers like my friend would think Brian a hero.

What does it gain any Cattleman in Canada to defend (oops I forgot you guys are not defending) the packers for their unethical business practices.

Oh yeah, I forgot to mention. I have sold 3 cull bulls, and 8 cull cows through the conventional market since May 20, 2003. Each of these animals has walked through the Olds Auction Mart with a huge bow glued to their back. Purple bows on the bulls last Feb. and red on the cows just before Christmas this year. If I am forced to give these fellows something, I simply like to call it a present.

Happy Happy Happy

[rkaiser]

Shoot kbp, take a look at Canfax. Our capacity is up and our fats are as close to being current as they have been for two years.

[kpb]

rkaiser, I'm not defending the packers, I just don't think they're any worse than the bankers or the big oil companies or big retailers or any of the other big multi's in our free enterprise economy...you get the picture. I see that capacity is up but presumably that is from the existing packers only. And your story about cattle prices makes sense so the packers don't cause too many waves. But I still don't get why they're paying .84 for fats when they could get them for, say .65 and still not cause a bigger ruckus than they already are. Why .84?
We really, really need a domestic packing industry controlled by producers but it's been almost two years since the first BSE and are we much closer to having our own plants? The government is more willing to write periodic cheques to producers than support a domestic packing industry. It's yet another mystery.

[blackjack]

rkaiser...did a little research on canfax... talking just Alberta here... Jan 15...42,179
Dec 11...47,792
Nov 27...51,626
Nov 6... 54,434
July 10...52,403
...maybe BFW can answer this question of where the fats went... how many feeders has there been put on the fed aside program...
... I wonder the same thing about the price the packers pay in the last year other than to keep the politicians happy...

[blackjack]

...oops...those numbers represent the amount of fats slaughtered in Alberta...

[grassfarmer]

kpb, Finally I agree with you we certainly do need a domestic packing industry controlled by producers.
As you say it really isn't happening though - I wonder why? perhaps cash strapped producers are too afraid to put their last dollars into a plant only for it to fail in it's first months of operation - because the transnational corporations will not accept competition in their monopoly and will surely crush the fledgling companies. Of course we already know the Federal or Alberta government don't have the backbone to enforce anti-competition laws. No wonder producers and even bankers are leery of investing in plants. And that's giving the Government the benefit of the doubt assuming they just aren't all that interested in seeing producer owned plants being built. Or are their corporate friends lobbying hard that they don't support such ventures? Who really is calling the shots here?