Beef Industry Conference

[rkaiser]

I get shit all the time for calling names on these sites, and oops, I did it again.

Mutinational smooshers was not very nice. If I only had one or two, or if the border opens, a few more buyers for my product I suppose I would do some smooshin too.

My wife gets pretty excited when we get another bull prospect call these days, and then another. I told her that we probably need 8 to 10 of those prospects for every bull we have for sale. This is true free enterprise. Somehow the defenders of free enterprise these days (ABP and the like) tend to forget that "next to" monopoly system that we have in the Canadian beef industry is no longer about freedom and the American dream. It is about control, margin, and profit without morality.

I don't know about the rest of you, but I would dearly love to give my shares in a MADE IN CANADA producer owned packing industry while making a living raising these darn cows in the mean time.

I used that Made in Canada quote because of the way ABP/CCA uses it when proclaiming their own Made in Canada solution. I added a few words to theirs on a napkin at the conference.

ABP/CCA Made in Canada Solution, financed by American Mutinational money, and driven by harmonization with the AMI led USDA.

[BFW]

Randy, I said it before I admire the effort that all involved with BIGC have put into this. I just don't agree with the idea of the check-off funding. Also you don't have to convince any of us multi-national smooshers of your concept, there are too few of us to make a difference politically and we have used up our political capital pretty much the last couple of years anyway. For the BIGC concept to fly you have to get a good piece of those 100,000 primary producers on side.

[gwf]

BFW: How would you propose to fund it then?

[BFW]

Fund it like any other business with a combination of equity and borrowed funds. I believe that is what the other plants being proposed are doing.

[gwf]

BFW: Are you going to put up the equity and sign the note at the bank for the balance?

[rkaiser]

I wonder what your reason is for not wanting a checkoff/share to build competition for the existing non competitive marketplace BFW?

[BFW]

Not for any of the proposals currently on the table GWF althought we almost did.

[BFW]

Randy, I cannot get my head around why any levy type funding is required for this undertaking. First of all I believe any business that is any good should be able to assume debt and repay that debt from after tax profits generated from operations. I know that this is where the problem lies in convincing the lending institutions that a venture such as this will be profitable. Secondly my understanding is that this plant will kill exclusively OTM cattle (or at least mostly OTM cattle)yet expects to collect a levy on cattle of all ages at every point of sale the same as the ABP does now. I feel that this is very unequitable. Finally and most importantly the BIG plan calls for this plant to be leased to an existing packer or some company with packing and marketing experience (which is a good idea I think). Presumably then the terms of the lease and the annual lease payments would be such that sufficient income would be generated to service the debt and provide a reasonable rate of return to the company shareholders. If this is true then why is any type of levy funding or government bridge financing required?

[blackjack]

BFW...I imagine there was talk about how many packing plants could be built before there would be more capacity than cattle...and if or that ended up being the case...would american cattle be brought up if the Canadian dollar continues to rise to fill the void...while us cowcalf guys like to point our fingers at the two American multies...they are actually now paying over the 10 year average in the market place for fats... my question for BFW even if we build more packing space for the OTM here in Canada...with the OTM still closed to the states what makes the industry think the local packers will pay anymore to the producer...

[farmers_son]

BFW: Fair enough if you cannot get your head around why funding is needed. Help me with this. I made a comment earlier in this thread about how government provided assistance to a priviledged few producers in this province so they could have irrigation on their land. Is the Western Irrigation District a purely business venture or at some point in its development was government support in the form of grants and loans or actual construction of damns and water works necessary? If government support was necessary then why would you deny the same support for producers wishing to add value through a producer packing plant?