Beef Industry Conference

[farmers_son]

Of course I meant to say dams. Sorry.

[rkaiser]

It's amazing how we always go back to comparing business that "made it on it's own". These are supposedly the only true free market businesses in the world.

Number one - everyone - BIG C is not asking for government money. BIG C is asking for a government loan, to be paid back by the levy which will turn into shares in the company. Spin this concept every way you will, but it is a very simple concept and can always be brought back to that.

As far as looking up to the business model of Cargil or Tyson for their unbelievably successful runs inspite of supposed tight margins at times between feedlot and retailer - let's consider this.

These giants has teams hired to work the governments of countries over, all over the world. Tax concessions, and grant are a big part of the full financial statement of these companies from building to operating.

Then I always consider the free enterprise FACT of giving something to get something back. I feel that the 10 or 12 per cent that I spend on promoting my bull sale is small compared to most. Is Cargil spending 10 or 12 per cent? Do they really spend anything on promotion of beef? I guess their first excuse would be the fact that like most feedlot operations, they are margin players. Margin players do very little advertising, they simply work the numbers, AND DO NOT have any consideration for who they are buying product from. Feedlots can brag all they want about the good relationship they have with their one or two buyers; even talk of years of working closely in an integrated model. However we all saw the meltdown of these marriages when Cargil and Tyson saw an opportunity for profit.

I will end once again with the notion of producers, feedlot, and cow/calf, promoting beef and paying a big chunck of the bill for advertising Cargil anf Tyson's beef. If, and I will say when, we have a functional marketplace once again some of the dollars spent by BIC and CBEF MAY help those same producers.

JOHN NEUMAN, chairman of BIC, can call me frustrated and misled all he wants, but the fact is for two years not one penny of our checkoff dollar has made it back down the line into the pockets of producers of this country. With packers paying a price based on their whims, rather than supply and demand, all the extra dollars made from promotion stayed in the pockets of retailers and packers!

Thes are the types of things that give Cargil and Tyson advantages over any other business ventures,and there are more. You can always use the heartstrings of society to show the need for Food Production to have a little bigger piece of the pie than other business. We have done it in basic agriculture almost to the point of too much.

It's time we used some of the rules that Cargil and Tyson have thrived under, and quit begging like a bunch of dogs. The money generated by a checkoff/share would be huge, and would not only fund an OTM plant BFW. This is a concept to take some control of the industry back. Challenge the rights of Cargil and Tyson to our taxpayers dollars and profits, from a sleeping group of giants.

Wow cowman, I think I got through that one without any anme calling at all.<><>><
Probably a few typos though, it came pretty fast.

[rkaiser]

I just want to add before I head off to chore that I am with you Gerry 100% on this issue of mandatory checkoff. This concept is not structured to help a few. It is structured to help Jeff, and Ben, and Darcy, and every other producer in this country. If these fellows do not have the time or energy to read, ask, or understand the ideas behind this thing, then they darn well need to be led to prospertity by a majority.

I only wish that ego's could be shelved and conversation could start between what governement has chosen to be Industry leadership (ABP/CCA) and those who see a way out of 15 or 20 years of decline in the beef/cattle industry in this country.

I would love for a committee to be set up by ABP/CCA to actually consider this thing without worrying about who thought it up.

Have a great day everyone.
Randy

[cowman]

Ah, you might make a politician yet Randy!LOL
But I do agree you told it out how it is! The ABP and the checkoff have done a lot of good...for a certain sector of our industry?
Consider the mandatory tag. Who paid for the tags? The producer. The feedlots, being margin players just factored in the time and cost and deducted the same from the bottom line. Who really benifits from food safety via the traceback? I would suggest all players do but only some pay for it? And the ones who don't pay for it have definitely benifited more in the last couple of years?
Who benifits from many of the ABP policies and lobbying efforts? Take for instance the issue of grazing leases. How does it benifit your average cow/calf operator to have welfare cows competing against your own? Is this fair? Would a better idea be to cancel/buy out the grazing leases and put them up for a 5 year tender bid?...minus the oil and gas revenue?
Why does the ABP checkoff go towards national programs? Does every other producer in the country pay the $3 checkoff or do they get a free ride on the backs of Alberta producers?
If we can have a checkoff to pay for Cargills and Tysons advertizing, surely we can have one to buy a plant and keep them honest in the marketplace?
The beef industry in western Canada evolved into the system we have today. There actually was a time when all the cattle were fed out on the farms. Were the big feedlots really more competitive? Or was it just the fact they had more clout in the marketplace? I would suggest the farmer feeder was in fact more competitive but couldn't get a good, consistant, fair price? If they passed a law tommorrow that made packers pay a railgrade price on every animal sold you would see the feedlot industry dwindle? The fact is the farmer feeder would beat them hands down. Why? His own money, his own labor, his own cattle, his own feed, his own effort! Cut out all the parasites along the way.

[BFW]

Blackjack, those are good questions and frankly I don't know the answer. Obviously more capacity for OTM should increase competition and therefore prices but until OTM beef can flow to the US I would guess prices would not increase dramatically. Also remember, the theory behind the producer owned plants is that even in periods of depressed prices the producer should do relatively well as the increased profits from operations will be returned to the shareholders.

Farmer's Son I think that the taxpayer has gotten a much bigger bang for his buck for his investment in irrigation infrastructure than on money invested in a packing plant for OTM cattle. I get your point though and don't really have a problem with the government providing some grants to assist in the construction of a plant I just don't want it to be funded by a checkoff from the steers that I sell. By the way your example of the WID is a good one. As a business venture it would likely have failed as it does not deliver water to enough acres of land (about 90,000) compared to the cost of the delivery infrastructure. Furthermore many of those acres require little or no irrigation water most years to grow a good crop so the farms that have access to the water were not signing up the irrigation rights thus not generating enough revenue to maintain the system which was built by the way, by the CPR in the early 1900's as apart of the deal that saw the CPR receive huge tracts of land along the track rightaway in exchange for the construction of the railline.

[grassfarmer]

BFW, going back a few posts you end by saying "For the BIGC concept to fly you have to get a good piece of those 100,000 primary producers on side."
That is what annoys me most about this situation - it is clear that primary producers do want a cow plant built - look at the surveys returned to BIG-C stating that. Yet ABP/CCA have no interest in these views and their leadership decide unilaterally that the industry is opposed to the concept of producer owned plants. Democracy is clearly not working here that is my biggest frustration.

[blackjack]

...thanks BFW for the reply... the thing I never hear or read is where the beef out of the producer owned plant will end up... what ever the plans are they had better be more efficient than the competition...or they will end up no different than the wheat pools...

[rkaiser]

I still believe that there is potential to sell OTM beef to Asia, and the EU - IF - somebody had the guts to stand up to the AMI led USDA and consider BSE testing to satisfy export demand.

The comeback to this statement is and always will be - Who has said that they would take BSE tested beef? My answer is as always - Let's ask!!!!!!!!!!

[BFW]

I think the bigger question is Randy, can raise, test, process and deliver this type of product to these markets and be competitive with the likes of Australia, New Zealand, Brazil, etc?

[rkaiser]

From conversation with Ted Haney and Ben Thorlakson, I believe I will answer your question with a yes Jeff.

Yes we can compete with a nice barley fed D1 or D2. Low end crap, maybe not, seems to be lots of that all over the world these days.

[rkaiser]

Oh yeah, we take a little story along to our BIG C producer meeting about Maggie Delaney. This is one firecracker of a gal who started a market for grain fed D1 and D2 cows to South Korea prior to BSE.
She had such demand that near the end (May 20/03) she could not fill orders with her own purchases so had a deal with Garnet Altwasher over at Lakeside to simply buy D1 and D2 carcasses to fill her orders. She felt that that one customer alone had a home for over 100,000 D1 and 2 cow carcasses alone. This was at pre BSE cow prices mind you!

South Korea is even more strict than Japan as far as rules about BSE testing.

[BFW]

Randy I have just finished rereading all of the info posted on the BIG website though I admit I did not realize that the plant proposal had been updated from what it had been before and some things are a little clearer now. Certainly the option of deducting a larger levy on cattle processed only at the BIG plant is a more palatable option for me at least although probably does not provide as much certainty for the plant itself. Also I now have a clearer picture of what BIG's thoughts on a lease operator entail. It's too bad that BIG did not try to get on the agenda of the ABIC conference (or did they?) as it would have gotten more discussion likely at one of the bear pit sessions. Perhaps BIG should try and persuade the various ABP zone directors to hold some special zone meetings to discuss this and other timely topics rather than wait until fall? I could put a word in to Zone 3 if you like.

[rkaiser]

I really appreciate your offer Jeff. Sometimes the passion of our goals sends the wrong message to those we wish to reach. I will have to say that Cam is probably even worse (or some would say better) than me. I had a good chat with Eric Butters the other day in Red Deer, and would certainly come prepared if invited to some sort of zone meeting to discuss something further. Open border or not, consideration for change must be on the table. I've heard from some pretty high standing Cargil employees lately who would welcome the chance to work for, and with, a Canadian company. Cargil and Tyson are not the enemy but they could very well be the competition rather than the only store in town.

[farmers_son]

Isnt there a contradiction in your packing plant proposal? I read that it is proposed that the plant be leased by a lease holder who will be responsible for all aspects of the plant or alternatively by a foreign team of professionals with expertise in creating off shore markets.

Yet on the other hand the proposal goes on to spell out just how the plant will be operated and the beef marketed, i.e. BSE testing. Wouldn;t that be up to the leasee/operator? Or would a commitment to test for BSE be a prior requirement to qualify to be a leasee?

[grassfarmer]

BFW, Pleased to see your support for BIG-C but in my opinion you are wasting your time trying to persuade ABP of the merits of such a plan. Look how much effort was put into raising this and other issues of producer concern at last Falls producer meetings to no avail. Even if resolutions were passed at zone meetings they were binned before or at their AGM. It is clear the Alberta government and the dictators(directors) of ABP have another agenda and will only support the expansion of Cargill and Tyson. I really hope the Federal government which appears to have more sympathy to the BIG-C cause will step in and bridge finance this proposal. Failing that I think the proposal is dead in the water. Sorry to be pessimistic but that's the way I see it.