What happens next?

[grassfarmer]

How are the packers on our side? What has happened since last Wednesday that affects Canadian producers? The Canadian packer monopoly has dropped their buying price by $5-8 cwt that's all.
R-CALF haven't made a cent extra off us in the same timespan. We have all looked to the border opening to bring some form of relief but in reality it only means having three big packing corporations to sell to instead of the present two. Tyson and Cargill's US plants aren't going to outbid their Canadian plants to get extra cattle - why would they? the profits they make all go to the same corporate bank accounts. R-CALF have done some stupid stuff but I still think they have merely been a distraction at best or a front for more widespread anti-Canadian protectionism at worst.

[kpb]

There are basic problems in the beef industry in this country and they are not all related to the BSE crisis. Some of them existed before BSE when most producers were still not receiving a great return on their investment.
The problems, as I see them, are:
1. U.S. packers control the processing of our finished product.
2. the primary producer does not have the facilities or inclination to maximize his return by holding his animals to finish.
3. there are too many middle-men in the business--cattle buyers, auction marts, check-offs to beef associations, brand inspectors, etc. all of whom take money out of the pockets of the primary producers.
4. the price on the grocery shelf has no relation to the price the primary producer receives because producers do not have a stake, for the most part, in feedlots, slaughterhouses or stores.
5. there are too many cows in Canada because the price to entry to our business is too low. As Grassfarmer publisher Allan Nation has said, if you produce a commodity in an industry where there is easy entrance, the price of that commodity will always revert back to a near-break-even point. There are many, many herds of 20 or 30 cows being managed by people with off-farm income who do not care if they make money or not. Because of that, the price that any producer receives for his fall calves will always barely cover costs since he is competing against ranchers who have the advantage of never having to actually make money. The only way around this trap is to add value to your commodity (calves) by backgrounding or finishing them yourself which most people will not or cannot do.
I believe that primary producers should always hold their calves but I think it is unlikely to happen. Also, I think we have to have our own processing facilities and, eventually, our own, producer-owned retail meat brand. Imagine that--owning our calves all the way to the barbeque. I think consumers would buy our producer-owned beef ahead of any others. And I think we could all make more money. rkaiser--how about incorporating that into the the BIG C proposal--how about having a special BIG C labelling? Or maybe let individual producers slaughter their animals at BIG C and use their own labelling? That's one of the most attractive aspects of the Sunterra proposal--you could slaughter your own animals there and put your own label on the beef.

[rkaiser]

Good stuff kpb. I agree that the Sunterra custom federal kill is something desperately needed in this country. Our branded beef program is already discussing options with Sunterra.

As far as BIG C branding a product, again I say great. You have hit the problem with primary producer profits right on the nose. Not that we are all going to become wealthy if we own cattle all the way through, but we will certainly have no one to blame if we don't see profit. Profit which I know is there.