this is progress?

[Bez]

So, do we keep operating the same way as we always have?

New slaughter capacity is fine - if and when it comes on line. Another year or two? Yeah, a couple are up - but not the numbers needed.

Where are the new markets for this additional slaughter capacity?

The answer is we cannot keep operating like Gramps did - otherwise we go down - slow but sure that is the way it goes.
Surely the naysayers can at least LOOK at new and different ways.

So far it appears there are a few who are quite content to maintain the status quo, critique any new thoughts and yet they are not prepared to offer up ideas - How about it?

Instead of saying something cannot be done - give us an idea. As an old boss used to say - "when you come to me with a problem, bring me at least two potential solutions".

Bez

[kpb]

Bez is absolutely right--as I said earlier the ideas put forward by 15444 are worth putting forward to all beef producers to see what they think. Grassfarmer you basically say that you think the supply management idea put forward by 15444 is unrealistic, then go on to say that the control of our ag industry by middlemen needs to be curtailed. Talk about unrealistic!! Do you really think the government is going to do anything and I mean anything about the multi-national packing plants, let alone big retail outlets, etc.
What evidence have you seen in the last two years that makes you think there is a hope in H. that the Cargills, Tysons, etc. will ever be controlled by anyone? Jeez the government was even afraid to get them to open their books.
At least the idea of supply management has a model already working in Canada so I don't think it's unrealistic at all.
Nicolas, you seem to be mostly concerned about fluctuating cattle numbers based on moisture conditions--as someone who pastures grassers every year I don't see that changing at all--why would it change the number of steers I bought? That has nothing to do with supply management of the cattle herd. Right now we buy the number of steers needed to eat the amount of grass we have and that varies year to year. So what difference does a quota of cows make to that?
As to your second point about this hurting new or small entrants I will say to you that if current conditions continue, no one will want to get into this industry full time and it will only be made up of hobby farmers. Don't expect to ever be taken seriously if that happens and don't expect to ever be able to make a profit because the price of your commodity will always be the price that the guy who is willing to absorb the biggest loss is willing to take. That guy will be a hobby farmer with off-farm income who doesn't care if he makes money or not.


kpb

[nicolaas]

I just believe that a quota system will not keep more people on the land in the long term. For example,there is less and less farmers in the dairy industry as the years go on, and it is not uncommon for the small ones to go bankrupt anyways. Kpb, I have 274 cows and have to work off the farm to support my habit, I do not see the issue with off farm income. It is not my RIGHT to farm full time. If my operation is not making money right now, it is my problem to deal with. If it continues to not make money, I will sell it before I get in too much trouble. Bez, if you do not like the free market approach to farming put forth earlier (producer owned packing plants, testing), the only other idea I have would be to have a voluntary cull of the whole beef herd. Put $2B in pot, pay $1100.00 for each cow/calf pair destroyed, and the govt pays this out till the moneys gone. This can be done by this summer, and will bring our herd down by nearly 2million animals. That should be enough to match our existing packing capacity, and bring up prices to pre bse levels prior to this fall. Just guessing at these numbers, but its the thought that counts. - Problems with that will be an upset public. A benefit of this over the quota system is that as we gain back and develop export markets, our industry can still grow. Guys would be able to sell out this summer and get more for their stock than they would otherwise get. And anyone would still be able to get into raising cows and expand as much as he wants without buying up costly quota (which by the way is a major trade irritant).

[jensend]

the situation is that canada has too much land. this isn't england or europe or even the united states where land for agricultural production is a scarce commodity which makes people realize food production has to be a decision, not a residual use of the land. take land out of cattle production - what will it be used for? then will you supply manage grain production, tree farms, golf courses? you'll have too many of all of them. the most rational course of action is to use the land to its most efficient potential and market the production. canada has too much land and should be marketing excess production to where there isn't enough land. if you reduce the number of cattle you shrink the economy of all the associated industries and that will be a huge step backwards. rational thought suggests we have this resource - land - and we should use it in an efficient productive manner. doesn't have to be cattle but you can't subsidize everything and that is essentially what supply management does in the name of keeping order in the marketplace.

[Bez]

In the end, I believe profitability is the key.

Find a way to be profitable and we make it - otherwise we do not.

So far, even in good times profitability is difficult - it is there but now there is none.

So, what is the answer?

I have no problem with a cull - and I give a damn what the public thinks. Unfortunately there are many of us that are simply always thinking of ways to improve profitability - then we come up with many more reasons why we should not do what it takes to achive profitability.

When business becomes a money loser they shut down or move.

So, what do we do?

Like I said before - I am ready to explore all alternatives.

Bez

[cowman]

Interesting discussion! Supply management is a no show...period! It just isn't going to happen. Do any of you honestly believe a Canadian government is going to risk international trade for a few old cow farmers? Isn't going to happen.
Personally I've always liked the idea of a cull...but that isn't going to happen either!
Not sure where all you guys are from but in Alberta our "duly elected" cattle group has the governments ear and they call the shots. Now I assume we are all devotees to democracy? So therefore, realize the majority of producers have spoken and you need to live with it? And if you didn't vote in the ABP elections, do you have a right to complain?
The last few comments from you guys have got it right. If it isn't working for you then you need to make some tough decisions? Quit the business or find a way to make it work. Some guys on here have come up with ways to survive? And some of us have come to the conclusion that the effort isn't worth the payback. No one holds a gun to your head and tells you to raise cows?

[15444]

Well, if you had listened to Rex Murphy's Cross Canada check-up yesterday you would see what people think should happen to agriculture. Old biddy says she would pay an extra $25 dollars on her grocery bill per month if she knew it was going to the farmer. But then the young ones (ahem 20-40) are the exact opposite, and the ones that will be around in 20 years?. They ask why government is bailing out the business of agriculture when Uncle Larry's video repair shop down the street didn't make it? I agree with them wholeheartedly. No one in agriculture has come up with a long term solution yet. Building packing plants isn't a long term solution because if that border isn't sealed for good to live cattle, the same ones on Agri-ville that talk about the glory of the free market and freedom in beef forever, will be the same ones who ship their cattle south or to the big packers for a premium, because money talks when the banker has his hand in you grabbing for more? I know because I will be one of them grabbing for that American green if I can get the chance, because bills have to be paid and if the Americans and big packers can give me an extra 5-10 cents per pound on my calves over the domestic guys, then that's where they'll go? Lots of guys that will come out of this with more debt then they had going in....makes sense to make the most money back as possible?...or lose the farm?

[grassfarmer]

kbp, Is there a model of supply management in beef working anywhere else in the world? I'd be interested in finding out.
It just seems to me you are tied up on the cutting cow numbers side of it rather considering the price of beef. If we went that route and cut cow numbers and the packers only offer the same price as now what do you do?
The world is awash with beef - reality is for your supply management proposal to work you would need to stop imports and have a herd smaller than domestic needs to raise prices. Just as unrealistic as my proposal.

[kpb]

grassfarmer, I just don't see a supply management proposal being unrealistic in Canada. The Alberta ag minister back when this BSE mess started, stated that she would consider supply managment if the beef producers asked for it. As far as around the world goes, I think you probably know a lot more about that than I do. What do European beef producers get for their product? Or UK? Are they subsidized?
grassfarmer, I frankly don't see any chance of limiting the power of the multi's in this country. Do you see any indication that the feds are going to do anything about this--cuz I sure don't. Supply managment may be pie in the sky but I don't think so--it is not an idea that is unknown in Canada and I believe it is workable. Of course we would have to limit imports--what's wrong with that? Every other country around seems to have no trouble limiting our exports whenever they want to. We need to develop a different mind set in this country--we need to start looking after our own farmers the same way every other nation on the globe looks after theirs. I'm sick of being the world's patsy.
Nicolass, your comments are simply stunning to me. You have 274 cows and work off the farm to, as you say, support your cattle habit. Would'nt you rather not have to work off the farm in order to make a decent living? That's what we're trying to come up with here--a way for beef producers to make a decent living, like every other worker in Canada, without having to support their business with another job. You should be the biggest supporter of supply managment because it would enable you to work on the farm full-time. Unless you like working two jobs?


kpb

[grassfarmer]

kpb,
I was genuinly asking if there were other supply managed beef industries around the world - I don't know of any but if there were some I would be interested to study them.
As far as European beef production goes - it is all sold at less than cost of production by farmers and the subsidy system tops up their income.
Growing up in a subsidy system we were led to believe that this was OK, consumers were the ones really being subsidised through access to cheap food.
Since coming here and seeing how the North American model works I realise the ones really benefitting from the system were the retailers (they hold the power rather than the packers in Europe)
I just wish you guys would see that the reason producers here are poor is not because we have too many cows,too much land, too much grain or that consumers get their food too cheap - it's because the intermediate players make an outrageous sum out of the processing. Due to their monopoly position - look back at my bread example from yesterday and tell me I'm wrong.
As far as moving ahead I see the Government no more likely to address supply management in beef than to tackle the multi-nationals. All producers are frustrated at lack of Government backbone and resolve in this industry - how can we get them to change and stick up for us - that is perhaps the biggest challenge.

[kpb]

grassfarmer, I too was being genuine when I asked what the situation is in Europe and UK for beef producers because I don't know. You said that overseas the producer is topped up with subsidies on the animals he sells at below cost--does this give him a decent living? And, secondly, are there barriers to entry for new producers or is everyone who produces a calf eligible for a subsidy?
grassfarmer, since BSE the packer has been making an obscene profit--I think we all agree with that. But I think the problems with our industry run even deeper than that. The fact is that even before BSE, even when we all actually made some money, we were still not getting a decent return on the capital we have invested. This is a hugely capital intensive business and I think we need to devise a system that we control that enables us to make a decent return on capital.
I recognize that no one owes us a living and I recognize that no one says we have to be ranchers or that we are owed a profit. But this is our industry and we could, if we wanted, gain control of it from the calf on the ground to the meat in the stores. That's what I think should happen--we should control our product from the field to the store. I think supply management is a part of that, so is owning our own packing houses and our own retail outlets. And in case anyone thinks that is too socialist consider this--all big businesses and multi's in this country are trying to do just what I suggest we do as a block--they are trying to own their production through contracted beef or other raw materials, right through to the consumer. And they want to control the supply and the price of that product whether it be gas at the pumps or beef in the stores. So why are so many of us so opposed to this when I suggest we grab the whole pie for ourselves and make some money rather than giving it to everyone else?


kpb

[grassfarmer]

kpb, UK producers aren't making a decent living either. Same problems as here - non farmers are buying up the land - farmers can't afford it, hard to see where the next generation of farmers will come from. New entrants are virtually non-existant since the late 1980s - it is much easier to get a start in Canada than in the UK. Quota prices and high land costs make entry impossible although beef and sheep quotas are being abolished shortly.
Some of the other European countries look after their producers better - notably France, like Quebec a different culture and way of thinking to their neighbours.
The Germans made a big policy change,in Fall 2003 I think,when they decided to no longer pursue the "global marketplace" but to supply their domestic market after realising that they could secure a more sustainable future for their producers this way. They realised that global marketing is merely transfering wealth from a huge number of rural producers into the hands of a few multi-national corporations. Germany has a huge population which Canada hasn't, relative to their land base, but I think that is a great move in the right direction.

I agree with the rest of your post - the middlemen are taking all the profit out of the job. We are just suggesting different ways of tackling the problems I think.
I have tried a little of the pasture to plate deal and can see the potential of it. Equally there is not room for us all to do that and many don't want to. Personally if we could make the commodity system work so that producers got a fair return I would much prefer sticking to the production side of beef rather than the processing and marketing sides.
I think we agree that Government has to be woken up and made to intervene somehow - I just think tackling the processors head on is the quickest and most direct method. I don't think it will be easy.

[cropduster]

Grassfarmer.......YOU ARE WRONG !!(re: bread)Western farmers supposedly have a monopoly in their grain sales.Why don`t they just demand higher prices??DDUUHH. Because they have to sell into a world market.Malsters,if offended at domestic prices,simply import their supplies,as they`ve done recently.The large packing companies invested here because of profit.If you wish to nationalize them, that will be the ceiling on free enterprise development forever.The `invisible hand` of supply/ demand will be adversely affected ,in the long term ,to the industries disadvantage.

[grassfarmer]

Am I wrong? Western grain growers have a near monopoly marketing body (CWB)but continually get shafted by a handful of bigger, more powerful transnational corporations. If we tackled these pirates the returns producers get would rise. Why shouldn't grain growers aim to get 10 cents instead of 5 cents off each $1.40 loaf that is sold? If you argue the free market will sort everything out good luck to you. There will be less producers left every year - because of value theft from the production chain by processors. I understand many think they are getting the same price for barley they got 20 years ago because of a world oversupply of grain - yet world stocks are at their lowest level since the 70s. We have got to get smarter and get organised as producers if we are to survive.

[15444]

'Get smarter and get organized'...now your thinking in the right direction grassfarmer.

Ok grassfarmer...you have to understand how North America works. Our ancestors left the Old World to carve out a New World where freedom rules, industry could grow and there was no limit to the amount of money a man could make. These principles carry on to this very day when we see CEO's and Presidents of multinational and national corporations rake in big bucks, politicians get big bucks, executives for every single retail business, etc. etc. That's the nuts and bolts...cut another guy's throat and climb over his body to the top. Absolutely nothing wrong with it, although there is a growing portion of the population that wants to limit that part of society...which is basically the fabric and soul of America. Do we go that route? It's going against the very principles of capitalism...which is North America.

Now, the problem in agriculture is that all producers are willing to cut the legs from underneath each other before they could ever consider forming a single powerful group to represent their interests. You have big groups representing packers, AMI or CMA. You have big groups representing consumers. But what about agriculture? Nothing. Bunch of organizations that fight for memberships and checkoff money. So agriculture whines and screams for government to limit the capitalistic nature of the market.

Government isn't in this country to solve anyone’s money problems. Maybe in the Old World with subsidies, but in the New World the government's sole job is to make sure that the people's way of life isn't threatened and that certain core systems are in place. Those groups that don't fit these criteria get to fight it out in a battle of the fittest. Don't kid yourself, agriculture is not part of this group. At one point in our country's history it was, but we now operate in a global market where products can be brought in at a person's whim if someone in the chain gets too pissy about their prices.

Certain companies have been able to avoid this entire system: with unions like Canadian Auto Workers in Bombardier, Air Canada, the Auto companies in Ontario and Quebec etc etc...or if government gets a healthy kickback for their goodwill efforts to keep poor companies going. Agriculture can’t even return the benefit of subsidies through giving election seats to government because the Feds don’t need rural votes to win elections.

But the true heart of this system lies in the Walmart who doesn't take union threats in Quebec with a grain of salt, or Buhler Industries in Winnipeg that threatened to pull out because of employee demands a few years back. I am actually very surprised that companies like Swift haven’t came to Canada yet and built packing plants. When they do, don’t expect them to push for an open border. Nothing better for a CEO then the feeling of taking a swim in a sea of green paper as they screw the little guy. Ah...Capitalism...don’t yah just love it!.