this is progress?

[WoolyBear]

Thank you 15444....... Thank you for your patience to reply, and Sorry I had to make you explain that one again.

I get my backhairs up when I hear about quota, buy ins and buy outs etc, so I guess it might work as you would have people that would like out with dignity right now. I hope that those of us left would be able to afford to expand to an economical scale under this proposal. We've been trying to expand our herd from within for the last 5 years so when you keep your own heifers, it has taken some of the sting out things.......

[15444]

Grassfarmer,

Link doesn't want to work for me. Does it work for you?

First, question #1. An earlier post of mine suggested that producer-owned packing plants would have to be the norm, which means that the government would have to make a concerted effort to make sure that most of these proposed plants get off the ground. As far as the retail level is concerned, supply management is just that, a managed supply.

Just thinking about WoolyBear’s comment earlier, one way to avoid a possible WTO backlash is to continue to allow the 74,000 tons/year into the country, but make it law that no one shall import further amounts over and above the WTO alloted amounts. This would also answer your concern about retailers. Retailers would be granted import certificates up to the 74,000 tons, and then would be required by law, to continue using Canadian beef for the remaining portion of the year, regardless of price. On the upside, if live beef rises dramatically in price after 10 years, retailers margins on beef would shrink and force them to be more accountable....balancing their profit over risk of potentially turning consumers away from their inflated prices.

Question #2. This question has too many possibilities to really answer. Some producers could get out of the cow/calf business all together and get into grain....or hay....or sheep...who knows! It is unknown to you or I what position producers would take in the post beef supply managed Canada. My guess is that older producers would slowly exit the industry, paying off their loans with both calf and potential quota money they earn each year, while younger producers may even expand at slow intervals to manage the cost of purchasing quota.

Other ag sectors? It is of my opinion that if beef becomes a supply managed commodity, sheep, pork, elk, and bison should follow suit to improve their situation as the beef lobby would no longer be pushing for an open border, so they would be left to defend themselves. If they don’t want to go in the direction, fine. I am primarily concerned with the beef industry and its continued survival in this country.

[15444]

WoolyBear, my proposal is for a beef industry that is no longer based on having large numbers in order to survive. I vision a day when cows/bulls sell for a minimum of a $1/lb. and calves are closer to $3. Is it a dream? No. If we eliminate even 25% of the herd over 12.5 years, I can easily see it happening.

Quota prices might rise to fairly high levels, but unless you are thinking about building a million dollar estate, I don't see the 300 head cowherd being a necessity in the future. Remember, you start out with quota that equals your current herd size. As the government eliminates a percentage of the quota each year, prices can only go up. Therefore, if you don't sell any of your quota to the government, you retain your original quota amount and can enjoy the rising prices as the cowherd numbers go down!

In the short term, my proposal will provide older producers with an exit strategy that leaves them with a sense of dignity and respect. Older producers have worked their hearts out for this industry, there is no reason for them to be pushed out by overdue loans. In the long term (i.e. after 15 years) my proposal provides the sons and daughters of these producers with a lifestyle in which they can love AND make a living at.

[grassfarmer]

15444, It was a bogus link, sorry try
http://www.nfu.ca/briefs/Ten_point_plan_to_end_farm_crisis_EIGHTEEN_-_FINAL_bri.pdf

That's a mouthful but it should work!

[15444]

Grassfarmer, just going to quickly comment on a couple things I read. Will read the rest tomorrow.

Part 5b about modulating supplies of meat. Already NFU stabbed themselves in the foot by suggesting that the larger guys should shoulder the risk of being large, while the smaller and middle sized guys get the cash. Already, every producer starts to wonder what is considered big...and in doing so, creates resentment among large producers for NFU.

I want to unite cattlemen with my proposal...not divide them based on size.

I have always respected NFU, but I know they are pretty weaked spined when it comes to the big picture. One of the first points talks about working with the EU, US, Brazil, etc. to decrease crop production by 3%. I have to keep myself from laughing too hard. Typical NFU, believing that everyone in the world plays nice if you play nice.

[Horse]

15444 there are presenttly app 400,000 cows on govmt land and they are being paid to be there for the 5 mo grazing season now if the govmt would remove those cows do you not think it would help the industry as a whole , thats in alta I dont know the figures on other provinces. And that would free up app 100 mil to the govmt per yr.
Someone mentioned a level playing field I dont feel we have one under the curent system of crown land leases.

[Horse]

horse, many of the leaseholders on government land have spent a fair whack of money improving pastures, fencing, developing watering systems etc. You say you have a sense of fairness, how fair would it be to arbitrarily order the leaseholders to get rid of their cattle ?
I do think that oil revenue to leasholders should be limited to damages, entry fees, inconvenience etc. not annual rental but that is my own opinion.

[cakadu]

For me, it is important to look at the words you are using - supply managed commodities. Even though poultry and dairy are about the only two sectors making money, there is still someone further up the line making the real money and capturing the value - as grassfarmer has pointed out.

We are an exporting nation and we export commodities thereafter buying back the processed goods.

The quota system you speak of implementing for cattle would have to be based on some sort of percentage of current numbers because there is no way domestic consumption will utilize the current numbers of cattle that we have - hence our huge problem.

Quota was originally given away for free - would quota be free in this case too?

Producers are fast moving towards being only 1% of the entire population of the country. It was at 3%, but those numbers are dwindling. One important question we might want to ask is how are we going to get the urban consumer/dweller to care about what happens to agriculture?

[grassfarmer]

15444,

"weaked spined"... when it comes to the big picture?? And "Typical NFU, believing that everyone in the world plays nice if you play nice."

I think these are both ridiculous accusations against the NFU.
Weak spined would be better aimed at the Canadian Federal and Provincial Governments, the CCA and ABP over this sorry "BSE" fiasco. The NFU have taken a strong line with suggesting remedies since day 1 - actually the problems of packer concentration and reduced net farm incomes to farmers are things they were campaigning against before May 2003 - who else was doing that?

Expecting everyone else to play nice is also a common problem of the above named groups as well as the NFU - and how often has it been raised on Agriville that we must make the Americans/Japanese/R-Calf play by the rules?

Your enthusiasm for your new plan is admirable but it won't come about either - it doesn't look at the big picture. You don't tackle the monopoly issue of the transnational giants and unless you do nothing will change. The "industry" wont buy it because so many western ranchers are hellbent on the "free market" concept despite it ruining them.
Thinking that Canada will suddenly decide to go it alone, look after it's producers and ignore existing trade agreements and break every rule in the book won't happen either. We spent many years wishing for such a development in the UK as well - reality is farmers are an insignificant % of the population and we are ultimately dispensable in this age of "cheap" transport of food around the globe.

[15444]

Horse,

On the grand scale, I really can’t comprehend why the government pays producers to put their cattle on that land. In a supply managed system though, the payments would switch around. Producers would pay a nominal fee on crown land per head per year to the government just like any other producer would do in dealing with private land ownership leasing. I don’t see as fair to make them get rid of their cattle, but they should definitely not be subsidized to put them there.

Cakadu,

Yes, quota would be free. As soon as a producer claims the number of cattle he has and it has been verified by a 3rd party, each quota unit becomes worth $500-1000 base price. Because the government would eliminate 2% of the quota per year (and provided the 2% hasn’t already been reached for the year), that producer could immediately sell his quota to the government. The actual cow then is sold into the open marketplace to be purchased for slaughter. This gives our older producers a chance to quickly exit the industry with a healthy bonus to take them out. Example: Producer, 59 years old, 65 - 1500 lb. Simmental cows - quota worth $65,000.00 market value of the cow @ $0.20/lb. = $84,500.00

I agree, there is no way to consume our current cattle numbers. That is why I said in an earlier post that no one should expect a drastic change in cow prices for at least a couple years after the system is put in place. However, you have to realize that if current UTM exports to the US get cut off, that is what we are going to have to do because there is no way we will be able to open enough additional export markets to consume the beef that is currently going to the US. I don’t think it should be a percentage of current herd size, but that would be something decided upon during open discussions.

You final question about getting consumers to care about agriculture is more like a dream. As the media now headlines the $50 million going to beef industry promotion, I am being asked questions by urban dwellers about why their tax dollars are going to support a stupid industry like cows, why doesn’t the government stop giving away money and let them figure it out themselves? Consumers are never going to actually ‘care’ for agriculture; their ‘caring’ begins and ends at the meat shelf, produce aisle, or the dairy fridges. We are just lucky that consumers haven’t banded together and bought memberships into consumer groups to argue for cheaper food, i.e. imported food. Currently, they are more interested in other things then to worry about their food costs, but that might change if the feds dip into their emergency funds to bailout the cattle industry again.



Ok, time to take a break, I’ll answer grassfarmer’s questions in a while.

[grassfarmer]

15444,

Got to thinking more about the quota side of it. I have experience of quotas and beef - in the UK we were allocated a quota - but it was only an entitlement to subsidy quota. If you wanted to keep cows over and above that you could (no one did because it was uneconomic without the subsidy)
We were allocated this free based on previous years cow numbers, you were able to sell it to other producers.
If you were to introduce quota here and you talk of the Government buying it back to allow people to exit the industry - how to you facilitate new entrants?
It actually isn't that difficult to set up a quota system - and you can build in "ring fences" to prevent Alberta oil barons buying the quota from Saskatchewan producers for example.

The how "big is too big" question you raise about the size of beef production units is a valid one. I used to argue this one with my father often. I think quota allocation should be tied to cows per labour unit. If a guy wants to run 1000 cows and employs 5 men to do so I don't think he should be denied quota whereas a person running 300 cows single handed gets it because he is smaller.
Ensuring rural jobs and strong rural communities is a worthwhile aim and to do that we need to keep people on the land. These are all things that could be overcome if we wanted a supply management industry - my guess is that producers do not want such an industry - they dont like regulation and red tape. Believe me there would be lots of it if we moved to beef quotas.

[Bez]

Lots of healthy discussion here.

I am a pro quote guy - or at least a pro "let's explore it" guy.

In the end, there is one fact. The only continually profitable ag operations in Canada are the supply managed operations.

As for imports, exports and packers - well, that remains to be seen. If there is no exploration then we have basically been defeated before we have even taken the first step.

Just because we operate the way we do does not necessarily mean we operate in the best way. Change will always have its detractors. But change can sometimes be a good thing.

So if we are to survive with a national beef industry, I believe we absolutely MUST look at methods that will create opportunity for us. If we do not, we maintain the status quo and continue on the way we are - making money once in a while, working off farm and ranch when we have to and always at the risk of some who control the pricing game.

If we sit and argue pro and con before an actual plan has been created, how will we really know if we are / are no going in the right direction.

How many of us are now covered in grey hair? How many of us are planning to hand the operation over to the next generation? How many of us have kids that will want to take over? There are some, but the numbers dwindle.

We have to look at change for many reasons, but to me the biggest is our future. At present, we sit back and look for handouts - the only winners at this time are those who win the subsidy games.

I believe we will eventually be forced to change, or be forced out. If we go to a supply and demand system there will be initial problems. These will be ironed out. I believe supply and demand will also force one of our competitors out of the market. That competitor is the dairy guy. To me, that is not a bad thing - but it will be to some.

Just my thoughts. What is the next step?

Bez

[Horse]

15444 I dont mean for the lease holders to get out of coes persay the thing is that the oil revenue is tied to cows as you have to have cows to get lease land therefor if you are reciving 1000/2000 or more per 1/4 and are required to have a few cows to keep the money rolling in then you keep cows.

If the idea of crown land was to use the grass for cows and no oil revenue then there would be a lot less cows.

[intr3est]

BEZ, could you get ahold of me at murgen_89@hotmail.com just want to talk about some things we might get going in Ont. thanks

[kpb]

grassfarmer, your comments about quota overseas are interesting. I believe that most producers in Canada would vote for a supply management system if it was thought out and explained to them. As Bez has pointed out in a later post, the only consistently successful agricultural enterprises in Canada are supply managed. Most thinking producers would easily see this and this far out-weighs any regulations that we might have to adhere to. Also, as you have undoubtably noticed, we are adhering to more and more regulations all the time anyways and live with a beef industry that has not made money for years (including pre-BSE). Bez's point is impossible for the anti-quota advocates to argue with---the bottom line in Canadian agriculture is clearly in favor of supply management. How can anyone argue with that?


kpb