Beef Future
Kevin: Speaking now with the president of the cattlemen’s association Stan Ebie and the CCA has their head office in Calgary. Welcome to the program Stan.
Stan: My pleasure to be with you.
Kevin: It’s good to have you back on the show to maybe explain some updates in the cattle industry. First of all, the announcement that came in March for the 300 million dollars from the feds for the beef industry. Your reaction; what does it mean? What does it represent to cattle producers?
Stan: It represents a commitment by the federal government to work with the industry to help us through the event that we are in. Cash flow at this time of year is always a significant pressure to all individuals not just the beef industry. This will help address some of that and give the lenders some confidence that there is assistance.
Kevin: After the BSE strategy the CCA and the government seemed to have a very quiet process avoiding confrontation with the Americans and then on March 7th the border didn’t open again. Hindsight is always 20/20 but do you ever have second thoughts that maybe we should have been tougher or have we been too polite in this process.
Stan: Possibly we have been too polite but we made gains right from September 2003 on we had the support and still have the support of the administration in the U.S. When we got the announcement what the judge in Montana had ruled we were actually in U.S. trade division caucus that day and the lady from the U.S. said she was very disappointed as we were. She said we have had directions from the highest authority in this country to get this job complete. That was the desire that the U.S. government at the administration level. Can we be tougher?
Possibly but when we get this kind of cooperation do we want to upset it when things were moving forward.
Kevin: I guess that is true and the other side of it is that we have seen directly that the Americans are protecting their turf. They blocked Canadian shipments to Japan and to Mexico. They have reinstated you as president of the CCA and I wonder does it change the way you deal with your American counter parts.
Stan: We have told them that we will not be their partners. We’ll be doing our own marketing and we’ll be competitors; fierce competitors in the international marketplace. Bearing in mind that we will always do business with the U.S. so there is the balance on the two issues here.
Kevin: Let’s talk about the Canadian Livestock and Beef Pricing at retail and wholesale that the standing committee in agriculture did a while ago and now they have announced the second phase of that. Firsts of all your reaction to that; they must have found enough information there that you need to go to phase 2.
Stan: Obviously they were concerned about that. I’m not sure the type of questions and the information that they requested but there was major concern each time that a program was announced 2003 and 2004 that the price of beef adjusted downward to the amount of the program. I think it is only prudent that the federal government know where the federal funds went. They went to the farmer but did the farmer get to keep it. That is the big question.
Kevin: Were you ever satisfied from any of that report as to why retail price didn’t go down and to why prices for steers and heifers dropped dramatically? Did you ever get a satisfactory answer for that?
Stan: Not a full answer but our people at the beef information centre you know they watch the specials and there was a trend downward in price. You had to watch all the specials. Percentage wise I can’t give you a number on that. At first blush the retail prices did stay extremely strong compared to what we as producers were getting. The specials in adjusted some of that.
Kevin: The standing committee called for the 2nd phase of that study and actually named the five packers to bring them under forensic audit. I guess I’m asking this question in your perspective. These are your supply chain partners and allegedly someone took advantage of farmers when really they were on their knees and still are on their knees at times. These are your partners; how do you react to that and how does it change your dealings with them?
Stan: I’m very disappointed that they took advantage of us especially in ’03. There was some heart left in ’04. They did hold the price better for us. We give them some reasons to hold the price with programs there. Making a profit is not illegal. Making a big profit and taking advantage of things is immoral. How do we deal with them in the future? How can we deal with them until we get enough competition in the marketplace here domestically to start to pull things around? In the short term if the border opened to live cattle to the U.S., that reinstates full competition. We need that full competition from a domestic processing capacity side to really insulate us from things such as this.
Kevin: Now the federal government put into place in the Fall- September ’04 the repositioning of the livestock industry strategy. Bring us up to date on what sort of things they are talking about and you are working with them to reposition the industry; how?
Stan: We are actually meeting with them ongoing on this effort to increase capacity, increase marketing so that we are less vulnerable on outside influences. Things have moved along we think fairly well on this. Our processing capacity is up about 25% from where it was in ’03 with another 20% coming on this calendar year. Once again you don’t just spring into action with new capacity. There is a lot of capital; it takes a number of procedures plus qualified staff to operate these places. Definitely moving that way isn’t quick enough and in hindsight never quick enough but definitely moving very solidly in that way. It is one thing to process it and another thing to get it marketed. We are looking for a home for 5000 tonne of beef that has to leave this country. Canada Beef export federation has worked extremely hard on Mexico and Asian markets primarily. We’ve basically made a gentleman’s agreement with the U.S. that U.S. meat export federation don’t come into Canada and Canada meat export federation don’t go into the U.S. Quietly we do some market encouragement in the U.S. on things. That whole marketing plan is working; is coming on and it has to be for the long term and not just the short term and we feel that the legacy funding that has got initiated now with the initial amount from the Alberta government and the federal government requests out to other provinces to help us along in the 10 year funding strategy for marketing.
Kevin: What are your producers telling you now that they want you to do in your new mandate especially in relation to BSE? Are they saying get out there and market our cattle or give us new tools or help us to value add? What is it they are asking?
Stan: They are pushing the let’s shut the door to the U.S.; let’s do our own thing; add our value here; do our marketing but be much less dependent on the U.S. then what we did in the past.
Kevin: And you are in favour of that?
Stan: Definitely. At our annual meeting, it was quite obvious that our producers are very determined to move this industry into a much more self-sufficient arena.
Kevin: That is very interesting because in times where it is very difficult; when money is tight, the whole idea of retooling and to change, sometimes that is hard because we just want it the way it was before because that is easier or we think it is.
Stan: Change is never easy but we have had dramatic change forced upon us through this even. Being livestock producers where we care for our livestock each and every day brings us a level of determination that might not be in some other industries where you can say we are closing the door for six months. We can’t do that. The independence and the determination has brought us this far and there seems to be a strong resolve amongst producers to get the job completed and have a solid future.
Kevin: Speaking now with the president of the cattlemen’s association Stan Ebie and the CCA has their head office in Calgary. Welcome to the program Stan.
Stan: My pleasure to be with you.
Kevin: It’s good to have you back on the show to maybe explain some updates in the cattle industry. First of all, the announcement that came in March for the 300 million dollars from the feds for the beef industry. Your reaction; what does it mean? What does it represent to cattle producers?
Stan: It represents a commitment by the federal government to work with the industry to help us through the event that we are in. Cash flow at this time of year is always a significant pressure to all individuals not just the beef industry. This will help address some of that and give the lenders some confidence that there is assistance.
Kevin: After the BSE strategy the CCA and the government seemed to have a very quiet process avoiding confrontation with the Americans and then on March 7th the border didn’t open again. Hindsight is always 20/20 but do you ever have second thoughts that maybe we should have been tougher or have we been too polite in this process.
Stan: Possibly we have been too polite but we made gains right from September 2003 on we had the support and still have the support of the administration in the U.S. When we got the announcement what the judge in Montana had ruled we were actually in U.S. trade division caucus that day and the lady from the U.S. said she was very disappointed as we were. She said we have had directions from the highest authority in this country to get this job complete. That was the desire that the U.S. government at the administration level. Can we be tougher?
Possibly but when we get this kind of cooperation do we want to upset it when things were moving forward.
Kevin: I guess that is true and the other side of it is that we have seen directly that the Americans are protecting their turf. They blocked Canadian shipments to Japan and to Mexico. They have reinstated you as president of the CCA and I wonder does it change the way you deal with your American counter parts.
Stan: We have told them that we will not be their partners. We’ll be doing our own marketing and we’ll be competitors; fierce competitors in the international marketplace. Bearing in mind that we will always do business with the U.S. so there is the balance on the two issues here.
Kevin: Let’s talk about the Canadian Livestock and Beef Pricing at retail and wholesale that the standing committee in agriculture did a while ago and now they have announced the second phase of that. Firsts of all your reaction to that; they must have found enough information there that you need to go to phase 2.
Stan: Obviously they were concerned about that. I’m not sure the type of questions and the information that they requested but there was major concern each time that a program was announced 2003 and 2004 that the price of beef adjusted downward to the amount of the program. I think it is only prudent that the federal government know where the federal funds went. They went to the farmer but did the farmer get to keep it. That is the big question.
Kevin: Were you ever satisfied from any of that report as to why retail price didn’t go down and to why prices for steers and heifers dropped dramatically? Did you ever get a satisfactory answer for that?
Stan: Not a full answer but our people at the beef information centre you know they watch the specials and there was a trend downward in price. You had to watch all the specials. Percentage wise I can’t give you a number on that. At first blush the retail prices did stay extremely strong compared to what we as producers were getting. The specials in adjusted some of that.
Kevin: The standing committee called for the 2nd phase of that study and actually named the five packers to bring them under forensic audit. I guess I’m asking this question in your perspective. These are your supply chain partners and allegedly someone took advantage of farmers when really they were on their knees and still are on their knees at times. These are your partners; how do you react to that and how does it change your dealings with them?
Stan: I’m very disappointed that they took advantage of us especially in ’03. There was some heart left in ’04. They did hold the price better for us. We give them some reasons to hold the price with programs there. Making a profit is not illegal. Making a big profit and taking advantage of things is immoral. How do we deal with them in the future? How can we deal with them until we get enough competition in the marketplace here domestically to start to pull things around? In the short term if the border opened to live cattle to the U.S., that reinstates full competition. We need that full competition from a domestic processing capacity side to really insulate us from things such as this.
Kevin: Now the federal government put into place in the Fall- September ’04 the repositioning of the livestock industry strategy. Bring us up to date on what sort of things they are talking about and you are working with them to reposition the industry; how?
Stan: We are actually meeting with them ongoing on this effort to increase capacity, increase marketing so that we are less vulnerable on outside influences. Things have moved along we think fairly well on this. Our processing capacity is up about 25% from where it was in ’03 with another 20% coming on this calendar year. Once again you don’t just spring into action with new capacity. There is a lot of capital; it takes a number of procedures plus qualified staff to operate these places. Definitely moving that way isn’t quick enough and in hindsight never quick enough but definitely moving very solidly in that way. It is one thing to process it and another thing to get it marketed. We are looking for a home for 5000 tonne of beef that has to leave this country. Canada Beef export federation has worked extremely hard on Mexico and Asian markets primarily. We’ve basically made a gentleman’s agreement with the U.S. that U.S. meat export federation don’t come into Canada and Canada meat export federation don’t go into the U.S. Quietly we do some market encouragement in the U.S. on things. That whole marketing plan is working; is coming on and it has to be for the long term and not just the short term and we feel that the legacy funding that has got initiated now with the initial amount from the Alberta government and the federal government requests out to other provinces to help us along in the 10 year funding strategy for marketing.
Kevin: What are your producers telling you now that they want you to do in your new mandate especially in relation to BSE? Are they saying get out there and market our cattle or give us new tools or help us to value add? What is it they are asking?
Stan: They are pushing the let’s shut the door to the U.S.; let’s do our own thing; add our value here; do our marketing but be much less dependent on the U.S. then what we did in the past.
Kevin: And you are in favour of that?
Stan: Definitely. At our annual meeting, it was quite obvious that our producers are very determined to move this industry into a much more self-sufficient arena.
Kevin: That is very interesting because in times where it is very difficult; when money is tight, the whole idea of retooling and to change, sometimes that is hard because we just want it the way it was before because that is easier or we think it is.
Stan: Change is never easy but we have had dramatic change forced upon us through this even. Being livestock producers where we care for our livestock each and every day brings us a level of determination that might not be in some other industries where you can say we are closing the door for six months. We can’t do that. The independence and the determination has brought us this far and there seems to be a strong resolve amongst producers to get the job completed and have a solid future.
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