Lakeside Beef Slaughter Increase in June

[farmers_son]

kpb: I note your comment "I believe that all of our primary prodution industries will eventually be relegated to Third World countries where cheap labour is abundant. " You might be interested in checking out a past thread in Agri-ville http://www.agri-ville.com/cgi-bin/forums/viewThread.cgi?1111769715

Pandiana pasted a couple of items, one being a link to an article by Dr. Blank who thinks along the same lines.

I frankly do not agree. The third world countries export at the pleasure of the developed countries who could shut down the upstart competitors in the third world with subsidies and politics whenever they so desire.

You said "That is why I think that despite our abundant grassland and high-quality cattle, we face an eventual losing battle in producing beef for export..." Canada is already a net importer of beef when non-NAFTA trade is considered. Canada will never be a net exporter of beef beyond NAFTA. Within NAFTA, when compared to the U.S., Canada is a low cost producer of beef and could be thought of as a third world or poor cousin to the U.S. with a lower GDP per capita and a poorly developed industry infrastructure. Politically we are only a middle military power.

[kpb]

farmers_son, thanks for the reference to a previous thread which I will read. I have to disagree with you that Third World countries export at the whim of North American countries which could cut off their exports at any time through the use of tarrifs, etc. You have to remember that the companies in these Third World countries that are exporting to us are not, for the most part, Third World companies but, rather, North American companies that are located in the Third World to take advantage of low-cost and abundant labor. There is not a hope that these companies, which are the largest multi-nationals in the world, would ever let any government impose restrictions on their ability to export to the North American marketplace.

More important than that, however, the North American (U.S) government has no interest itself in imposing trade restrictions on multi's using foreign labor forces to produce cheap goods. The U.S. economic system is rooted, as I have said before, on continued and gross consumption. To deny the American consumer the ability to purchase low-cost goods on a continuous basis would be to destroy the banking and credit system in the country, decimate the stock market (through a collapse of the share prices of the multi's) and plunge the U.S. into a depression. The government is not going to do anything to cause that.

In fact the North American economies are addicted to borrowing to buy things. Strangely, in this strange world, our role as consumers is as vital as the Third World's role in production. I'm not saying it's right but neither can exist in the world economic system without the other.

Grassfarmer, I hope you are right about our abundant land base giving us a competitive advantage but I must say I believe otherwise. Africa used to have a large and thriving cattle industry before political upheavals destroyed it and presumably has the potential again. And there are other countries in the world--Brazil, Russia--that have the potential to produce a lot of calves.

But the point really is the land, in fact, does not give us an advantage on an economic basis even though we have an abundance of it, because it is so expensive to produce a calf here when compared to most places in the world. Yes we have a lot of land, but even our cheapest land is not cheap enough to produce a calf for $100 a year like they can in Brazil.

The abundant land argument in Canada is cancelled out by the fact we have a severe climate for half the year in my opinion. The pure fact is that we cannot produce a calf as cheaply in Canada as they can in Brazil--not even close. As harsh as that is for us to accept, I don't think, in the long run, that that is any different from the shoe factory in Canada that went bankrupt because shoes could be made more cheaply in Indonesia and exported back to Canada.

kpb

[farmers_son]

I did not say the third world exports at the whim of North America as the developed nations include Europe, Australia, New Zealand, Japan, Canada, U.S.A., and Israel, a few others. Mexico is not considered a developed country.

Brazil's competitive advantage is not its weather which in fact offers some challenges but its cheap labour. Brazil faces challenges with an unstable currency and economy, a history of military governments, uneducated work force, disparity between the rich and large poor populations. Brazil is South America's economic leader but remains propped up by the IMF. Even as recently 1998, the IMF (United States) injected 40 billion dollars to keep the Brazilian economy from collapsing in the middle of the 1998 election in Brazil. Brazil functions at the whim of the United States in particular and the other developed nations who support the International Monetary Fund.

[rkaiser]

I wonder what we should do with all of this land we have in Canada kpb?

I was on a bull delivery trip to southern Sask the other day. Coming up to my cutomers farm I noticed a lot of very nice farmed land. Clean as a whistle. Strip farmed with nice white stubble and recently seeded summerfallow. Stubble was substantial and clean. When I got to my guys place, I commented on the pride taken in farming this piece of ground. He went on to tell me how this fellow and a number of other neighbors had taken on the organic route, and that this clean beautiful ground was actually organically farmed. By the book costs for Canola in his area, he said, were up close to $200.00 per acre with seed, fertilizer, and spray. How many less bushels would it take this organic guy to make a profit from his land.

My guy ran a spread of 50 quarters of mostly native grass, and only a small amount of crop and hay land. Not certified organic, but operating on the same principles as his neighbors.

Who's pockets are we lining with input costs, and who's product are we simply overproducing with these inputs. Same thing with cows, fertilizer, and growth promotants. Call me loonie for talking natural, or low input, but it could solve more than one problem for this beliguered industry we call agriculture if we shorted the chemical companies in exchange for tighter supply.

Anywhooo, if we drop the cattle numbers, what do we do with the grain. If we drop the grain acreage, what do we do with the land. Bottom line is, the dinosaurs ran on this earth for thousands of years, and now it's the humans turn for a while. Why not try to feed the ones who have every bit as much right to be on this earth as us. We have the land, we have the time, we have the ability. And even though we all complain, we also have a pretty darn good life doing it.

[kpb]

rkaiser, it's not a question of what we do with grassland when there are no cattle to run or what we do with grainland when nobody wants to farm grain. That's like asking what do we do with factories when the textile industry leaves Montreal and heads for China (which has largely already happened). I think it misses the larger point which is losing the industry as a whole to another country.

If the calf price in Canada this fall and next fall is $200 a head--I'm not suggesting it is going to be but humour me and pretend that it is--how many guys would still run cattle? Not many I would say and who cares what is going on on the land.

What I'm suggesting is that the agricultural industry in Canada is no different than any other basic products industry. If, as farmers_son says and I agree, the Third World nations have an advantage over us because of cheap labor, those countries will be able to export beef cheaper here than we can produce it, regardless of all our land. Our abundant grassland is, in fact, irrelevant from a competitive economic viewpoint because our overall costs are so much higher than, say, Brazil.

Farmers_son, I think you are missing the point that the IMF props up Brazil and a multitude of other Third World nations not out of the goodness of its collective heart but rather because the developed world, namely North America and Europe, need these countries to remain solvent. And the reasons for that are two--the banking industry, largely centred in the U.S. but including Japan and Europe, would collapse if the IMF removed support and, secondly, the multi's, again largely based in the U.S. have huge interests in keeping the trade connections with the Third World open.

The IMF will never, never, remove support for major debtor nations like Brazil because it is to the banks of the devloped countries that a lot of the debt is owed. It is a symbiotic relationship and there is as much dependency by the developed world on the cheap labor and ample resoures of the Third World as there is by the Third World on the money of the developed nations.

Economic globalization is a form of imperialism whereby rich nations basically colonize the poorer nations to be able to provide cheap goods for the consumers of their countries. And that is so the companies in, say the U.S. that sell their goods can make money. Good or bad that's how it is and there's no way multi-billionaire Paul Martin or mega multi-billionaire George Bush even wants to change it.

Agreed there are companies in Europe and Japan that have the same mega-status as the U.S. but it is the American companies that have been the most aggressive about utilizing Third World resources for their benefit. The Americans have managed to wrap up capitalism with democracy and, now, religion, and because of that have a huge buy-in from their citizens to global economic expansion by their multi-nationals.

I don't see that expansion slowing down and my main point, a long rant ago, was that I'm not sure we should see beef production as immune from that philosophy of producing goods at the lowest price possible in some far-off land and importing the finished product to serve the domestic market.


kpb

[kato]

I've been giving this one a bit of thought. This may not be as bad as it seems. I've been a little concerned lately about how long it's taking for the appeal on the temporary injunction to get going.

Figured it would be just our luck that the appeal court would overturn it and then a couple of weeks later it would go to court in Montana again, and be made permanent, and then it would be months before that was appealed, and so on and so on. Meanwhile nothing gets done and we all suffer.

Perhaps this way he can do what we all know he wants to do, and then the appeal court will be prepared for it, and can just jump in and overthrow it once and for all. This is just my thinking, and I'm not a lawyer, but to me it would make sense. (As if anything that's happened in the last two years ever made sense!)

Either that, or R-Calf is getting jumpy, and figures that the longer they wait the higher the stack of oppostition to them will get.

Kind of like a politician thinking of an election eh??? LOL

[grassfarmer]

One thing that you are overlooking kpb is the potential to produce here a lot cheaper. I'm not talking about tinkering with extended grazing season or different breeds but if your scenario of $200 calves were to come true and 80% of producers went to the wall inside three years the land is still here. Supply and demand would see a different kind of operator - one that could sell $200 calves - if the land away from city influences was $100 an acre. So we can in a way compete with anyone, anywhere in the world - maybe we have just got carried away and payed too much for land relative to it's worth as a producer of beef?

[grassfarmer]

grassfarmer, we have been in this BSE crisis for two years and ag land isn't worth less than it was pre-BSE. $100 an acre ag land in Alberta isn't likely going to happen, at least for the sake of the cattle producers in our province I hope it doesn't.

[grassfarmer]

Emrald, I realise land prices haven;t dropped due to BSE - they didn't in the UK either so it doesn't surprise me. I wasn't predicting they would fall rather showing that in the worst case scenario kpb was talking about beef production would not cease on the prairies because we could import cheaper meat from elsewhere.
Actually high land prices are bad for young or continuing producers and are
only good for retiring or exiting producers.

[BWC]

Nice call kato, no one really knowsor can guess our fates in the U.S justice system. I do beleive that R-Calf officials are very concerned over the growing resistance to their efforts. The ramifications of the loss of the boxed beef trade are very scary and they are well aware that it would really put us in a bad way. The onlt contingency plan that I have heard that makes any sense, is that the CBEF is pushing the Federal Ag Ministry to direct the CFIA to immediately develop a tseting for market acccess protocol with Japan and other Pacific Rim nations. But this is all speculative at the moment. Hope for the best

[grassfarmer]

Not much of a contingency plan at this late stage is it? How long would it take to move the sloths at CFIA to approve such a procedure, then build testing facilities large enough to handle the workload, then of course there is Cargill and Tyson who have sworn they won't test - where else can we get them killed? Maybe in another two years they would be ready to go - if buyers actually materialise. Let's pray it doesn't come down to this desperate scenario.