Country of origin labelling

[cowman]

How is it that countries like Australia and New Zealand can ship beef half way around the world and still out compete our cow beef? If we are averaging 30 cents a pound for live cows...what are they getting? Surely the cost of transportation must be fairly signifigant?
Why would the EU allow in beef from a country that has FMD? I thought Europe had about the highest health expectations in the world?
Apparently the European consumer doesn't want hormones in their beef so doesn't it make sense to give them what they want...if it makes sense? I think the reality is it just doesn't pencil out? Not a sure enough market to alter the whole North American market? The perception is that Europe is just using the hormone/GMO thing as an artificial trade barrier and if they didn't have that they would come up with something else?

[farmers_son]

Kpb: Re what we are smoking...Prior to BSE the cattle industry did assume that if there were markets for our beef that the packers would seek out those markets, sell into those markets and the resulting profits would work their way through the system to the primary producer level through higher live prices.

Well that was then, no one in Canada believes that anymore. And whether we are talking about COOL or producer checkoff dollars being spent on promotion and marketing there should be absolutely no doubt anymore that the resulting benefits will not make to the producers. The system just does not work that way.

COOL will not work, period. It is absolute folly to believe the packers will let any resulting profits slip through their hands in the form of higher live prices. The packers have zero interest in pursuing any avenues that will see the price of live cattle increase even marginally over the long term. In fact their interest is best served by maintaining live prices at a level that will see producers just keep from going broke.

Whether we are talking the U.S. or Canada there are competing sources of beef available from countries such as Brazil, Uruguay, Argentina, New Zealand. We are in a North American market, the world knows that even if we do not. It is high time we started acting like North American cattle producers and work together to find solutions to chronically low live prices rather than work separately through protectionist non solutions like COOL.

[FRENCHMAN]

Willowcreek..You'll never know if producers support you and your domestic beef as long as you let the thieves that have had you bent over in the compromising position- the multinational packers - have their way with you...Either your proud enough to identify it as a Canadian product or let it go into the generic mix- with the US, Mexico, Australia, soon to be most of South America.....Remember under NAFTA, CAFTA, AFTA, and FTOA what comes into the states unmarked can then go on north unmarked.....


Ot ...
It leaves here as Product of Canada
All you got to do is stop rubbing the Product of Canada labels off

[cowman]

Or how about the Canadian cattle out of feedlot alley that went directly to Washington to be slaughtered and on the boat to Japan with a big "product of the USA" on the box? Here those Japanese thought they were eating US beef when all along it was Canadian barley fed beef!
Probably got a shock when they got some of those corn fed Brahmas from Colorado!
I'm all for COOL...both in the US and Canada! Put the USDA stamp on all that cheap supermarket beef and we'll keep your high end restaurant trade! I suspect if any restaurant or supermarket in Canada advertized USA beef they would be throwing it out the next week? That is how much R-CALF has turned off the Canadian consumer. Pretty sad.

[farmers_son]

You say you are all for COOL. Do you believe it will increase the price the packers pay for our live cattle?

[cowman]

No it won't but at least when the consumer bites into his old kangaroo steak he'll know it sure as hell never came off an Alberta farm!
I find it kind of funny that people rip the packers for what an outrageous job they do screwing everyone when the fact is no one forces you to raise a product that isn't profitable! The fact is if we had a producer plant would we really make anymore money? The last two years were not the norm and you can accredit that to government not the packers? The packers reaped the benifits in a big way but I note it wasn't just the big American corporations but our own little lads like XL and Sunterra as well as every two bit abbatoire in the country?
The fact is IBP and Cargill are better at what they do than just about any other packers in North America? They can actually get them killed and sold cheaper than anybody else? I wonder how much they make per steer keeping in mind the last two years were not normal? Since they have come to Canada what was the profit on each animal, again leaving out the last two years?
I believe they operate on a fairly low margin, quoted in that 1.5% range? Is that true or fairly close?
If that is true, then how are we going to get this fantastic dividend on our cattle? I wonder if this is the reason hardly anyone with a brain wants to enter the packer business?

[farmers_son]

I agree with you when you say COOL will not raise the price we receive for our live cattle.

If you want to know the Canadian packer margins, one just has to look at the basis between live cattle in Canada versus live cattle in the U.S. Once that beef is in a box it is all the same price so it would not be too far off the mark to say that most of the basis between Canadian and U.S. live cattle prices is due to lack of competition resulting in extra packer profits.

This week a Canadian producer received $185 less for a fat steer weighing 1350 pounds than an American producer would receive for the same animal. Now there may be some cost differences but I think it is fair to say that a packer in Canada is making about $185 over a packer in the U.S. and that money comes right out of the Canadian producers pocket. I have no argument with you saying that Tyson and Cargill can get them killed and sold cheaper than anyone else. However that is not reflected in the price they pay producers.

[cowman]

farmers son: Right now the border problems haven't sorted themselves out. Eventually they will? Patience.
We all should realize that this "difference" in price is being caused by red tape? And a lot of the red tape is being caused by our old friends R-CALF stirring the pot and smearing the USDA every chance they get!
What I asked, before, is what was the packer profit per steer, pre-BSE? If the packers claim they work with a 1.5% margin what does that mean? Does that mean on a $1400 steer they actually made $21? If that is the case, who can do it cheaper?
Can a producer owned plant do it cheaper? How can they?
Now I know Cargill/IBP are doing very well in Canada right now, but when everything gets sorted out I doubt they will do better than the efficient plants in the US? For one thing the US labor costs are quite a bit less! I wonder how much profit the big US plants make on a steer? Is there any info out there about that?

[farmers_son]

Actually we have been way too patient.

I have been unable to get pre BSE numbers showing the historical basis between what the Canadian producer receives for a live slaughter steer or heifer and what the American cattle producer receives for the same animal. It has been over 2 years since there has been a normal border and the border is far from “normal” yet. Maybe someone with old Canfax numbers has that information. I am looking for the difference in live slaughter prices between Canada and particularly the Northern U.S. adjusted for the dollar prior to BSE.

Again, it is not a question of a producer packing plant doing it cheaper. I am sure Cargill and Tyson are very efficient operators. It is a question of whether or not there is enough competition for our live cattle to force Cargill and Tyson to pay producers fair prices for our steers and heifers, cows for that matter too or do the packers simply keep any benefits from their efficiency for themselves.

Although we hear a lot of excuses why the Canadian producer receives less for a fat steer than an American producer, I think lack of competition cannot be overlooked as a driving factor. American plants have to pay health care insurance for their workers which tends to offset any wage differential in Canada. Our plants are more modern and more efficient than many U.S. plants. There is really no reason for there to be any basis on live cattle between Canada and the U.S., assuming normal trade across the borders, although we have been conditioned to accept a basis just the same.

The bottom line reason Canadian producers get $185 less for a fat steer than a producer in the United States is because our cost of production is less than in the U.S. And the packers just pay us enough for our live cattle to keep us producing more. It is as simple as that. The packers just do not have to pay us any more, there is no competition to force them to pay any more and they will continue to pay us just enough to get by on until competition comes into the marketplace. And that competition is not going to come from anyone else than producers themselves.

[gwf]

I recall quite a few years ago that Swifts or Canada Packers (I am not sure which one for sure) had on the label of some of their products that they had a margin of profit on “this package” of 1% or 1.5%. Creative interpretation of numbers can be shown to make any point you want them too. Critics of this statement countered by saying that they did it 100 times a year. We all know that this conclusion is not logical either.