Country of origin labelling

[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.

[grassfarmer]

Cowman, You should maybe check out what efficiency means. You're falling for the old myth that beef producers aren't efficient enough. When you claim the packers are just conducting normal business and if producers can't supply cattle at below the cost of production they should leave the industry. The packers do not have to be at all efficient when they have a monopoly position in the marketplace, on the other hand Canadian farmers and ranchers are by far the most efficient industry in the country.
Like many you probably reckon grain prices are in the doldrums because of the myth of over supply - a world awash in cheap grain thanks to farmers being too successful using all the modern high tech methods. In fact for 5 of the last 6 years world grain consumption has exceeded production. Again the problem of low product prices is being caused by lack of competition beyond the farm gate.
It's a shame agricultural producers are believing the lies of efficiency propogated in the mainsteam media by Corporate America.

[cowman]

grassfarmer: Well I do believe there is a surplus of grain. Or should I say a shortage of grainbuyers with any money?
Top that off with the "grain wars" where the EU and USA paid people to buy their grain at below production cost, and there you have the problem?
The western Canadian grain farmer is very efficient...twenty years of poor prices and government mismangement has pretty well weeded out any inefficient ones? The Cargills and ADMs aren't to blame here, they are just taking care of business in relation to how the various governments decree they can? If these guys are such crooks why don't the democratic countries pass laws to curtail them?
Canada chose to not step up to the plate and play the subsidy game. This in turn forced the western Canadian farmer to seek alternative markets for his grain? Those markets were hogs and cattle and that is why we produce so much meat for export. This of course eventually impacted on our neighbors in the USA?
So who do you blame? The US and EU governments for trying to keep their farmers afloat? The cheap Canadian government who were too busy buying off Quebec to get out and fight the grain wars?

[rkaiser]

Great stuff cowman. It is the typical human arguement tactic to back someone off who is making a legitimate claim. "It" being, "pull out the Blame Game". No cowman Cargil and Tyson are not to BLAME. But they are certainly taking full advantage of the rules. AND they are certainly a big part of the rule making process.

It is just like the debate over packer ownership. It may seem fair and right for packers to own cattle and maybe it's just an accident that markets are changed due to this ownership of cattle. Give me a break.

We all know that progress in politics and law making is something that happens with time and a hell of a lot of energy. Energy at every level. Energy even at the level of our very own ABP and CCA. We all know the steps that have been taken in the last few years to include packer representatives in the ABP/CCA debate and decision making process. Add to the the influence pressure put on producers by the financial forces of the packers.By the way, how many of you know that the current vice chairman of CBEF is an American Cargill employee. That's CANADIAN Beef Export Federation.

Now keep going up the ladder and tell me that Cargill has less political power in this world than the Government of Canada.

These guys are big business at it's finest. They have think tanks working every day to decide what they want to happen 10 years from now, and think tanks spreading word to the media to make beleivers out of guys like cowman.

If we are going to survive in this "legal and legitimate" world we must be wise and even manipulative just like our "worthy opponents." Yes our opponents. Cargill and Tyson are simply taking what they can get from us. To me that is far from integration.

farmer_son is right. Competition is the key. There is demand for the high quality product that Canada has to offer, and it's time we offered it ourselves rather than surrender this "diamond" to the jeweler.

[grassfarmer]

Cowman, "If these guys are such crooks why don't the democratic countries pass laws to curtail them?"
Well first of all it's not the country that passes the laws it's the Government of the country. Now Governments are made up of elected officials - elected by whom? - the electorate, you and me. Now when this democratic process isn't cherished, made to work and made accountable by the people of the country problems arise. Poor voter turnout, lack of interest in what is going on in politics after an election all lead to the elected officials having the opportunity, if they are so inclined, to pursue interests contrary to what they were elected to represent. This can be taking back door bribes from entities wanting to influence political decisions, making up agendas of their own to follow, being persuaded to vote with the pack instead of sticking up for a cause their electors thought was important and occasionally simple corruption and theft of the type the current Liberal Government is accused of.
As I said these things happen because the population in general allows them to happen. So if the Government rules allow immoral, exploitative and dishonest business arrangements to happen under their juristiction it is happening because the population at large are not making democracy work, usually because they are too lazy or because particular issues don't affect them. Suggesting that because current Government laws allow foreign packer profiteering at Canadian producers expense it must be OK is a cop out - afterall how many of you believe that the Government gun control laws are OK? That is just another law passed by "them" so it must be a good law right?
There is an obvious parallel here between Government in general and in organisations like ABP - they are allowed to continue as they are because of apathy and a people that have grown lazy in the protection of that most precious right - democracy.

[cowman]

grassfarmer: Of course you are right about the people of a nation allowing their governments to do as they will, by apathy and failing to get out and vote. This is a sad fact of life and I doubt it will ever change?
Personally I'm not a big fan of democracy in the first place...as it is basically mob rule on a large scale? Much better a republic where the rights of the individual have precedence over the will of the majority?
No I don't support the gun law in Canada! But I do abide by it and learn to adapt to it. If it is truly bad it will collapse on its own?
You learn to live with any situation? If the government says this is how it is what are you going to do? Do you get out and try to change the law or do you figure out how to adapt to it? I have found that usually figuring out a way to adapt is better than wasting your time trying to change the whole nation...usually with zero results!
But then I suspect you are a crusader and enjoy tilting at windmills...which is okay too! You do the dirty work and I'll just carry on trying to get along!
In reality you don't have to save the world?