grassfarmer?

[cowman]

Farmers son: Is that $180 extra justified? I don't know. Maybe it is, maybe it isn't? I believe there is no one stopping anyone from exporting fats to the US? Supposedly those Canadian producers would be getting the American price? Why would they sell to Cargill for $180 cheaper?...maybe the spread is justified?
I don't have any solutions. I don't think there really are any? Now perhaps investing in a co-op packing adventure might be a good investment...or it could be throwing good money after bad? We all have to decide where we put our money...and hopefully live with the consequences! I often wonder though if the packing business is so rosy how come the banks aren't very keen on financing them?
How do I see the cattle industry in the future? Mainly as a tax dodge for the wealthy wanna be cowboy!
Now I do believe a co-op packing venture could succeed if the government stepped in and regulated the industry...sort of like in the AWP and Sask Pool hay days? However I am sure you realize those days are gone and it is very unlikely any government other than an NDP government would ever attempt it? And hopefully we never see an NDP government in our lifetime?

[farmers_son]

Cowman: Good comments. Re “I believe there is no one stopping anyone from exporting fats to the US?”. I am not able to export live to the U.S. for a number of reasons, mostly because I am not a big enough feedlot. I would point out that our domestic market is still our number one market and most of our beef is destined to stay home. The wholesale price of boxed beef is similar in Canada and in the U.S. This whole notion of a basis between Canada and the U.S. is really an excuse for a lack of competition to buy our live cattle on this side of the border.

I think you made a very good comment regarding why are the banks not keen to finance packing plants. In agriculture these days most of the financing is provided by government. AFSC and FCC would provide the lions share of financing for most large agricultural capital purchases and in fact these lenders are moving into financing operating money as well. It would seem that these government lenders would need to step up to the plate to finance capital expansion into value adding for agriculture if we ever expect to see the industry move in that direction.

I see producers looking to vertically integrate as the very essence of free enterprise and capitalism. The status quo of ad hoc programs and government assistance is more along the lines of what would be part of a NDP mandate. We need to get away from that dependence upon government aid. Producers looking to build packing plants so as to inject competition into the market is, in my mind, pretty right wing.

I am sure you are aware that government policies favour the big packers in this country at the moment. It is about high time those policies were changed to at least give producers looking to vertically integrate a level playing field.