ABP Strategic Plan

[rkaiser]

Prior to BSE our industry was becoming more integrated and, shall I say, legitimately one industry. Cargill and Tyson were offering grid pricing schemes and extra value for carcasses that held more value at the wholesale level. Sure we had margin players and a degree of seperation between producer and packer, but there was also room for small players to start up and take the risk of value adding ourselves. Groups like our Canadian Celtic, (then Galloway by Choice) had there roots set at this time, as well as some of the organic initiatives and a few branded export products. Sunterra, Diamond Willow, the Kobe beef boys, and the Piedmontiese exporters are a few that have yet to give in to the forces against them.

You want to talk about forces against. Investment in the cattle industry is one thing, investment in the cattle/beef industry is another. The closed border has made this game an even tougher task for those who invested prior to BSE, and made it near impossible for new comers to join in.

Rule changes have favoured the multinational packers ever since the closed border OUT OF FEAR. Very little consideration has been given to the efforts of CANADIAN ventures due to this fear that Cargill and Tyson may slow down a line.

Hogwash.

Cargill and Tyson are in business for profit, and profit has been there for the taking since Sept. 2003. And continues NOW as farmer-son has pointed out.

The shift in ABP policy was somewhat evident at the CBEF meeting where CBEF and even ABP supported testing for export marketing purposes. A move that would give new packing plant proposals a tiny leg up on the multinationals. Let's hope this shift continues and more effort is made to promote and assist new CANADIAN packing initiatives.

THI IS THE ONLY WAY TO CREATE THE COMPETITION WE NEED FOR PRODUCERS TO GET A FAIR SHAKE AT THE SLAUGHTER LEVEL.

Feeder prices ARE NOT GOOD. They are better than what they were, but nowhere near what producers need to operate profitable businesses.

We do not all want to be packers. But the BIG C idea is one that allows us all to take part in some of the post slaughter benefits without investment of time or very much money.And allows for a return of competition to the market which is pathetically dysfunctional even with an open American border.

The CCA has continued the fear stance. Fear of what the Americans might do, fear of loosing a shift at a Tyson or Cargill plant, while Tyson plays games with their Union backed by a warchest from two years of massive profits.

A footnote. Believe it or not, a slower line, or a shut down at Tyson would actually help our Canadain Celtic program. Hard to figure you say?
One more of the effects of this whole debacle is a major frozen inventory of low end cuts in Canada. The profits are soo good for a boxed product south of the line that Cargill and Tyson have the ability to play the lowball game in Canada with product that ALL of us want to move. Let this inventory drop a bit with a closed plant and all of a sudden, CANADIAN wholesalers may have a chance in this pathetic market.

Cargill and Tyson have chosen to take the route they are on. Producers of this country are simply paying the price. Should those of us who speak out against this unfairness be ostracized? Should we be held responsible for tearing apart a system that WAS becoming more integrated prior to BSE?

Or should we continue to fear the rath of Cargill and Tyson, and/or the USDA like the CCA has chosen to do?

Time again to speak up at the ABP meeting. Time again to harden your skin and be prepared for volleys from leadership that is more fearful than you. If everthing that ABP or CCA did was right and unchallenged, we should all be profitting well in a world priced beef market as high or higher than any time in history. We are getting closer, but we are not there yet.

[rkaiser]

I agree it is time to speak up at ABP Meetings but there is still time beforehand to raise issues and concerns with your zone delegates or candidates. They are supposed to represent the grass roots so the grass roots should speak out.

[cowman]

Well I don't know about the fat market but the feeder market is not all that bad. Yes it would be nice to get $1.60 for the calves but after the last two years $1.30 looks pretty good?
The real dog here is the cull cow market? And with the Lakeside strike I see that getting worse? How long are we supposed to hold these old cows?
Now personally I haven't used the downer program where the vet comes out and shoots your old cows and you get $225! It seems to me it is just a scheme to get rid of the old cows and pretend it is all for science and food safety? The other night I saw a show on Malawi where the kids are starving and here we sit on a mountain of beef that no one wants! Something isn't quite right when we feed our cows to the coyotes and magpies while those little black kids are starving?

[rkaiser]

This coming from the man who has supported a cull slaughter since day one ???????

[cattleman2]

F_S: How many packers are there in the Pacific Northwest competeing for those cattle? Probably 1 less than in Canada. Are those cattle bringing $200 head less? I don't think you can say that it just the lack of competition causing the market distortion...

[BFW]

rkaiser, I have to question your statement that "feeder prices are only better than they were, but still not good enough to operate a profitable business." I would like you to qualify that statement. Here you have practically the highest prices on record being received for feeders in the US (and access to that market), feed grain prices the lowest in recent memory and hordes of over eager buyers ready to fight over every lot of good calves that come into the ring! I expect that most people selling calves are just damn tickled with the prices that calves are bringing and you have the gall to say that it isn't enough! If you can't make a living selling calves at these prices in this environment you had better ask yourself why not or consider a career change.

[cowman]

Randy: Yep I have...still do! If we don't get our cow herd back to some reasonable numbers, how can we ever expect decent prices?
Now if those cows go to Africa or down in a pit doesn't really matter because it has the same result...less calves on the market?
It is very obvious the US farmer/rancher doesn't want our cattle or beef...and who can blame them? I suspect trade harassment will now be the norm from here on in? So why not get the numbers in line with the domestic market and lobby the government to keep out the imports?
Who makes all the money on exports? Is it you and I or is it the packers and feedlots? Prices are pretty high in the US right now and there are a lot of fat cattle crossing the border supposedly getting the American price? I do realize the feedlots have added costs due to American trade harassment.
I'm not sure if the feeder price is sufficient? We were getting more for calves in 2000 than today. However what was a pickup worth in 2000? What was gas or deisel worth? What was a steak worth in a restaurant? So I guess we definitely have taken a step backwards?

[farmers_son]

Cattleman2: Lack of competition is the cause of the market distortion, why U.S. cattlemen get $200 or more for the same animal than an Alberta producer receives. There are a number of reasons for that lack of competition but the end result is we do not receive a fair price for a fat animal in Alberta.

Boxed beef moves both north and south every day. While there is a basis between U.S. and Canada live cattle prices there is essentially no basis between U.S. and Canadian boxed beef prices, basically a level playing field for the most part. In fact even before the Lakeside strike the price of nearly every cut of beef in Canada was higher than in the United States. We have been conditioned to accept a basis for live cattle however I think there is no sound reason for a basis to exist other than lack of competition for live cattle within this country.

Cowman: Numbers of animals are not the issue. We could dump half of our herd in a pit and the packers would still not pay us a fair price for our live cattle. The packers do not pay us a fair price because they do not have to. There is not sufficient competition within our market to force the packers to bid up for our live cattle and until such time as something changes in our market to create that competition nothing will change even if a spacecraft came along and beamed up every other cow. Look at it this way, there is not so many cows or calves in this country as to drive down the wholesale price of beef. The wholesale price of beef is right up there with the U.S. price. It is not a supply problem, it is a problem of non functioning markets caused by a lack of competition.

[rkaiser]

BFW - I think your sentiments are coming from your own (feeder) prospective. Calf prices must be scaring the hell out of you. Even though the last two years, and especially the last year have been profitable from a feeder (margin) standpoint, who wants to pay a buck thiry for six weight calves with a fat market hovering in the 85 cent range.

By the way BFW, I opened the gate to a man's land who feeds a bunch of calves for you each year and let in a herd of hairy black beasts yesterday. Same mix wagon dropping feed for your calves and my cows.

As far as calf prices for the cow calf producer - I will say again that these prices are not enough. Comparing our industry to the oilfield and what a man can earn there, we are still a lemonade stand next to Hooters. We all need a better price for what we do BFW, and I hope like hell you can weather this calf price hike and not blame it on the cow calf guy if it doesn't work.

Send me an email, and we can talk about how we're going to keep our custom feeder on his toes.

rpkaiser@telusplanet.net

[cowman]

farmers son: There is not enough competition to bid up our cattle? Or is the supply so bloated that the packers don't have to bid up our cattle?
Add a bunch of trade barriers that were imposed by the USDA and suddenly our large numbers of cattle become a problem? Unfortunately it looks like the USA intends to continue to throw up roadblocks to live cattle trade and live cattle trade was what drove the expansion of the Canadian cowherd?
If the Canadian cowherd shrank back to a domestically sustainable level I believe you would see some competition? Cargill and Tyson are in the business of competing and to make a buck they need to keep the line full. Not much incentive to pay you for your steers when the guy down the road will sell for less? But what if your steers were the only game in town?
If this basis of $200 or whatever was eliminated, I assume the basis on feeder calves would disappear also? Maybe besides a better fat market we would have a massive movement of feeder cattle into the US? The whole problem here is the continued USDA trade barriers that continue to give the packers and also the feeders an advantage. Personally I don't care if my calves are fed in southern Alberta or Iowa...whichever will make me the most money!