U.S. to Open Border to All Cnd. Cattle

[cakadu]

From a purely competitive and economic standpoint, protectionism costs consumers way more. A good example of that is in the peanut industry in the US. The more you protect, the more that has to be done in the area and the more that costs. We have far greater labor and input costs in North America. Someone has to pay those costs and it eventually ends up being the consumer.

In the more northern states, it costs a lot more to raise animals, just like it does here because we have to feed for so many days of the year. The more inputs, the more you have to pass on those costs. Who ultimately ends up paying those costs?

The other question that needs to be asked is, despite the fact that the consumer pays more, how much of that actually ends up with the producer?

The harder you try to hang onto something i.e. jello, the more of it slips through your fingers. How good is protectionism in the long run? Charge too much for your product and consumers will eventually substitute for something else.

That happened for many years as poultry gained market share on beef. Now good cuts of poultry are comparable (and quite substitutable) to beef cuts. If consumers don't find the quality and value for dollar, they will speak with their pocketbooks.

[cowman]

Personally I think the COOL law is a good thing? For Canada too?
I'm not sure about R-CALFs reason for wanting it? I suspect it is more about thinking the packers/retailers will think the hassle of importing product will make it easier to just buy American beef?
COOL, as proposed, doesn't really restrict Canadian beef because the majority of our beef is heading to the restaurant trade, which is exempt from COOL?
I do believe though that COOL is a good thing. Personally I don't want to buy any Brazilian Zebu or Australian kangaroo! And actually if I'm forking out $20 for a steak I don't want any corn fed American beef either!
I wonder what the American consumer might think when they went to the meat counter and saw a package labelled "Canadian Sirloin Steak, tested BSE free, barley fed, age verified 18 months old"? I suspect once they tried it they might question why they were buying the "product of the USA" that was costing them 20% more?
Are American consumers so patriotic and loyal that they would continue buying an inferior product just because it was made in America? They sure wouldn't in Canada.

[farmers_son]

There is a reality we need to consider. It is not about American beef or Canadian beef. It is about American cattle producers and Canadian cattle producers trying to make a living in a nearly pure competitive environment characterized by many weak sellers and a few strong buyers.

Very few of us actually sell beef. The packers sell beef and if anyone thinks they pass on the profits to us cattle producers I think that person is dreaming in Technicolor. Producers tend to think in terms of if we could just keep that product out of our market or if we could keep that product out of our market we would finally be able to make a decent return. While that might be nice in theory in practice it is not going to be so. In the present market structure the packers are not going to see us producers ever make any more than enough to just keep us alive.

American cattle producers are not the problem. We Canadians need to understand that. Canadian producers are not the problem and hopefully American producers will come to see that too. We have problems in our industry but it is not each other. The packers are the problem, pure and simple. Imports from offshore do present concern. But we need to be clear it is not the producers in Argentina, Brazil or even Australia who are importing that product to keep our live prices down. It is the packers.

It is the packers who seek to drive down the prices paid for our live cattle. They seek to drive down the prices paid for live cattle in Canada, they seek to drive down the prices for live cattle in the United States, and Argentina, Brazil, Australia, Europe and anywhere else cattle producers are seeking to make a living from agriculture.

Bottomline, cattle producers need to get over viewing each other as the enemy which is pure BS anyway. It is just easier to say that if the Canadian producer went away or the producer in Argentina would just mind their own business then producers in other countries would finally be able to make some money. The real problem and the tougher problem is trying to extract a fair price for our live cattle from the packers. We will never make any money raising cattle as long as the market power is in the hands of a very few global packing plants who stand see their profits increase in direct relation to their ability to artificially lower the prices paid for our live cattle.

This American producer against the Canadian producer is just playing into the hands of the packers. They are laughing all the way to the bank as producer group after producer group is seeking ways to protect themselves against the other meanwhile turning a blind eye to the shenanigans of the packing plant industry. Producer against producer is a luxury we cannot afford any longer if we intend to ever address the real issue of unfair pricing of our live slaughter cattle.

[gordie]

farmer son

Very well put, it says it all. Can,t believe us ranchers can,t get along always worried some one is going do better than us. If we could join our forces we would be a lot better off.

[Willowcreek]

farmerson- "It is the packers who seek to drive down the prices paid for our live cattle. They seek to drive down the prices paid for live cattle in Canada, they seek to drive down the prices for live cattle in the United States, and Argentina, Brazil, Australia, Europe and anywhere else cattle producers are seeking to make a living from agriculture."

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I will agree with you on this--the packers will buy product wherever they can get it cheapest using whatever method or corner they can cut- and use whatever method they can get away with to market it at the greatest return to THEM...

And that is why in this new global trade world we need ways to identify our product for the consumer...Some way to identify US beef and Canadian beef from the Mexican, Australian and soon to come Brazilian product...

Canadians should be out fighting to get Country of Origin Laws in all countries, rather than lobbying to kill
the US law like they have been..

We (Canadian and US ranchers) have spent generations building our genetic quality of our herds- which means nothing right now, as the packers can throw anything from Uruguay, Mexico, Australia, Brazil, etc. out there and call it product of US......

This goes a lot deeper than just between US & Canada and like cowman says I think COOL would end up being beneficial to Canadian producers in the long run..

How do you compete in a worldwide market when noone even knows the quality of that product? Thats where Canada is now.. With the fraud of the USDA allowing the packers to use the USDA stamp on Canadian (and all imported) beef nobody even knows they have ever eaten Canadian beef-- couldn't have been because it had a USDA stamp on it showing it is US!!....

[cowman]

I agree with Willowcreek that our product should be labelled with country of origin. First of all so the consumer can identify that product? If you are afraid to put your name on it, what does that say about your product?
I'll get ripped for saying this: Tyson and Cargill are successful corporations for one reason...they do it better than anyone else! Just like Walmart does in the retail business?
If there is such a goldmine in packing don't you think there would be a whole bunch of players involved? The "dream" that a farmers co-op is going to compete with these competent businesses is basically just that...a dream? Niche markets, yes but not in the big bad commodity market of beef?
Both Cargill and Tyson are in the process of integrating into the feeding business(at least in Canada) and who knows where that will lead eventually? I doubt you will see many custom lots refusing to feed Cargill/Tyson owned cattle?
I guess if you want a "fair" price for your product then you need to move up the ladder and do it all? I would suggest it has been tried...in the hog industry...and it was an utter failure! And I will also add there is no one holding a gun to anyones head, telling they must produce calves at an "unfair" price?
Personally I don't care who buys my calves/yearlings, whether its Cargill or Butte feeders or an American feedlot? Whoever pays the most...its called the market?
Cargill and Tyson did not create the situation we have in Canada! This situation was created by protectionist forces in the USA and our own weak federal government? R-CALF were actually the ones who did keep the border closed with their suit that Cebull ruled on! No ifs, ands or buts on that one! I also believe the USDA is very aware that OTM cattle are going to be a problem mainly due to R-CALF?

[farmers_son]

There is absolutely nothing stopping anyone from labeling beef as to its country of origin right now. If Willowcreek wants consumers to know they are eating beef that was raised on his ranch he can label it Product of USA or Product of Montana and sell it in stores throughout North America if that is what he desires. Cowman, you are free to do the same. If the consumer places a value on having that information you will be rewarded in the marketplace. Mandatory Country of Origin Labelling is another animal all together.

We are all adults here so lets not try to kid each other that MCOOL is about anything else than creating barriers to trade of non U.S. beef. U.S. producers support MCOOL as a means of limiting competition from beef sourced from cattle not raised, fed and slaughtered in the United States. U.S. producers who support MCOOL believe their live cattle prices will rise if sufficient barriers can be erected to either stop competing imports or failing that have those imports relegated to lower value sectors of the beef value chain. Underlining this line of reasoning must be a belief that the packers will pass along any benefits, assuming benefits actually exceed costs, to the producer level. However the same producers who support MCOOL typically are those producers who are most suspicious of the credibility and fairness of the packers in the first place. It is very, very unlikely that MCOOL would raise live slaughter prices in the United States.

Cowman: Of course you are entitled to your opinion about the viability of coop packing plants. But the solution to uncompetitive bids for our live cattle extends well beyond building a few new packing plants. Producers need to bear in mind that the big packers are global players whose strategy extends well beyond the borders of any one country or the cattle producers in those countries. Over the longer term, producers will not be successful in raising the price of their live cattle by lobbying government for policies that lower the price of live cattle in other countries. Doing so only creates a pool of cheaper live cattle in that other country that global players like Cargill and Tyson can use to drive down the price of live cattle in the producers own market.

If U.S. producers want to see the price of their live cattle rise then the surest way to have that happen is to encourage national policies that actually would see the price of live cattle rise in Canada and Mexico. An example of this happening is, against all predictions, a rise in U.S. live cattle prices after the border opened to rather substantial imports of Canadian live cattle last summer. The price of live cattle rose in both countries. Sometimes the answers are obvious but we just cannot see the forest for the trees. If U.S. producers wish to see their live cattle prices rise, then it would be in their best interest to foster policies that see increases in the price of live cattle in the other NAFTA countries. If producers in Canada and Mexico want to see prices for their live cattle rise then support initiatives that will see live prices rise in the United States. It is really that simple.

[cowman]

Well I don't raise "beef" and I'm not a packer/retailer so actually unless I go that route...it ain't going to happen!
Now I do raise what I think is a quality product...one I think the market desires...but what happens after I sell that calf/yearling isn't up to me? They could starve him down or feed him corn and he might not be "a great eating experience!
But when I go into Safeway or Sobeys or whatever and I buy a steak that costs me $8 I want to know it is a quality product...and yep I want to know it came off an animal from Canada! If I go out to a restaurant and am paying $16 for a steak I want to know that I am getting a quality product, not some garbage from Brazil or Australia. I never order fish or chicken because I believe if I am in this darned business, then I should support this business! And I will tell you I have had some excellent steaks in Montana...at a time no Canadian beef was entering the USA!
The point here is this: Canada and the USA have a similar system...at least on the Northern Plains? Same cattle, same feed, same damned people...basically?
In fact I might suggest to you and to Willowcreek we are not very different at all? Alberta and Montana have one hell of a lot more in common than Quebec and Montana...or Alberta and New York?
I actually believe if I was living in Montana I would probably be supporting R-CALF! They have a lot of good ideas...they just aren't doing it right?

[farmers_son]

Regarding the comment that we are not different at all: Cattle producers everywhere have common challenges and no matter where you look the story is the same, marginal returns in a marketplace characterized by many weak sellers and a few strong buyers. If we are talking about cattle producers I would think the situation would be similar in Alberta, Montana, Quebec and New York. Where producers may differ is their response to these common challenges.

The world has changed from the fifties and sixties where protectionism was common, beef trade seldom occurred between countries and the industry was domestic not global. Seeking solutions on a country by country basis is not going to provide the same results that might have been achieved in 1955 as the nature of trade is different and the industry is no longer domestic but global.

I am convinced that if producers are going to be successful in seeking increased profitability then they must realize that they are in competition with the packing plants for their fair share of the consumers food dollar and not in competition with other producers. I think cattle producers should be suspicious of who really benefits from trade actions that see producers pitted against producers in other countries. Cargill, Tyson and their ilk are powerful multinational, integrated, global corporations that profit from these trade actions. American producers will never improve their lot by seeking to lower the price of Canadian live cattle. American producers will not be successful in turning back the clock to 1950 when global trade in beef did not exist.

The challenge for all cattle producers is to force the packers to pay them a fair price for their live cattle because unless the packers have no choice but to bid up they will not. The packers will not bid up for American live cattle if they can buy cheaper cattle in Canada and Mexico. I would add that Canadians need to start doing more within Canada to ensure fair pricing for our live cattle. But that does not change the fact that producers lobbying for government to put in place policies that by design or consequence lower the price of live cattle in the other country only serves the packers interest.

Although it may take a paradigm shift in thinking, the truth is if Montana producers want to see fewer Canadian cattle crossing the border, the best way to do that is to lobby for policies that see the price of our live cattle increase, not decrease.

[cowman]

Well first of all I don't see a COOL law as protectionist? Now maybe the one proposed in the USA is in fact protectionist in the sense that the packers/retailers won't go to the expense of doing it? I do see COOL as giving the consumer useful information that helps him make a decision of where he wants to spend his dollar? If an inferior product is passed off as a superior product, it hurts the superior product? If you have a superior product then you should demand that the government protect your rights...just like they do with cheap knockoffs of watches, handbags etc.?
However as a consumer, not a producer, I want to know where the product I'm buying comes from? So if I buy tomatoes I want to know they were raised right, not sprayed withh DDT or something? If I buy a steak I want to know it is disease free and not contaminated with pesticides? Now I trust the CFIA to do their job and I trust the USDA to do their job...I don't know about Brazil or Argentina or Australia! Maybe I am naive to trust the CFIA or USDA? Especially when R-CALF keeps saying the USDA are liars and cheats and American beef is unsafe!
And quite frankly I like to buy products made in Canada and the USA! If I have to I will pay a little more for them than imports! The way I see it is this: The auto worker in Oshawa is buying my steak...not the worker in Taiwan! If I expect the auto worker to have the money to shell out $8/lb. for a steak then maybe I need to buy a chev/dodge/ford instead of a Toyota! Now I realize that is sort of simplistic since the auto trade has basically gone global and they build Toyotas here.
I don't see the USA and western Canada as seperate countries, so have no problem buying American. The fact is US companies and people operate up here as if they were Canadians. Remember the Liberal ad when Mulrooney was trying to get the free trade deal through? An American negotiator was talking about the only line they needed to change in the agrrement was this one? And then he took an eraser and erased the border?
I believe, in the big picture, that is where we are headed and I would suggest that is a good thing? These artificial borders do nothing but restrict commerce and industry.

[farmers_son]

“Maybe the [MCOOL] proposed in the USA is in fact protectionist…” Darn sure it is protectionist. It is nothing less than apartheid for beef with the U.S. beef promoted as white and all other beef painted as black. Producers on both sides of the border will spend millions trying to convince consumers their national beef is best while the packers sit back and cash the cheques.

I agree with your comments about erasing the border. It may take some convincing south of the border however. And thinking beyond MCOOL; protectionism in the larger picture, producer against producer, is not working to improve the situation of North American cattle producers. Our problem is not the producer in Montana or North Dakota, their problem is not us. The problem is the packers and until such time as attention is diverted away from border issues to the real problem of unfair bids for live slaughter cattle our problems are not likely to improve.

[cowman]

Well I may be wrong but I thought the packers were fighting MCOOL in a big way? I don't think they relish the idea of not being able to source cattle or beef that needs to be seperated from the US cattle?
What is an unfair bid? You put up a product for sale and anyone who wants it can buy it. If you don't like the price you don't sell it! If you think you can do it better than Cargill/Tyson then I guess you go that route?
Isn't that really what all these new producer type plants are about?
Companies like Cargill/Tyson are pretty tough players...that is how they got where they are today. It's called business? You operate for the biggest profit possible within the rules! You can't blame companies for doing their best? If the rules aren't fair you need to address the rule makers not the people trying to operate a business.

[Willowcreek]

farmers_son-- I think it would be a hell of a lot better spending money promoting your own countries cattle and beef than what is happening now- millions being spent to run each others cattle and beef down- with each country trying to keep the others out of their country ...But you can't promote and advertise your beef until it is identified and labeled.....

And the North American beef idea will not fly in the US- that was shown when even the NCBA membership almost revolted at their convention and their President had to take the TV and apologize saying "we weren't listening to our members."

[farmers_son]

Cowman: What is an unfair bid? I would say when the packers are selling UTM and OTM beef for record prices but the live slaughter price versus carcass basis is as much as $400 wider (for cows) than historically I think it could be said the bids are unfair.

Live cattle are a perishable product. It is not reasonable to say that we put up our animals for sale and you do not sell if you do not like the price. Fat steers and heifers have to be sold within a relatively small window of time. We can only hang onto cull cows for just so long before selling them no matter the price. If nothing else cash flow demands force us to sell whether the price is fair or not. The packers know this and collude to lower prices in order to increase their profitability.

Ok, Cargill and Tyson are tough players. And we can either continue to accept their artificially low prices for our live cattle or we can start to operate for the biggest profit possible by understanding the rules and using them to actually realize better returns for our production. Cargill and Tyson are not just going to hand over some of their profitability to producers because they are nice guys. Producers need to be able to force the packers to pay fair prices by using business rules themselves. No white knight is going to come into our market and create competition and fair pricing for us. We have to do it ourselves. We really have no other choice.

Willowcreek: I agree that North American beef is a tough sell in the U.S. As producers we need to avoid confusion about beef and cattle. We do not produce beef the packers do.

But would you agree that cheap live cattle in Canada would act to drag down U.S. live prices. I think you would agree with that.

Look at it like this. The present situation could be compared to two patrons of a bar having a fist fight over a girl while the packer slips out the side door with the young lady of interest. We can either continue to duke it out or we open our eyes and realize that the packer is dating all the pretty Profit girls while we are exchanging blows and do something about it.

I know it is a stretch to suggest there could be advantages to producers not fighting with producers and that trade and international cooperation could actually increase our individual farm profitability but it is something I think needs to be considered. I am suggesting that the surest way to raise live cattle prices in the U.S. is to raise live cattle prices in Canada. Working to raise your live prices by stopping trade with Canada through various protectionist measures in effect creates a pool of cheaper live cattle here in the longer terms works to limit live prices in your market.

The best way and the surest way to increase your live prices is not to put up protectionist barriers which do not work but to encourage policies on both sides of the border that will see the price of our live cattle mirror yours. Once that happens Canadian live cattle are no longer a source of cheaper competition.

[GodLovesTheUSA]

QUIOTE "The best way and the surest way to increase your live prices is not to put up protectionist barriers which do not work but to encourage policies on both sides of the border that will see the price of our live cattle mirror yours. Once that happens Canadian live cattle are no longer a source of cheaper competition."
What an intelligently written closing comment from a truly blind and ignorant Canadian who can not or will not see anything from the other persons point of view.
Helen Keller wrote in her biography
The World I Live how she pitied those that had sight but could not see.
This individual truly needs to be pitied.
I am disappointed in myself that I am responding to this sad comment. However I think that this individuals comments reflect a mindset that I would like to address. I do so because have heard these comments from other Canadian producers.
Obviously this individual is making his comments through a worldview of self interest. If something is good for him then it must be the right thing for the rest of the world.

This comment reinforces my initial assertation that Canadian beef producers feel that they have a God given right to American markets and American money.

I do not think that you Canadian beef producers realize the true and unfortunate situation that you are in.
You have a very poor ag economy with a federal government that does not care about you. You have lost lucrative export markets and the market economy has forced you to look at alternative markets. You some extreme NEEDS. You NEED to sell the production from you land and livestock. Where is the easiest market to sell into. The good old USA. Please try to recognize that the NEED is all yours. That is how you see the world. You have a very self serving attitude. Because you need to have have your cattle exported into other countries developed markets you would like to see the whole world run by rules that fit your NEEDS.

I think that free trade is fine, but you Canadians do not seem to make such a fuss if the value of your currency is lower making it more difficult to buy American and giving you an advantage in export markets. You seem to leave that little factor out of your comments.

The sad part about your self serving outlook on American markets and your right to access them is that in focusing completely on these problems you fail to realize your true difficult situaion and also great potential and you fail to see how you might try to meet real market needs.

The main reason the Canadians producers are in such a difficult spot is that they fail to see what the political and economic realities are in Canada. Canadian producers need to realize the new realities and then find new products and new markets and work towards a new economy.

Candians had a great success for quite some time with their Canola oil which replaced softer wheat markets. Yes, over time world competition took that advantage away. But this was an example where Canadians led the way in meeting market needs instead of just saying that we have this beef and NEED to sell it somewhere.

Remember, markets are not formed from your NEEDS but from the markets needs.
I am sorry to inform such an obviously intelligent writer as yourself that the world does not revolve around your NEEDS.