I agree with cowman on this one. While smcgrath and myself are in accord on where we think calf prices are headed I cannot agree that this will bring about more investment in packing facilities in this country.
Investment dollars flow only to places where it is perceived that money can be made. And because these dollars have the whole business world to choose from, how likely is it, do you think, that this venture capital will go to the cattle packing business in Canada where there is already well-entrenched competition, a highly cyclical and variable raw product and limited retail channels? I can think of a myriad of places where I'd rather put my money and, believe me, these venture capitalists are a whole lot smarter than me.
If we rule out outside financing for Canadian packer plants, then you have to look at producer-owned plants. But surely this too is a dead issue? Most of the proposed plants could not raise money from producers during the BSE crisis. I see no chance of this happening in the next while.
The fact is, as cowman has pointed out several times, we had a Canadian packing industry in times gone by. They could not compete with the Cargills of the world and they're long gone. Without direct government involvement--something I do not see happening either--we are not going to have a packing industry in this country in 10 years that is much different from the one we have now.
kpb
Investment dollars flow only to places where it is perceived that money can be made. And because these dollars have the whole business world to choose from, how likely is it, do you think, that this venture capital will go to the cattle packing business in Canada where there is already well-entrenched competition, a highly cyclical and variable raw product and limited retail channels? I can think of a myriad of places where I'd rather put my money and, believe me, these venture capitalists are a whole lot smarter than me.
If we rule out outside financing for Canadian packer plants, then you have to look at producer-owned plants. But surely this too is a dead issue? Most of the proposed plants could not raise money from producers during the BSE crisis. I see no chance of this happening in the next while.
The fact is, as cowman has pointed out several times, we had a Canadian packing industry in times gone by. They could not compete with the Cargills of the world and they're long gone. Without direct government involvement--something I do not see happening either--we are not going to have a packing industry in this country in 10 years that is much different from the one we have now.
kpb
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