An efficient producer?

[cowman]

I have a neighbor who is basically grain but runs about forty cows on the side. He has a chaff saver and his cows mostly eat chaff with a bit of bought hay thrown in? He has the cows out cleaning up the stubble fields and runways until late in the fall. He has some hilly land on some of his farm that is no good for grain farming.
He told me if the cows can support themselves in the poorest years he is quite content to keep them! In the good years he puts some money in his pocket!
A big straight cow/calf operation can't compete with guys like this? Hey they have to rely on the calf market...EVERY year...he doesn't? And in reality there are a lot of operations just like this? What is the average cow herd numbers in Alberta?

[grassfarmer]

But does his cow operation have to financially support his farming one? Last time I checked everyone is claiming farming is a disaster. I think i'll stick with cows and grass.

[blackjack]

...farming is obviously an averaging thing...over the years there would be some where we lived off our own cows and others where we lived off the calves those farmers sold...just a honest opinion...

[mb_rancher]

Cowman I agree with cswilson you sure like to whine and complain about everything.

[farmers_son]

I never picked up on any whining or complaining in Cowman's post. There are efficiencies to keeping a small number of cows to use waste or byproducts of another enterprise. But the numbers you can do that with are limited.

If you want an example of an operation that a straight cow calf guy cannot compete with how about cull dairy cows and Holstein steers. The main product is milk, a supply managed commodity, but the sideline product is cull dairy cows and Holstein steers which are sold into the larger cattle market. And it amounts to a sizeable percentage of the animals slaughtered. It is one thing to compete against a grain farmer trying to use some chaff but how can a cow calf producer compete against a supply managed dairy producer.

[farmers_son]

I checked and since 2004 the price of milk in Alberta was adjusted upwards by about $1.90 per hl. to allow for reduced revenue from the sale of cull cows and bull calves.

[Rodjam]

I remember reading a couple years ago that the average cow herd was 20 cows, I believe this was pre BSE/drought years. I suspect this number is only going to go up like grain acres farmed has.

[grassfarmer]

Farmers_son, I don't grudge the dairy farmer a living - i'm pleased to see one sector of agriculture that is stable and prosperous. Long live supply management if that is the result. Remember there is a price to buy into dairying - easily $3 or 4 million for a small farm and quota which makes all our $500 versus $3000 /acre land debate look like mickey mouse money. They aren't really competing with me on their steer calf sales anyway as it is a different item worth what? half the price of quality beef steers? Again we could get into the same argument why single out dairy producers - why not pasture lease holders, guys with oil royalties, guys with off farm income, guys with farming byproducts? We are all different, but we can all exist and I don't see that's a bad thing.

[cowman]

Well a fattened holstein steer doesn't go into a dogfood can or something? And hey hamburger is hamburger...but whatever!
But I don't envy the dairy farmer...he pays dearly to milk cows...in time, investment and lifestyle! The quota system is an example of a government policy gone wrong without a doubt, but that is the system we live under and it is too late to correct the problem?
Don't forget the beef industry was offered supply management by Eugene Whalen and we turned it down? Probably the dumbest thing we ever did? Why just think...we wouldn't be getting screwed over by the USA, we'd be getting a "made in Canada" price for our calves, and finally we could sell our cow quota to guys like grassfarmer for $25K per cow!...yea, we screwed up!

[grassfarmer]

How has the system gone wrong Cowman? A dairy farmer can make a good living off a quarter or half section, pay a dairyman $50k a year, spend money on machinery, buildings thus putting some money into the rural economy. His income doesn't come from a Government subsidy either it comes from the marketplace. Only difference to most of us is that he is getting a fair price based on production cost for his milk without the pirates in the supply chain taking 95% of the profit. Consumers buy milk and I haven't seen them protest the price of it recently. Don't kid yourself either that milk is a highly valuable commodity and beef or grain isn't - look at bread or steaks in the store. Supply management allows you to see the true value that is being created by the producer on his farm by his labour and investment. I can't see that being a terrible system - rather an indication of the wealth that all ag producers are creating but only a few are currently being adequately paid for.

[coppertop]

the entire milk pricing system is under review and dairy farmers may find themselves at the mercy of the marketplace just as the beef farmer is, if things change.

[farmers_son]

Well I did not intend to open a debate on supply management. Whether or not we “screwed up” by not going the supply managed route with beef cattle is neither here nor there. We went a different route and there is no going back.

I think Cowman did raise an interesting point when he said we cannot compete with guys like this. Which raises the question of who do we compete with. I believe Grassfarmer is incorrect when he says we can all exist. Obviously there is a trend, even a government policy, towards fewer and fewer farmers. So we are not going to all exist and some of us are already going the way of the dodo.

Coppertop: The milk pricing system is under review but by whom. By the politicians that is who. As long as the dairy industry is important in politically influential areas of the country and the cow calf/beef industry is not then we should not be surprised by the outcome of such reviews. Like it or not in Quebec the dairy producers are influential. In Alberta the packers are influential and producers are not. So maybe that partly answers the question of who do we compete with. We compete with other lobbies for a competitive advantage from government, a chance to survive if not profit. As witnessed by the declines in primary agriculture and the boom in the oil sector, the dramatic profits of the packing industry and continually increasing value for dairy and supply managed quota we can see who has been competing most successfully.

[cowman]

Grassfarmer: I wasn't saying supply mangement as such was a bad thing? When I said the government screwed up, I was talking about the system where the "quota" became more valuable than the cow and became a commodity? So today we approach a $35,000/cow, piece of paper to own "quota"! The fact is this real assett called a "quota" was created out of thin air and cost the original owner zero dollars? Instead of being allowed to buy and sell quota, it should have been when you quit dairying the quota reverted to the government and gone back out to someone else?
Now this high priced quota is very good for the original farmer...not so good for the young guy wanting to go into dairy? The young Canadian wantabe dairy farmer can't get a start? So instead our dairy industry has been overtaken with wealthy Eurobucks? How many Canadian dairy farmers are left? Ultimately we have to ask....was this good for the Canadian farmers?
This whole scenario is being played out all across Canadian agriculture? The "native sons" if you will, cannot afford to compete with wealthy Europeans coming in and out bidding them on land? Are the Europeans better farmers?...doubtful...you don't have to be all that good when you have more money than you know what to do with!
Now this is not a bash on European farmers. After a few years they usually get it and start to fit in and realize farming over here isn't all its cracked up to be! And I guess we should all realize we are in reality all "European farmers"...just some have been here a little longer?

[grassfarmer]

Would you care to explain this one Cowman? "Are the Europeans better farmers?...doubtful...you don't have to be all that good when you have more money than you know what to do with!"

[cowman]

If you have all the money in the world you can look pretty good? You can afford to do things others can't...whether cost effective or not?
For example you want to raise the best crop in the country go out and pound the inputs to it! It will look very good...even though you may lose money on it!
You want the best calves in the country? Don't spare the genetics, facilities, feed or hired help...and you will ring the bell at the sale every time! Of course you might not make any money.
Consider this: A Dutch dairy farmer comes in with millions and builds a showplace? Meanwhile old Johnny Canuck is trying to figure out if he can put some siding on the barn or maybe only buy a few cans of paint! He has to make his living milking cows...not so his wealthy Dutch neighbor?
The same could be applied to other "playboys" besides the Dutch dairy farmer? How many of the big purebred outfits here are owned by guys who wouldn't know which end of the cow to feed...and really couldn't care less if they made a dollar?
Now I might have to classify my ownself as a "playboy"...although I am a darned poor one!