Regulated beef industry

[dfarms11]

Qwestion? What would be the pros and cons to a regulated beef industry like the dairy and poultry industry? What if we had a quota system for beef like they do? What would things be like for us? I don't know much about the quota systems but I would like to learn.

[cowman]

Way back in the 1970s Eugene Waylon offered supply management to the beef and hog industry? Both turned him down.
Might have been the biggest mistake we ever made?
I believe there were some basic flaws in how supply management was managed. The fact that quota became a commodity that became much more valuable than the farm, shouldn't have been allowed to happen? Today the quota value for one dairy cows production, trades at over $35,000! Great if you were one of the lucky ones who got your quota for free...not so great if you have to buy quota to get into the business or need to expand?
The basic principle of matching the supply to the demand was a good idea I believe! The prices are set so the producer has a profit. Brings a whole lot of stability into an operation and allows the consumer a good product at fairly consistant and affordable
prices?

[brian99]

maybe look at the potato industry. These boys are doing very well for themselves and are dealing with very large processors(McCain, Lamb Weston) as their buyers. They negotiate thru a producer board.

[smcgrath76]

So let me get this straight. We want to get rid of the wheat board, protect supply management and regulate the beef industry.
Sign me up if it means I qualify for free initial quota and then can bail out.
I am not sure what to do with the extra couple of million beef cows we will have kicking around.
How about structuring policy to allow for innovative approaches to business?
Does supply management mean I can't sell grassfed beef from my farmgate? Does it mean that we have to pool our production? Does it mean that we can't seek premium markets or that we take the average of the day?
There are a lot of trade implications in moving this direction, some of which may affect industries larger than ours. The POY (piss on you) approach is not commodity specific. You mess with beef, we mess with softwood lumber or grain or cars or steel, etc. It would be pretty tough to go into the next round of WTO with a straight face if this were to happen.
Also, while I appreciate that supply management does create some certainty in industry, don't be fooled into thinking that all producers in supply managed industries are making a profit. There are still good and poor managers in every business.
Maybe BSE has broken the free enterpriser myth that we used to hold so near and dear.

[grassfarmer]

I would agree that supply management is not a good fit for an industry that needs to export the percentage of beef that Canada does. Saying that the "free market" system isn't working either - pound cows were selling until after 8pm last night in Ponoka, the current exodus from the cow/calf sector looks to be huge.
I think the solution lies somewhere in between. Supply management in the Cdn dairy sector works because producers get a return that covers the costs of production of all but the poorest managers. Quarter section farms with 70 cows can make two salary incomes - that is what agriculture should be like - people need food Contrast this to the US free market system where dairies sometimes run thousands of cows and can't make money. Over the years store bought milk price has been lower in Canada than in the US.
We could achieve sustainable incomes from beef production if Government stepped up to the plate - not the charity plate, the political one. Proper anti-monopoly rules would ensure we actually did have a competitive free market for our production. There is enough money in the beef production chain to allow this all it needs is the political will. As far as WTO goes who cares? it is nothing more than a gathering of corporate gangsters deciding how to split the world economic pie up between themselves. It has nothing to do with free trade.

[Willowcreek]

grassfarmer{"As far as WTO goes who cares? it is nothing more than a gathering of corporate gangsters deciding how to split the world economic pie up between themselves. It has nothing to do with free trade."}

AMEN

[cowman]

Well I don't think anybody has to worry about supply management in beef...because it will never happen!
The day when this was a possibility is long gone. In fact I doubt supply management in poultry/eggs/milk will be around much longer.
The fact is our export market for beef, pork, grain is pretty vulnerable? There is enough money in the Canadian supermarket to take care of us...if we had supply and demand in balance?
I think we have to look at the "cheap food policy" of North America? There is no "official"cheap food policy but it is there none the less? An excellent book on this is "The politics of food" by Don Mitchell?
Bottom line is cheap food is a necessity to fuel industrial North America! We are the peasants...and no one cares about the peasants? They really don't.

[kpb]

grassfarmer, I agree that there is no political will to break up the monopolistic nature of our business. However I think there is no chance at all of this changing. The Canadian populace gets less and less in tune with farmers and a smaller and smaller percentage of citizens actually produce food.

That to me is a reality and the other reality is that we live in a democracy where the majority rules. As long as this is true the majority will want cheaper and cheaper food. If that means beef from Argentina than so be it. If it means importing all our meat and all our vegetables than our politicans, responding to the desires of the majority of the electorate, will do everything needed to make it happen. After all that's what the "majority rules" means, right?

kpb

[grassfarmer]

kpb, I would argue that the customer should be our best friend and greatest ally. They are already paying a more than adequate price for the food they consume (more than adequate to give us as primary producers a viable return) plus they are also paying for all the aid packages (to producers) needed to keep the food supply rolling into the supermarkets. Don't ever make the mistake of thinking farmers aren't needed. Global movement of food will increasingly be looked upon as poor practice in terms of energy use given the transport requirements. A move to more local food could be a big help to us. Moving beef in from Argentina does not make sense when we already have more than we could eat.
As Cowman says "There is enough money in the Canadian supermarket to take care of us..." - he keeps getting the punchline wrong though!! instead of "...if we had supply and demand in balance?" it should be "... if there were more equitable distribution of the returns throughout the production chain."

[cowman]

Well I think you saw it differently than I saw it grassfarmer?
I don't know if the supermarket is getting filthy rich or not? I think I showed that the packing house isn't making excessive profits on a fat steer right now?
Really though, here is how the wholesale beef trade works: Monday morning the packers offer the retail trade a price on wholesale beef. Usually it is counteroffered, sometimes accepted? It all depends on how good the demand is on the supermarket shelf? If meat isn't moving at the price offered...the supermarket must lower the price to the consumer....and therefore must offer the packer less for his product?
The packer in reality is a middle man between the fat market and the retail store.
It could be argued that the retail store is also a middle man?
Study after study has shown the packing industry operates on a very small margin? Not sure about the retail store, but would suspect they probably work on a thirty to forty per cent markup on basic product?
Marketing, processing, advertizing all have a cost?
Reduce the supply and there will be more dollars chasing less product...what happens? The price goes up!
Cargill, Tyson, Safeway, and Sobeys never got where they were because they were stupid? They out competed all the other guys...and they did it by being efficient and squeezing every last dollar out of the marketplace.