Wrote a letter today....

[kato]

I was quite impressed with the NFU analysis. We've been in the business long enough to have personally seen the changes they have noted in it, and agree with their interpretation of how they affected things now.

I remember when we first started out, we were thinking, "You know, if we had 50 cows, we could really make a good living." Well, 50 cows came, and for some reason it wasn't enough to live on. The next goal was 75 cows. Same result. On we went to 100 cows. Still not getting ahead. So now we're closer to 200, and have pretty much reached the limit that our land base will allow. We've maxed out our resources, and it's still not enough. To expand the cows now would probably require hired help as well, and we all know how much spare change there is around these days for that.

So where do we go from here? The number of cows it takes to stay afloat these days literally does not allow time for off farm income. We also run about 250 background calves a year, and when they work out, it makes a big difference. Lately though, they are not always working out, and our appetite for risk is very low. Losing money on feeders is simply not an option any more.

If I went to work, then we'd have to hire someone to take my place, and that puts us nowhere ahead. There is only so much work a person can physically do, and we're not getting any younger.

I know we're not alone in this predicament, and it's reached the point where something's got to give.

If the NFU report can generate some constructive discussions, then it has served it's purpose. Those discussions need to take place. Sure some of the solutions are what some would call outside the box, but that's the kind of thinking we need right now. We need a shakeup in attitude because what worked in the past just isn't working any more.

[coppertop]

kato, your latest post says volumes about the industry that the average person, particularly those brought up in an urban setting, just do not understand.
The message you provided should be required reading for ever politician, both rural and urban, from municipal to federal. I think many of them feel that running a cattle operation is a part time job, with plenty of extra time to devote to some sort of value added project.
For many of us, the land base we have lends itself best to forage and pasture production, and we have utilized that land to raise cattle.
I have seen most of my closest neighbours EXIT THE INDUSTRY over the past three or four years. All that are left in this area now are the large cow/calf operations, small feedlots and a few 150 head operations.
The age of the farmers isn't getting any younger, and the incentive for the younger generation to take over the farm just isn't there.
We will have a lot of land sitting idle when the current crop of producers decides it is time to stop losing money in the cattle business.

[grassfarmer]

We are starting to take this NFU analysis out on the road, setting up producer meetings across the country as well as arranging meetings with politicians etc. I was part of a delegation that met with our local MLA just before Christmas and it was a positive meeting. He did not dispute any of the findings of the report but expressed the difficulty the Provincial Government has in addressing the problems as packer monopolies, captive supply etc are far bigger problems than the AB Gov. can solve on their own even if they wanted to. We are trying to highlight to them that with Obama soon to be president the timing may be very good for collective action on these issues. Obamas rural policy looks very similar to some of the suggested solutions proposed by the NFU.
One of his major policy pillars is stated thus
"Prevent Anticompetitive Behavior Against Family Farms: Obama is a strong supporter of a packer ban. When meatpackers own livestock they can manipulate prices and discriminate against independent farmers. Obama and Biden will strengthen anti-monopoly laws and strengthen producer protections to ensure independent farmers have fair access to markets, control over their production decisions, and transparency in prices."

Now that is the kind of action we need - lets put some pressure on our elected officials and try to get them to follow suit.

[coppertop]

grassfarmer, have you and your group considered making presentations to Agricultural Service Boards?
Many ASB's are made up of both elected and appointed members, and making presentations to these organizations would not only get the NFU position out to the agricultural community in municipalities across the province, but you would receive valuable feedback from the producers who make up the majority of the membership of these boards.
If you are interested in pursuing this, I suggest that you contact Agricultural Fieldmen in your area, and request an appointment on their ASB agenda.

[rkaiser]

Burn and run American style. Old George did some burning up of the economy when he saw that he was on his way out and the American plants are doing the same. How many more of us will be tempted by the 60 or 70 cent cow prices that some are predicting to come this spring. We are coming up to a period of being desperately short of fat cattle to keep the lines at Cargill and Tyson rolling and it seems that the cows are still making the big boys enough money that they are going to be willing to spend and extra 20 or 30 cents a pound to own them.

Or do they like the fact that they are finishing off our cow herd before they pull the pin. What is that phrase that they use in war for burning things up before the aggressor leaves the battlefield?

[Sawbones]

We can't seem to learn from the past. COOL is a non tariff trade barrier the same way as BSE. Brad Wildeman, the president of CCA stated in a report to Cattlemen in December "On average, the combined impact of lower revenue and increased cost(of COOL)is about $90 per head. Of course, the Canadian packers seeing this opportunity have factored it into their domestic bids, so we can apply roughly a $90 loss to all cattle whether they are exported or not."
And the CCA's response is a court challenge against the US when we know even if we win things won't change.
Why not get mad at our local packers instead of allowing then to **** us as they did from 2003 to 2005 or better yet, support the producer initiatives like NVF, the Balzac Plant or Keystone.
Randy, you're right when you say the cowherd is being dessimated.$.50/cwt seems high for a cow today but it certainly wasn't only 6 years ago. It must be the Canadian way to shrug our shoulders and say there's nothing that we can do except follow the crowd or exit the industry.

[kato]

Hey Randy. Good to hear from you.

I agree that we have a shortage coming. We only have to look at all the slaughtered bred cows to see that many thousands of feeders are not going to be here next fall.

Will this give us better prices? It would be nice, but I'll believe it when I see it.

Here's a fearless prediction for the future. Canadian cattle numbers drop. American based packers start whining that they don't have enough numbers to run the plants. Do they pay more for the cattle? No. They go to the government pleading poverty and threatening to shut down if they don't get some good old fashioned corporate welfare. Do they open their books to prove they need money? No. Does the government pay? Yes, probably. Do we get any farther ahead because of it? No.

These big corporations have been taking their easily gotten profits and investing them in South America and Australia. They've got things set up so they can easily shift operations overseas and replace the fallen North American beef industry with cheaper imported beef that will make them even more profits.

And the only way they will say the government can stop them is to pay up with Canadian taxpayer money. I would hope that if this day ever comes, our government will find the backbone to just let them go. They need to be putting energy into putting the Canadian cattle/beef industry back into the hands of Canadians, where it belongs.

And they need to be reminded who put them into office, and who can take them right back out again.

[Sawbones]

Kato, your predictions are right on the mark. Another quote from Mr Wildeman. "One thing is certain-the entire industry needs to speak with a single voice..." Again absolutely true but Mr Wildeman, you and the CCA and largely endorsed by the ABP have to change your songbooks. You are not speaking for the good of the industry. Simply knowing the age, actual birth place of a calf and putting on a symbol that looks like a rooster comb that's part of an advertising campaign that some say cost producers close to 1/2 million is not going to save the industry. We need to address the slaughter situation and we need to do it now. The actual retail price of Canadian product in the US has not changed as there is no differentiation at the food service. COOL could be used to our advantage if only we could share in the profits of getting our own branded products sold,

[Sawbones]

Kato, your predictions are right on the mark. Another quote from Mr Wildeman. "One thing is certain-the entire industry needs to speak with a single voice..." Again absolutely true but Mr Wildeman, you and the CCA and largely endorsed by the ABP have to change your songbooks. You are not speaking for the good of the industry. Simply knowing the age, actual birth place of a calf and putting on a symbol that looks like a rooster comb that's part of an advertising campaign that some say cost producers close to 1/2 million is not going to save the industry. We need to address the slaughter situation and we need to do it now. The actual retail price of Canadian product in the US has not changed as there is no differentiation at the food service. COOL could be used to our advantage if only we could share in the profits of getting our own branded products sold,

[smcgrath76]

I think this is pretty close to the challenge.
Let's assume COOL is costing $90 per head in terms of basis. Let's look at Canadian plants. A large portion of cattle killed in Canada are also eaten here (no COOL cost). Another large portion are also sent to the restaurant/food service in the USA (again no COOL cost). There may be some segregation and labelling costs on a portion of production but certainly not all. I struggle to believe the actual cost to the plant is $90. I do believe it is $90 to the producer.
I think the scenario of packers scaling back operations and stepping out of the marketplace is very real based on projected cow numbers. If you look at the north american cattle numbers I beleive we are near a tipping point in Canada (http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1464)
I believe that plants will scale back as cattle numbers fall, but that there somes a point where they scale back completely when the economies of scale no longer exist. Based on one large plant with a single shift capacity of 3500, working 6 days a week, 50 weeks a year, that is a requirement for just over 1,000,000 head. Add a 5000 head plant and you add another 1.5 million. add another 1500 head plant and that is 500,000 more. That is 3 million head out of a potentially contracted 3.2 million head cowherd. Add feeder exports and voila. I am not sure where the tipping point is, but in the current scenario it may be coming sooner than later.