Budget

[smcgrath76]

$50,000,000 for packers as I understand it is matching funds for producer investment. So, producers have already invested and built 2 plants in western canada and started a 3rd (NVF, Ranchers and Rancher's). Does this count? Does XL's purchase of Lakeside count?
As for a coordinated voice I think that gets difficult, from the perspective of independence but also from the perspective of many producers owe a lot of $ to input companies, etc.
I don't think there is anything inherently evil about these companies, but they certainly have developed a stranglehold over many producers. Not to seem facetious but I suppose due credit is deserved for working the system to their advantage. We could learn from that as producers.
As far as AG being on the agenda, it is not. Quite frankly it is not even the most important industry in the Ag minister's own riding.
On the upside I see the oil industry is getting some backing in the new budget.

[kato]

I think a good use of the 50 million would be to use it to upgrade existing provincial plants to federal status. The best way to have a new producer driven operation succeed is under the radar. To just try and start a multimillion dollar facility from scratch, and build a market for the product is extremely difficult. It's like these new high end plants have got a big target painted on them and the bigger operators know just how to deal them out of business.

I'm not sure about the other provinces, but there are lots of small independent abbatoirs in Manitoba, and they are run by experienced people who know the business. What's stopping these existing business from expanding into larger ones is the lack of ability to sell the meat out of province.

These smaller already functioning facilities could grow at a more reasonable pace that would more likely succeed. They could expand at a rate that matched the market they were reaching. They would have time to develop a customer base, and not have to go millions of dollars into debt on the speculation that they might be able to move the product later.

Will the federal government do anything this sensible this with the money? I will believe that when I see it. They haven't shown any indication yet that they have a clue. They are far more likely to just cut a cheque to XL or Cargill and pat themselves on the back.

[grassfarmer]

Sawbones, that's fine you don't have to agree with all the 16 solutions suggested by the NFU but please do not dismiss the work on those grounds, get involved, add your ideas. The suggested solutions are not cast in stone they were proposed as solutions to be discussed with all beef producers until we can reach a consensus. I do not believe that the NFU document advocates an automatic herd reduction to supply only domestic production but it does highlight the fact that the greatly ramped up production that we have exported since 1989 has not done us any good - the volumes exported rose by something like 8 times the start volume but the prices to producers have halved (adjusted for inflation).
What we are saying is not that exports should be stopped but that the exporting we have been doing with the current packing structure has been a disaster. If we were able to achieve the most important points of the 16 NFU solutions ie break the packer monopoly and captive supply systems we would then be in a position of potential profit for beef producers in both domestic and offshore markets.

Unfortunately our meetings in Edmonton today with AB ag officials were disappointing - they agreed with some of the proposed solutions but there were some that they felt uncomfortable supporting. Guess which ones? tackling the packer monopoly and captive supply. I guess they feel intervention would be "anti-free market" which is an irony as you couldn't get much more anti free-market than some of our current practises. I was not impressed with that - and we highlighted to them that unless they can deal with these obstacles their ALMS solution will go nowhere either.

[grassfarmer]

Max,
I would have to disagree with your comment on the "cheap food policy". This is not what is bankrupting producers it is what we could call another false cause of the current crisis. The data contained in the extended form of the NFU document highlights the fact that consumers are paying a very similar price (adjusted for inflation)to what they paid in the 33 years from 1975. Canadian consumers are paying only a bit less for beef than they were 20 or 30 years ago - farmers are getting half as much - the consumer is not the problem.

I like to say that we have not a "cheap food policy" but a "cheap raw material policy". Government policies are geared to subsidise producers through bailout packages to remain on their farms rearing cattle at below the cost of production - to supply the raw materials the packers and retailers profit from.

We must not falsely accuse the consumer of causing our problems because they are innocent - they pay plenty for their beef and they also pay the taxes to bail us out. We must unite with the consumer to get political action, and we should be telling them where the dollars are really going in our beef production process not demanding they pay more for beef.

[mb_rancher]

With all this being said has anyone heard that Obama has put COOL legislation on hold until he changes it. Ive heard that it wont be Canadian freindly when hes done with it. Market is ready to start feeling the effects.

[kato]

Have you been listening to OT again? ;-)

What I've heard is that all the latest rulings have been put on hold, which is what normally happens in a change of administration. It's not like MCOOL has been singled out, which is what the boys at RCALF would like you to think. It's not necessarily true that it's on hold so it can be made worse for us, which is what they would also like you to think.

They're grasping at the fact that Obama signed a paper saying it needed to be more stringent, but we have to remember that he signed it in the middle of a political campaign. We all know how much weight something like that carries in the real world.

I've also read that the new administration has decided that unlike the old one, that it just might be a good idea to be nice to the neighbours. I guess we'll have to wait and see if this proposed more diplomatic approach is actually carried out. He seems to have integrity as a higher priority in his values than GW did, so who knows, maybe he'll decide his country should live up to the trade agreements it has signed? Maybe he would actually be embarrased by having his country being known as one that reneges on contracts.

It would be nice to settle this MCOOL thing once and for all, but in the long run we need a lot more to happen before we can get on with business. And before we can get the long term problems addressed we still need that market in the States, like it or not. As bad as things are, every extra bid on the cattle we do sell is a plus, no matter where that bid comes from.

Our first priority is to survive long enough to see a better structured industy develop.

[smcgrath76]

Actually the way I read the budget is that there is $50 million for livestock slaughter facilities. I am thinking the pork guys could sure use a plant about now. As well, I am somewhat cynical since I know that due to the Feds (CFIA) several producer plants were nearly double the original cost. Something about continually changing blueprints, and minds in the good old inspection agency. Basically the way I see it is that if used at all the 50 million will just barely cover the costs associated with servicing the CFIA "changes on the fly" food safety program, but maybe I am just a cynic.

[kato]

Or realistic........

[greybeard]

That’s the way I read that too Sean.We have to remember when they say livestock that means a lot more than cow/calf.
Most of that money will be used to ensure compliance of some of the tough to swallow regulatory issues being jammed up the small operators a$$.
Most of those small outfits that Kato speaks of are profitable due to the efficiencies of being owner/operators. Working through a snowstorm of new paperwork with no obvious benefit to your business is hard to put a priority on when you have operated for years without it.
I expect to see less competition there, as regulation is designed to favor large corporate operations. You can’t have all those small fly by niters destabilizing the marketplace!
I think Joel Salatin wrote a book about his battles withs inspectors and beurocrats.

[kato]

It's the under the radar part that is the strength of the small operators.

There is right now the beginnings of a potentially major change in the consumer culture of this country. It's the trend to buying local, and we should not underestimate it. The mass produced industrial style food system that we have in place right now is losing favour with every recall and every outbreak of food related illness.

I believe that in the next few years this will only gain strength. Who better to step in and fill this potential consumer demand than the small local operators? It's a totally different type of culture, and it's not one that big corporations fit into.

I would bet that if someone did a consumer survey and asked people if they would prefer to buy locally produced meat products from local sources, that they would say yes. I bet they would also say that they don't know where to find them.

I sell vegetables at the local farmer's market, and last summer I watched a young couple sell enough local pork and lamb from a deep freeze in the back of their half ton truck to make a living. They use the market to make contacts with consumers, and then they deliver pork to town all winter to the same people. They are getting by on a fraction of the numbers of livestock that the guys with the big million dollar barns are raising. I bought a few chops myself, and they were the best pork chops I'd had since we used to raise our own pigs.

This market may seem small now, and everyone may think that there aren't enough consumers to go around, but just think what would happen if the same people who buy at the grocery store every week switched to buying from their local farmer instead? The market is there, we just have to find a way to take part in it. Changes in culture take some time, but they are real, and I think this one is happening right now.

This is the kind of thing that the 50 million needs to be spent on.

[grassfarmer]

I think if the $50 million was spent getting rid of CFIA and replacing it with a new, sensible organization that does not have an agenda to close down small plants, stop offshore exports etc the money would be well spent.

[kato]

Or maybe figure out who's setting the agenda, and get rid of them. It would be very interesting to know who's coming up with all the bright ideas........

[grassfarmer]

Oh that's the easy part Kato, the agenda is set by those who stand to prosper from it - Cargill, Tyson et all. Now will you send me at least part of the $50 million?