I thought the paste below was interesting. Apparently the protectionist stance the U.S. is taking in regards to their cattle producers is not working.
Could it be that American policies (such as COOL) which effectively drive down the price of live cattle beyond U.S. borders do not work to increase the price of live cattle within the U.S.?
That those protectionist American policies which American producers are told and tend to believe were supposedly designed to support live cattle prices with the U.S. really serve to create sources of cheaper live cattle beyond U.S. borders. That the global packers can access these pools of cheaper live cattle to further drive down the price of live American sourced cattle.
Could it be that low live prices in one place only serve to lower live cattle prices at home?
I tend to think and believe the American cattle producer will eventually figure out that their present efforts to support their domestic live cattle price by driving down the price of live cattle elsewhere (through COOL and other similar protectionist policies especially targeted towards bordering NAFTA partner countries) that those policies are doomed to fail.
However I fear it may take them so long to figure it out that their domestic industry and partner cattle herds in Canada and Mexico will have all have shrunk past the point of no return. That North America will become increasingly dependent upon imports of non-NAFTA beef with not enough acres of grass or not enough packing plant capacity remaining to ever be self sufficient in beef again.
The fact is the simplest and best way to increase the price of live cattle in the U.S. and thereby strengthen cow herd numbers is to ensure the price of live cattle in neighbouring Canada and Mexico is also strong.
American producers have only to look at price of their own domestic live cattle since COOL came into effect October 1 to see what COOL is doing for their industry.
The U.S. government knew what was doing when they enacted COOL and it had nothing to do with supporting live cattle prices within America. It had everything to do with lowering the cost of food to American voters.
Beginning of Paste...
US cattle herd falls further
6/02/2009
The US cattle herd started 2009 2% below year ago levels, at 94.5 million head, as drought, high production costs and increased cow slaughter all contributed to a falling inventory throughout 2008 (United States Department of Agriculture).
The majority of the decline in the US cattle herd at 1 January 2009 was due to the beef cow herd, which fell 2.4% year-on-year, or 760,000 head, to 31.7 million head. A 12% increase in beef cow slaughter during 2008, to 6.3 million head, was the main factor behind the decline, with higher production costs and low incomes making it more difficult for producers to retain breeding numbers. According to CattleFax, the current US beef cow inventory is now smaller than the previous low in the US cattle cycle set in 2004.
Could it be that American policies (such as COOL) which effectively drive down the price of live cattle beyond U.S. borders do not work to increase the price of live cattle within the U.S.?
That those protectionist American policies which American producers are told and tend to believe were supposedly designed to support live cattle prices with the U.S. really serve to create sources of cheaper live cattle beyond U.S. borders. That the global packers can access these pools of cheaper live cattle to further drive down the price of live American sourced cattle.
Could it be that low live prices in one place only serve to lower live cattle prices at home?
I tend to think and believe the American cattle producer will eventually figure out that their present efforts to support their domestic live cattle price by driving down the price of live cattle elsewhere (through COOL and other similar protectionist policies especially targeted towards bordering NAFTA partner countries) that those policies are doomed to fail.
However I fear it may take them so long to figure it out that their domestic industry and partner cattle herds in Canada and Mexico will have all have shrunk past the point of no return. That North America will become increasingly dependent upon imports of non-NAFTA beef with not enough acres of grass or not enough packing plant capacity remaining to ever be self sufficient in beef again.
The fact is the simplest and best way to increase the price of live cattle in the U.S. and thereby strengthen cow herd numbers is to ensure the price of live cattle in neighbouring Canada and Mexico is also strong.
American producers have only to look at price of their own domestic live cattle since COOL came into effect October 1 to see what COOL is doing for their industry.
The U.S. government knew what was doing when they enacted COOL and it had nothing to do with supporting live cattle prices within America. It had everything to do with lowering the cost of food to American voters.
Beginning of Paste...
US cattle herd falls further
6/02/2009
The US cattle herd started 2009 2% below year ago levels, at 94.5 million head, as drought, high production costs and increased cow slaughter all contributed to a falling inventory throughout 2008 (United States Department of Agriculture).
The majority of the decline in the US cattle herd at 1 January 2009 was due to the beef cow herd, which fell 2.4% year-on-year, or 760,000 head, to 31.7 million head. A 12% increase in beef cow slaughter during 2008, to 6.3 million head, was the main factor behind the decline, with higher production costs and low incomes making it more difficult for producers to retain breeding numbers. According to CattleFax, the current US beef cow inventory is now smaller than the previous low in the US cattle cycle set in 2004.
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