Canadian Barley Exports Suck!

[farmers_son]

I know what you mean and I have spoken with the Ranchers Beef people.

I guess my point, which I must have not communicated clearly, is it does not put cash in my jeans when a packer finds a new market for beef. I sell live cattle and the price of live cattle does not track the price of beef in this country at this time.

I respect the Ranchers people but they have not offered my any more for my live steers than Cargill. Cargill and Tyson are the price setters. They pay me as little as they possibly can. Competition for live cattle is what sets our price, not the wholesale price of beef. The packers who would pay us a better price for our live cows are on the south side of the border. We have to get the border open to live cows before we will receive a fair return on culls. The U.S. is not asking for BSE testing and in fact every time we find another positive the process is set back.

However I have been told Rule 2 is moving along well in spite of what Willowcreek might have us believe. The U.S. realizes their unscientific blockade of our cattle and beef is delaying other nations resuming trade with America.

[DiamondSCattleCo]

"I respect the Ranchers people but they have not offered my any more for my live steers than Cargill. Cargill and Tyson are the price setters."

But with BSE testing, we then gain access to more lucrative markets. A $9/kilo beef market would be nice to sell into versus the $3/kilo markets we have right now. Suddenly Cargill and Tyson won't be the price setters and they'll need to cough up extra dough to get some of those stolen steers.

Rod

[rkaiser]

Thank you Rod, you likely chose even better words to describe the scenerio than I would have.

[farmers_son]

I guess a $9 kilo market would be nice (if it even exists) for the packers to sell into. That does not mean the packers would pass along one red cent of that extra money to the producer. I do not share the view that rkaiser seems to have that the packers are nice guys who only make a teeny weeny little profit and everything else trickles down to the producer therefore if producers lobby for BSE testing on the packers behalf so as to open export markets for the packers the resulting benefits accrue to us.

I think the packers are a bunch of pirates who would buy our live cows for nothing if they could. Right now the only reason the packers are not paying 5 cents a pound for live cows is the BSE surveillance program will pay $250 for a dead cow on the farm. That is an example of how an alternative market for a cow, even a dead cow, forces the packers to pay more. If we want to be paid a fair price for culls the only way, and I mean the only way, is to regain access to the higher live cattle prices being paid in the U.S. Otherwise the packers could be making a $1000 per cow but Cargill and Tyson would still not bid against each other to raise the price they have to pay us.

Just my opinion.

[rkaiser]

Fine opinion other than a weird explaination of rkaiser.

You know that I have supported testing from day one, and still do. I also support every new venture trying to start up in the Canadian packing industry including the one that BIG C proposed and got laughed out the door at the ABP/CCA level. If this plant would (and still could) have been built by now, the main thing that would have set it apart would have been access to lucrative markets in Asia and in Europe.

I am personally continuing to present alternatives that would see my cattle leave this country farmers_son because ABP/CCA have taken the position that "if I bad mouth the beef that is sold out of two and now three Multinational packing plants that control well in excess of 80% of our slaughter capacity, I am bad mouthing Canadian beef.

I realise that I do not need to badmouth to sell, but I sure wish you would take a crack at marketing beef like a number of us have done in this country and see what "YOUR FREINDS" at Cargill and Tyson will do to you.

Got your EU tags yet farmers_son?

[brian99]

I think the word everyone here is looking for is ruthless. I'm not a fan of the packers, anything but. Cargill and Tyson don't steal cattle,however, they do ruthlessly exploit market opportunities. Ranchers voluntarily bring their cattle to market, feeders voluntarily sign cattle up on the grid. The packer viewpoint (and I've worked at Lakeside) is that everything is a resource to be used up. Straw, silage, cattle, equipment, people. Extract as much profit as possible, and move on.
If a cattle producer has a problem with that, he will quit. As long as he is willing to continue, packers will continue to kill cattle.
The worst thing we can do as producers is subsidize our cattle. All an off farm job does is fatten profits for the packer. Everyone else becomes poorer because those cattle can be sold for less and still carry on.
The only thing packers are sensitive to is volume. As long as we bring the cattle they don't care. If we were to drop production 25% as an example, they would raise fat prices(if necessary), try to bring in American cattle, lower costs, raise prices to retailers(if possible), and ultimately if margins got bad enough for long enough, close the plant. After all it's only business.
What we can do is find more buyers for our beef. I know it sounds trite, but that's the only solution. I have been selling beef out the farmgate for two years, and it has helped move cattle the market would have otherwise "stolen". I call those cattle "my sacrifice to the buyer gods". Better beef for half the store price is my motto, and it has worked, but it is fickle, and time consuming and frustrating at times. Do what we have to, find new markets here and abroad, and do an endrun around what you're doing now.

[farmers_son]

Good comments all. One comment I might suggest is that the primary producer is often forced to accept an unacceptable price because we dealing with a live perishable commodity. The word voluntary may not truly reflect the situation in many cases.

I think we still have a non functioning market for live cattle within Canada. I see the solution for that, in the short term, is the much anticipated reopening of our border with the U.S. to live cows. And no Willowcreek, there is not a tsunami of cull cows this time any more than there was a tidal wave of steers last time around.

Sadly we only have two major packers in this country just like we only have two railroads and sounds like we will only have two major grain companies. Two is company, it takes at least three or more to make competition. Without that much needed competition it is very optimistic to believe we can create such dramatic demand for Canadian beef by BSE testing or some other means that the two packers will throw their past close relationship in the waste basket and start competing against each other for our live cattle. It is never going to happen, at least until we do regain access to some real competition which happens to be on the American side of that darn border.

And rkaiser I do know you supported BSE testing from day one and I have not. But I am sure we could still sit down and have a beer and work out solutions for our industry.

[DiamondSCattleCo]

Farmers_son,

While you make some good points, especially about our two packer system, our prices are still governed _somewhat_ by supply and demand. We increase demand for our product, we will see higher prices. Of course, not as high as they should be, since the packers get to stuff most of dollars in their own pockets, but we should still get a bit.

This is where I believe BSE testing is an important component of increasing our prices. Tyson and Cargill aren't interested in shipping Canadian beef to Japan and other parts of Asia. This much they've proven. But if we can get a few smaller, independents shipping into Japan, maybe we can re-develop our market and Tyson/Cargill will finally have to ship our beef elsewhere, other than the fickle US market.

Rod

[farmers_son]

Re supply and demand. I guess that is the 64 thousand dollar question. If we had a functioning market our prices would be governed by supply and demand. I do not think we have a functioning market with only two packers acting as a monopoly. Without competition the free market system fails.

BSE shone a light on the clear disconnect between live cattle prices and wholesale beef prices. If wholesale beef prices were driving our live cattle prices (a natural result of supply and demand) the BSE crisis would only have lasted a couple of months as trade in our UTM beef resumed in August or September 2003.

It is my view, and that is all it is, that even if the border opened to our cow beef but not to live cows that the price of our live cattle would not change very much because the packers would not have any competition for the live animal. I could be wrong but that is how it looks to me.

I certainly am a supporter of independent packers in this country providing an alternative market for our live animals. I think those plants would need to be owned by producers if the producers ever hoped to share in the profits beyond the farm gate, but hey… that is just me. In the meantime the only way I see to positively inject an element of competition into the pricing our live cattle is to regain access to competing cull cow bids and reduce the restrictions on our UTM cattle entering the U.S.

Certainly the U.S. market is political, fickle too. In my view with Rule 2 published it is only a matter of months before our cows and cow beef reenter the U.S. I guess I am gambling on that somewhat. What with the U.S. dependence on our oil and the changing U.S. stance on Iraq I think the U.S will find stop finding new ways to kick Canadian butt. I hope so anyway.

[rkaiser]

You know, we can all sit back and talk about that fickle American consumer, or that elusive Japanese market, but these pirates are playing games with our Canadian wholesalers and consumers as well. Do you know why Costco has some of the best beef available in Canada these days? Or why some of our restaurants chains whine about Canadian product until they buy American beef that used to be Canadian Cattle anyway.

It's almost time folks. There will be a editorial letter coming from these fingers very soon that will (WILL) reach as many newspapers in Canada that have the guts to print it, despite what ABP/CCA continue to tell us about respecting the Canadian consumer. They need to wake up. Both of them....They need to know the story. They need to become Proud Canadians rather than lap dogs of the Mutinational American Pirates.

Stay tuned. I will run this thing by every one of you for editing and suggestions before I let it rip.