Self-preservation vs. industry preservation

[cakadu]

Earlier today I was discussing with a friend my thoughts on the current situation in terms of the prices being charged for hay and straw. I've said it before and I'll say it again that I don't have any problem at all with people making money on what they produce. I'll even go so far as to agree that supply, demand and the free market system will dictate price.

What I don't understand is the prices being charged right now, when times are extremely desperate for a number of people. We can blame the Americans for subsidies, we can blame the easterners for not caring, we can even blame the government for not stepping up to the plate during what is agreeably the worst drought in over 100 years. What we should be doing is looking a little closer to home and in particular in the mirror.

While talking with my friend, it dawned on me that the price gouging (there is no other term for it) is not being done to us by any of the aforementioned groups. It is being done to us by Albertans and in many instances by our neighbors. The east has tried to help out by donating hay and it is gratefully accepted. What have we done to work together to ensure that more than just a few of us manage to make it through to hopefully greener days?

Are those that have feed talking with those that don't to see what kind of arrangement can be made to ensure that both can survive? Who is working together for the benefit of the ag industry as a whole?

Instead, what we hear are stories of people charging 3 and 4 times what the feed is worth or worse yet speculating and waiting to see if someone will come through with the big $$$$ and pay whatever we ask. Trying to get all that you can right now is one solution, but enjoy it because it may be ALL that you get.

Is it any wonder that some of us cannot see the Focus on Sabbatical Idea ever working? We are in the midst of a crisis that calls for us to work together as never before and what are we doing?

[ianben]

It is often said over here that the only people farmers make money out of are other farmers.
Corn or Horn one will always take advantage of the other.

I agree it is short sighted and one would think there must be a better way.

If some of that cheap barley had been left in the bin and the feedlot had paid a bit more when the price was rock bottom. The barley in the bin would help both the low yeilds and the feedlot.

It is the way most of our suppliers treat us, They hold stocks but we pay for the service. How do you get farmers act this way???

[jensend]

In times of a natural disaster it shouldn't be up to Ontario farmers to bail out Western ranchers (they couldn't anyway). When the price of hay is low the Western guys aren't offering higher prices to keep hay farmers in business. Maybe the federal government is going to have to be embarassed into taking the role it is supposed to. It's damned good of people to help out their neighbours and fellow producers but what are the billions of dollars Alberta has sent to Ottawa being used for? To say that feed should be sold at charitable prices doesn't take into account all the $1.75 barley the feeders were willing to buy when they were making big money. The situation now is a direct result of a weather disaster (like a bad blizzard in Toronto) and the federal government should suck it up and do their share. Let the markets work and things will get sorted out and if the markets are too harsh let producers have back some of the money that they have sent to Ottawa. Where the hell is Ralph Goodale now? I thought politics was communication between government and constituents but Ralph speaks only for a third-rate thug named Jean and forgets where he came from. We now Lyle doesn't have the fortitude or the intelligence to comprehend the situation and then deal with it.

[grassfarmer]

You are right Cakadu, Focus on
Sabbatical would be unlikely ever to work as we are all individuals there would always be hard up people desperate enough to break any form of coalition - that's life,that's business.
As for hay being overpriced - it certainly is but it's a sellers market and this is their boom time - how many cattle farmers tell the auctioneer to stop taking bids when their calves are making sky high prices in the better years ?

[cakadu]

I agree with you on the points about the market dictating what will happen and some will loose and others will win.

Grassfarmer, your comment about "sky high prices in better years" has some merit, however, this isn't a better year for anyone so working together is more appropriate now than ever before.

Jensend, no one is talking "charitable" prices, what I'm talking about is something reasonable so that people can at least have some hope of being able to carry on.

If we don't pull together in the tough times, how do we ever expect to work together when things get better? How many do we have to see fall before we realize that by saving one we save ourselves? When the majority of the cattle are loaded on trucks and gone to the auction, who is going to buy your mouldy hay and grain?

[cowman]

I think you make a big mistake when you say the hay farmer is "gouging" his neighbors. The general consensus is that the hay crop is less than half of the 2001 crop and that crop was half of the 2000 crop. So if small square bales were $2.50 in 2000 they need to be $10 in 2001 just for the hay producer to stay even! This is not a "boom" time for them either and they well realize it doesn't bode well for their future. Thus you see them taking care of their regular customers by selling them hay much cheaper than that $10 figure(and losing money!).
Also consider the feed grain producer. His yields will be dismal this year and he needs a much higher price to just break even. Now we have our federal government doing everything possible to ruin that high price. Why? To save a livestock industry that is way overgrown? I would suggest to you that the federal governments' unwillingness to support the grain farmer in the first place led to this overgrown livestock problem. A lot of farmers got out of grain and into hogs and cattle because grain farming just did not pay a decent return. This drought has brought the problem out real clearly. The fact of the matter is we are awash in a sea of cattle and to a lesser extent hogs and we need to bring the numbers back in line with reality. This drought will do that and all the meddling in the world won't change that.

[carebear300]

I only have one comment another farmer isn't the trouble. He is just trying to make a good buck when he has a chance. The longer you survive in this business you realize that when the grain segment of agriculture is really desperate the livestock segment always does good. And contrarily when the grain industry is rosey nobody but a stubborn old doughhead like me wants to feed cows when it is forty below. I have some waste land so will always have some cows to go along with my grain farming. The trouble is that the grain industry has been so poor for so long that everybody thought that that is the way it would stay. It still might if the federal government had its way. Governments and bug agri-business have been the problem and will continue to be the problem. The free market only has a chance to work when all players in that market are equal in power and at the present all the power and money is in their hands. Until that changes farmers will continue to be in big trouble!!!!!!

[pandiana]

cowman, your comment "The fact of the matter is we are awash in a sea of cattle" has me wondering about the basis for this observation. I have somehow missed this fact. I realize that we have a lot of cattle but it hardly compares to the US, Argentina, etc.. and it seems, more importantly, that we must have a market for these cattle as there did not, up until this years extenuating circumstances, appear to be a glut. I would be interested in some background on your observation and this would influence my decisions regarding future cattle industry prospects.

[pandiana]

Possibly I have been more fortunate than some at least in some respects. I have found myself in a position where I have had to buy a large portion of my feed for the past two years. Each year prices have gone up considerably because of drought. Nonetheless, I have had the good fortune to deal with people who have tried to give me the best possible price on feed. Although economics of feeding cattle at today's price is questionable, I do not feel that I have been unduly taken advantage of. I agree that individuals who have suffered several years of depressed prices should have the opportunity to recapture some of their losses. On the other hand, I agree that some of the prices being charged are outrageous. For suppliers of feed to force cattle producers to disperse their herds by charging exorbitant prices would be a short sited solution. I do believe it is possible for cooperation between sectors to establish long term relationships built on trust and respect. Let's hope.

[cakadu]

There is nothing wrong with making enough to break even, but there have been other threads in the Rural chat room that have had people stating that they were going to wait to see what happened and how much they could get. Ads for hay want bids sent to them, so you know that they are looking to get the most that they can.

We have become so far removed from the golden rule it is disheartening to say the least.

[jensend]

I'm afraid I just don't get it. I've been farming for thirty years in Alberta and now saskatchewan and I cannot remember a cattle feeder telling me that $1.75 barley was going to ruin me so he would add 50 cents a bushel to help me through. Last year the Montana government subsidized freight on hay but they didn't put a lid on prices. I'm sure the truckers raised their rates because of the demand. I run over 100 pairs and have to buy some of my feed too but I expect to go with the market just like I am willing to when calf prices are high. I think if there has to be subsidies they should come from the gov't. and not from other producers. That $150 hay is just compensating for some $40 hay sold in the past.

[cakadu]

This isn't about trying to correct the (perceived) wrongs or marketplace dictates (supply and demand) from years past. I don't recall people complaining too much about not getting enough for their hay in the last few years - at least in my area of central Alberta anyway - it seems to me that things were relatively even.

To me what this i's about is trying to get through this as best we can by cooperating and collaborating.

It's not about misery loving miserable company as was being portrayed on Global News tonight. They interviewed a hay producer from the Taber area who was in the midst of cutting hay. He said that the north was spoiled and that we were getting a taste of what they had been going through for the last 3 years. He went on to say that they in the south were used to going without water - as he's filmed standing in front of his irrigation equipment.

All we can deal with is today!

[Muttley]

A price is set by what the demand of a product is. You can hardly blame anyone for charging a high price if one can receive it. I don't think there is to many farmers out there that have sent back to many grain cheques or calf cheques and said "no thank you the price is to high"

[jensend]

Cakadu: I had no intention of giving the impression that I was wronged or cheated by somebody paying a low price for feed. All I am saying is we live with the markets and to try to change the rules just because the market turns on you is no more fair. I speak to people in the drought-stricken parts of Alberta on an almost daily basis and I hear what they are saying and the tone of their voices. My point is that instead of my neighbours here subsidizing cattlemen by selling frozen greenfeed cheap the government should do any subsidizing. As cowman said why should a poor hay crop be sold cheap? People here can take off good lentil greenfeed but selling it won't make up for the frost loss. Cattlemen aren't the only ones hurting from all this.

[cowman]

pandianna:Over the last ten years or so when the American cow herd has been static(actually going down in numbers the last five)the Alberta cow herd was agressively expanding. So today we are rated as about the 3rd largest cattle"state"! We have more cattle than Colorado! Saskatchewan has also expanded although not at as high a rate.
Why has this happened? A lot of it has to do with the Alberta governments' encouragement but also the bungling of the feds in the grain business. When the Crow was scrapped it pretty well made us completely non-competitive in the export grain market. The federal government wouldn't protect the grain farmer from unfair competition from Americans and Europeans, so farmers piled into cattle and hogs. I remember the year after the Crow died seeing miles and miles of fence going up around land that was way too good to run cows on. A lot of new players got into the game and the rest expanded. The rise in hay prices was happening before this drought hit because of the demand for feed for this expansion! So here we are today with over 2 million cows in Alberta and only the ability to feed (maybe) 1 million? This drought really brings home the reality that we have too many cows. If, for whatever reason, the American border closed we would be in serious trouble! We've built an industry based on sand!
Now if we'd brought in a marketing board with quotas we would have only been producing for a protected domestic market. We wouldn't have had this huge glut of cattle to kill and export.If there had been a cost/price ratio we would have been protected from these natural disasters.