Too much production

[cowman]

Supply management can work in a domestic market. It would be very tough to make it work in Canada for beef, hogs, and grain because we have such a small population. But it has worked for poultry and dairy. It might not have been pretty or ideal but it did work. What would it mean for beef and grain? Well it would mean about one third of the beef farmers would have to go and probably two thirds of the grain farmers. I guess we would need to turn about half the land into parks or something?
I'm not really up on how grain is priced and if the two price system is still in place for wheat. There used to be two prices. One for Canadian millers and one for export. The Canadian millers price was whatever the market could bare while the export price was competitive. Believe it or not the millers often got poorer quality wheat...and paid twice as much as the quality export wheat! And to top it off Canada lent the importers the money to buy it! A lot of which never got paid back!
Countries like Japan do this all the time. A case in point is Kubota tractors. A Kubota will cost you almost twice as much in Japan as it does in Canada. They use their high domestic price to subsidize their exports. The local Kubota dealer showed me the actual figures. In reality we do the same thing here with milk, I believe?

[farmboy1]

Very few dairy products are exported. There is an allowable amount needed for export in order to balance the domestic market. There is an off-setting allowable amount of importation as well. Depending on what happens in the near future re: BSE trade rules, this could be a viable time to explore s/m in other commodities. If no one wants our beef, pork, etc., it may be time to change the rules for other countries wishing to export to us. The Canadian gov't seems to be the only gov't lately to embrace WTO subsidization rules. Our gov't has done the boy scout thing and dropped a lot of ag. support because "it's the right thing to do" for free trade. Have the Merkans or the EU? HARDLY!!!!!! For s/m to work, you need domestic prod'n controls, import controls, and price controls. Will it change the consumer price? Not a chance. However, the producer will get a fair percentage of a re- distributed pie. Where will that fair price come from? The ones making huge profits now. Is that communism? It must be- if the producer can make a living at it.The Merkans are making huge profits in the beef sector right now because they have the closest thing to s/m they will ever have. They have supply problems- there is no glut of beef in the market. There could be, but politics is protecting their producers. I fail to hear any howling from US producers at this time that the consumer is being ripped off. This hemisphere is full of beef that the US could access if the consumer was being ripped off, but they don't want it. One bit of mis-information about s/m is that it protects inefficiencies. This is simply not true. In the dairy sector, quota prices are not used in the COP formula. The pricing structure will not allow it and should not allow it. This would make it too easy to bid up the price. The dairy industry has a HUGE problem with quota price and new entrants and they know it. To buy quota, producers are having to amortize loans over a longer term all the time. As far as making a living goes, the price paid to producers is set up so that only the most efficient (33.3%) are going to receive a profitable living from it. It is incumbent on the rest to tighten their belts and figure out how to do a good enough job to get up there. However, the better the best do, the better the worst must do in order to stay in business. If you look at agriculture, it is the producers who always receive the lowest returns for their efficiency gains. They will just be able to survive a little longer. However, in s/m as in other commodities, efficiencies usually are attained by larger operations. The consumer is demanding a better product, safer, and cheaper all the time. However, they are beginning to hate "factory farms". They are driving us to get better (hence,often bigger), but don't want to compensate us. This is a tough one. They want cheaper food, nicer stores, better selection, fewer pesticides, blah, blah, but don't want to pay more. The retailers are making more profit every day, so where does that leave the producer? Holding the smaller, lighter bag of cash - the leftovers. S/M works. The large corps. don't like it because their price is controlled. However, they still make excellent profits. Talk to your grocer and see how they'd do if the dairy case was removed from the store. However, the producer has a fair share of it and their are no big price spikes. There have been no big price swings in beef either- at the retail level. Personally, I think the consumer is being ripped off more in the non s/m commodities. Or maybe not. They are probably paying a fair price for beef. Am I getting a fair price? Only when I sell freezer beef. Definitely time to explore this s/m philosophy in a little more depth- and soon.

[ianben]

Supply management with quotas is not what my internet vision is about.

Farmers everywhere have the same problems.
I farm in EU but subsidies do not save you for the same problems of BSE and weather,and perhaps even more the power of the people we deal with in getting a fair price. They as you would expect factor our subsidies into the price we are both charged and offered.

Also we have no real idea of what quantity of any commodity is acctually needed and no idea of how much nature will allow them to produce anyway.

I think we could harrness the internet to give us this basic marketing information. Allowing us to sell perhaps only a percentage of what we produce in one year but at a price which leaves a profit.
Then give us information of products that are really wanted leaveing us to make managment decisions on real knowledge rather than gut or irational year on year trends.

Would it not be nice to have grain left from a cheap 80bu yr to sell in 15bu drought.
You are all trying to make decisions on what to do for the best in the beef sector with no real guidance. I faced the same problem post 96 and choices are really few without any real information.
I choose to scale right back and diversify as far from agriculture as possible.
I still believe today this is the best way to stay farming and manage individual risk. Income from as many sectors of the econamy as possible.

Mega farmers without some form of controls on supply and production with make mega losses at times. Just look at hogs.

Many individual farmers using the internet could become an equal force to the multinationals and dictate prices after all they need the food we produce to survive and make a profit for their shareholders.