Mr Butter's letter

[Kathy]

"Comply or get out of the business!"

Yah, that's real positive thinking!

[smcgrath76]

GF, I think you outlined exactly my concern. I am not convinced that the ALMS is going to raise the floor price on cattle, living or dead in the province of AB. It will raise the cost of oding business. As per your previous post, our time estimates are substantially higher than you posted, but even at $330, that's 1/2 a calf for many people.
The only indicator I could think of that would indicate the program was successfully establishing an AB price over time would be the removal of basis from the AB industry. In other words the AB price would become detached from the US price less basis.

[Sawbones]

This is my understanding of Canada Gold and please correct me if I'm wrong. The business model is selling 2,000,000 shares with a max of 100,000 per investor so that theorectically 20 people could own the company. The owners will decide on the dividends. The cow calf person writes a cheque for $6.50 per head for the right to particpate without knowing where the cattle will be fed,cost of feeding, place of slaughter, cost of slaughter or even the end purchaser of the product. There are extra cost as far as audits and veterinary involvement. You've said this is not just a supply contract but at present, I don't have the faith to sign up my calves without the other pieces of the puzzle being in place. They need a long term contract with a packer with fixed costs and a guaranteed market..then that makes a value chain. At the present time, it's just talk

[coppertop]

The livestock strategy will drive producers out of the industry, and until it is a Canada Wide initiative it makes no sense at all to have it mandatory. Alberta producers will up front all the cost and see no more return for their product than those in other jurisidictions.
I am beginning to think that unless we agree with Grassfarmer we are all BACKWARD thinking !!!

I am attending the upcoming producer organized meeting on Wednesday evening with an open mind, prepared to listen to ABP, Alberta Agriculture and producers, many of whom will have forgot more about raising beef than any bureaucrat in the province !!!

[grassfarmer]

Sean, You are not convinced that the ALMS is going to raise the floor price on cattle, living or dead in the province of AB....the only indicator you could think of that would indicate the program was successfully establishing an AB price over time would be the removal of basis from the AB industry. In other words the AB price would become detached from the US price less basis.
Fair enough - i'm not certain it will work ultimately either BUT what other options do we have? we must try and achieve the aims you state above if a cattle industry is to survive in this Province. This proposal offers the best opportunities of achieving the aims that you stated. If you or anyone else has better ideas please bring them on - but the status quo is not an option.

Sawbones, I think the fears you have as a cow/calf producer with Canada Gold may be based on the misunderstanding that it has to involve retained ownership - it doesn't. I have the same fears as you about retained ownership - i've looked at it a few times but always backed away as I felt that I was taking all the risk whereas it was clear the feedlot couldn't fail to make money company. With Canada Gold the cow/calf producer can get certified by the program and offer their calves for sale to participating feedlots or backgrounders at special sales to be arranged or privately. By paying the $6.50 fee producers will get carcase data back on their calves as well as feedlot performance data even if they sell them at weaned calf stage, to me that alone is worth more than $6.50 I see this as an opportunity to access a premium market with my calves as people like Rick Paskal are behind this project and want certified cattle in their lots this winter. I think it is excellent that cow/calf, feedlots and even packers have been working together on this program - it shows a new spirit of co-operation which is much needed.
Now like the age verification there are no guarantees how much the premium may be (or if there is one at this stage)but that is the nature of developing new business or new markets. If everyone waits for the day that a regulated, guaranteed premium is in place before they start to produce the calf the program requires that's surely a more socialist system, like waiting on welfare, that Albertans are supposed to hate?

Coppertop, "The livestock strategy will drive producers out of the industry..." The status quo is currently driving people out of the industry, so what would your solution be??
The fact that it isn't Canada wide isn't Alberta's fault - take that up with the Feds - you can't blame our Ag minister for trying to help producers in his province.

[smcgrath76]

GF, that is a great challenge. I am not sure I have better answers and I probably tend towards the sink or swin model (which I appreciate the minister can't do).
I think that a pilot slaughter plant (similar to the leduc pilot plant for agrivalue) would be a good investment. It would allow smaller value chains to get started without incurring the cost of building a plant. I think investment in research and extension is a good move. I think some sort of an exit strategy is a good investment. I think that investing in an agency to assist local businesses in navigating export is a good investment.
I don't disagree that the floor needs to be raised, but I don't see a lot of fostering of innovation through the program. Quite frankly there are all kinds of opportunities out there, and I think producers need to pursue them. I don't think that dragging the entire industry up by its' bootstraps so to speak really accomplishes anything in terms of adding value. Rather it simply raises the base expense level.
One major challenge I see is that poor cattle obtain too much money out of the marketplace. The producers of these cattle are overpaid, and producers of superior cattle are underpaid. The best rewarded producer will be the one that has the lowest cost, rather than the best product. Addmitedly producers can't always get this information back, but conversely this is not a profit driver for the guy who sells at weaning.
Canada Gold has very good protocols and procedures, but it still does not have any breed makeup or quality criteria persay in their specifications that I can see.

[per]

Canada Gold is an idea that came out of a think tank of progressive producers of calves and fats. It is a way to marry all the things that the industry has been asking for and lamenting the absence of. Most of us realize that regular commodity beef is not the way of the future so something else has to be offered. Canada Gold is putting together a pilot to get it's feet wet and find niches that could be filled on a large scale. At the very worst, only commodity price will be achieved less 1 cent per pound. Which will still at the very least buy you your carcass information. At it's best the sky is the limit. All sorts of different protocols can be supported for various likes and dislikes of the end user. All good ideas have an infancy and need time to mature. All I can say is that it is going to take some forward thinking folks and a little faith to make it work. Status quo is not likely to work as a long term strategy. As far as ownership of Canada Gold goes, as 50 shareholders are approached then the regulations are such that different rules apply to the company. That bridge will be crossed and eventually there will be more than the 50. In the mean time you all have the opportunity to be in on the ground floor. In my experience, there usually is not much reward if there is no risk. So yes it just might not work. It is guaranteed not to work if no one steps up to the plate and takes some risk.

As far as the ALMS is concerned there is not much in there that the industry has not already asked for. There are some concerns especially regarding the health act and careful consideration needs to go with the regulations that come out of it but the intent is to forward the industry. I think participation in the form of the different industry groups, letters to the Minister and his staff is necessary. But, it needs to put forward ways to make it work, not complaints that we just don't want to work on it or throwing around fear full unproductive rhetoric.

This is our chance to make this industry work. I am positive the Minister wishes he could take back his think about exiting the industry statement, but just maybe he was right to think it. We finally have a Minister that is trying to drag the industry into the 21st century. Rather than making it a hard pull we need to give constructive input.

[Sawbones]

One of the main hurdles that Canada Gold has to overcome is the slaughter solution. They may be able to work a short term deal with XL or even go to Washington but neither appears to be a long term solution. I agree with Sean that an incubator plant is needed for new value chains during their establishment that will have a fixed price of slaughter and guaranteed timely access. You need to be able to guarantee price and delivery before any retailer or food service will talk to you about the merits of your product

[coppertop]

Sawbones, that was one suggestion that came out of the producer arranged meeting on this topic that was held last evening.
I think that with this new strategy the Devil is in the details, such as having to scan cattle going from pasture to pasture.
Community grazing reserves will need a premises ID as well, which caused some concern.

[grassfarmer]

Sawbones, slaughter is certainly one issue CanadaGold has to overcome - my understanding is that they are working on innovative ways to get the current packers to custom kill. Given that their plants are running way under capacity I don't see that should be too difficult to achieve.

Coppertop, So at the meeting did the deputy minister outline the details of the regulation that will see us having to scan cattle going from pasture to pasture? It sounds most unlikely.