NMA Appeal-July 13

[15444]

One thing I didn't comment on from grassfarmer's first post is my idea that I don't think American packers will favour keeping cattle in Canada if they don't have too. Keeping cattle in a country that doesn't have the packing capacity to handle everything it produces, just doesn't make sense. Take them back to a country that has ample slaughter space and can kill fats on a short notice compared to Canada.

I personally would rather sell to an American buyer that is taking the cattle I sold him, out of the country...rather than feeding them in Canada. Get the buggers out of the country, rather than have them stick around and compete for slaughter spots later on and drive down prices from oversupply.

Their are only 3 solutions to this whole mess: bury 'em, export 'em, or box 'em. Everyone else must be looking for a 4th solution as it would explain why nothing is happening.

[farmers_son]

Could it be possible that the CFIA will secretly agree to ration the movement of live cattle into the U.S. to protect U.S. live cattle prices and Canadian feedlots? I would expect to see a few token loads of live cattle move south at first then the regulatory process will be structured so as to protect their markets and to protect Canadian feedlots as well. The federal government has not spent billions to shore up about 100 big Alberta feedlots just to have them sit empty because they cannot compete with American lots which have been making record profits for the last two years.

Based on what I have been told about the FMD situation in the 1950s, our markets will not instantly bounce up to U.S. equivalent prices. That will take several years after the border opens to live cattle.

[kpb]

grassfarmer, our prices will move up a lot when the border opens. Firstly, the number of cattle that will cross the line will not have a great impact in overall North American prices, despite what R-Calf thinks. Secondly we have a whole lot of room to move upwards. I don't think we'll make up the whole premium at once--although we may--but the big basis that exists now will largely disappear. That is real supply and demand--we have the supply and the U.S. has the demand so you can expect prices to go up by quite a bit.

farmers_son, you may be correct about prices not equalizing completely right away but I'm starting to think they may because I believe the market has to be efficient. Because of good transportation and communication systems now, most commodity markets are efficient. Anything that distorts the market (unaccountable price differences between free trade areas for example) is rapidly remedied these days through the use of arbitrage and forward contracting or the rapid movement of goods to fill the price vacuum. I'm not sure yet but we could revert quickly back to the normal basis between the two countries.


kpb

[kato]

I can't see the CFIA rationing exports, because there is really no way for them to do that.

What will slow things, if anything is the fact that the inspection process itself is cumbersome. They have to be looked at a lot more carefully than before (mouthing, identification etc.), which will slow it down. The actual border crossing procedure will probably be a lot slower too, because you can be sure they'll be looking at them pretty hard there. This means appointments to cross will involve more waiting. I know for a fact that there are several USDA vets who just love to turn loads around for whatever whim occurs, so they will be extra slow and difficult to deal with.

One example, in the past, if you had a load of hereford steers, you would list the tag number range, and the general red white face description for the load, and that would be it. Now each animal is listed individually, with a description, and they want the CCIA numbers listed in numerical order on the export paper. This means you take the list down, rearrange it in order, and then write out the papers. One mistake, one number entered wrong, and that load doesn't get over the border.

But if there is money to be made, they will go south, we can bet on it.

[Willowcreek]

Kato- I don't know what the process will be about fats ready to slaughter- but when the proposed border rules first came out I talked to a small feedlot operator (10,000 head) I know in Neb that said the USDA rules for the feedlots that feed Canadian calves are so stringent and require so much government inspection and paperwork that it makes it impractical to feed Canadian cattle...He said he could only see some of the large corporate feedlots that would be willing to jump thru all the hoops and strings to get certified...

[kato]

The procedure I described was for slaughter cattle. For feeders, yes it is worse.

[farmers_son]

I was thinking of feeders when I suggested a form of rationing would take place to protect Canadian feedlots.

[kato]

Perhaps with the feeders, they'll feed them here and ship them south to slaughter. The path of least resistance. That wouldn't be all bad.

Not great if you're a Canadian feedlot competing to buy the calves, but not bad if you are into custom feeding. I think over the past two years we've developed an ability to adapt pretty quickly to whatever comes up.

This BSE thing has turned us into a real tough bunch of survivors eh? Kind of like our parents and grandparents who lived through the Depression. Once you've been to the bottom, you can deal with just about anything. We'll deal with whatever happens next. No matter how the various court cases turn out.

[cowman]

I believe this whole BSE thing, while very frustrating, is just part of a bigger picture? Americans are pretty paranoid right now about everything?
Look at all the drivel that happens at the border, proposed passports and about Canadian airlines flying over American airspace?
We need to realize in this country that our federal government needs to get with the American program or we will continue to lose trade and commerce? If America is freaked about how we let just about every low life into this country, then we need to address that? Can anyone really blame them for wanting to keep out known terrorists and criminals...while Canada welcomes them with open arms?
While I personally feel America blundered in a big way by starting an illegal war in Iraq, did we have to spit in their face and rub it in? Bush has screwed up royally and has a tiger by the tail and doesn't know how to let go, but it is not the time to say "I told you so!" In the end the American people will realize they are in another Vietnam?
The ideal situation, for both our countries, would be a harmonized system where there basically is no border, a common dollar, a common tax system, a common subsidy program? A defacto union?

[farmers_son]

Isn't that like saying if you see a bully beating up someone smaller, then you should just walk on by and say/do nothing?

Canada is not a third world banana republic even if the U.S. wants to treat us like one. We are a member of the G8, not to mention NAFTA. We are a proud supporter of the United Nations and Canadians should never forget the proud role we play in International Peace Keeping.

In fact, UN peacekeeping forces are very much the product of a Canadian initiative taken by Lester B. Pearson, then Canada’s Minister for External Affairs, during the Suez Canal crisis of 1956.

Canadians have a responsibility to speak up when we see any nation being the aggressor and attacking another country without cause. That is not rubbing their nose in it, as you say.