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    Aid is on the way

    Ottawa and the provinces will unveil today a massive relief package for the beef industry that could cost up to a billion dollars or more, to help struggling ranchers and expand Canada's meatpacking sector, senior industry sources say.

    Federal Agriculture Minister Andy Mitchell was to hold news conferences in Calgary, Regina and Winnipeg to announce the multi-step, multi-year plan.

    The federal-provincial plan comes at the beginning of the period in which ranchers are readying to sell their calves. Without aid, many feared a total collapse of the cattle industry.

    "We're pleased that they're able to move it ahead as quickly as they have," said Dennis Laycraft, executive vice-president of the Canadian Cattlemen's Association. He'll help Mitchell and provincial counterpart Shirley McClellan at the Calgary announcement.

    The government will pay advances to ranchers of about $150 for each calf they promise to hold off on selling until 2006 based on a percentage of their herd, said a senior cattle-industry official who spoke on condition of anonymity.

    The plan will provide loan guarantees for groups that want to build new packing plants to increase Canada's slaughtering capacity. It will organize a euthanization program for tens of thousands of aging cattle.

    Many of the culled cattle will be tested for mad cow disease to help Canada meet its international requirements to screen 8,000 animals this year and 30,000 next year, the source said.

    "These are animals that will likely not survive through the winter," he said. "It is not a broad-based cull."

    Ranchers who surrender animals to this targeted slaughter will also be compensated.

    The pivotal component of the plan is aid for calf producers. Many farmers feared prices for young cattle would fall through the floor, with the industry near its lowest level since the crisis began. Tens of thousands of Canadian ranchers rely on the fall calf run for about 75 per cent of their annual income.

    Last fall many ranchers were optimistic the U.S. border would re-open to live cattle, giving bounce to the struggling industry. Even the cheeriest of industry leaders say trade won't resume until well into 2005.

    Federal Conservative Leader Stephen Harper predicted it would take longer than that, due to U.S. protectionist groups and lukewarm relations between the two countries.

    The cash comes at a crucial time for struggling ranchers like Keith Porter.

    "It's tough to have enough money just to pay our bills," said Porter, who farms near Duffield. "If we hadn't been around for the last four generations . . . some young farmers that are starting up got really large debt load."

    Porter complained about selling a 2,450-pound bull to a slaughterhouse for 12 cents a pound, a fraction of what he would have got.

    The plan will cover older animals through cash advances under an existing income-stabilization fund.

    The aid for calf producers will give them incentive to hang onto their cattle for months or years until the border re-opens, prices rebound or there's enough slaughterhouse capacity in Canada to handle them.

    Dozens of investor groups have drawn up plans to build new packing plants or update existing ones, but have had trouble securing the millions it costs, and the municipal approvals needed to do so.

    The government plan will help investors secure loans for the plants. The goal is to have enough capacity to slaughter all market-ready cattle in Canada by 2006.

    It would reduce pressure on the need to open the border and ease the stranglehold on the industry that U.S.-owned Cargill and Tyson plants enjoy.

    The slaughterhouse money will assist small and medium-sized plants and startups, a move that pleases Grant Hirsche, one of the leaders of the Beef Initiative Group that wants to build a large producer-owned abattoir in Alberta.

    "The taxpayer will come unglued if this is an aid package that allows Cargill or (Tyson) to get this," Hirsche said.

    The package is almost identical to a contingency plan released last month by the Canadian Cattlemen's Association. It was drawn up after weeks of negotiations between farm-group leaders and federal and provincial negotiators.

    For the first time since June 2003, Ottawa will release a relief package with the co-operation of the government of Alberta, Canada's largest cattle-producing province.

    "Alberta is on line with the federal government and its plan to assist our industry," said Terry Willock, spokeswoman for McClellan, the provincial agriculture minister.

    An Ottawa-driven plan to bail out farmers was released in November.

    #2
    I await the announcement with interest, particularily the bit about holding calves over until 2006. $150 will not go far in feeding a calf until 2006. If we get the money this fall and feed the calf 1st November to 1st January 2006 that's 422 days or 35 cents per day. Can this be done? is feed cheap enough / land to summer graze cheap enough? I can't quite grasp the economics of this one yet. Oh, and I assume that you COMMIT to holding the animal to 2006 so if the US border did open next May and prices rose you couldn't sell. Could be handy for the big packers to have this captive supply of out of specification fats coming on stream in 2006 especially if the US border has opened by then.

    Comment


      #3
      Did I read that right? It was an advance of $150.00? Or a straight payment? If it's an advance that has to be paid back, I'm not so sure about it. Might be better off to leave it alone if we could get financing elsewhere, and retain the right to sell when we want to.

      The part about supporting the packer initiatives is good, as is the compensation for the real old cows.

      Looking forward to more details on this one.

      Comment


        #4
        Does anyone know what happened to the other 30% of the $80 we were supposed to get? I guess they ran out of money as we haven't heard it mentioned.

        Comment


          #5
          almoy,

          the other 30% is supposed to be paid out by the end of october. I guess it is called TISP.

          johann

          Comment


            #6
            The majority of us have calves that finish at 12 to 14 months of age. How on earth are we supposed to drag out that feeding period for another year and still have a marketable animal? The only ones who can benefit from this program are the ones who regularly wean 300 pound calves.
            Perhaps I can just tag all my heifers.
            ??

            Comment


              #7
              TISP... stands for This Is Summertime People.

              How unthoughtful of us to expect government employees to cut into their vacation time to process cheques.

              To all our poor overworked bureaucrats who are recovering from vacation, our deepest apologies.

              Comment


                #8
                bward, I take your point, this will suit people who calf later in the year or have smaller calves. I still am not convinced that majority of calves in Western Canada are finished at 12-14 months though - sure enough some of the big good exotic cross calves can do that but they need to have been done well throughout their lives. To kill at 12 months needs gains of 3lbs a day right through and an awful lot of producers run cows under conditions that will not produce 2 lbs of gain on their calves never mind 3lbs.
                I would think it is feasable for all calves born after 1st April and many poor ones born before that be entered in this scheme on 1st October this year and marketed after that next fall. Of course the producer is limited to 40% of their production so late calvers can't claim all their calves - but they could sell them at possibly higher calf prices.

                Comment


                  #9
                  Let me play devil's advocate for a minute.

                  I worry about the fact that if the market turned around, and guys wanted to move cattle to take advantage of it, they would not be able to. Don't forget that this thing will put a big slug of fats on the market in Jan. of 2006. Are we just moving our problem to a later time?

                  Scenario... spring of 2005. Border opens, prices are really good. Maybe we have a poor crop and the feed is high. You have tagged calves that you want to sell, and they are of a size that will be finished in fall 2005. Will you be docked accordingly? If a feedlot is buying cattle, they won't want cattle that they can't sell.

                  I think they need to add an amendment to the package. That would be that if the market price for fats goes to a certain level, that cattle could be released into the market. If they started coming too fast, and it dropped under that level, then they would have to be held again.

                  Just something to think about.

                  Comment


                    #10
                    Hard to have faith in a plan that reaches forward to 2006 when we are still waiting on 30% of the last plan.Our city friends think we are getting well compensated during this crisis because they are always hearing of new money coming our way.

                    Comment


                      #11
                      Kato, You are still talking about holding cattle till Jan 2006 - the program i've seen indicates you need to keep them for a year. I'm still hoping the beaurocrats can get moving, get the forms out and have aid available to cattle being killed next September.

                      Comment


                        #12
                        Ohh..oops. I don't remember where I read that, but I guess it was the wrong place.

                        So when does the 'year' start? Does that mean you can choose your start date? That could be interesting.

                        I still don't think it's going to help us anyway. Our calves don't fit into a 12 month feeding program very well. They'd get too big, and eat way too much. They work better if we wean em, feed 'em and get them gone. This year we got caught by feeding them to fit into the short keep January market, and it was not good, price wise. They looked real 'pretty' in January, but they don't like them to be as fat when you are selling short keeps as they would be at the same time if you were finishing them yourself. So we had to turn it on in February to finish them. Becuase they weren't pushed hard enough, young enough, they are finishing now. They should have been gone a long time ago. (Mind you, the price is a lot better this week than it was last week...)

                        Comment


                          #13
                          If you don't have quality you gotta have age so I'm laughing .

                          Comment


                            #14
                            Kato: Taking your scenario of the border opening in the spring of 2005, what would happen with your tagged calves? Simple...they would be shipped south to be finished! When that border cracks open it will be standing room only at the marts, as all the American feeders line up to buy them, and I doubt they'll much care what kind of tag is in their ear?
                            I suspect the border will open if Bush gets back in? If Kerry gets in I doubt we'll ever see it open? Bush is all for big business and lets make some money, while Kerry is??? Who knows?

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                              #15
                              Whoa cowman. Leave us not forget it was Bush who signed into law the $180 Billion farm aid package. I would agree that we have a better chance of the border opening IF Bush gets back in, but it is certainly not a done deal.

                              Think about what happens before an election - if he were really interested in helping big business, then wouldn't he be opening the border to allow cattle across for better competition down there? Big business tends to make bigger campaign contributions.

                              I still say we need to look way beyond the U.S. border and sending the live cattle across. Most importantly the value the Canadian producer could capture goes across the border with those live cattle as well.

                              Time to start keeping the value at home.

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