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Oct 22, 2004 | 22:27 1 ...since you guys are running for positions on ABP...just thought it would be interesting to read your views on packer owned cattle...what should be done with all the culls and your thoughts on testing for BSE... Reply With Quote
Oct 22, 2004 | 23:19 2 Packer ownership has obviously become a way for Cargil and Tyson to manipulate the fat cattle market in this country. Whether you want to believe that it is intentional or not, large numbers of fed cattle ready at certain times affect the price. Simply business some may say, but that can also be said for the extreme profits the packers are reaping while the producers of this country struggle to survive. The system is broke, and it needs to be fixed. I do not have the solution at this point, but feel that some sort of limits must be set.

As far as cull cows are concerned, I am confident that the best solution is to kill these cattle, and sell the beef. I fully support a plan to build large producer owned packing facilities, and sell these cattle to markets in Asia.
I sat as a new member of CBEF at their annual meeting in September, and feel quite confident that we can sell all the beef we want in Asia. We may need to implement testing for BSE to crack the Japanese market, and am all for testing for export demand.
The only reason we are not selling more beef to offshore markets at the moment is the lucrative boxed beef market in the USA. Packers are operating at record pace, and have no need to source new markets. Packing capacity is crucial, and even more so for the cow and bull kill.

When it comes to BSE blackjack, I would be considered a radical in most eyes. I do not think that Mark Purdey is some sort of God, but I do believe that he, and many more scientist every day are on the right track. BSE is caused by a chemical imbalance, and is not transmissable through contaminated MBM.
I have read the ABP technical committee report on research related to BSE and find it very disturbing. Our industry has become blinded by the words of few, and is afraid to challenge the real issues.
Why is their no proof through experimentation that contaminated MBM is the cause of transmission? I am sorry, but that is one of the simple questions that I have posed for dozens of people in dozens of letters, and have yet to recieve and explaination.

We need to look for short term solutions to the problems at hand. The solution to the problem of BSE in general will take years. Mark my word, the truth about BSE is not the story line we are following now.

The more I write about this topic, the more I will be labeled a duck, so I might as well stop for now. I would share more, if you would like to contact me personally.

rpkaiser@telusplanet.net Reply With Quote
Oct 23, 2004 | 00:18 3 rpkaiser,I'm not sure who coined the phrase "BSE Mafia" but it ain't too far off the mark if you ask me!!!
Out of all the lies and misinformation that has been passed out through all of this BSE BS the one person I would most like to have a "one on one" with is Dr.Prusiner!!!! To hell with the r-calf leadership and their pissant followers!!!
I too,hear stories,from sources that I have no reason to doubt, about things that went on during Britain's BSE fiasco!!!
e-mail coyote5@mts.net Reply With Quote
Oct 23, 2004 | 08:08 4 Sorry to disappoint you but I am not running for a position on ABP. I see in the annual report that rpkaiser is and I wish him well.

But I do attend the fall meetings in several zones and I keep interested in our industry organization as I feel it is important. My commenting about the ABP is to hopefully convince other producers the ABP is important to their individual operations and that they will take the time and effort to actually attend a fall meeting in their area this year.

But since you asked...

There should be no packer owned cattle just producer owned packing plants.

The problem with culls is a direct result of a lack of packing capacity not a lack of markets so the answer is increase packing capacity.

Lets talk about food safety rather than just BSE. The reality is people can get sick and die from eating our product, whether from E. Coli or quite possibly Johnes Disease to name a couple. Far bigger problems than BSE and its associated media hype. We cannot expect Dr. Atkins' diet to carry our industry through food scare after food scare. We need to be able to offer a higher degree of food safety to our customers. Reply With Quote
Oct 23, 2004 | 08:22 5 ...thanks for the reply rpkaiser... I go to the auction marts quite often and hear other ranchers with the same concerns... I think the ABP SERIOUSLY needs to have government change some rules of the game should we say on packer owned cattle...cull cows I agree with you... as for BSE a lot of ranchers also wonder about the science in that it is not seem to be logical... good luck rp kaiser... Reply With Quote
Oct 23, 2004 | 08:29 6 ...oops sorry fatherson... those are the sentiments I hear and share as well... Reply With Quote
Oct 23, 2004 | 09:22 7 fathers_son or is it rsomer?
correct me if Im wrong, but you say you are not running for the APB. Is that because you were elected last year and your term is not up?

By the way, you mentioned in an earlier thread that you were running for municipal office. The elections are over. How did you make out with that? Reply With Quote
Oct 23, 2004 | 10:25 8 I'm just going to put this thought out there - with no packer representation on the ABP, would it be short-sighted in terms of the producer owned packing plants, or some of the other plants that are trying to start up? The sentiments I am hearing are against the big players, but what about the smaller ones?

Change is hard for anyone - some to a lesser degree than others. What may have worked 25 or 50 years ago may not be as applicable in today's world. How possible is it that the ABP could expand it's representation without hurting the core of it's business - namely the beef producer?

I am just trying to get a better picture and understanding of what is happening and why some of the sentiments are running so high. I believe that in order to move anything forward, there has to be common goals and a united voice. How possible is that in the beef industry?

Maybe the upcoming elections will be a step in that direction. Reply With Quote
BFW
Oct 23, 2004 | 11:37 9 Blackjack, Idon't think that packer owned cattle are the real source of our problems right now. There is a lack of slaughter capacity in our system right now no matter who owns them. Limiting or even banning packer owned cattle may have repercussions that we are not prepared to accept. Would we lose the ability to forward contract cattle (avaluable risk management tool) or the ability to market into some type of grid pricing arrangement? There are alot of custom feedlots who would be unhappy with the loss of a good customer and many feeder cattle sellers who on yearling cattle in particular)have been quite happy that the packers are bidding on their feeders. Until some of these questions are dealt with I could not support a ban on packer ownership of cattle.

As for cull animals I think that they should be removed from the system, tested for BSE, and either enter the food chain or destroyed and the producer compensated appropriately. At least try and simulate a somewhat normal cull situation so that they do not become an even bigger burden to the system the longer this situation carries on. As for BSE testing, again test the older cull animals to determine prevalence and if the market place demands it. BSE testing for younger animals does not appear to be required and it seems attitudes around the world are changing in regards to the need for testing young animals. Reply With Quote
BFW
Oct 23, 2004 | 11:38 10 Blackjack, Idon't think that packer owned cattle are the real source of our problems right now. There is a lack of slaughter capacity in our system right now no matter who owns them. Limiting or even banning packer owned cattle may have repercussions that we are not prepared to accept. Would we lose the ability to forward contract cattle (avaluable risk management tool) or the ability to market into some type of grid pricing arrangement? There are alot of custom feedlots who would be unhappy with the loss of a good customer and many feeder cattle sellers who on yearling cattle in particular)have been quite happy that the packers are bidding on their feeders. Until some of these questions are dealt with I could not support a ban on packer ownership of cattle.

As for cull animals I think that they should be removed from the system, tested for BSE, and either enter the food chain or destroyed and the producer compensated appropriately. At least try and simulate a somewhat normal cull situation so that they do not become an even bigger burden to the system the longer this situation carries on. As for BSE testing, again test the older cull animals to determine prevalence and if the market place demands it. BSE testing for younger animals does not appear to be required and it seems attitudes around the world are changing in regards to the need for testing young animals. Reply With Quote
BFW
Oct 23, 2004 | 11:45 11 Cakadu I also think that it is very short sighted to try and exclude the packing industry from the organization especially under the current environment of trying to establish producer owned plants. The industry council plans include representation I believe from some of the smaller members of the packing industry. I also think it is wrong to assume that the 2 large packers will dominate industry council and fill the 2 board seats potentially allotted to it. Reply With Quote
Oct 23, 2004 | 12:41 12 crossfield_beef: or maybe I am rpkaiser or cowman or GLTUSA. Lets see there is rusty1, pandiana, ivbinconned. Maybe I am one or all. And then again maybe not. Could be emrald1 is really BFW or 15444 is incognito. And it could be that there are aliens walking amongst us and the world is about to end. But probably not.

Some make it a point to identify themselves for whatever reason, I choose not to. I think the real benefit of Agri-ville is anyone can participate and the worth of their opinions is determined by what they say not who they are. You could be reading posts by the chair of ABP, ranchers, men, women, big producers, small producers, executives of the big packers, city dwellers and Americans but what they say is what counts, not who they are.

I have no interest in who you are crossfield_beef but I welcome your participation. And if I say I am not running for the ABP it is because I am not running for the ABP. Reply With Quote
Oct 23, 2004 | 13:36 13 It is true that packer ownership is not the main problem at the moment, but may I consider the big picture.

Canada has more fat cattle than the packers have room to kil. Thus price is affected. This is simply an issue of numbers. Large numbers of packer owned cattle coming to market at a similar time have this same supply and demand effect. This is also simply an issue of numbers. Like I said before, whether you want to believe that this affect on pricing is accidental, just business, or price fixing, no one can deny that it does not happen.

Certainly there would be problems associated with limiting, or eliminated packer ownership, however acting like there is nothing wrong is even a bigger problem in my mind.

Don't worry folks, packer ownership will never go away. Cargil and Tyson have so many company names, and numbered associate companies that we will always be able to depend on their
"good paying" pens of custom feeders.

Is there a cattle feeder out there who can truely say that they are making good profit from the custom fed cattle owned by Cargil, or is it simply a good cash flow situation for the banker to see those cheques coming in every month.
The feeders I have spoken with say that the margins are so tight on "Cargil custom fed" that they make very little profit.

With the changes in Producer ownership of packing plants coming on Cakadu, the packer ownership question must be delt with carefully, but it must be delt with. Reply With Quote
kpb
Oct 23, 2004 | 14:31 14 The issue of creating larger domestic packing plant capacity is an absolute red herring. The fact is that our domestic packers were not able to compete with the large multi-nationals years ago and the competitive situation is worse today. The multi's are better established and will not give up their market share. They have no fear of domestic competition or, indeed, of our federal government. The reason our new packing plants are having so much trouble raising money is because no knowledgeable big investors think they can succeed on a long-term basis. The business plan of a domestic packing industry failed before and the conditions are worse now. I think it is naive to think it can succeed now anymore than 5 and 10 cent stores can compete against Wal-Mart. Reply With Quote
Oct 23, 2004 | 15:23 15 The big picture is what is important, rpk. The issue of packers owning cattle is one that must be looked at carefully because you don't want the producer owned plants to run into problems because of cattle ownership. By-laws, organizational rules etc. will have to ensure that the wording allows for such eventualities.

As far as trying to run with the big packers I think that the only way for them to make it is to stay under the radar of the big plants. They won't make it if they go head-to-head with them, so the best way to ensure success is to stay under their radar screens. You wouldn't start up an independent store thinking that you would take over Wal-Mart's share. Besides, wouldn't you want to create your own brand and your own identity? That is what will help to make it rather than break it. Reply With Quote
kpb
Oct 23, 2004 | 16:07 16 I think that the old Eatons, Stedmans, etc. not to mention local hardware stores all thought they were "flying under the radar" and had their own brand or niche market. None of them were able to compete against Wal-Mart. And in our industry the old packing houses were run by people who knew the packing business inside and out. These were not innocents. The fact is that the business scene both here and south of the border is littered with the carcasses of companies that thought they could be niche players or capture a small market share that the mulit's have missed. The latest example in retailing is Toys R Us which is being ground into dirt by Wal-Mart after thinking they owned the niche market of toys and were unassailable. The multi's want it all, they want the total market and will not stop until they get it. It's no different in packing houses than in retail or fast food or banking or downstream oil companies. I'm afraid I don't believe that any domestic company will fly under Cargill's radar. Reply With Quote
Oct 23, 2004 | 21:09 17 They maybe want it all but that doesn't mean we have to roll over and give in. We can start to seriously fight back and recreate a production chain we own. The Canadian consumers I've spoken to are very much on the side of the primary producers and against US corporations owning everything.
I think we just need to be looking at the glass as being half full rather than half empty. Reply With Quote
Oct 23, 2004 | 22:34 18 I agree grassfarmer. One thing the BSE mess has done is raise an awareness among comsumers about the issues such as monopoly of packing plants etc. Before BSE how many urban consumers would have known or cared about IBP or Cargill ?? Reply With Quote
kpb
Oct 23, 2004 | 23:53 19 I respect the opinions of both grassfarmer and emerald but I disagree that we can create our own production chain in Canada and I also think it is unrealistic to think that Canadian consumers will support domestic packing plants simply because they are made in Canada. If you again look at other examples it is quite clear that while the consumer talks a good story, he will go to the place which offers the lowest price. That's why Wal-Mart thrives and your local town store dies. If Cargill can undercut proposed Canadian packing plants, they will and will eventually make the domestic plants go under. In my opinion this is not looking at the glass half empty--it is, in my judgement, being realistic. There is no benefit in going into a revitalized Canadian packing industry with rose-colored glasses on. I believe that the only way a Canadian packing industry can survive is with strict government support and regulation. Reply With Quote
Oct 24, 2004 | 07:15 20 kpb: You raise some interesting points. You are correct when you say there is no benefit in going into a revitalized Canadian packing industry with rose-colored glasses on. Cargill and Tyson Foods are fierce competitors but not with one another. I think you are wrong when you suggest the reason our new packing plants are having so much trouble raising money is because no knowledgeable big investors think they can succeed on a long-term basis. I think it is because the market is so uncertain right now. Until our access to the U.S. market is a lot clearer it is questionable investing millions in packing capacity that will depend upon U.S. exports to be viable long term. I agree, the only way a Canadian packing industry can survive is with strict government support and regulation. That is the only way a U.S. packing industry survives too. The U.S. government is very involved in the U.S. packing industry with controls on competition, packer owned cattle, controls on off-shore imports as well as going to bat for its industry over issues of foreign trade. We need Canada to do the same if a Canadian packing industry can prosper.

There is a saying that whether you think you can or you think you cant you are right. I think the present degree of foreign ownership of the Canadian packing industry is absolutely unacceptable. I believe a producer owned packing plant has huge brand potential when compared to traditional players such as Cargill. And make no mistake about it, any new packing plant might fail. But there are success stories out there too. I would expect the real benefit of a producer packing plant would not be its huge earning potential but its potential to inject competition into the market place. Because without competition at the level where producers sell their calves into there is absolutely no future for anyone in this industry. Reply With Quote
Oct 24, 2004 | 07:37 21 Well kpb it is re-freshing to hear someone say it like it is! However be warned, reality isn't something a lot of us like to hear on here! We are more into hoping a "utopia" can happen and things like Cargill, IBP and Wal-mart will simply disappear and we'll all become honest caring packers and the world will beat a path to our door to buy our superior "green fed" beef! Reply With Quote
kpb
Oct 24, 2004 | 10:20 22 farmers son, We are in agreement that a domestic packing industry will only survive with strict government support and regulation. Also, I believe you are correct when you say that a concern of investors is the border situation. But since our government is doing nothing to ensure the survival of the packing industry in Canada, long-term, with the border open or not, your points end up being the same as mine---a domestic packing industry will not attract investment dollars and be able to survive in the current climate. And all these domestic packing houses are at risk as long as they do not have committed, long-term investors with very deep pockets and government support. I agree with you that an optimistic outlook can help determine a positive outcome but we need seriously to get this packing issue right this time. If these plants open with investors unable to compete against Cargill (i.e. unable to absorb huge losses for a long time) and without government shelter, they will fail and it will be a disaster for our industry. It is no good saying our consumers will buy local beef or saying we will only go after niche markets. Do we want a domestic packing industry or not? If we do, then let's get the government to shelter our plants to they can compete with the big boys. Otherwise we'll just be niche players in our own market. This would be truly sad--we might as well just give the country to the Americans. Reply With Quote
Oct 24, 2004 | 10:35 23 Please help me to understand this. If the government listens to the likes of ABP, CCA etc in terms of what to do in the beef industry because these organizations are deemed to be the voice of the industry, then how can the government decide to do more to protect the entire sector when these organizations are stating that they want the US border to open?

If we keep doing the same thing, how can we expect a different result, better treatment, more money for producers and whatever else you might want to add?

I have to believe that we have learned more than that over the last 18 months. Reply With Quote
Oct 24, 2004 | 10:42 24 Cowman, I appreciate you get a kick out of playing Mr doom and gloom on Agriville - you were doing it in 2002 when I first joined this forum and you couldn't wait to see the whole Canadian cowherd killed because of drought. I do resent this ongoing sneering at anyone that dares to suggest we might have a chance to survive and build a successful Canadian industry - many people are working damn hard through a variety of groups and organisations to try and improve the situation for primary producers - if you don't want to fine, but give a break to those who are giving of their time and energy. And before you tell me I'm naive and don't know how the world turns like you "older" guys who have seen it all before I will tell you these US corporations can be broken. Just think about it, they only really grew into a position of global strength in the 1980s - they are the new kids on the block, as indeed is the US as a global force (really only post WW2)Compared to all the farmers and ranchers in Canada with backgrounds stretching back hundreds of years into Europe. Empires rise and fall and these ones are not invincible. Reply With Quote
Oct 24, 2004 | 12:00 25 http://www.beef-initiative-group.com/

Hey cowman and kpb. When you have a moment, could you read the packing plant proposal Beef Initiative Group is backing.

One of the reasons we all believe is holding up investors, is the proverbial black ink in the business plan. The proposal to build a plant with producer money generated from a levy gets around this issue to a certain extent. Ranchers know all about risk. And the risk associated with $3.00 per head to put another large player in the marketplace rather appeals to me.
What do you guys think? Reply With Quote
Oct 24, 2004 | 14:46 26 I'm sure no one will believe this, but I believe the day will come when the big multinationals will lose their powers. It may not be today, or tomorrow, but it will happen, of that I have no doubt. There is a life cycle to expansion that we have seen over and over as long as history has been recorded.

In the past it has been the expansion of nations into empires. Now it is the expansion of small corporations into huge ones that span the globe. Just as empires are not sustainable, neither are these multinationals, over the long term.

Sooner or later, cracks appear, and then it all starts to come apart. I don't know what will start it, but it is bound to happen. Remember Nortel? Formerly considered invincible...Or back a few years ago when Chrysler almost went broke? It's not that far fectched of an idea.

Maybe the border should stay closed. That way we will get on with re-inventing the Canadian cattle industry in a way that has a better long term picture for us. Just going back to doing business like before is only going to get us kicked in the butts again.

If we go through this whole debacle without coming out of it any wiser, what a waste that would be. Reply With Quote
kpb
Oct 24, 2004 | 16:13 27 rp kaiser, I read the Beef Initiative Group proposal several weeks ago and will re-read it as you suggest. I think the idea of a $3 levy to build a big, competitive packing plant is an excellent idea with one condition--it must be protected until it can show an operating profit. In other words, either the producers who own it must be prepared to answer a cash call in the first few years if necessary or the government must protect the plant until it can get up and running. Either way, to me, is fine and once the plant is running then I think, if it is big enough, it will be competitive, again, if the government enacts legislation that is favorable to domestic plants. I am not interested in niche markets or speciality plants---if we really want to own our own industry surely to goodness we can get together to build, own and get the good management in place to run a large domestic plant. We need government help to support, nurture and protect this plant but is this not what government is for? As far as the comments about monopolies having a fixed life and waiting until they whither and die I must say that I find these naive. There are certainly examples of large companies going bankrupt or having financial troubles but the economic history of the last 50 years is not towards small but, rather, towards large, dominating companies. I think that anyone who thinks that the Wal-Marts, Cargills or Citi-banks of this world are going away is living in a different reality than me. The only way these companies are going away is if they are bought by even bigger monopolies. History shows us that empires don't last forever but none of us, individually, are going to be around to see the end of these multi's.The only thing these powerful companies respond to is something more powerful--if we respond as a group, with the support of our government, we have a chance of changing and benefiting our way of life. Grassfarmer, I am new on this site but, in defence of cowman, I agree with much of what he said today and believe it is best to go into something with a realistic view of the way the world works. There's no sense us building all sorts of domestic plants that are doomed to failure. I do not believe there is a hope that the multi's will, through their own good will, let these plants survive. They only respond to a greater force than themselves. And finally, grassfarmer, if cowman did propose a cow cull in 2002, it's just too bad we didn't all follow his advice, isn't it. Reply With Quote
Oct 24, 2004 | 17:23 28 kpb, If you allow me to extract a couple of sentences from your paragraphs I can show what I want to seehappening. In reference to new plants "I do not believe there is a hope that the multi's will, through their own good will, let these plants survive. They only respond to a greater force than themselves" - exactly right. As you say " The only thing these powerful companies respond to is something more powerful--if we respond as a group, with the support of our government, we have a chance of changing and benefiting our way of life." exactly right again . The last sentence totally baffles me though - you wished we had culled the herd in 2002? why would we ever wish to have destroyed our livliehood? our factory if you like? If people don't like any sector of agriculture that is their choice but I cannot understand these guys who seemingly want to pull the whole industry down because they are no longer enjoying it or finding it profitable. I'm the eigth generation to farm in our family and the point I was trying to make is that although individually none of us last for ever, primary producers (family farms usually) are what agriculture has been about for hundreds of years - these mega corporations are insignificant in terms of history. There are millions of farmers around the world - but only one Cargill, one Tyson Foods we outnumber them and we can defeat them. Reply With Quote
Oct 24, 2004 | 18:02 29 Was reading over the packing plant proposal myself and realize, due to your statement kpb, that nothing is mentioned concerning the first two years of operation. The bridge financing needed to build this plant would include operating funds for those first years. The levy would be on every animal sold; just like the ABP levy, with the exeption of packer owned cattle (which we hope becomes less anyway) This money would pay down the bridge financing over time - - - the rest is explained very well in the paper.

One bright note to announce. The Deputy Premier of Saskatchewan stood up at the last BIG C producer meeting and proclaimed that his government, along with the Manitoba government would supply funding for a feasability study on this proposal.

I like the fact that this proposal is being tweeked at these meetings by the very people who will be part of the good and the challenging aspects. Reply With Quote
kpb
Oct 24, 2004 | 18:13 30 grassfarmer, you and I are just about on the same wavelength here, I think, but our answers to the current woes differ. We are in agreement that the multi's will only repond to a greater force but I think that force has to come in an organized fashion--namely from the government, which is supposed to represent the people, and from industry groups which represent us. The individual rancher has no power with the big packing plants. In regards to my last sentence, it was flip I admit, but my point is not that the whole herd should be culled but rather what a better position we would all be in if we had sold some cows prior to BSE. I, too, have a strong sense of history and it grieves me more than I can tell you to see good men with 100-year farms in my neighbourhood having to get jobs to support their families. That is simply not right. And you must know that while there are still lots of farmers and ranchers in Canada there's a whole lot less than there were 50 or 100 years ago. That's because many left the farm because they could not make a living. And that was because we all bought into bigger being better and more being more profitable. As long as we pursue these policies we will lose more and more good farmers and ranchers. We do not need more cows in our herds, more acreage for our grain or more hogs in our barns. What we need is a decent secure price for what we produce so that you and I and our good neighbours will still be here in another 100 years. That's what really worries me and that's why I think we need a restructuring in our industry. Grassfarmer, we both have a high regard for our industry and a pride in what we do but I recognize that we cannot continue along our current path and expect good results in the future. Reply With Quote