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Beef Production


let me get this straight

Oct 28, 2004 | 13:09 31 Thanks kpb I just wondered where you stood in the scheme of things is all. Some guys are like the guy who wrote "A Thousand Ways To Make Love" buthe never had a girlfriend. I think a mass cull and payout would accomplish alot-I just think quota's would be almost impossible to allocate and administer fairly-you'd see a big runup in cow prices as guys tried to get their numbers maxed before the quota allocation-it might make more sense to have your quota be in pounds of beef produced that would make it equal between cow/calf, yearling and finishing operations-ourselves we sell calves,grass cattle and finished. Reply With Quote
Oct 28, 2004 | 18:39 32 cs wilson, I actually don't think there is an alternative, longer term, to a cull of the nation's herd and I like your idea of a graduated scale for people who actually want to leave the business even though I would not be one of them. It pains me to see the hog farmers and cowmen who are struggling or right out of the business in my area.
Normally we sell our calves, too and then buy calves to background and run on grass. We've never finished them although I've thought about it a few times. This year I seem frozen so we haven't bought any calves yet for backgrounding. Last year, needless to say, wasn't a great year for backgrounding and running on grass. And I just don't have a real grasp on what the market is going to be like in the next 12 months so am a little paralyzed. I imagine we'll buy in the next two or three weeks. Reply With Quote
Oct 28, 2004 | 18:46 33 kpb, why not expand slaughter capacity, and continue marketing out beef? With the right system in place, there is a lot of potential out there.
There are just too many assets invested in the beef inudstry to just let 50% of it go. What are we going to do with all the additional land? Not going to be a nice feed market with half the cattle gone....then guys marketing feed grain and silage get killed!!
It also won't be good for hte farmers retiring to sell their assets either as the market will be flooded with used machinery!
Then in 5 or 10 years we will probably see people getting back into cattle as there are not many alternatives Reply With Quote
Oct 28, 2004 | 20:53 34 Expand slaughter capacity AND let these guys that want to cull their cows ----cull their cows.
We don't need to waste beef, and we don't need folks with the idea that killing cows and putting them in a pit to dictate that kind of action to those of us who believe we will be able to sell this beef within the next year or two.
It's all about time now folks, all about time. We have survived this long, we can survive a bit longer.
I vote NO to killing off cows without using them. Reply With Quote
Oct 28, 2004 | 22:19 35 Well fellows, I sure hope you're right. We've been going now for 18 months in this mess and I don't see that things are much better than they were at the start. I can't think the government is going to keep coming up with money every four or five months and we're just getting more and more and more beef every year and a heck of a lot more old cows.
I understand that it takes about 18 months to build a packing plant so I sure hope we get at it soon.
rp kaiser I admire your optimism and enthusiasm but I hope you have a set date in your mind when we are all going to have to do something different than working and hoping for a U.S. border opening 'cuz if you don't I'm afraid there's going to be a whole lot fewer of us around. As I said before, trade disputes with the U.S. take a long, long time to resolve and quite often don't get resolved.
You guys don't like supply management and you don't want a cull of a percentage of our cows. Is your suggestion, apart from building a slaughter plant to compete against the multi-nationals in an unregulated environment, for us to just hang on? Reply With Quote
Oct 28, 2004 | 22:32 36 I know that in the past we've touched on this some and I'm wondering where it is at now, especially with reading in the local paper tonight that the deputy premiere is saying that there will be a plant for cows being started.

All these plant proposals have many things in common and will likely be competing for some of the very same markets - whether they be domestic or global. People like to know "what's in it for me" and to see successes. Wouldn't it be better to put the focus and resources on one plant, get it up and running and then use it as a template for additional, more local plants?

Many of the resources are spread so thin and being duplicated in a number of places, so I think it would be best for all if there were one success, find markets that can be expanded and then use that as a means to get additional people involved. Having a successful model to build on is a lot better than "paper" to try and build something. The plants wouldn't need to be identical because each area has differences, but there are many commonalities.

Looking south is not the answer and doesn't leave us any better off because the border may not open for a while yet, or could slam shut again for any reason. Better to spread the risk and not have all of our eggs in one basket. Reply With Quote
Oct 29, 2004 | 08:32 37 I absolutely agree cakadu, it is crazy sometimes, when community groups 50 miles apart each want their own packing plant, and then wonder why they each can't raise enough capital!! There should be someone out there coordinating two or three groups in all of Western Canada and thats it. Reply With Quote
Oct 29, 2004 | 21:09 38 ...I agree cattleman and cakadu... in my opinion packing capacity is the most important topic that needs to be addressed at the ABP meetings... I also think a cull plant between the SASK and Manitoba border and maybe one along highway 2 between Ponoka and Olds would be enough... If and when the Price family get their plant built I think the capacity for under 30 months with Tyson Cargill and XL will be sufficient... even though it looks grim ...live cattle under the age of 30 will head south again someday... Reply With Quote
Oct 30, 2004 | 06:25 39 Packing plant capacity and supply management... Interesting thread. It occurred to me reading this thread that if the majority of cow calf producers were integrated with a packing plant and produced for that plants needs, wouldnt that be an effective non governmental form of supply management?

Not to mention the advantages from producing what would essentially be designer beef directly tailored to the plants customers needs. This is along the lines of the proposed Price plant but the problem I have with that plan is only a handful of mega players are participants, the majority of producers were effectively excluded by the large commitment required to join in. To address industry problems effectively the majority of industry participants, namely the average sized cow calf producers need to able to participate or we will end up increased packing capacity with the same problems we have now.

There are big players in the industry, members of the Canadian Meat Council such as Cargill, Tyson, XL and Sunterra who would be very happy to see us producers continue to supply them cheap calves instead of participating further up the supply chain where they are. While they are proposing increased plant capacity, which is needed, their proposal offers me little hope of a brighter future for the common man.

This is a very interesting time in agriculture and I am very concerned that the policies and directions I see coming down from Provincial and Federal governments in terms of support for the mega players and lack of support for the common producer will see a very different agriculture in this province in as little as 10 years unless there ways are found that the average producer can participate in the value added markets. When the province says it wont get involved in forming a producer owned packing plant what they are really saying is we support the mega players who have the resources to do this on their own with financing and grants but we leave the average man who does not have sufficient resources to sink or swim. Reply With Quote
Oct 30, 2004 | 08:34 40 You know this is strange...I was thinking along the same lines yesterday!
Consider this: One big Packer that kills everything. All the cow calf producers have a contract to supply X amount of calves at various times of the year so as to ensure a constant supply of slaughter ready cattle. All cattle genetically the same...in other words you buy your genetics from the packers breeding program.
The packer takes delivery of the calves at a certain target weight pre conditioned! He places them in his own lots or custom lots feeding to his specs? The cattle come to slaughter at the desired weight and the desired finish.
If this system was possible it certainly would be more efficient than the gong show we have now? If there was some sort of fair contract formula it would make a lot more money for everyone involved? It would eliminate all the windfall profits and windfall losses? It would eliminate a whole lot of middlemen that really are not necessary for efficient beef production? No more salesbarn ripoffs, no more purebred ripoffs, no more cattle buyer ripoffs! Reply With Quote
Oct 30, 2004 | 08:59 41 Cowman I just think you'd be trading your poisons especially if you gave the packer control of the genetics that you use-look at the turmoil in the grain industry over Roundup Ready Canola-if you think were the packer's bitch now the other scenario would be much worse. I have no trouble selling on a carcass grid-we know the carcass specs we need to hit and it's up to me to manage my resources as I see fit to reach them in the most profitable manner. If were going to go that route we might as well unionize and just draw a wage from whatever megaplayer were signing our livliehood over to. Reply With Quote
Oct 30, 2004 | 10:01 42 exactly so cswilson! Reply With Quote
Oct 31, 2004 | 05:12 43 Well I never said that it would be easy, but if it could be done in a fair and equitable manner it could work?
There are a few things that always bothered me about the cattle business. One is this: We take a calf off momma who has hardly ever seen anybody but the owner and never ate anything but green grass and drank water out of a dugout,stream etc. We load him in a trailer take him to a mart where he is subject to all kinds of stress. He spends the night bawling and walking. He is driven through a loud noisy ring and sold. Mixed with a bunch of strange cattle and back on a truck for a long ride to the feedlot. There he is processed with a lot more stress and then put in a pen with strange feed, strange water and strange feed mates. Will he get sick? It is a bloody wonder that he doesn't get sick!
I believe if this whole process was eliminated it would be a lot better for the health of the calf?
Everyone is fairly disgusted with how the packers have been operating, but consider how it could be? Say if the packers were producer owned? And maybe the feedlots too?
So we have a system like this: ABP packers(producer owned) signs a contract with John Doe cow person to recieve his calves Oct. 30 at a target weight? A sliding scale adds or subtracts to everyones satisfaction. The calves are delivered to ABP feedlot(producer owned) and fed to the target weight and grade and then delivered to ABP packers? Now we've eliminated the auction barn, we've eliminated the cattle buyer, we've eliminated one truck ride, we've eliminated probably one brand inspection and we've eliminated about two checkoffs. We've probably eliminated some vet expenses?
Any profit at the end of the day would go back to the producer? Perhaps the producer would retain ownership to the point the carcass is sold to the retailer? Reply With Quote
Oct 31, 2004 | 06:28 44 The future cattle industry that cowman is presenting to us is very likely. Given that this is a likely future for the industry we can see just how critically important that the packing plants are owned by producers (and not just one or two mega producers but thousands of producers) who are in control of their destiny. Otherwise our destiny is in the hands of Cargill, Tyson Foods and other mega players who simply do not have the best interests of the actual cow calf producer first and foremost.

The challenge for producers is how to make it happen, to take charge of our destiny and build a viable future for our farms and children. There are considerable obstacles to achieving a brighter new future, not the least of which is the vested interest of the existing big players represented by the Canadian Meat Council but also government who get more political mileage from handing producers subsidy cheques than creating real opportunities for grass root producers to become vertically integrated up the supply chain through ownership of the calf right from birth to box. I do not believe the government is behind us producers on this one and they need to be before this kind of change will happen.

In hindsight BSE may be the best thing that ever happened to our beef industry if we as producers can get organized and create change that benefits us. We as producers need to own the packing plants or we are destined to become piece work employees of the multinationals. Reply With Quote
Oct 31, 2004 | 07:55 45 Great stuff! The only thing I can think of to add would be that "producer owned" means almost anything we can think of beyond "multinational pirates".

New Generation Co-op's, Sunterra (big money producer ownership), Gerry Fleming's Levy funded plant (for us folks who don't have the big bucks), and any other bright new idea that this crisis has generated.

That trip through hell for the weaned calf that you talk of cowman, will still have to be,(and always has been) up to you, or the individual. Reply With Quote
Oct 31, 2004 | 16:31 46 The numbers show that the average calf changes hands four times from birth to slaughter and I have often felt that if producers were able to eliminate all this middle-man activity, their profits would be considerably enhanced. Just by simply retaining ownership as a managment plan, you can increase the profitability of that critter.
Farmers_son, I agree completely with your point about producer-ownership of packing plants but I fear for the future of these plants as long as our federal government will not enact legislation to protect the domestic packing industry. We HAD a domestic industry not that long ago--we cannot expect a domestic industry to survive now against the multi's when the old industry could not. And the economic environment is actually more difficult now than it was then.
Everyone has noble intentions in this area, which I think is fine, but without government support these plants cannot survive.
And rp kaiser, I think you said in a previous thread somewhere that even if the new domestic plants were eventually taken over by the foreign multi's, it would not matter since our packing capacity would increase. I totally disagree with this view--as long as our ability to slaughter our own animals is not controlled by ourselves we will always be on the edge of another disaster. Reply With Quote
Oct 31, 2004 | 18:27 47 That was a rather short term thought on my part kbp. Sometimes too many things going in to this head at once, and not enough thought on what comes out.

Packing capacity is crucial in the short term. I would also prefer to see Canadians and even better yet, producers own these plants. Some will fail, and hopefully other Producer initiatives will take over.

My apologies kbp. Reply With Quote
Nov 1, 2004 | 07:54 48 It absolutely crucial that a wide cross section of producers are able to participate in the ownership of Alberta's and Canada's packing plant industry. And there is no question that government needs to commit to see this happen. Not just more packing capacity but packing capacity owned by average producers like you and I. I am concerned that there are a lot of challenges to be overcome before that will actually happen and the goal of an average producer actually participating further up the beef supply chain is achieved. I have not seen where either the Alberta government or the Federal government is onside. Someone can correct me if I am wrong but I have not seen where the ABP is onside. There is a lot of agreement on the need for the average producer to be able to participate in the packing plant side of the industry but I question if we know how to get there. Reply With Quote
Nov 1, 2004 | 08:14 49 farmers son: While I laid out a scenario where things could work the fact is it just isn't going to happen?
Cargill and IBP are in the process of expanding to such a degree that they should be able to get all the fats dead?
And this is with the blessing and wholehearted support of the Alberta government and the ABP?
But consider this: The producer doesn't need to own the packing house/feeding complex if the rules were in place where the packer had to offer a fair contract for the calves? Now this would require the government to "regulate" the industry! The packers always claim they are making their money on a slim margin and quite often operate in the red, so they should be receptive to a stable guaranteed profit? No more windfall profits, no more windfall losses?
Of course if they chose not to operate in this type of market, they could always sell out to a producer operated system? Perhaps BIG Cs suggestion of government bridge financing and a surcharge on every animal could be used to buy them out? Reply With Quote
Nov 1, 2004 | 19:37 50 cowman, you are correct that the packing industry, if not domestic-based, at least needs to be government regulated. Frankly I see absolutely no signs of this happening and I also don't see any of our so-called industry groups pushing for this, do you?
If all our industry groups, which supposedly represent us, pushed together for government regulation to control the packers I think we have a chance of something happening. But I don't see this taking place--whenever I hear the industry leaders on the radio they're sure not talking about regulating the packing industry. They're always talking about either getting the border open or short-term government support programs. I think farmers_son has it absolutely right when he says that the new plants have to be owned by the producers and have to be protected by the government. But, sadly, I see no sign of this taking place. And for that reason I see little hope of the Canadian packing industry being able to survive on a long-term basis, even if it is able to get off the ground which I think is doubtful. Reply With Quote
Nov 2, 2004 | 00:59 51 kpb - Haven't heard your resolution yet at any ABP meetings. This is the time for you to raise your voice with your concerns.

Propose that ABP press the government to regulate.... I'll second your motion as long as it's not to far left. Reply With Quote