let me get this straight

[kpb]

The U.S. and Japan have reached an agreement to trade beef. This morning I heard that Taiwan is also opening their borders to U.S. beef. At lunch I heard the U.S. ag secretary say that the situation with U.S.--Canada trade is different than that of U.S.---Japan. And our ag minister just got back from a tour of Japan and Taiwan with what???
A whole lot of nothing.
Foreign nations and foreign muli-national corporations only respond to issues that are in their own best interests. Instead of chasing after foreign markets that are clearly playing us for fools, we should be focusing on downsizing our industry to meet our domestic needs. We are going to have to downsize our industry sooner or later anyways (I also heard today on the radio that there are half the nunber of hog farmers that there were FIVE years ago) and we can either do it with grace and security for those guys leaving or we can let the market do it by forcing people under.
Anyone who thinks that so-called free enterprise continues to exist in this international marketplace is clearly in serious denial. We need to act like all these other countries and protect our own interests.The world does not want our beef and the sooner we come to grips with that new reality the better off we'll be.
Finally, there's going to be a lot of hooey in the next little while about how good the U.S.--Japan agreement is for us since the U.S. will need more beef to satisfy that market. This is utter nonsense--the only thing that will happen is that prices that U.S. ranchers receive for their calves will go up and they will be less inclined to open their border. They sure don't want our calves streaming across the border to lower their prices. And, meanwhile, they are increasing the size of their herd. All the talk from our leaders about what a wonderful step this is is complete balderdash.

[cswilson]

Let me get this straight you have faith in these same government officials to implement and administer supply management and herd reduction in the beef industry I can't see them doing a bang up job of that deal either.

[kato]

Yes there are fewer hog farmers, but they raise far more hogs than ever.

Downsize the cattle herd, OK, then what? Grow grain? Put a few million acres of pasture and hay back into crops? What does that do to the grain industry? Blows it away, that's what.

We got into cattle in the first place because there was no money in growing grain. I've said it before, and I don't mind repeating it. Only since the livestock industry has expanded, has the grain side of things started to improve. In a post Crow Rate Western Canada, there is not enough profit in grain to sustain agriculture on it's own.

We took land out of production, and developed a market for feedgrains. With half the cowherd, the grain industry goes back to being just as export dependant as we are. Just look at the harrassment the Wheat Board gets every year and you'll see what a cakewalk that is.

We have a small population. We have a lot of land that can grow food. There are a lot of people in the world who need to eat. We have a moral responsibility not to squander our productive capacity. Until there are enough people living in Canada to consume what this huge landbase can produce, we are going to have to live with the reality that our food will be exported. We might as well get used to that, and learn to play the game.

[kato]

Excellent response Kato. Downsizing may have some appeal for those who think they have the war chest to survive something as devastating to the current system as that, but that BIG PICTURE that Kato paints appeals to me.
kpb, have you ever considered the numbers involved. The amount of beef that Canada needs to export to remain viable would barely supply one of the larger cities in the whole of Asia. There are a lot of people over there. One thing I will have to say for Canadian Beef Export Federation is that they can supply a pile of facts and figures on export potential. Give Ted Haney a call and ask him if he thinks we can sell the excess beef we have once BSE BS has worked itself out of the system.
In fact........rather than waste a bunch of time trying to convince a group of hopefuls trying to find solutions to an industry in crisis, why not jump in and help reveal theis BSE BS for what it is, so that the whole world can find an easier job getting food where it is needed.

[cakadu]

We only produce a small fraction of what the Canadian consumer wants i.e. citrus fruit, g****s in January, fresh vegetables year round, are all things that we cannot grow or if we can grow them - at huge expense.

We need to start value-adding and making some of these things at home. One impediment to making things at home is that some of the inputs to make them are quite expensive.

Supply management was brought in to protect the small family farm, yet even there the higher ups at the CDC are saying that within 10 years, the 18,000 dairy farmers will have shrunk to 10% of that figure leaving some 16,000 plus farmers without steady income. They will have buyouts in terms of the quota - much of which was given to them if they were in early enough - but they will still be gone nonetheless. That doesn't mean that our milk production will suffer, in fact just the opposite - there will be huge mega barns. Their reasoning is that only the most efficient will survive. That can be intepreted many ways, but generally it means that bigger will hopefully be better.

We have bought into that mentality hook line and sinker and no matter how much evidence is given to the contrary, people still believe it. If you aren't making money grain farming or annual cropping 2,000 acres, you aren't going to do it with 4,000. Economies of scale diminish the larger you get. There is an optimum and each producer should be finding that on their own.

What we should be looking for is what we can produce efficiently and sustainably. We have gotten fairly efficient at cattle production for example, but we don't make much money at it, or at least the majority don't from what I am hearing.

There are things that we can likely do very well. We have to stop choking on ants while trying to swallow elephants.

[kpb]

kato, rp kaiser and cakadu, thanks for replying--I respect your opinions on this topic. Cakadu and I share the belief that bigger is not better for anyone in agriculture.I think Cakadu has an excellent grasp on sustainable agriculture and I agree with just about everything she has to say. Kato, I realize that there are more hogs than five years ago but I don't care about those hogs or about the huge hog factories--what I care about are the 50% of hog farmers who are no longer in business. I am attempting to devise a scheme so that we don't lose 50% of the ranchers in the next little while. Or, failing that, that the ranchers who do leave are compensated for leaving.
rp kaiser, I recognize that the amount of beef we need to export is a drop in the bucket internationally. What worries me is that no one wants this beef. Try as everyone might, the fact is no one wants our beef. Now, we haven't accepted this fact for quite a while now and it's become apparent to me that a lot of us still don't want to accept it but the proof is in the pudding. So, fellows, I've given you my idea of what we should do to deal with the fact that we have no export market to speak of--what is yours? It's no good saying we should keep working to open the export markets--that's the old saw that hasn't been working for well on 18 months now. So. if we have no export market and you think my ideas don't work or are immoral or anti free enterprise what do you guys suggest if the borders don't open to us for, say, seven years??

[cakadu]

kpb - part of the reason that our beef was not demanded as much as it could have been was the delegations going overseas to sell it weren't listening to how the customers wanted it. They wanted to sell beef in a box, when the customer was telling them they wanted to buy say strip loins as an example. We were still very much in a commodity type of focus.

I'm not sure how much of that has changed, but I think our delegations are finally catching on to the fact that they have to give the customer what they want and are prepared to pay for versus what we are trying to sell. We could have been marketing ourselves and our products a whole lot better is what I have heard.

Maybe this whole mess will help people to embrace the concept of a marketing focus versus one of a production focus and work together so that we can see everybody getting what they need.

There are some very serious questions that we need to answer in order to determine how agriculture will go forward in this country.

[cakadu]

The solution that I support follows the lines of giving the customer what they want as well. The BIG C plant proposal includes plans to test beef for BSE for export markets that ask for it. Japan has asked for BSE tested beef.

Brian Evans, (Cheif Veterinary Officer for Canada) told the executive commitee for BIG C in Ottawa Oct. 14th that contrary to popular belief, if we demonstrate the need for testing at slaughter as a means of opening up export markets without creating double standard for domestic consumers, CFIA will endorse the proposal.
If we get one truckload of beef into Japan, who has the toughest rules, the flood doors would open to the rest of the far east.

I am not sure why you are so stuck on the fact that nobody wants our beef kbp.

More boxed beef is crossing the border to the USA than any time in history. If we had more domestic slaughter capacity, even more would be going.

The tiny port city of Macau in China has an amzing story to tell. They are allowing beef to enter their country from Canada,,,,,,all ages, all cuts. Macau is what we would consider a smuggling supermarket for China, and it is all legal. Hong Kong is similar. We have already broken into these markets once again, and once again, the only thing holding us back is the lack of slaughter capacity to fill these markets. Why would Cargil, Tyson, or even Xcel beef look into markets that would mean more paper work etc. when they are making record profits in the easy and lucrative boxed beef market in the USA.

You have decent arguements about sustainability, but your export demand
gloom is hard to understand.

[kpb]

cakadu, once again we are in complete agreement about giving the customer what he/she wants. I would like to know if, in fact, our overseas delegations are currently doing that. rp kaiser, thanks for explaining how you think we could work towards resolving our situation.
I have two reasons for being, as you say, gloomy on our export prospects. The market to the U.S. has been closed for 18 months or so. Long ago this ceased to be a BSE issue and became a trade issue. I have experience with trade issues from the U.S. and I can tell you that it takes years and years and millions of dollars to resolve them and sometimes they are not resolved at all. That is why I am gloomy on our prospects of exporting live animals to the U.S. I think the issue in other countries is similar--it long ago became a trade issue and we generally have little power when it comes to trade because we export more than we import.
From what you said in your reply to me, you feel that a domestic planting industry would resolve a lot of our over-supply problem by processing our meat here, then shipping it across the border. As I have said before, I completely agree with your concept but only if the feds protect this plant or plants. I have no faith in the feds doing this since they have demonstrated in the past no inclination at all to protect our domestic packing plants. It is my belief that a plant like this cannot survive against the entrenched multi-nationals unless it is sheltered by the government. Please remember that we had a domestic packing industry here not so long ago that received very limited government support and was destroyed by the Cargills of this world.
rp kaiser, I am really not a doom and gloomer and have made these posts to get people in our industry to think about things they have not been thinking about---What if the border doesn't open? What if we can't get a viable packing plant open? Trying to get answers to these questions is responsible not gloomy. It would be irresponsible to not ask these questions and just continue the way we have for the last 18 months.

[cowman]

The whole argument for supply management is a joke anyway. Just never going to happen? Impossible with the new trade agreements we've signed.
But we will have a form of supply management...come what may! Only it will be the banker doing the managing!
When the debts get to high he will be pulling the plug and it won't matter one bloody bit what the price is!
And after a lot of immense pain for everyone involved things will return to some sort of normal balance. There will still be people owning cattle that shouldn't and there will be others who were very good stockmen who will be gone.
Not pretty but thats just how it is.

[Bez]

kpb

Your comment - Quote - I am attempting to devise a scheme so that we don't lose 50% of the ranchers in the next little while. Or, failing that, that the ranchers who do leave are compensated for leaving. - end quote

Admirable ideas lead to great expectations.

Well, my wife and I entered into an expansion program prior to the disaster hitting us last year. We have put the brakes on in a big way - for obvious reasons.

But the damage was done. After our business plan acceptance by all the financial, accounting and legal people and so on - we spent a lot of borrowed money - knowing full well we would be in a deficit position for at least 5 years.

Then BSE hit one year after we started.

If we had not attempted to streamline and improve our operation we would have managed. But we are now down to zero savings and zero buffer. It is the debt we incurred in our expansion plan that has basically killed us.

If you want to formulate a plan - well, find a way to either pay off that debt or hold off the banks and we make it. For me and multitudes of others.

Bottom line - the banks do not wait and my non-existant money from cais does not cut it. I can name several in my area in the same canoe. So, find me 76K and all will be well as we will not live outside our means ever again. Same as we did before we took the unprecedented step of borrowing to improve.

You and I both know this is not going to happen. But hope can always spring eternal.

Hold back money is nice - for those who have some reserve - we have none and therefore have decided not to participate - not enough buckolas in the bank for us to participate in this program.

Regards

Bez

[cswilson]

kpb since you don't respect my opinions-like I care-can you answer this question. Where are you situated in the beef industry-age,land base, cowherd size-I don't want to know what you had I'd like to know just where your arguement is coming from.

[kpb]

Bez has made the point of why we need to make a restructuring plan now better than anything I could possibly say. And Cowman has, as usual, articulatated what will happen if we don't get a contingency plan in place. I agree with him about the result but disagree that a supply management plan could not work. Such a plan would reward everyone currently ranching--either by providing a way to retire with dignity by selling their quota or by providing them a way to continue with a secure future in the cattle business.
cs wilson, you've called me a commie and you've called me a skunk. I will tell you that I remain a cattleman and derive all my income from cattle. I started my own operation and was lucky to expand pre-BSE. Bez's message is self-explanatory and I thank him for sharing it with us--I have friends in the same boat and I'm sick and tired of watching good men get beaten down. You may not like supply managment but it seems to me that I've presented the only ideas on this forum since I came on a couple of days ago to deal with borders staying closed and no federal protection of a domestic packing industry.
Cowman, you may just be right, if we aren't prepared to even recognize the problem, then I guess we're doomed to engage in supply managment as administered by the banks.

[cowman]

kpb: We, in the beef industry, had our chance at supply management about thirty some years ago when Eugene Whalen offered it to us, and we turned it down?
Supply mangement is on its way out. If it wasn't for the fact that most dairies and poultry operations were in Quebec/Ontario, it would have been phased out by now.
We are in a global market now, whether we like it or not. The fact is most of our ag industries can't compete with goods produced elsewhere! And especially against the countries that have no problem subsidizing their agriculture in a big way! Read that as Europe and the USA!
It is a sad thing what has happened to agriculture in Canada in the last 40 years or so. I believe it is a very short sighted view by politicians who really couldn't manage a hot dog stand, but then who am I?
It is frustrating to see my neighbors disappear and leave the countryside...and yet who can blame them? A young man would have to be an idiot to stay and live in poverty.
When I was young I made a decision to have a prosperous life! That wasn't going to happen in agriculture! Besides my nature was people oriented and I was never content to go round and round on a tractor!
So I combined the two and I believe I have the best of both worlds! The fact is, in Alberta, there is so much opportunity to make a buck it is scary! Just wish I could be five people at once so I could take advantage of it all!
We all have to do what is best for ourselves. I believe it is never right to put all your eggs in one basket, even though our government pushed that in a big way.
There are a lot of exciting opportunities in things like ag tourism. These halfwits will pay you to let them ride an old nag around or play cowboy, or other things like that! People won't pay for food but they sure will pay for recreation! Sort of like buying the sizzle rather than the steak!

[cswilson]

Ohhh aren't we the sensitive one-where did I ever call you a commie or a skunk-I said your vision is pretty much similar to what Russia tried which looks alot like communism-I don't need to call anyone names-you seem to be unable to answer simple questions though-Age?, land base?, location and number of cows. You know the old saying 'If you aren't a socialist at 20 you don't have a heart-if you aren't a conservative at 40 you don't have a brain'. I'm very curious as to where your positioned in the beef industry is all.