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Canada Complicates Things.........

RobertMac

Well-known member
Jason said:
Your numbers don't add up right Robert. Maybe it was a typo.

Let's look at the big picture...
The USA consumes over 12.5M metric tons(carcass weight equivalent) of beef yearly. Add in Canada, 13.5M[13,500,000 metric tons]. Japans total beef consumption approaches 1.2M and the amount supplied by the USA/Canadian beef cartel would be a very small percentage of that. But, what effect would opening the Asian markets have on the price of live cattle? I think most would say that it would help maintain high prices...yes?

Now answer me this...if you were in the business of selling beef, would you want to open a very small market that would have the effect of raising your cost of procurement for a very large market??? Opening the Asian markets would be good for the producer...but what is good for the producer, is bad for the processor!!!! Do you really have to wonder why a backbone showed up in a beef shipment to Japan? Until the supply of cattle exceeds demand to the point of reducing the price of live cattle in the USA, don't look for any significant exports!

For the US to consume 12.5 MMT , that's about 40 pounds per person per year. Pretty close, but the US only produces 11.46 MMT and traditionally exports 10% of that.

Canada only produces 1.07 MMT as total production. We eat about 51 pounds per person or about 0.7 MMT

Total world exports are only 7.1 MMT and Japan has to import nearly all their consumption, so 1.2 MMT is significant in that light.

Put it in a different light, the US consumes 10 times what Japan does, but Japan consumes more than Canada's entire production.

Since Japan is a market that yields better prices for beef than domestic markets, how does it follow that processors don't want the market opened? Even if it means higher prices for cattle, it means more dollars in revenue, good for producers and processors.

Jason,
You'll have to take up your numbers argument with Agman's source...the USDA. But I'll check the numbers.

You're right, the USA market is over ten times larger than the Japanese market. Japan and Canada are roughly the same. The question is...will the added income from a small fraction of the Japanese market make up the difference for the increased cost in the USA market? Remember, the USA market is ten times the TOTAL JAPANESE MARKET...so we are talking an exponential comparison.
 

Econ101

Well-known member
Jason said:
Your numbers don't add up right Robert. Maybe it was a typo.

Let's look at the big picture...
The USA consumes over 12.5M metric tons(carcass weight equivalent) of beef yearly. Add in Canada, 13.5M[13,500,000 metric tons]. Japans total beef consumption approaches 1.2M and the amount supplied by the USA/Canadian beef cartel would be a very small percentage of that. But, what effect would opening the Asian markets have on the price of live cattle? I think most would say that it would help maintain high prices...yes?

Now answer me this...if you were in the business of selling beef, would you want to open a very small market that would have the effect of raising your cost of procurement for a very large market??? Opening the Asian markets would be good for the producer...but what is good for the producer, is bad for the processor!!!! Do you really have to wonder why a backbone showed up in a beef shipment to Japan? Until the supply of cattle exceeds demand to the point of reducing the price of live cattle in the USA, don't look for any significant exports!

For the US to consume 12.5 MMT , that's about 40 pounds per person per year. Pretty close, but the US only produces 11.46 MMT and traditionally exports 10% of that.

Canada only produces 1.07 MMT as total production. We eat about 51 pounds per person or about 0.7 MMT

Total world exports are only 7.1 MMT and Japan has to import nearly all their consumption, so 1.2 MMT is significant in that light.

Put it in a different light, the US consumes 10 times what Japan does, but Japan consumes more than Canada's entire production.

Since Japan is a market that yields better prices for beef than domestic markets, how does it follow that processors don't want the market opened? Even if it means higher prices for cattle, it means more dollars in revenue, good for producers and processors.

One thing your numbers prove, Jason, is that when the substitutes for beef cost more, the price of beef is more.

Who would have thought?

It is time some of the producers started putting on their thinking cap.
 

Jason

Well-known member
Robert, you are arguing that sending maybe .5MMT of beef to Japan will increase the cost of all cattle the US packers buy?(over 11MMT?)

If that is really what you are saying I don't follow your logic.

2 reasons.

1) Japan buys things like tongue at a significant premium.

2) They also pay a premium for well marbled middle meats.

Tongues will not affect the purchase price of cattle in the US because there are more tongues than buyers at the premium prices. Packers won't be fighting for more cattle just for the tongue.

Costs of sending middle meats to Japan are known. Packers won't be spending more getting them to Japan than they can get in the domestic market.

Your arguement makes the case that packers give every cent of increased profit back to producers ( not what anyone has ever promoted here). What has been stated is that increased profit potential raises prices to producers as a percentage of increase. No increase no price gain. To say the packers are sitting status quo on exports because cattle supplies are tight is foolish. They would sell every pound of production overseas if allowed and if it was at a higher profit. They would have no trouble telling American consumers here is the price we can get overseas, if we can't make the same here we won't sell it here.
 

Econ101

Well-known member
Jason said:
Robert, you are arguing that sending maybe .5MMT of beef to Japan will increase the cost of all cattle the US packers buy?(over 11MMT?)

If that is really what you are saying I don't follow your logic.

2 reasons.

1) Japan buys things like tongue at a significant premium.

2) They also pay a premium for well marbled middle meats.

Tongues will not affect the purchase price of cattle in the US because there are more tongues than buyers at the premium prices. Packers won't be fighting for more cattle just for the tongue.

Costs of sending middle meats to Japan are known. Packers won't be spending more getting them to Japan than they can get in the domestic market.

Your arguement makes the case that packers give every cent of increased profit back to producers ( not what anyone has ever promoted here). What has been stated is that increased profit potential raises prices to producers as a percentage of increase. No increase no price gain. To say the packers are sitting status quo on exports because cattle supplies are tight is foolish. They would sell every pound of production overseas if allowed and if it was at a higher profit. They would have no trouble telling American consumers here is the price we can get overseas, if we can't make the same here we won't sell it here.

The competition game is about comparative advantage against competitors, not necessarily increasing the amount given to processors and then passed on to producers.

If the following were true without reference to the competition game,

"They would sell every pound of production overseas if allowed and if it was at a higher profit. They would have no trouble telling American consumers here is the price we can get overseas, if we can't make the same here we won't sell it here."

The big packers would not use their influence to stop Creekstone from testing for bse and opening up their sales base.
 

Silver

Well-known member
Tommy said:
Silver...I know the feeling. I'm at the point now where I don't want our safe Canadian beef with all it's working safeguards being associated with beef from the obviously inferior and unsafe system in the US. I think the faster we can disassociate ourselves the better. Label it I say.

Go for it Silver! I'd like nothing better than to have your beef labeled and not riding on the back of the USA. Are you working towards that or just giving lip service?


Riding on the back? More like bent over the barrel by the USA. :lol: :lol: :lol: :lol:
 

Sandhusker

Well-known member
Silver said:
Tommy said:
Silver...I know the feeling. I'm at the point now where I don't want our safe Canadian beef with all it's working safeguards being associated with beef from the obviously inferior and unsafe system in the US. I think the faster we can disassociate ourselves the better. Label it I say.

Go for it Silver! I'd like nothing better than to have your beef labeled and not riding on the back of the USA. Are you working towards that or just giving lip service?


Riding on the back? More like bent over the barrel by the USA. :lol: :lol: :lol: :lol:

Complacency got you there and complacency will keep you there.
 

Silver

Well-known member
Sandhusker said:
Silver said:
Tommy said:
Silver...I know the feeling. I'm at the point now where I don't want our safe Canadian beef with all it's working safeguards being associated with beef from the obviously inferior and unsafe system in the US. I think the faster we can disassociate ourselves the better. Label it I say.

Go for it Silver! I'd like nothing better than to have your beef labeled and not riding on the back of the USA. Are you working towards that or just giving lip service?


Riding on the back? More like bent over the barrel by the USA. :lol: :lol: :lol: :lol:

Complacency got you there and complacency will keep you there.

Wrong, Sandhusker. Two Irishmen got us here (Mulroney and some old washed up movie actor) by shoving free trade down our throats. Big business and politics will keep us here. Thanks for your wonderful insight though.
 

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