Canadian Packer Profits

[mrj]

Now it's time for Philosphy is it agman. I will not disagree with you about learning, but your judgement of people who sometimes have very good points disappoints me.

What makes you think you know so much that you can run people down for efforts that you yourself do not understand.

It's been a very easy offence for you, and some of the people who trust you, to use the word blamer, or whiner. There may be misunderstanding, but adding complexities to issues like you do does not make you anything but an egotist.

{Randy, your "judgement" and name-calling of agman disappoints me.

When you state: "all the learning we do will be less than someone else has done" and "fortune has as much to do with business as knowledge most of the time" "there are a few bright minds up here getting it done ON THE BACKS OF SOMEONE DOWN THE LINE", it all sounds an awful lot like blaming and whining!

You speak ill of agman, yet you turn around and want him to share with you his words of wisdom for success in the cattle/beef industry when you ask "Why not share some insight into what the industry needs?" of the man you just called "judgemental", an "egotist", "boastful" and just a "defender of packers". Amazing! MRJ}

Life is pretty simple Agman, and we humans including yourself, are only a small step above a dog or a cow. All the learning we do will be less than someone else has done.

Business is also fairly simple, and fortune has as much to do with business as knowledge most of the time.

All this talk about packer profits is fair conversation. It is not blaming in most cases. It is trying to understand how something could be so terribly out of balance. (Especially in Canada these last 2 years)

I wonder what all of these minds you talk of that (GET IT DONE) in Canada are getting done. Or are Canadian producers and industry leaders all blamers and complainers Agman. There are a few bright minds up here getting it done on the backs of someone down the line, but overall this countries beef industry is a joke.

Why not share some insight into what the industry needs rather than spend your time waiting to identify or judge another uninformed misguided soul, or, your usual defense of everything the packers of this continent do.

I know you already know this but my customers are housewives, iron chef's and basic consumers as well. Our business is small with 12 to 15 head killed per week, but it has taught me a thing or two about the business of beef, and it isn't all about defending the mutinationals from blaming inept farmers who do nothing but blame.

I imagine your life is a busy one and ranchers.net is only a place to vent and sometimes be entertained, however your role here has been defined agman as the defender of packers and I have seen little else in the way of offered knowledge from the life of learning that you boast.

Here is a real cue (and clue) from agman you may have missed, Randy! Agman stated: "you learn more working with people than against them. Unfortunately too few people in agriculture who know anything beyond their level of production, yet they complain about upstream businesses which they know nothing about."

More very valuable information from Agman: "Misinformation is the enemy of any business and no sector of agriculture is more misinformed than those at the producer level. Some of this is their own making, as they refuse to learn, rather they choose to blame others. Those that are unwilling to learn will soon perish. Those that are willing to learn can; the opportunity is there each day. You have to decide which group you want to join."

If all producers would take those words to heart and live by them, it would do more good for them than just about anything else we/they could do, IMO.

Thank you Agman!!!!
MRJ

 

[Mike]

I vote that we get Haymaker a job in a packing plant so that he can learn to work with them and learn the packing industry inside and out. Then he can come back here and enlighten us with his experiences and teach us how to get along with packers.
What say you, Haymaker? ready to change occupations for a year or so?

 

[rkaiser]

"Misinformation is the enemy of any business and no sector of agriculture is more misinformed than those at the producer level."

You can deal with a quote from agman like this however you like MRJ; my point is that this is an arrogant remark that reeks of negativity.

Telling someone how dumb they are is no way for any positive movement.

I applaud agman for learning all he can about the industry. But churning out a personal opinion from that knowlegde and then calling folks names that question the system is simply as childish as the words I chose to use yesterday.

 

[agman]

"Misinformation is the enemy of any business and no sector of agriculture is more misinformed than those at the producer level."

You can deal with a quote from agman like this however you like MRJ; my point is that this is an arrogant remark that reeks of negativity.

Telling someone how dumb they are is no way for any positive movement.

I applaud agman for learning all he can about the industry. But churning out a personal opinion from that knowlegde and then calling folks names that question the system is simply as childish as the words I chose to use yesterday.

I will stand by my statement, as unpopular a it may sound to you or some others. The farther removed from the actual consumer of product one is the less likely that he is knowledgeable regarding consumer wants, desire and needs. That is a fact of business, any business. Without the consumer we do not exist.

Being intellectually deficient is vastly different from being deficient of knowledge. I have not met one person in agriculture to this day whom I thought was intellectually deficient. To the contrary most people I have met are very bright, I have stated that on many occasions. However, I have many times seen vast deficiencies in knowledge. Those deficiencies most times lead those people to the wrong or simplistic conclusions. Therein I see a vast difference how various individuals view certain events or conditions and then adapt. Some complain and assign blame while others recognize change, opportunity, and move forward.

The economics you describe as simple I see as much more complex. The more I have learned about all the various sectors that comprise our great beef industry the more complex I realize it is. If it was as simple as you espouse you would not be complaining about packers. Packers would be like beer halls, one at every street corner.

 

[rkaiser]

What I am complaining about is the dysfunctional Canadain beef market.

Do you have any suggestions on how to fix it?

Excessive profits for one side and massive losses on the other. Just so happens that packers are on one side of this equation and producers on the other.

 

[Anonymous]

Randy,

On one hand you are upset with the profit margins in the Canadian packing industry.

On the other hand you are unwilling to assume any ownership in a packing company to capture the profits you say are there.

What choice are you left with?

Who has ever blamed their way to prosperity?

With your unwillingness to assume more of the consumers dollar by financially controlling your destiny, what right do you have to complain about packer profits?

When you buy bulls or replacement heifers, are you concerned about the profitability of the seller or do you try to buy them as cheaply as you can?

Why should a packing company be any different?

They don't owe you a living and you don't owe the seedstock producer a living. Business is business.

I have never seen any industry so full of blame as the packer blamers in the cattle industry. Packer blaming is such a complete waste of time.

R-CULT handed your packers the leverage they used against you while they join you in your packer blame. How ironic!

What agman said is absolutely true. There are those in this industry, mostly R-CALF members, that are so driven by blame that they could absolutely care less about the facts or bettering their own situation.


~SH~

 

[rkaiser]

My personal interest in owning shares in a packing facility are due to the fact that I work closely and respectfully with a packer. I realise that he has challenges as I do, but with some respect from both of us, we can both work through tough situations. We will never change the industry, but have found a way to stay mostly under the radar of the big boys and carve out a market for ourselves.

My industry interest is with BIG C and the concept of a large producer owned facility to create competition in this country and creat new markets outside of America. In this venture, I would be part of the packing industry, and I am sorry if I led you to believe otherwise. In the conventional beef packing world, size will make a difference. I agree that many of the new ventures embarked on in Canada will fail. There is simply tons of eveidence to show that the economy of scale will affect viability.

You and agaman, and other can continue to use the word blamer forever, but your lack of experience in the Canadian situation is certainly affecting your judgement. You both know the power of money. This power has led to some major action by packers in this country, led by the multinationals. You can view this abuse of power as simply business all you like, but you have not felt the burn like thousands of Canadian producers. Tell me that Packers have had nothing to do with any political or industry generated decisions made over the BSE isssue. Decisions that continue to see packers profitting profusely, and producers, especially primary producers, loose nothing but equity.

Or simply blame Rcalf for keeping the border closed. I have never said that I support the chickenshit protectionist ways of Rcalf, but neither do I support the fact that packers weild power over our governments with no respect for the hand that feeds them.

 

[Maple Leaf Angus]

~SH~ until you have experienced what we as CDN. cattlemen have for the past two years, I think you are very poorly qualified to speak to our situation as you do.

We are not talking about taking advantage of a good business opportunity, we are talking about the economic equivalent of rape by the packers. There is absolutely no justification for their actions.

What they have done to the cattle producers of this country has built such a deep hatred for packers that it will be years before this is forgotten. I can't help but think that there will be a payback for some of the guys at the top of the heap. Never under estimate the power of a long-held grudge for a deep injury that was intentionally perpetrated.

There are some long memories in this business.

 

[Jason]

Randy thanks for calming down a hair and coming back to the table to dialogue.

Just for a second consider some of the programs in place now and what they are doing to our market.

The set aside fed program is one I am not sure about. It allows feedlots to bid a fee per day to hold heavies from slaughter. They have to be minimum 1100 pounds I think, and it is a 90 hold back.

I wonder about this program as it makes for heavier carcasses garanteed the price of fats at the time they are entered in the program. No overweight discount to the feeder but more beef to move.

The heavier carcass isn't much more costly to process so actually makes the packer a bit more money.

I don't know whether the good it does is more than the harm it does.

Next is the second payment the gov't sent on the Dec 2003 inventories ...the producers got paid, but they specifically excluded the packers who got 11% of the first payment. That seems fair when the packers are profiting in the end not to get that direct subsidy.

The dollar climbing makes boxed beef shipped South worth less so margins will fall. The fat prices have dropped a cent so the packers have whatever formula in place to keep present margins.

I think they are justifying the expansion with the current profits. My take on that is at least someone is expanding capacity. The expanded capacity will be free and clear for them when more normal competition resumes.

Next on the radar is a potential strike at Tyson/Lakeside that will hurt us worse than almost anything that has happened yet.

Option 1 Tyson just raises wages - result new expenses that will ripple through the industry and stay in place even when margins fall when a more normal supply demand situation occurs, but the immediate is we keep that capacity running.

Option 2 Tyson lets them strike and we suffer for 3-6 months as prices freefall with 40% of our capacity gone overnight.

I like option 1 in the short term but what about in 1 year 2 or 3? It will make new plants even less competitive, resulting in even more of them failing. Option 2 might get a couple new plants off the ground, at producer expense if they can get built soon enough...but I doubt any are even that close.

Agman's most telling statement about new plants is management expertise. I couldn't agree more. Most business suffer from poor management, just the packing industry is a tougher environment than many others so it is magnifyed.

More questions that answers I know. But thats the way it is.

 

[rkaiser]

Jason - "Next is the second payment the gov't sent on the Dec 2003 inventories ...the producers got paid, but they specifically excluded the packers who got 11% of the first payment. That seems fair when the packers are profiting in the end not to get that direct subsidy."

Randy - Do you think they should have got the first payment?

Jason - "The dollar climbing makes boxed beef shipped South worth less so margins will fall. The fat prices have dropped a cent so the packers have whatever formula in place to keep present margins.

Randy - This statement is about as bad as calling me down for dealing with fat price offering in Canada compared to the USA. We can all do that math, can't we.

Jason - " I think they are justifying the expansion with the current profits. My take on that is at least someone is expanding capacity. The expanded capacity will be free and clear for them when more normal competition resumes.

Randy - Herein lies one of the major problems new packing capacity from outside those who have benefitted will face. Profits produced in a long term situation can be justified, but excessive profits due to a major event like this will only bolster advantage for years to come. Of course we need capacity, but our problems with skinnying margins started long before BSE and had a lot to do with lack of competition, now this situation can only worsen.

I can't comment much on the inner working of Tyson's labour situation other than to say that I wish my profit picture was good enough to simply shut down my business from time to time when expenses rose. I don't believe for a moment that Tyson would stop the gravy train to prove a point to labour. They definately would see merit in a move like that should the border close to boxed beef however.

Expertise in the packing industry involves complete lack of concern for anything but profit. Of course management must include explicate detail to sales, purchasing, and processing, but must leave out any emotion or concern for any other aspect of the industry whatsoever. Vertically integrated systems may show some respect for the whole industry by connection to ownership, but operation must be executed by the same family of fox that is currently in place.



[/quote]

 

[Jason]

Randy - Do you think they should have got the first payment?

Jason- At the time yes, in hind sight no. However descisions have to be made in the time frame and we can't change it. The packers were in the same boat as feedlots etc, and they were taking huge losses. They potentially could have folded. As it has turned out they could have survived without the payment with current profits.

Jason - "The dollar climbing makes boxed beef shipped South worth less so margins will fall. The fat prices have dropped a cent so the packers have whatever formula in place to keep present margins.

Randy - This statement is about as bad as calling me down for dealing with fat price offering in Canada compared to the USA. We can all do that math, can't we.

Jason- That statement is fact. The dollar climbing makes product sold into taht dollar worth less (not worthless). There is no judgement good or bad attributed just a fact.Take the next statement and combine them.

Jason - " I think they are justifying the expansion with the current profits. My take on that is at least someone is expanding capacity. The expanded capacity will be free and clear for them when more normal competition resumes.

Jason- Making money leaves a corporation in a taxable situation. Plant expansion is only partially a writeoff so most of it needs to be done in after tax dollars. To pay for a multi million dollar expansion after tax takes nearly twice as much money, and they still have a responsibility to show a return to investors. This could be the case for their wanting the $65 margin Agman mentioned before. Is it fair? Rough calculations based on some assumptions would say yes, but we don't have all the numbers, and even the $65 is an educated guess, not an audited number.

Randy - Herein lies one of the major problems new packing capacity from outside those who have benefitted will face. Profits produced in a long term situation can be justified, but excessive profits due to a major event like this will only bolster advantage for years to come. Of course we need capacity, but our problems with skinnying margins started long before BSE and had a lot to do with lack of competition, now this situation can only worsen.

I can't comment much on the inner working of Tyson's labour situation other than to say that I wish my profit picture was good enough to simply shut down my business from time to time when expenses rose. I don't believe for a moment that Tyson would stop the gravy train to prove a point to labour. They definately would see merit in a move like that should the border close to boxed beef however.

Expertise in the packing industry involves complete lack of concern for anything but profit. Of course management must include explicate detail to sales, purchasing, and processing, but must leave out any emotion or concern for any other aspect of the industry whatsoever. Vertically integrated systems may show some respect for the whole industry by connection to ownership, but operation must be executed by the same family of fox that is currently in place.


Jason-You continue to assume there is no competition between Tyson/Cargill/XL/Bouvy etc. Granted there are too many cattle which makes it a buyers market, but why don't they just break the industry if that is their goal? Why do they stop at $65 margin and not go for $100? I content there is some heart in their business descisions as they need feedlots and producers in place, but they also need to make a profit. If they went for excessive, ridiculous profits, another company would come in to get a piece of the pie.

Will expansion place Tyson and Cargill in the driver's seat? possibly, but as long as there is more hook space it will encourage more competition even if only between the 2 major players. Not ideal but if they start to take too much for too long someone will come along to take a piece of the action.


[/quote][/quote]

 

[agman]

Jason - "Next is the second payment the gov't sent on the Dec 2003 inventories ...the producers got paid, but they specifically excluded the packers who got 11% of the first payment. That seems fair when the packers are profiting in the end not to get that direct subsidy."

Randy - Do you think they should have got the first payment?

Jason - "The dollar climbing makes boxed beef shipped South worth less so margins will fall. The fat prices have dropped a cent so the packers have whatever formula in place to keep present margins.

Randy - This statement is about as bad as calling me down for dealing with fat price offering in Canada compared to the USA. We can all do that math, can't we.

Jason - " I think they are justifying the expansion with the current profits. My take on that is at least someone is expanding capacity. The expanded capacity will be free and clear for them when more normal competition resumes.

Randy - Herein lies one of the major problems new packing capacity from outside those who have benefitted will face. Profits produced in a long term situation can be justified, but excessive profits due to a major event like this will only bolster advantage for years to come. Of course we need capacity, but our problems with skinnying margins started long before BSE and had a lot to do with lack of competition, now this situation can only worsen.

I can't comment much on the inner working of Tyson's labour situation other than to say that I wish my profit picture was good enough to simply shut down my business from time to time when expenses rose. I don't believe for a moment that Tyson would stop the gravy train to prove a point to labour. They definately would see merit in a move like that should the border close to boxed beef however.

Expertise in the packing industry involves complete lack of concern for anything but profit. Of course management must include explicate detail to sales, purchasing, and processing, but must leave out any emotion or concern for any other aspect of the industry whatsoever. Vertically integrated systems may show some respect for the whole industry by connection to ownership, but operation must be executed by the same family of fox that is currently in place.

[/quote]

Expertise in the packing plant is one misplaced cut on a tenderloin and you are out of business.

 

[rkaiser]

I beleive I mentioned explicit detail to processing agman, did I not?
Or is your statement a "mafia like" threat to my tenderloin should I not agree.

 

[Anonymous]

Randy: "You and agaman, and other can continue to use the word blamer forever, but your lack of experience in the Canadian situation is certainly affecting your judgement."

What's not to understand Randy?

You had BSE, R-CULT took advantage of the situation to stop Canadian live cattle imports, this placed Canada in a position of more cattle than slaughtering capacity, packer bids lowered in Canada accordingly.

Those are the cards on the table.

How will packer blaming change those facts???

What good can possibly be accomplished by sitting around and bitching about packers??

It's totally senseless! It changes nothing!

I honestly feel bad for the Canadian producer and I absolutely detest R-CULT for their lying, deceptive, hypocritical ways but that changes nothing either.

Randy: "You both know the power of money. This power has led to some major action by packers in this country, led by the multinationals. You can view this abuse of power as simply business all you like, but you have not felt the burn like thousands of Canadian producers."

What major action?

Lowering bids to offset the losses in Washington????

Think about it Randy!

Randy: "Tell me that Packers have had nothing to do with any political or industry generated decisions made over the BSE isssue. Decisions that continue to see packers profitting profusely, and producers, especially primary producers, loose nothing but equity."

The same companies own packing plants in Canada and Washington. While packing plants in Washington are struggling for cattle due to the closed Canadian border, packing plants in Canada have a surplus of cattle.

Do you think that is advantageous for the packers???

I suppose that would explain AMI's lawsuit against USDA for not allowing the importation of Canadian cattle over thirty months of age huh?

Kinda defeats that argument doesn't it?

The multinationals would be better off in a position of having a steady flow of cattle to all their plants rather than robbing Peter in Canada to pay Paul in Washington.

What do you think these multinationals are doing with those profits? Investing it in foreign cars or expanding slaughter capacity just as if you invested those same dollars in a slaughtering facility.

Maple Leaf: "What they have done to the cattle producers of this country has built such a deep hatred for packers that it will be years before this is forgotten. I can't help but think that there will be a payback for some of the guys at the top of the heap. Never under estimate the power of a long-held grudge for a deep injury that was intentionally perpetrated."

Hate the large packers all you want if you think it will help you prosper but remember one thing, unless the consumer buys your product, you are both out of business.


The biggest threat to this industry today is industry blamers like R-CULT that add expense to this industry with their blame based legislation and convince themselves they are actually helping.



~SH~

 

[Murgen]

"The dollar climbing makes boxed beef shipped South worth less so margins will fall. The fat prices have dropped a cent so the packers have whatever formula in place to keep present margins.

Speaking of the rise in the Canadian dollar, does anybody remember what feds were selling for in Canada, when the dollar was this high before?

We like to blame the low prices on BSE, but the dollar does have a huge impact also.

 

[Murgen]

I should add, that in May 2003, I believe we were working with a .63 dollar, now we are at about .80 compared to the US buck, it does make a difference. What effect does selling the boxed beef in US dollars have, not sure, maybe someone more intelligent than me can let us know.

 

[rkaiser]

What would you like me to say SH? You are right about everything?Packers are completely innocent of anything that has anything to do with producer losses?

Producers and packers are on two seperate sides of this industry. One is a buyer, and one is a seller. What more needs to be said. Packers will do everything they can to reduce costs, and increase profits. Buying cattle cheaper is a very effective way to reduce expense, is it not.

Your eveluation of packer motives in Canada vs. the USA is as speculative as mine. No one of us will ever truely know the profits taken in Canada during this time of (What I predicted you would say) RCalf's holding the border closed.

I can't stand what I hear from Rcalf either, but do you truely beleive that Rcalf is solely responsible for the border being closed?

You asked what actions the packers have taken in Canada. I sit as a representative for BIG C as a member of CBEF. Canadian Beef Export federation. CBEF, by the way, has an executive American representing Cargil currently sitting as vice chairman. Led by this fellow, the packers have lined up against every other member, and finally the president and staff in opposing BSE testing for marketing purposes. Was Canada put in this last ditch postion by Rcalf? Maybe partly but I beleive that movement of some kind could have happened long ago had the packers been in a position of loss rather than gain in Canada. Our open Boxed Beef border has meant that no movement is just fine with everyone for now, except for the lowly Canadian Cattle producer, who has little or no power with the packer led industry leadership of this country and more than likely yours as well.

Do you honestly feel that we need to show no distain for anything the packers do? Are you so impressed with the size and money and power of these companies that you think no other human has the right to question what they do?

I've held back on the foul language the last few days while you keep up the "Blamer" label. I can only take so much of that type of childish crap SH. Either find a way to curtail your own emotions and discuss this situation SH or go pi55 up a rope.

 

[Anonymous]

randy: "Packers will do everything they can to reduce costs, and increase profits. Buying cattle cheaper is a very effective way to reduce expense, is it not."

The same way you reduce costs when buying bulls, replacement heifers, or feed. You are the buyer and someone else is the seller. If you get a bull bought fairly cheap compared to the going bull market, should the seller blame you for their losses?

It's the same thing!


It's like this stupid "captive supply" argument. Producers forward contract their calves and that's an accepted business practice. When feeders forward contract their fat cattle, THAT'S MARKET MANIPULATION. Where is the logic in that?

randy: "I can't stand what I hear from Rcalf either, but do you truely beleive that Rcalf is solely responsible for the border being closed?"

Absolutely!

It was their lawsuit that stopped the effort to open the Canadian border because they are simply not smart enough to realize the legal presidence they have established with their position against Canadian BSE firewalls when our BSE firewalls are exactly the same.

That's why you see them continually contradicting themselves. One day USDA doesn't care about food safety, the next day we have the safest beef in the world, the next day USDA hasn't gone far enough to assure the safety of our beef. When R-CALF lies as much as they do it's virtually impossible for them to keep their arguments straight.

randy: "Led by this fellow, the packers have lined up against every other member, and finally the president and staff in opposing BSE testing for marketing purposes."

BSE testing of cattle less than 24 months of age is like selling a prostrate cancer test to 12 year old boys. It's not surprising the large packers wouldn't support it.

randy: "Do you honestly feel that we need to show no distain for anything the packers do? Are you so impressed with the size and money and power of these companies that you think no other human has the right to question what they do?"

You can show all the disdain you want for the packers but what good comes from it? What changes? Nothing!

You can question their business practices all you want but unless you have solid proof that they are breaking the law, you are just venting.

I am more impressed with the equity tied up in land, livestock, and machinery than I am with the large packers. I am impressed with the boys at USPB that quit blaming packers and became the packer. Now they have nobody to blame for lower cattle prices but themselves since they are the ones selling the end product.

Funny how their patronage dividends doesn't jive with those "HUGE PACKER PROFITS" that Callicrate was telling them about.

If you think blaming packers is going to change things, hey, knock yourself out.


~SH~

 

[rkaiser]

SH BSE testing of cattle less than 24 months of age is like selling a prostrate cancer test to 12 year old boys. It's not surprising the large packers wouldn't support it.

Did I say I was refering to under 30 month cattle? I did say marketing puroses, did I not? No one has demanded UTM testing except Japan who is moving away from it. Testing UTM may have opened a door for Canadian beef to Japan a year ago or more, which would have changed the whole picture by now. Take the side of non testing for whatever reasion you feel fit. If testing would have gotten rid of cattle in Canada, it would have helped our over supply. Of course you will argue capacity was the problem, however a guaranteed market would have put more players in the capacity game quicker.

I have to say that I am amazed that you feel Rcalf has the clout to stave off the Government on their own. But hey, your opinion is your opinion. Saying that Rcalf is soley respnsible for keeping the border closed to Canadian Cattle for two years, when the packers had the door open to Boxed Beef in less than two months is a hard one to grasp.

Just can't stop with the blamer label can you SH.

If the packers simply killed cattle and processed them, I could see how we should all leave them alone. But they are very political. Involved in every aspect of the industry and government. Is that wrong? NO. But it certainly sets them up for critism. I could sit back and feed my cows and take whatever is given to me as well, but I choose to involve myself, and set myself up for criticism. I also choose to be involved in my own vertical market, and support a new packing industry model in Canada that would see producers in charge of their own destiny (good or bad).

What have you chosen SH? To attack Rcalf, and anyone else who challenges the status quo? To prove the stupidity of blaming? Anyone with an iota of sense knows that blaming is useless, yet you continue to nothing but blame Rcalf. Is that helping? I choose to attack Rcalf as well, especially on their narrow protectionist views, but if there is simply nothing wrong with anything the mutinational packers do, why are there so many people looking for someone to challenge their ways?

Emotion always gets in the way with all of us humans. We take the smallest difference of opinion and make it into the end of the world.

BIG C started out a lot more agressive than we have been lately, and we have made a lot more headway with the same set of original ideas, since we toned down our rhetoric. GET THAT - same set of original ideas. It was the adjectives that were getting in the way.

Who would you suggest should reign in the packers from time to time?

 

[PORKER]

I sure would use Big C if they were a little closer to Michigan.