Canadians See The Value of Cattle Decline

[Tex]

Just look at the chart on the site below.

http://finance.yahoo.com/currency/convert?from=USD&to=CAD&amt=1&t=5y

It is what happened to the price Canadians received for their cattle because the U.S. is their only market. As the currency goes, so goes the value.

This is the risk to producers who have one main foreign buyer with floating currencies.

In addition to the foreign exchange rate risk, the Canadian cattlemen have to deal with the regular cattle price cycles.

Does this keep producers in business or not? Does it increase or decrease the supply on the market as a whole when small producers go out of business? What is the ultimate consequence to the consumer in the long run? Do they benefit from lower numbers of small producers?

Can people who have the money buy Canadian cattle infrastructure easier or less easy? Tyson made a lot of money due to the low Canadian dollar. Now they can buy this infrastructure on the cheap with the Canadian dollars they earned. What does that do for small producers? What will happen when a Tyson type consortium buys up these assets? Will the benefits of a productive economy still go to small producers?

Will the processors lose money, not make as much, or just offer less for the cattle they get from Canadians?

 

[Jason]

That's a crap assesment, not long ago it was blamed on a pegged currency. Now it's blamed on a free market currency.

Sh!t happens. It can be sad that producers get taken out by market forces, but nothing in life is garanteed.

Anyone that thinks thay have a right to make money in the cattle biz is next to be gone.

 

[Denny]

I would put the blame on high grain prices.

 

[Tex]

That's a crap assesment, not long ago it was blamed on a pegged currency. Now it's blamed on a free market currency.

Sh!t happens. It can be sad that producers get taken out by market forces, but nothing in life is garanteed.

Anyone that thinks thay have a right to make money in the cattle biz is next to be gone.

What are you contesting, Jason? There are many factors, as I noted, that cattlemen have to worry about. One of them is exchange rate risk if your product is global. No, the currency can't be blamed for everything, but the decline from $1.60 loonies to the dollar to .94 is a huge drop over a 5 year time period. From the high to the low, that is a 40% drop (if you want to be more conservative with your numbers, just call it a 30% drop).

Now tell me how many Canadian cattlemen, including yourself, can deal with a 30 to 40% decline in the value of your product in terms of your currency and still make it? Did all the other prices in Canada decline by that much so that you you had 30% deflation in your production costs? Did yall have that much margin of profit that could just vanish without harming you? (That price advantage was made by the processors, largely, who sold your product into the U.S. market).

I will grant you, Jason, that this is not the only factor hitting Canadians, but it isn't a small one either.

Denny says it is high grain prices. That is the reason I brought up what was going on with barley in Canada.

The fact is, it is hard for the people who own the production infrastructure (like farmers, cattlemen, etc) to make it in a global market when values fluctuate this much. Prices often times are not stable enough to provide for the consistent stream of income needed for debt service. The risk premium becomes higher.

 

[RobertMac]

It is what happened to the price Canadians received for their cattle because the U.S. is their only market.

This is the reason for the extent of the problem Canadian producers have faced. Your beef industry expanded to fill ONE MARKET...the USA. When access to that market was disrupted because of BSE, Canada had an excess of cattle with no where to go. Simple supply and demand.
And because you had no home-grown packers or your government doing things to help you find/open other markets(as in BSE testing), Tyson and Cargill reaped the benefit of your situation...they bought low and sold high!

 

[Maple Leaf Angus]

It is what happened to the price Canadians received for their cattle because the U.S. is their only market.

This is the reason for the extent of the problem Canadian producers have faced. Your beef industry expanded to fill ONE MARKET...the USA. When access to that market was disrupted because of BSE, Canada had an excess of cattle with no where to go. Simple supply and demand.
And because you had no home-grown packers or your government doing things to help you find/open other markets(as in BSE testing), Tyson and Cargill reaped the benefit of your situation...they bought low and sold high!

Good summary, RobertMac. It is a perfect illustration of what happens when we always take the easiest market. And most of us do, regardless of where we are.

It also illustrates what happens when politics interfere with the natural flow of goods.

 

[RobertMac]

It also illustrates what happens when politics interfere with the natural flow of goods.

Politics, like the weather, are things you have to plan for. That's why I have been planning for S.A. beef for the last five years...I can now produce beef as cheaply as they can!!

 

[Maple Leaf Angus]

For what market? If you plan to (continue to) sell all of your beef direct to the intelligent consumer, it will matter less whether you are competitive with imported beef. I think that is the ticket to survival as an independent producer.

However, there is one thing that concerns me with regard to the viability of the direct-to-consumer market. When, not "if", it actually gains enough share to make the major packers and retailers uncomfortable, you will see increased and burdensome regulations encumber the small abbatoirs to the point where they can't keep up with the financial burden that accompany the necessary "improvements". Who do you suppose will be pushing for those changes?

There is already a growing number of shops closing down here in Ontario. Last week, the owner of a butcher and processing shop where my niece works announced that he is not going to try to comply with the latest round of new requirements. He has state-of-the-art facilities.

He makes a wide range of beef and pork products that he sells to hospitals, nursing home, restaurants as well as a brisk trade out of his retail storefront. His products are second to none. But now he is closing up shop.

This last round of regs. required all of his packaging to carry date packaged, best before date and a complete list of nutritional value. The latter would require testing that would add a continuous cost.

And all for for a very dubious benefit. His existing customer base has been built on reputation. Theyalready know what they are getting . They are not asking for these changes.

 

[Tex]

Canadians also let a few greedy billionaires reap the benefit of the "salmon run". That money is needed now (should have been banked by producers) by producers who are over extended.

 

[rkaiser]

And you have just made a major point as to why we need to continue to fight or even tear down the pussy footing CCA in this country Maple Leaf. Cow towing to the needs of the multinational companies is why these small processors are faltering, and it is the ultimate goal of these lobbyists for Cargill and Tyson and their puppets at CCA.

Two meeting under my belt out here in the ABP elections and I know that I will get in. Don't know if I will simply resign at that point or what yet. BIG C has made some major progress as of late and I plan to even bring forward a resolution at my last meeting to tear the checkoff out of the useless lots hands. A resolution of this sort was passed at one meeting last night and am looking forward to throwing some sand in that wound tomorrow.

 

[Maple Leaf Angus]

Canadians also let a few greedy billionaires reap the benefit of the "salmon run". That money is needed now (should have been banked by producers) by producers who are over extended.

Well Tex, I can see your point about the billionaries reaping the benefits. (or is it raping the benefits?). Now, what I want you to show me is how you would be able to do anything differently had you been in our shoes.

I find it insulting to hear you say that we "let" them do it. You know that in our overmature, North American capitalistic system that government and big business run hand in hand.

 

[Sandhusker]

How about making it a qualifier that one has to be a resident of Canada to receive aid from the Canadian Government?

 

[Maple Leaf Angus]

How about making it a qualifier that one has to be a resident of Canada to receive aid from the Canadian Government?

Oh, I see! Just like you do in the U.S.! :lol: :lol: :lol:

 

[PPRM]

Canadians also let a few greedy billionaires reap the benefit of the "salmon run". That money is needed now (should have been banked by producers) by producers who are over extended.

Well Tex, I can see your point about the billionaries reaping the benefits. (or is it raping the benefits?). Now, what I want you to show me is how you would be able to do anything differently had you been in our shoes.

I find it insulting to hear you say that we "let" them do it. You know that in our overmature, North American capitalistic system that government and big business run hand in hand.

There is too much of an assumption that "This won't happen in the USA".....

I see all sorts of possibilities.........Bottom line is if a cattleman has no options for selling, he will get what is offered. That commonly is as little as the buyer of his product has to pay,

Yes, $95.00 fats is fun right now. But NOW is the time to prepare for the future,

PPRM

 

[Sandhusker]

How about making it a qualifier that one has to be a resident of Canada to receive aid from the Canadian Government?

Oh, I see! Just like you do in the U.S.! :lol: :lol: :lol:

It makes more sense to you to give profitable US corporations Canadian taxpayer money? People like Tim are going belly up, don't you think that those millions of your dollars would of been better spent keeping them afloat?

 

[Maple Leaf Angus]

How about making it a qualifier that one has to be a resident of Canada to receive aid from the Canadian Government?

Oh, I see! Just like you do in the U.S.! :lol: :lol: :lol:

It makes more sense to you to give profitable US corporations Canadian taxpayer money? People like Tim are going belly up, don't you think that those millions of your dollars would of been better spent keeping them afloat?

:lol2: :lol2: :lol2:

Lil buddy, lil buddy, lil buddy :kid: , you seem to have some severe comprehension problems! :nod:

:lol2: :lol2: :lol2: :lol2:


NO it does not make sense to throw coin to the wealthy! And I am so glad to hear that it does not happen in the U.S.A.!!!! :lol: And that you are in such a good position to shovel out advice on how someone else should put an end to porkbarreling! You being a BANKER of all things! :lol2: :lol2: :lol2:

I should think that if any of your customers would read the stuff you post here, they might have grave reasons to doubt your ability to have an interest in their finances! :lol:


Oh and if Tim, Greg, Jason, Shelly, Manitoba Rancher, Cowsense, MLA, - the list goes on and on - would have received enough help to make the difference between survival and insolvency, you would have been the first to scream "UNFAIR SUBSIDY"

When I read your responses to the points I make, I often have to re-read what I posted because your replies would indicate that I wrote something entirely different than I intended. However, many others seem to get the idea behind my opinions, however poorly written they may be.

That leads me to think that the problem might lie in your comprehension abilities, as I stated at the beginning. I am glad that you are not representative of the intelligence of the average American, or else the country south of us would be the biggest handicapped parking spot in the world.
:lol2: :lol2: :lol2:

Since this seems to be an ongoing and irritating situation, I have decided that trying to develop any understanding with you is an exercise in futility. You are obviously programmed to be nothing more than a persistent irritation.

CDrom's are obsolete, but you still seem to operate on them. Actually, another possibility exists in that regard. Because you have trouble holding a consistent postion (other than your hypocrisy) it just may be that you operate on floppy discs! :lol2: :lol2: :lol2:



:wave:

 

[Tex]

MLA, who made the bulk of money in the bse bailout by your government? Was it the avg. producer or did the money go largely to wealthy Americans who had a grip on your industry?

I am not saying that your country is alone in that result. These billionaires are able to buy off politicians and therefore policy in both countries. You made a deal with the devil to save your industry, and I see that may have been the only thing you could do. It is still wrong.

P.S. --- they made money off of the bse bail out AND the selling of your lower priced beef to the higher priced U.S. market (aptly named "salmon run" as salmon runs are temporary too). Since there was little competition in Canada, these wealthy Americans (Tyson in specific) made off with the bulk of the profits (profits, not price). Now you are stuck with an exchange rate problem that is helping put Canadians out of business because you played the devil's game instead of getting out of it while you could (real bse testing to open your markets instead of the USDA/Canadian equivalent BS policy).

 

[RobertMac]

However, there is one thing that concerns me with regard to the viability of the direct-to-consumer market. When, not "if", it actually gains enough share to make the major packers and retailers uncomfortable, you will see increased and burdensome regulations encumber the small abbatoirs to the point where they can't keep up with the financial burden that accompany the necessary "improvements". Who do you suppose will be pushing for those changes?

MLA, this has been my biggest concern. Just like Randy says about CCA, NCBA has been on the other side of this issue...against producers!!! Our cattlemen's organizations(and I mean all of them) have to use their political capital to protect the independent processors we have. The same regulations should not be placed on a 5 head/day processor as a 5000 head/day packer. BUT, the product coming out of both plants should be held to the highest standards. We can't leave our destiny in the hands of the global packers because they simply don't care about producers.

As producers, we have to search out INDEPENDENT branded programs(not something like CAB) and support them. Sort your best calves to sell to them...sell the bottom end to the commodity processors...even if you have to take less money for the better calves. Look to the future!

We also have an untapped resource...THE CONSUMER!!! We have to educate them and enlist them in this fight. They want safe food and they don't trust imports from countries that don't have our safety standards(and our standards need to be strengthened). And with every recall, they trust the corporate food providers less and less! The opportunity is there, but we have to stop our organizations from sending the wrong message to politicians and consumers. Big packers leave big cracks!!!!

 

[Sandhusker]

Oh, I see! Just like you do in the U.S.! :lol: :lol: :lol:

It makes more sense to you to give profitable US corporations Canadian taxpayer money? People like Tim are going belly up, don't you think that those millions of your dollars would of been better spent keeping them afloat?

:lol2: :lol2: :lol2:

Lil buddy, lil buddy, lil buddy :kid: , you seem to have some severe comprehension problems! :nod:

:lol2: :lol2: :lol2: :lol2:


NO it does not make sense to throw coin to the wealthy! And I am so glad to hear that it does not happen in the U.S.A.!!!! :lol: And that you are in such a good position to shovel out advice on how someone else should put an end to porkbarreling! You being a BANKER of all things! :lol2: :lol2: :lol2:

I should think that if any of your customers would read the stuff you post here, they might have grave reasons to doubt your ability to have an interest in their finances! :lol:


Oh and if Tim, Greg, Jason, Shelly, Manitoba Rancher, Cowsense, MLA, - the list goes on and on - would have received enough help to make the difference between survival and insolvency, you would have been the first to scream "UNFAIR SUBSIDY"

When I read your responses to the points I make, I often have to re-read what I posted because your replies would indicate that I wrote something entirely different than I intended. However, many others seem to get the idea behind my opinions, however poorly written they may be.

That leads me to think that the problem might lie in your comprehension abilities, as I stated at the beginning. I am glad that you are not representative of the intelligence of the average American, or else the country south of us would be the biggest handicapped parking spot in the world.
:lol2: :lol2: :lol2:

Since this seems to be an ongoing and irritating situation, I have decided that trying to develop any understanding with you is an exercise in futility. You are obviously programmed to be nothing more than a persistent irritation.

CDrom's are obsolete, but you still seem to operate on them. Actually, another possibility exists in that regard. Because you have trouble holding a consistent postion (other than your hypocrisy) it just may be that you operate on floppy discs! :lol2: :lol2: :lol2:



:wave:

I don't understand your porkbarrel comment. I'm a banker, not a Congressman. Do you know what "pork barrel spending" is?

Unfair subsidy? You guys got money from your government from the same deal that paid Tyson and Cargill, that argument is already there.

I was just pointing out that Canadian money would have been better spent aiding Canadians who needed it instead of multi-national US corporations. I didn't think that would be a real controversial statement…

 

[Mrs.Greg]

Canadians also let a few greedy billionaires reap the benefit of the "salmon run". That money is needed now (should have been banked by producers) by producers who are over extended.

You and your buddies confuse the living heck out of me,one minute Tex your saying its not producers fault,next breath its all our fault.One minute you and buddies are saying look at the subsidies the Canucks are getting,next minute,oh well if things were done properly the Canucks would be getting the subsidies they need to pull them through.I don't get it,the last few posts its like giving you all a piece of info about how the Canadian cattlemen are struggling,its like your just giggling at the glory of a number of us saying enough is friggin enough.Just where in the HE double L do you guys think our cattle should be going,you hate the idea of our packing plant giants,yet wallow in the glory of the one the ranchers tried to get off the ground,goes under but not before being at the end of a ecoli investigation.

Greg and I are getting ready to leave the industry because of alot of things and this kind of bullshit is a part of it,seems like we're fighting weather,bse,prices in grain and cattle.Greg and I aren't leaving the industry because we're losing everything,that is not the problam at all,its just getting really hard to keep the love affair with the industry going when theres SOOOO much of this bullcrap involved..Yes that money should have hit the cattlemen not the packers but damn it what the heck do you think bringing it up every second post does to help us,nothing its done its over with,we can't go back,at this point I'm putting all my faith in Randy,hope it flys.

Why we bother even trying to get anything across to you guys I have no idea