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Packer profit/loss in Canada

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Murgen

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Just getting some numbers together about packer profit and loss in Canada.

Here are some pre-BSE numbers, let me know what you think......more to come: (post BSE)

2002

volume 3,095,524

Aggregate Net Profit/loss ($000)$132,266

Gross Margin/head $248.42

Net Margin +$42.73 (profit)

Jan to April 2003


volume 956,978

Aggregate Net Profit/loss ($000) -$652 (loss)

Gross Margin/head $217.00

Net Margin -.68 (loss)
 

Murgen

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Should have added the Expenditures for the Jan to April 2003 time period.

Revenue/head $1710

Cost of Sales as % 87%

Labour & direct Expenses 9%

Admin Exp. %4

Net prfit/loss as % 0%
 

Econ101

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Murgen said:
Should have added the Expenditures for the Jan to April 2003 time period.

Revenue/head $1710

Cost of Sales as % 87%

Labour & direct Expenses 9%

Admin Exp. %4

Net prfit/loss as % 0%

Murgen, are those figures as accurate as the AMS data?

You are beginning to sound a little like Jason.
 

Murgen

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These are figures just for Canada, including the largest five packers within Canada. (Lakeside, XL, Levinoff, Better Beef, Cargill.) These companies received government assistance in the amount of $73.4 million since July 2003.

I'll get the numbers put together tonight for profit/loss since BSE!
 

Murgen

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Murgen, are those figures as accurate as the AMS data?

You are beginning to sound a little like Jason.

Econ, are you saying you believe these numbers, or disagree with them, state your opinion!
 
A

Anonymous

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Murgen- Is this what you are trying to come up with?

Packer probe finds 'exorbitant' profits

By Barry Wilson & Mary MacArthur

Ottawa, Camrose bureaus

Western Producer

December 7, 2005

Canada



A Parliament-ordered partial audit of beef packer profits in the months after the BSE crisis proves that Canada's major packing companies made "exorbitant" profits at the expense of producers, says the former chair of the House of Commons agriculture committee that oversaw the investigation.



Packers lost $40 million in the month following the announcement on May 23, 2003, that BSE had been discovered in Canada, according to a report tabled in Parliament Nov. 28 hours before the government fell and the election campaign started.



During the next 12 months, those companies made almost $600 million in net profits while the livestock industry lost billions in income and equity.



"I believe this report will verify what Canadians have long come to believe, that the packers made exorbitant profit on the backs of Canadians, not only the primary producers but certainly the consumers of Canada," committee chair Paul Steckle said as he tabled the report.



Steckle is now running for re-election in the cattle-heavy riding of Huron-Bruce in Ontario, seeking his fifth consecutive mandate as a Liberal MP.



Robert Meijer, director of public affairs with Cargill, which owns a large packing plant near Calgary, said the problem wasn't with large packing plants, but with a combination of factors from the BSE crisis, such as lost markets, closed borders and too much supply for the demand.



The report, based on evidence accumulated in confidence by Parliament-appointed auditors, deals only in aggregate numbers to avoid revealing confidential information.



It reported that during 2002, the average net packer margin per head slaughtered was $42.73. During the next 12 months after government BSE aid money began to flow, the average net margin per head soared to between four and six times the 2002 average, almost $180 per head in the first half of 2004.



Steckle said in an interview it is clear that packers manipulated the market to their benefit and it went beyond market rules of too much supply chasing too little demand.



"As tax dollars flowed to producers, packers just lowered their price to effectively receive that money on their bottom lines," said Steckle. "We have to figure out a way in future to make sure tax dollars get to the people we are trying to help. The evidence is clear that major corporate profits were being made, sometimes with the help of taxpayer dollars, at a time when farmers were losing enormous amounts."



He repeated earlier charges that the companies were profiteering, even though they were doing nothing illegal.



"I guess it was the market working and it is the way the government allows the market to work," he said. "Everyone makes as much profit as they can. But the situation is different when there is no competition on one side of the equation."



Meijer said he doesn't think anyone is surprised to hear the packers made money.



"We never denied that and in fact we worked very hard to allow the committee and its auditors to have access to as much information as possible," he said.



"At the end of the day the most important message is that there wasn't found that there was any wrongdoing. The market acted the way the market was acting and that's the way an open and free market does operate."



Steckle said the affair also shows how useless the government's competition policy is.



"We have no competition policy, Competition Bureau, in this country that means anything," he said in the interview. "I don't know why we keep it around."




 

Econ101

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Murgen said:
Murgen, are those figures as accurate as the AMS data?

You are beginning to sound a little like Jason.

Econ, are you saying you believe these numbers, or disagree with them, state your opinion!

When auditing any kind of numbers, it is more relevant to have the actual numbers that can be verified and not some estimate as to what those numbers were in the past. That is what real auditing is about.
 

Murgen

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Actually Paul's assisant was over for a couple drinks last night, had a great visit with him. Thought some would like to see some of the actual numbers broken down. If not let me know, I won't post them.

I'm wondering how they will compare to the numbers in the US?

How badly were the producers taken advantage of?, that's what I'd like to know. I'm going to research the figures out myself and with a little help from you guys, we can get this figured out.

It's been proven some won't take SH's word or Sandhusker's, so let's get the facts, without the rhetoric.

Do the financials look realistic so far?
 

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