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Sinister Parallel

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Maple Leaf Angus

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Every now and then, we can use the assessment of past events to predict, with a fairly high degree of accuracy, what is going to take place. We don't need to be clairvoyant, just observant.

If what I see developing as a result of r-calf's actions comes about, the U.S. cattle industry had better enjoy it's good times, because they won't last much longer. (Even before taking natural price cycles into account!).

The past event to which I am referring was executed in the '70's. The U.S. administration took exception to the activites of the USSR and placed an embargo on grain sales to the Soviet bloc. Grain prices crashed in the U.S. and skyrocketed in the USSR. AND in countries who would sell them grain.

Such an opportunity for profit did not go unnoticed by a certain entrepreneur who had a boat and a bit of land in Brazil. He planted a "field" of soybeans and sold them to the Communists. For A whole pile of money. So much, in fact, that he decided to plant some more.

And now, almost 35 years later, he has not stopped making his field bigger. And he will not, because his farm is at least 4 times bigger than the U.S. Plus the fact that he can grow beans way cheaper than the U.S.

Not only did he negatively impact the price of soys, the lower price caused a shift to corn acres in the U.S. and pressured that market as well.

One stone, two birds.

If the border does close to Canadian boxed beef, it will be a short-lived victory for r-calf, because that act will be the catalyst for precipitous action (finally) for the Canadian cattle industry to totally develop the necessary infrastructure for marketing all of our beef anywhere in the world according to their standards. (The customer is not always right, but s/he is always the customer.)

The U.S. beef producers will be left with their high cost and archaic infrastructure and domestic market. And fearmongering b*****ds that will have to eat one hell of a lot of beef when their "first" case of BSE is announced.

The Parallel? Well, I think it should be pretty clear. Once we, Canada, have provided the world beef consumer with what they want and on their terms, the rest of the beef exporting world will be in the unenviable position of having to play catch-up.

I do feel sympathy for those American cattle men and women who are going to be sucked into the aftermath of these events through no fault of their own.They were caught in the crossfire of the attack launched by some blind and greedy ideologues who spout "food safety" as the mantra that motivates their deeds.

If I were one of them, I would be inclined to fight my r-calf neighbour to the death. Because that is going to be the outcome of their actions anyway.

We seldom can see the broad and long-term impact of our actions at the time we commit them But it is guaranteed that we will reap what we sow.

Hey, I think I just wrote my next column! Sneak preview for the good folks at Ranchers.net.
 

Soapweed

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MLA, you have probably hit the nail on the head. For every action there is an equal and opposite reaction. The recoil might hit harder and hurt us more than the bullet.
 

Kato

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Judge Cebull's decision on boxed beef could be what pull's the trigger... :shock:

There are a lot of people watching carefully, and the political will is starting to show. We have a minority government who's very survival depended on the votes of two independant MP's just last week. One of these two has been supporting the cause of Canadian cattle producers since the beginning of this fiasco. You can believe his opinion is valued in Ottawa right now. :!:
 

the chief

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MLA wrote:

I do feel sympathy for those American cattle men and women who are going to be sucked into the aftermath of these events through no fault of their own.They were caught in the crossfire of the attack launched by some blind and greedy ideologues who spout "food safety" as the mantra that motivates their deeds.

If I were one of them, I would be inclined to fight my r-calf neighbour to the death. Because that is going to be the outcome of their actions anyway. ---end of quote

MLA, I felt sympathy (hell, I was one) for the pork producers that were "sucked into the aftermath of blind and greedy idealogues" in 1998.
I fought against packer ownership and captive supplies much the same you will "be inclined to fight my r-calf neighbour" and guess what? Myself and thousands of other producers lost. Why? Because our national checkoff funded organization didn't give a **** about us. And now in Illinois, the ILL FB, IL corn and soybean growers, IPPC and IL Beef are trying to find a way to "recover" the livestock industry in Illinois.

What they won't admit is how their "packer-oriented" goals killed the industry and it will NOT come back.

Be careful, MLA, who you crawl into bed with. The guy who "pays" you for your cattle will ALWAYS look for a way to keep his money.

I appreciate your insight into this matter. I guess time will tell if you are right. Have a good day :)
 

Maple Leaf Angus

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the chief said:
Be careful, MLA, who you crawl into bed with. The guy who "pays" you for your cattle will ALWAYS look for a way to keep his money.

You could not have given better advice. I do not consider any cattle buyer to be impartial to me or anyone else with cattle to sell.

A careful reading of what I wrote above will show that I said nothing to indicate that the beef producers will be huge beneficiaries of the new order. There will be improved opportunities for some, but it would take a darn poor memory to forget the rape of the cattleman and woman up here north of the border for the last two years.

The point of the post was to show how short-sighted actions can have long-term, adverse implications that were never anticipated by the perpetrators.

I really believe that this whole mess is going to hurt all cattle/beef producers in North America in the long run. Sure, the packers will make lots of money because of their consolidated position in Canada, but there has been a body blow dealt to the independent producer in Canada.

The irony of the matter is that those r-calfers who love to hate and curse the packers have played right into their blood-stained hands with their convoluted, twisted and short-term thinking.
 

Radar

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MLA, does that include Smithfield as well, who has recently expanded their US beef operations?
 

Maple Leaf Angus

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Radar said:
MLA, does that include Smithfield as well, who has recently expanded their US beef operations?

Forgive me for being so dull, but I'm not sure what you mean by ". . . does that include . . ."

Does what include . . .?
 

Radar

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MLA, I don't find your writing in the least bit dull. In fact, you convey your thoughts extremely well. What I was referring to in this case was that if Canada was expanding their beef infrastucture to become the world power in which every other country would be enviable, why would Smithfield be interested in expanding their beef business by merging with ContiGroup Companies, Inc. within the United States. If what you are proposing is on the horizon for the future of the Canadian beef industry is true, why would a company such as this not expand their holdings within Canadian confines?
 

Maple Leaf Angus

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RADAR - Let me say first of all that I am the least qualified to speak to the particulars in this business. I have always been better at "big picture" stuff than details. Plus I like to ramble senslessly!

As for the issue of consolidation in the American industry, what else would you expect the major players to do? I would never say that there is no future for the processers.

Here in Ontario, we are in the process of losing one more competing packer to a buyout by Cargill. Better Beef in Southern Ontario kills 1700 -2000 hd. per day. Why would Cargill want that plant, HUH? So when we say "Canadian beef industry, we might just as well say "the big U.S. packers".

It sounds kind of funny to say that Canada will be "a world power". :lol: :lol: I wouldn't stick my neck out that far. I do think that if the border situation does tighten further, the meat packers/processers will certainly find a way to capitalize on their cheap, captive (spelled Canadian) supply and do whatever it takes (testing for BSE) to sell their product, our beef, into the best markets in the world. There is a demand for our kind of beef.

Keep in mind that our big packers are your big packers. They would be well positioned to use their Canadian packing plants to sell tested beef to the same export markets that they are currently shut out of with untested U.S. product (by their choice).

That way, they will have facilities from which to sell tested beef without having to test for the American market, which is 90% of their total market. That would be a significant savings for Cargill and Tyson's (spit) (sorry, I need to do that when I say those names) while giving them a separate facility and supply (Made in Canada!) for the export market. It is all about their profits.

So, even if the newest and and most efficient plants are running in Canada, it would not necessarily mean that the CDN. producers would see any premiums for their product. Up here we know all too well, from recent experience, how much the packers care about the producer. The U.S. producer would no longer be faced with competing with the CDN. boxes, only the Aussie, Mexican or Brazilian stuff.

Just thinking about how this could play out makes me boil with rage. I know that I have been very harsh toward r-calf. But when I consider how their tactics could very well give the packers the leverage they need to further tighten their grip and widen their profits both here and in the U.S. , it makes r-calfers look like stupid little pawns in a game that is far too big for their minds to grasp.

Better quit before I blow a gasket.

Fire away folks.
 

Bill

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Maple Leaf Angus said:
RADAR - Let me say first of all that I am the least qualified to speak to the particulars in this business. I have always been better at "big picture" stuff than details. Plus I like to ramble senslessly!

As for the issue of consolidation in the American industry, what else would you expect the major players to do? I would never say that there is no future for the processers.

Here in Ontario, we are in the process of losing one more competing packer to a buyout by Cargill. Better Beef in Southern Ontario kills 1700 -2000 hd. per day. Why would Cargill want that plant, HUH? So when we say "Canadian beef industry, we might just as well say "the big U.S. packers".

It sounds kind of funny to say that Canada will be "a world power". :lol: :lol: I wouldn't stick my neck out that far. I do think that if the border situation does tighten further, the meat packers/processers will certainly find a way to capitalize on their cheap, captive (spelled Canadian) supply and do whatever it takes (testing for BSE) to sell their product, our beef, into the best markets in the world. There is a demand for our kind of beef.

Keep in mind that our big packers are your big packers. They would be well positioned to use their Canadian packing plants to sell tested beef to the same export markets that they are currently shut out of with untested U.S. product (by their choice).

That way, they will have facilities from which to sell tested beef without having to test for the American market, which is 90% of their total market. That would be a significant savings for Cargill and Tyson's (spit) (sorry, I need to do that when I say those names) while giving them a separate facility and supply (Made in Canada!) for the export market. It is all about their profits.

So, even if the newest and and most efficient plants are running in Canada, it would not necessarily mean that the CDN. producers would see any premiums for their product. Up here we know all too well, from recent experience, how much the packers care about the producer. The U.S. producer would no longer be faced with competing with the CDN. boxes, only the Aussie, Mexican or Brazilian stuff.

Just thinking about how this could play out makes me boil with rage. I know that I have been very harsh toward r-calf. But when I consider how their tactics could very well give the packers the leverage they need to further tighten their grip and widen their profits both here and in the U.S. , it makes r-calfers look like stupid little pawns in a game that is far too big for their minds to grasp.

Better quit before I blow a gasket.

Fire away folks.
It sounds kind of funny to say that Canada will be "a world power". :lol: :lol: I wouldn't stick my neck out that far.

Not firing at anyone MLA but did you know that in 2002 Canada was the third largest Beef/Cattle exporter in the world with 15% of the world export market. This came out of the 17th largest national herd. Australia was #1 with 23%, USA #2 at 16% and Brazil behind us at 11% so with our increasing cowherd and a bit of salesmanship we could easily become #2.
 
A

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The chief: "I fought against packer ownership and captive supplies much the same you will "be inclined to fight my r-calf neighbour" and guess what? Myself and thousands of other producers lost. Why? Because our national checkoff funded organization didn't give a s*** about us."

The reason you lost is because you couldn't prove your case. It's pretty hard to convince a savy judge that forward contracts (75% of captive supply) are used to manipulate markets when the plaintiffs themselves willingly entered into forward contracts.

How can a judge reach any other conclusion when his instructions to the jurors was that they had to agree that ibp "LACKED" a legitimate business reason for using forward contracts (75% of captive supplies) when the plaintiffs testifed that ibp "HAD" a legitimate business reason for using forward contracts (75% of captive supplies)??

Talk about taking any hope of credibility out of your arguments.

Funny, the highest cattle prices ever recorded and WHERE IS THE CURRENT LEVEL OF PACKER CONCENTRATION AND CAPTIVE SUPPLY?????

Yeh, that's what I thought!

Salebarn cafe market analysts!



~SH~
 

Radar

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"Plus I like to ramble senslessly!"

I would contend that is hardly the case, MLA! I don't disagree with you on too many points from the outlook that the US packing concerns, especially those that are multi-specie marketers.

Their are a lot of "what ifs" involved in your post and I am hardly qualified to provide an adequate analysis to dispute what you posted.

On the other hand, here's some of what I "think".

I don't know what the benefits are for employees at US packing plants or post retirement benefits are for that matter or employee turnover either. However, econimically it would seem that the cost of benefits for employees would be markedly less in a country where a socialized medical system is in place. Why not take advantage of this previously? Probably because the supply of raw materials was not adequate enough to expand production.

As far as Canada becoming the number 2 exporter of beef in the world goes, what has Canada learned in the past two years about relying on foreign markets? What is being done to increase Canadian domestic demand?

Anyway, thanks for the thought provoking posts MLA.
 

don

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radar: As far as Canada becoming the number 2 exporter of beef in the world goes, what has Canada learned in the past two years about relying on foreign markets?

many canadians, but not some of the ones who matter, have learned we had better diversify our export markets whether the american based packers agree or not.

individual producers are learning that they are largely reponsible for their own fate (foreign concept to r-calfers) and maybe reluctantly charting their own path for the future. where r-calf is failing american producers is in not saying let's do something positive to build the beef industry for the benefit of producers; instead, someone else is to blame for any problems and litigation is the primary solution. r-calf's only success has been the cebull injunctions. every other intitiative has failed and they quickly fall back to blaming canadians for all the ills of the american cattle producer. canadian producers worry about an injunction on boxed beef and rightly so, but i think any success there will be short-lived as r-calf and any populist politicians who support r-calf will find out how much political power the packers have. cargill and tyson have spent tens of millions to expand canadian slaughter capacity and although the payback is measured in weeks they won't easily give up the bonanza of the last year and a half.
 

Radar

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"r-calf's only success has been the cebull injunctions. every other intitiative has failed and they quickly fall back to blaming canadians for all the ills of the american cattle producer."

I'm not a member, and do not follow their press releases nor what who said what among their leadership on a daily basis. What I have seen is that they are holding the USDA to their own standards. Yes, it has been by litigation. The other route they could follow was through lobbying, and as you stated Don, not to many can hold up for to long against the political clout of a Tyson or Cargill.

Just to let you folks know, I'm not anti-Canadian, nor against the beef produced there. I would like to know however, that is where the beef originated and that it was brought into the US via standards created within our own system.
 

don

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radar i agree with your last post. my point is that the solution for any woes the american cattle producer thinks they have will very likely have to happen within american borders. the cebull injunctions are a stopgap measure if the states want to trade. if captive supplies, lack of competition or mcool are to be dealt with the canadian border is largely irrelevant. i think r-calf is helping keep canadian otm's out and that is their only beneficial action. one possible consequence of that is that if canada starts testing all otm's, i don't think many americans will want any otm's shipped to canada if the border opens in case an american origin animal tests positive. that could make quite the disruption in all your markets, domestic and export.
 

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