COLUMN - Ruminating

by MCPA President, Martin Unrau

This summer has been filled with both good news and bad news stories. It seems everything I wanted to talk about this month has both a positive and a negative aspect.
From the MCPA’s perspective, sometimes we just don’t now how a scenario will play out given all the variables until all is said and done. Because our industry is so intertwined from the packing plants all the way down to the cow-calf producer, a change in one sector can dramatically affect the profitability of another.

Today I’d like to talk about the good, the bad and the optimistic aspects of the following issues:

Country of origin labelling

Good news: The Canadian Cattlemen’s association lobbied hard since COOL was proposed in the U.S. and believe we were successful by working with USDA and the American bureaucrats to get the rules in the original document relaxed to the point that the new legislation would not be devastating to our industry.
The bad news: We’ve heard there are a few U.S. plants that won’t accept Canadian cattle and we won’t know for awhile exactly how our cattle are going to be viewed by U.S. feedlots, processors, retailers and consumers.
The optimistic view: Discounts on Canadian cattle probably won’t be as high as we originally thought.

MCEC investment in plant

Good news: It looks as if Manitoba will soon have a packing plant to process and market cattle.
The bad news: Producers in the province have always been divided over whether a plant here will be a viable investment or not.
An optimistic view: This is the chance for those producers who support the idea to see it become a reality and it is a very good opportunity for producer dollars to be put towards something positive. The naysayers will lose nothing with the options available.

WTO talks

The good news: Manitoba Agriculture Minister, Rosann Wowchuk attended the WTO meetings in Geneva. Staff from the CCA told me how impressed they were by her tenacity, that she and her colleagues pushed hard for the trade dependent west, in favour of opening new global markets for beef.
The bad news: Eastern Canada is not as interested in new markets because they heavily represent supply managed industries like milk, poultry and eggs. Talks broke down when India and China could not come to an agreement with the U.S. on import tariffs.
The optimistic view: WTO isn’t dead yet. There are people working behind the scenes trying to revive it and although we may not see much happen until early in 2009, the hope still exists that Canada may be able to negotiate a trade deal that is more favourable to the beef industry in the future.

Hay crop

Good news: Many producers have had decent crops in the province and have put up enough hay this summer.
The bad news: High levels of rain in isolated parts of the province are making it near impossible for producers in those areas to get up enough hay for this winter.
And in a corner in the southwest, dry conditions have persisted since spring drying up the pastures and making it impossible to harvest hay. Some producers have been forced to start selling cows.
The optimistic view: The provincial government has offered a positive freight assistance package. I hope that producers who normally just feed hay, explore all options. Good oat straw and six pounds of barley a day will get your cows through the winter just fine. Don’t be shy to ask for professional help about balancing rations.

We’ve had discussions with a few MPs and they are working hard to see if something can be done through AgriRecovery.

Cattle prices

Good news: There are a number of positive signals in the market that cattle will be selling for a decent price this fall. Cull cattle are bringing pretty good money, the dollar is down a bit and because of erratic weather throughout the country, there may be quite more feed grain available than originally thought.
The bad news: To recoup the losses producers have seen over the last five years, we need more per pound than what most of us can reasonably expect. Recovery on each of our farms is going to take awhile.
The optimistic view: I think good, 550 wt calves will bring $1.25 - $1.30 per pound this fall. Cull cows are also a decent price and it looks like we’re climbing out of the bottom of a hole.

Cattle movement

The good news: Cow-calf producers in Manitoba should benefit with the feedlot industries in both the east and west wanting our calves.
The bad news: Cash injections into the industry that are not balanced across the country put those who do not receive cash at a disadvantage. Feedlot operators here in Manitoba may have a difficult time competing for calves against Alberta, hurting our feedlot industry. The possibility of trade action from the U.S. still exists because of the Alberta payment.
The optimistic view: Out-of-province feedlot operators are already booking pen space in Manitoba feedlots so there is opportunity for our feeders to do some backgrounding and custom work.

Cattle Sales

Over the past few weeks I’ve become concerned about a trend that is developing that may not be in the best interest of the Manitoba industry as a whole.

In an effort to save paying commission sales at the auction marts, some producers are selling direct off the farm. This is a practise that has always been around, but hearing some of the prices guys have been paid in the past has me concerned.

There is room for both the independent buyer and auction mart in Manitoba. Years ago, all we had were the drovers who went from yard to yard.

The establishment of auction barns across the province made selling and buying cattle both fair and competitive for everyone. Auction markets are the price setters and provide a vital service to our industry. It is your choice how you sell, but keep in mind that the auction marts need us as much as we need them.

And on a final note, fall District Meetings are right around the corner. This is your chance to come out and voice your opinions, both positive, negative and optimistic. The schedule is listed on the back page of this paper. We look forward to seeing you there.