Rumor I heard

[rockridgecattle]

I am from Manitoba Canada, and just heard a rumor that kinda bothers me a bit. OK maybe alot.
There is a packer plant in Alberta Canada....owned by Tyson and called Lakeside Packers. I think i got the names right
Rumor has it that with the calf market on the down and low, they are looking to buy 500 thousand calves or feeders. They then would be able to keep the pressure on the market, allowing them to dictate the prices.
Now that the Canadian culls have made it through the system, the herd is barely large enough to feed our nation, let alone meet our export needs, the calf market should start to rebound again. However, with Tyson holding onto these many calves, we might not see a rebound in prices like we hoped
:shock:

Feel free to correct me if i am wrong, after all it is a rumor i heard...


edit: asked hubby the numberd

 

[Bez+]

I am from Manitoba Canada, and just heard a rumor that kinda bothers me a bit. OK maybe alot.
There is a packer plant in Alberta Canada....owned by Tyson and called Lakeside Packers. I think i got the names right
Rumor has it that with the calf market on the down and low, they are looking to buy 500 thousand calves or feeders. They then would be able to keep the pressure on the market, allowing them to dictate the prices.
Now that the Canadian culls have made it through the system, the herd is barely large enough to feed our nation, let alone meet our export needs, the calf market should start to rebound again. However, with Tyson holding onto these many calves, we might not see a rebound in prices like we hoped
:shock:

Feel free to correct me if i am wrong, after all it is a rumor i heard...


edit: asked hubby the numberd

This has been happening for some time now - nothing new here - they are simply increasing the control that has already been happening.

Regards

Bez+

 

[john250]

RR, the combined US and Canada cattle report shows the 2008 calf crop at 41 million, 400 thousand calves. Understand, I don't trust Tyson if they are out of my sight but the purchase of half a million calves can only help the market.

 

[Bez+]

RR, the combined US and Canada cattle report shows the 2008 calf crop at 41 million, 400 thousand calves. Understand, I don't trust Tyson if they are out of my sight but the purchase of half a million calves can only help the market.

Yup - you are correct.

One time only though

Bez+

 

[Bez+]

I wrote this some time back - you can argue the finer points if you like - but having been associated with a few packers and a couple of major buyers I have the gist pretty well on target.

1. Packer starts by purchasing lots of cattle and holding them - arguably to guarantee a steady supply of beef for future kill. And they will tell you that is why they buy large lots and hold them. We call this retained cattle - often on contract. Remember - contract - so someone is already getting into bed with the packers - so it starts.

2. Packer buyer buys cattle on the open market to kill - those go straight to the plant and enter the kill line - price starts to get up as buyer pressure drives it up - and when it is out of the purchase price range the packer is willing to pay - packer stops buying and runs their own retained cattle into the kill line. Packers know to the fraction of a penny when they will start to buy on the open market and when they will stop buying on the open market - well in advance of the time the do the actual buying.

3. Prices start to drop when no major buyers pull the trigger at the sale. Bringing the packers back into the game.

4. Prices drop to the buy price the packer is willing to pay (all planned ahead of time - they know to the decimal point what price they need to make on a buy to make a profit) and the packer will buy. Packer buys to refill the hold overs and to fill the kill line.

5. Price starts to rise - packer stops buying and uses those retaned cattle until price drops.

They have been doing this for several years now to refine the process and have taken out a lot of competition. There are - from memory only folks - about three companies that now control more than 85% of the market - they are not concerned about the other 15% until they have the initial cut under control. The remainder will come.

In the process they have also taken out a lot of smaller producers - and you might see a consolidation of larger operations over the next few years - in my mind that has already started. All it takes is a contract to provide beef to a packer as per their specifications. Just like the hogs folks. Then the packer has the producer bound by a contract - as the contract nears the end - if the contract is not renewed the producer is in trouble - businesses get bought for pennies on the dollar for reasons of financial hardship.

Suck in the larger producer - nail their foot to the floor and and the legal process can be used to help acquire that business.

Ownership of land and infrstructure is not even needed - a lease or rental situation is better for the corporation as it is 100% tax deductible - making it more profitable.

In the end one should never EVER doubt the will of a corporation when it has billions - yes billions - of dollars at its' disposal and reams of accountants and lawyers and finally - politicians who believe consolidation is better - and those exist - and usually they are voter based - urban folks - who really do not care about the health of YOUR business - as long as there is safe beef on the table 2.3 times per week. The corporation now has the power to decide what the public will eat, what the public will pay for it and finally - how much you, the producer gets for your labours.

Remember the hog producers........

Not as far fetched as it might seem.

Bez+

 

[Alberta farmer]

Rockridge: Tyson does not own Lakeside. XL(Neilson bros) does own Lakeside. Tyson Foods sold Lakeside packers last spring and does not have any packing plants in Canada. After aquiring Lakeside, XL promptly closed down their cow plant in Moosejaw as they claimed farmers weren't sending enough cows, at the right price, to market!
I suspect record number of calves will hit the Alberta markets this fall as farmers can't afford to keep them over this year due to high feed costs and an actual shortage of hay. With the COOL drivel in the USA drying up a lot of the calf market we'd better hope XL and Cargill step in and buy those calves, otherwise the only solution might be the old .22! I also suspect the run of cows will overwhelm our packers this fall!
All summer in Alberta auction barns have been selling pairs...split off the cow for slaughter and who knows where the small calf goes? Maybe veal. XL Lakeside has been killing mostly cows all summer.
I would guess Cargills days are numbered in Canada? After a huge liquidation of cows this year there simply won't be enough fed cattle to support two large plants in the west. I think XL has shown the big boys they can be even more ruthless? Better get your Manitoba plant up and running.

 

[Bez+]

Rockridge: Tyson does not own Lakeside. XL(Neilson bros) does own Lakeside. Tyson Foods sold Lakeside packers last spring and does not have any packing plants in Canada. After aquiring Lakeside, XL promptly closed down their cow plant in Moosejaw as they claimed farmers weren't sending enough cows, at the right price, to market!
I suspect record number of calves will hit the Alberta markets this fall as farmers can't afford to keep them over this year due to high feed costs and an actual shortage of hay. With the COOL drivel in the USA drying up a lot of the calf market we'd better hope XL and Cargill step in and buy those calves, otherwise the only solution might be the old .22! I also suspect the run of cows will overwhelm our packers this fall!
All summer in Alberta auction barns have been selling pairs...split off the cow for slaughter and who knows where the small calf goes? Maybe veal. XL Lakeside has been killing mostly cows all summer.
I would guess Cargills days are numbered in Canada? After a huge liquidation of cows this year there simply won't be enough fed cattle to support two large plants in the west. I think XL has shown the big boys they can be even more ruthless? Better get your Manitoba plant up and running.

AF,

Wondered when you would turn up - how's it going?

Times are looking pretty bad in western Canada right now for the cow calf folks.

I think the run will be a bit smaller than most think - if only because the producers have been selling off all summer long.

But I believe you and I would agree that there is unlikely to be a bounce in price of any note - and if there is it will be for a very short period of time.

Where we live, I think we are the only folks within 30 or more miles that have any cattle any more - and we will be down to 8 plus a couple of steers this fall. Big drop from the several hundred pairs we once ran - but it costs money now.

You staying in the game - or reducing to minimum numbers?

We rented out some land we cleared and tile drained this summer - pay back on it is 8 years - wish cows would do that - I would buy several hundred again. Even if I had to do it on time. No chance of me ever doing that today though.

My best

Bez+

 

[grannysoo]

In the end one should never EVER doubt the will of a corporation when it has billions - yes billions - of dollars at its' disposal and reams of accountants and lawyers and finally - politicians who believe consolidation is better - and those exist - and usually they are voter based - urban folks - who really do not care about the health of YOUR business - as long as there is safe beef on the table 2.3 times per week. The corporation now has the power to decide what the public will eat, what the public will pay for it and finally - how much you, the producer gets for your labours.

Bez+

I agree with your thoughts, however a corporation does not have a will.

The problem with corporations is not the fact that they are corporations, it's that some of them have greedy people running them. When you start talking about the big corporations, they are so intertwined with government and each other, they have advantages over all of the others. Take ADM for example. Talk about corporate dominance. No one can compete with them. It's just a bunch of good ole' boys doing business with other good ole' boys and everyone scratching each others back and padding each others pockets.

Many corporations are good, just as many are bad.

 

[Alberta farmer]

Bez: No I'm packing it in. If I thought it might improve in the future I might try to hang in there. When Tyson decided to leave Canada I could see the writing on the wall. Two packers now, probably one in the not too distant future.
Our useless government doesn't seem to care. They ruined the business by allowing ruminant offal to be fed to cows. When faced with a law suit to own up to their responsibility they decided to fight it to the death although they are clearly responsible.
The drought in Alberta was pretty severe this year. Not a lot of feed around and what there is, is pricey! I'm done feeding people for free.

 

[Bez+]

Bez: No I'm packing it in. If I thought it might improve in the future I might try to hang in there. When Tyson decided to leave Canada I could see the writing on the wall. Two packers now, probably one in the not too distant future.
Our useless government doesn't seem to care. They ruined the business by allowing ruminant offal to be fed to cows. When faced with a law suit to own up to their responsibility they decided to fight it to the death although they are clearly responsible.
The drought in Alberta was pretty severe this year. Not a lot of feed around and what there is, is pricey! I'm done feeding people for free.

I am sorry to hear that - Canada will need folks like you and me some day - unfortunately that day may not come in time to save some of us. Ever since that fateful first day and the immigrant American farmer who brought BSE to Canada - it has been all down hill.

Not too many folks left in the biz are under 60 now.

My best - stay in touch

Bez+