Income Supports for

[jdobbin]

As I predicted a week ago, the high cost of subsidizing the ethanol industry now means that Canada has to subsidize and support the livestock industry because of high feed prices.

http://ca.news.yahoo.com/s/capress/071214/...l/livestock_aid

Federal Agriculture Minister Gerry Ritz promoted billions of dollars in aid Friday for struggling livestock producers, but farm groups were left to wonder whether the announcement contained any actual new money.

Ritz told reporters in a conference call the government will offer an extra $1 billion in loans through advanced payment programs. Producers could get up to $400,000 each, with the first $100,000 interest-free.

Ritz also said the government would be streaming more money through existing support programs such as AgriInvest and AgriStability, although he was short on specifics.

The money is aimed at helping pork and cattle producers, who have been wallopped by rising feed costs as well as plummeting exports due to the strong Canadian dollar.

"We've seen these peaks and valleys before, (producers) have struggled through. It's a matter of the government giving them help at the time," Ritz said.

Edited December 15, 2007 by jdobbin

[blueblood]

Cattle Prices have been in the tank for a long time. High grain prices have little to do with it. A bigger problem is passing the costs onto the producers for exporters to meet the extremely high standards put on Canadian cattle for export. That costs a lot of money. I mean if grain prices were so high worldwide, why are producers in Australia and Brazil and the U.S. able to make a go at it??? Don't worry in five years or so, packers will realize they have to pay up for grain and people will smarten up and quit overflooding the market with cattle. The market is overflooded with cattle, it has to sort itself out.

[jdobbin]

The market is overflooded with cattle, it has to sort itself out.

It won't sort itself out with government subsidies.

[Michael Hardner]

I for one would like to understand why the government needs to subsidize certain industries but not others, if it's not just politics.

[Borg]

I for one would like to understand why the government needs to subsidize certain industries but not others, if it's not just politics.

Simply because canucks have surived on a cheap food policy. You want to eat cheap you better produce some of your own food.

Once that ability is gone you are at the mercy of others.

Trust me - lose agriculture in this country and you will see the cost to eat rise substantially.

As a quick addition - do you want a foreign country with potentially lax standards supplying your food?

Lose the ability to feed your country and eventually you will lose sovereignty.

Hog producers are going down big time as well - forecast to lose 10 - 15% of the operations over the next 6 months.

Borg

[Topaz]

I just watch on Marketplace, that Canadian mark "product of Canada" on labels may mean that the only thing a product of Canada is the paper or the ink! Highliner, the salmon comes from Russia, the shrimp, from China or Nam, were most of our fish by Highliner come from. There has been health problems with these countries. I, for one will not buy their product again. Another product, garlic which had Canada Garlic came from California or Mexico.

[Wilber]

I for one would like to understand why the government needs to subsidize certain industries but not others, if it's not just politics.

Guess it depends on what you consider to be important. We give all kinds of tax credits and subsidies to so called "culture" because it supposedly defines us as being "Canadian" yet some feel the food they need every day to put in their bellies in order to stay alive, isn't that important. The more control you give to others over essential commodities, the less sovereignty you have and the more it can be used against you. Don't know if that comes under the definition of politics.

[Michael Hardner]

I can see the argument for culture, to a degree. If we consume only imported culture, we will eventually see ourselves only as they see us.

But food ?

If we need subsidies to compete with imported food, then how is that 'cheap food' ? The imported food is cheap, and the domestic food is costing us tax money.

Canada's best industries have made it without government hand-outs. RIM, Nortel, Four Seasons hotels had a level playing field (R&D tax credit notwithstanding) when they went into other countries and won the business.

[jdobbin]

Guess it depends on what you consider to be important. We give all kinds of tax credits and subsidies to so called "culture" because it supposedly defines us as being "Canadian" yet some feel the food they need every day to put in their bellies in order to stay alive, isn't that important. The more control you give to others over essential commodities, the less sovereignty you have and the more it can be used against you. Don't know if that comes under the definition of politics.

The problem with one subsidy for agriculture is that it often hurts another area of the agriculture economy. Create a subsidized market for ethanol and hurt the feed industry for cattle. Subsidize cattle and hurt hogs. It goes around and around.

[jdobbin]

Hog producers are going down big time as well - forecast to lose 10 - 15% of the operations over the next 6 months.

That is in part to it being an export market product in a big way.

[Wilber]

The problem with one subsidy for agriculture is that it often hurts another area of the agriculture economy. Create a subsidized market for ethanol and hurt the feed industry for cattle. Subsidize cattle and hurt hogs. It goes around and around.

In this case I agree. I don't think we should be subsidizing fuel production at the expense of food production. We don't need ethanol to survive.

[margrace]

Other than Borg do any of the people on here know anything about the production of your food. Canada has extremely strong rules to keep your food safe. The fish item is just the thin edge of the wedge. Give up your control of your food and you will suffer for it. Stores such as Walmart are pushing the limits be careful of what you buy and eat.

Good sensable food is important and I don't mean 90% of the guk you buy in your foreign owned suppermarkets. In order to keep your food safe and in order to protect your environment your food should come from a 100 mile radius of where you live.

Out of curiosity I have tried the processed food sold today, it is tastless and unappetizing. I honestly cannot understand how people can eat it and it is so expensive.

On the Barrie tv news this week a doctor and nutritionist showed how much better and cheaper it was to buy Canadian apples for instance. It has been widely discussed recently that the generation coming behind the baby boomers will not live as long as their parents. Their eating habits have a lot to do with it.

The huge increase in diabetes alone should warn people. Lately I have notices that a lot of the good restaurants are growing their own produce, why do you think that is? Could it be it tastes better?

Edited December 16, 2007 by margrace

[Borg]

I just watch on Marketplace, that Canadian mark "product of Canada" on labels may mean that the only thing a product of Canada is the paper or the ink! Highliner, the salmon comes from Russia, the shrimp, from China or Nam, were most of our fish by Highliner come from. There has been health problems with these countries. I, for one will not buy their product again. Another product, garlic which had Canada Garlic came from California or Mexico.

I like the Billy Bee honey thing.

Import the honey from China, package it in Canada and call it a product of Canada.

All CFIA demands is a portion of the packaging be completed in Canada for it to be called a product of this country.

Actually I am a strong proponent of country of origin labelling.

You would be surprized at what is produced outside this country, added to our food and then passed of as a canuck product.

Borg

[Borg]

I can see the argument for culture, to a degree. If we consume only imported culture, we will eventually see ourselves only as they see us.

But food ?

If we need subsidies to compete with imported food, then how is that 'cheap food' ? The imported food is cheap, and the domestic food is costing us tax money.

Canada's best industries have made it without government hand-outs. RIM, Nortel, Four Seasons hotels had a level playing field (R&D tax credit notwithstanding) when they went into other countries and won the business.

Producing electronics, rooms, etc simply creates money.

Try eating that.

When the price goes up there will be even more folks looking for a handout - simply to buy bread.

Borg

[Michael Hardner]

When the price goes up there will be even more folks looking for a handout - simply to buy bread.

Explain how the price will go UP if we drop subsidies ?

[margrace]

I like the Billy Bee honey thing.

Import the honey from China, package it in Canada and call it a product of Canada.

All CFIA demands is a portion of the packaging be completed in Canada for it to be called a product of this country.

Actually I am a strong proponent of country of origin labelling.

You would be surprized at what is produced outside this country, added to our food and then passed of as a canuck product.

Borg

No I wouldn't, How many people lost pets over the pet food fiasco of Chinese additives, are we so nieve as to think that isn't happening in our food as well. I have always made it my policy not to buy food produced any where else but in Canada and for some things the US. I am 72 and I have never believed that other countries are safe to buy for. But of course I have already posted this and got told off for threatening world trade.

[margrace]

Explain how the price will go UP if we drop subsidies ?

Because there will be nothing produced in Canada, it cost more to bring in food from elswhere. Farmers cannot contiunue to support your life style. When its gone then watch out.

[Borg]

Explain how the price will go UP if we drop subsidies ?

Not a simple answer but it will hopefully provide some insite.

While I am not a big supporter of subsidies, it is impossible today - for those agricultural industries NOT under supply management - to make a profit on a consistent basis. For this reason it is extremely common for a producer to work off-farm to support the farm.

It is for this reason many European countries have guaranteed those in agriculture will make a living wage - they have seen this happen in the past and are prepared to guarantee a food source for their own people.

The costs for land, equipment, fertilizer, herbicides, pesticides, fuel and labour have sky rocketed with no real increase in the product produced at the "coal face".

Most farmers and ranchers - in fact all farmers and ranchers NOT under supply management - are price takers, not price setters.

So, subsidies keep them in business. Those subsidies allow them to get past the down cycles in their specific portion of the industry. It is rare indeed to see those under supply management be big recipients of subsidies - however supply management is under attack at the international level with world trade organizations claiming it creates an unfair system. However supply management is worded such that it is for DOMESTIC consumption. Thos other countries that want to get their product into canada are claiming it creates an unfair pricing advantage for canadians in those specific sectors of agriculture.

When the agricultural industry of this country fails - and it is not there yet - but there are huge numbers going down every year - we will be forced to import more food.

As canada is a net exporter of many types of typical staples at this time, I can be seen as pissing into the wind - however the average age of folks in agriculture is now over 50 and there are few coming in to replace them. The cost of starting an operation when compared to the risks and rewards is very prohibitive and the average person cannot afford to even start up without external help form family - banks are loathe to finance. There is more money to be made in a clean office than in the barn so the kids leave for greener pastures (pardon the pun).

One would like to think this actually produces larger and more efficient operations as consolidations take place.

Not necessarily so. What it does do instead is allow vertical integration and industrial take over. That allows control of pricing and the export of jobs. Evidenced by Tyson and Cargill downsizing North American operations and increasing foreign operations - cheaper to produce the food off-shore. Then export it to canada and increase the price to increase profitability.

Packers manage to control the price at the farm gate in the following manner:

They buy and keep a supply of animals on hand. This is done at the lowest price possible. They do not slaughter these animals immediately. They continue to buy at the sale barn. When the price gets to where they do not want to pay any more, the simply start slaughtering their own animals. This drives the prices down and they replace their own stock pile. If the price stays down they buy from the sale barn. As the price increases they use their own animals - driving the price down yet again.

Price manipulation at its finest. Causing subsidies to be needed to keep the farmer going.

It keeps packer industry shareholders VERY happy as the profit is excellent.

Fed cow prices are at present running in the 80 cent per pound range and hogs are in the 80 - 83 dollars PER ANIMAL range.

Prices in the store have not changed, but the profitability is greater and shareholders are happy.

Hog and beef are in it up to thir ears at present.

Only supply management has saved dairy and poultry.

At present the CCA estimates the average loss per animal to be in the neighbourhood of close to 350 - 400 dollars per fed cow. Hogs are presently losing 65 dollars per finished pig. This all reported in Ontario Farmer dated 11 December.

Average cattle operations are approximately 250 head and hog operations somewhere in the 500 sow range.

As our inability to feed ourselves increases due to the loss of farming operations, the cost of importing and then buying food will cause an increase in pricing.

It all boils down to one question.

Do we want to eat food grown on canada or do we want to import?

Borg

[Michael Hardner]

Because there will be nothing produced in Canada, it cost more to bring in food from elswhere. Farmers cannot contiunue to support your life style. When its gone then watch out.

Margrace,

You're incorrect. The reason we have subsidies is because imports are cheap and farmers need a handout to be able to keep their prices down to international levels.

[Michael Hardner]

Borg,

Not a simple answer but it will hopefully provide some insite.

While I am not a big supporter of subsidies, it is impossible today - for those agricultural industries NOT under supply management - to make a profit on a consistent basis. For this reason it is extremely common for a producer to work off-farm to support the farm.

It is for this reason many European countries have guaranteed those in agriculture will make a living wage - they have seen this happen in the past and are prepared to guarantee a food source for their own people.

The costs for land, equipment, fertilizer, herbicides, pesticides, fuel and labour have sky rocketed with no real increase in the product produced at the "coal face".

Most farmers and ranchers - in fact all farmers and ranchers NOT under supply management - are price takers, not price setters.

So, subsidies keep them in business. Those subsidies allow them to get past the down cycles in their specific portion of the industry. It is rare indeed to see those under supply management be big recipients of subsidies - however supply management is under attack at the international level with world trade organizations claiming it creates an unfair system. However supply management is worded such that it is for DOMESTIC consumption. Thos other countries that want to get their product into canada are claiming it creates an unfair pricing advantage for canadians in those specific sectors of agriculture.

When the agricultural industry of this country fails - and it is not there yet - but there are huge numbers going down every year - we will be forced to import more food.

As canada is a net exporter of many types of typical staples at this time, I can be seen as pissing into the wind - however the average age of folks in agriculture is now over 50 and there are few coming in to replace them. The cost of starting an operation when compared to the risks and rewards is very prohibitive and the average person cannot afford to even start up without external help form family - banks are loathe to finance. There is more money to be made in a clean office than in the barn so the kids leave for greener pastures (pardon the pun).

One would like to think this actually produces larger and more efficient operations as consolidations take place.

Not necessarily so. What it does do instead is allow vertical integration and industrial take over. That allows control of pricing and the export of jobs. Evidenced by Tyson and Cargill downsizing North American operations and increasing foreign operations - cheaper to produce the food off-shore. Then export it to canada and increase the price to increase profitability.

Packers manage to control the price at the farm gate in the following manner:

They buy and keep a supply of animals on hand. This is done at the lowest price possible. They do not slaughter these animals immediately. They continue to buy at the sale barn. When the price gets to where they do not want to pay any more, the simply start slaughtering their own animals. This drives the prices down and they replace their own stock pile. If the price stays down they buy from the sale barn. As the price increases they use their own animals - driving the price down yet again.

Price manipulation at its finest. Causing subsidies to be needed to keep the farmer going.

It keeps packer industry shareholders VERY happy as the profit is excellent.

Fed cow prices are at present running in the 80 cent per pound range and hogs are in the 80 - 83 dollars PER ANIMAL range.

Prices in the store have not changed, but the profitability is greater and shareholders are happy.

Hog and beef are in it up to thir ears at present.

Only supply management has saved dairy and poultry.

At present the CCA estimates the average loss per animal to be in the neighbourhood of close to 350 - 400 dollars per fed cow. Hogs are presently losing 65 dollars per finished pig. This all reported in Ontario Farmer dated 11 December.

Average cattle operations are approximately 250 head and hog operations somewhere in the 500 sow range.

As our inability to feed ourselves increases due to the loss of farming operations, the cost of importing and then buying food will cause an increase in pricing.

It all boils down to one question.

Do we want to eat food grown on canada or do we want to import?

Borg

Except, MY one question is how will prices go up ?

"As our inability to feed ourselves increases due to the loss of farming operations, the cost of importing and then buying food will cause an increase in pricing."

How ? Your answer is by 'price manipulation', but unless we have a tiny number of players supplying one good group, how does the market fail to supply food, but not other commodities ?

It's more scare mongering and pining for the past. I'm sorry, but the fact that farmers are all over 50 is probably an advantage. Their kids should get out of farming because it seems that the family farm is a quaint but economically untenable artifact.

Canada posted the definitive question of free trade in 1988, and Canadians and every government since have opted for freer trade and lower consumer prices that come with it. For those of us who felt the pain already, it's annoying to hear from manufacturing, farming and other industries that we have to turn back the clock.

[Borg]

Margrace,

You're incorrect. The reason we have subsidies is because imports are cheap and farmers need a handout to be able to keep their prices down to international levels.

Yes, and no.

Yes because at present the commodity pricing does not allow the farmer to make a living.

No because despite buying off shore, the savings is not passed on to the consumer.

Exampls of pricing on raw commodities above shows the cost received today by the farmer. Would you prefer Brazilian or Argentinian? Their disease protection and chemical as well as antibiotic protocols often do not pass the CFIA tests.

I believe she is attempting to say that "in the future" pricing will rise to whatever the international conglomerates want.

In that I do support her comments.

Despite the fact there are subsidies I would pose this question:

If it is not possible to grow what we need to eat - are you prepared to pay whatever price it takes when imported food is the only thing available?

I do believe it may come to that - you may not - but are we at all prepared to risk it?

Personally I am not - even though our operation is profitable - but barely. Fortunately we have other supporting business that keeps things rolling.

It is a rare day we eat anything that is imported - unless we import it ourselves. Then we know where it comes from. In fact we inspect very closely and personally.

The counter to that is the 100 mile diet - in other words eat nothing produced outside 100 miles of your home. Very, very difficult to do.

Borg

[Borg]

Borg,

Except, MY one question is how will prices go up ?

"As our inability to feed ourselves increases due to the loss of farming operations, the cost of importing and then buying food will cause an increase in pricing."

How ? Your answer is by 'price manipulation', but unless we have a tiny number of players supplying one good group, how does the market fail to supply food, but not other commodities ?

It's more scare mongering and pining for the past. I'm sorry, but the fact that farmers are all over 50 is probably an advantage. Their kids should get out of farming because it seems that the family farm is a quaint but economically untenable artifact.

Canada posted the definitive question of free trade in 1988, and Canadians and every government since have opted for freer trade and lower consumer prices that come with it. For those of us who felt the pain already, it's annoying to hear from manufacturing, farming and other industries that we have to turn back the clock.

I do not expect you to agree with my comments - simply telling them as I experience them.

Once the system does not have the ability to feed itself - it IS at risk.

I would like to think you might actually agree with that - but if not time alone will tell us as to who is correct.

As I repeat - I am not a supporter of subsidies - but until it beciomes possible to earn a living in the ag world, we will see the ag community decrease in size.

When others control the food source they also control pricing. Profits will demand an ever increasing price.

Do we want to protect our food source or do we want to survive at the hands of others feeding us? That someone else will also control price and I doubt it will go down.

In the end I believe that to be the real question.

Be that as it may, I have heard and do understand the traditional self supporting theory - and in fact it is true the government and the people are tired of hearing this story.

We may very well regret not supporting the ag community. Only time will tell.

Borg

Edited December 16, 2007 by Borg

[Michael Hardner]

Borg,

Yes, and no.

Yes because at present the commodity pricing does not allow the farmer to make a living.

No because despite buying off shore, the savings is not passed on to the consumer.

It seems to me that prices are a lot better than they were in the past. WAL MART, for example, has built their reputation on very low prices.

Exampls of pricing on raw commodities above shows the cost received today by the farmer. Would you prefer Brazilian or Argentinian? Their disease protection and chemical as well as antibiotic protocols often do not pass the CFIA tests.

Testing is something that is provided, though, and not something that a foreign competitor can claim gives an advantage to domestic producers.

I believe she is attempting to say that "in the future" pricing will rise to whatever the international conglomerates want.

In that I do support her comments.

Despite the fact there are subsidies I would pose this question:

If it is not possible to grow what we need to eat - are you prepared to pay whatever price it takes when imported food is the only thing available?

We live in an icy country. Yes, we could put up tariffs that make it impossible to import any food but given that this is Canada it seems odd to assume that the rest of the world won't be able to sell us any.

I do believe it may come to that - you may not - but are we at all prepared to risk it?

We have risked it with manufacturing, with our military, with computer software. Other countries have the same risks when they import good from us.

Personally I am not - even though our operation is profitable - but barely. Fortunately we have other supporting business that keeps things rolling.

It is a rare day we eat anything that is imported - unless we import it ourselves. Then we know where it comes from. In fact we inspect very closely and personally.

The counter to that is the 100 mile diet - in other words eat nothing produced outside 100 miles of your home. Very, very difficult to do.

Borg

Very difficult and not practical either.

This debate was basically done in 1988 and 20 years of legislation can't be turned back easily. How did you stand on the FTA ? Do you shop at WAL MART ?

I feel sorry that your operation will likely have to close as a result of new global trade patterns, but unless somebody suggests a realistic alternative that doesn't involve turning back the clock we will probably continue as we have done.

[Michael Hardner]

Borg,

I do not expect you to agree with my comments - simply telling them as I experience them.

Once the system does not have the ability to feed itself - it IS at risk.

I would like to think you might actually agree with that - but if not time alone will tell us as to who is correct.

As I repeat - I am not a supporter of subsidies - but until it beciomes possible to earn a living in the ag world, we will see the ag community decrease in size.

When others control the food source they also control pricing. Profits will demand an ever increasing price.

Do we want to protect our food source or do we want to survive at the hands of others feeding us? That someone else will also control price and I doubt it will go down.

In the end I believe that to be the real question.

Be that as it may, I have heard and do understand the traditional self supporting theory - and in fact it is true the government and the people are tired of hearing this story.

We may very well regret not supporting the ag community. Only time will tell.

Borg

As I have said, the ag community will slowly fade, with some exceptions. Other will control the food source, and the pricing will be determined by the market. If profits get too high, then other players will come in and force competition.

We didn't 'support' the manufacturing community, nor the software community and you have felt the benefits of these things already...

[Borg]

Borg,

It seems to me that prices are a lot better than they were in the past. WAL MART, for example, has built their reputation on very low prices.

Testing is something that is provided, though, and not something that a foreign competitor can claim gives an advantage to domestic producers.

We live in an icy country. Yes, we could put up tariffs that make it impossible to import any food but given that this is Canada it seems odd to assume that the rest of the world won't be able to sell us any.

We have risked it with manufacturing, with our military, with computer software. Other countries have the same risks when they import good from us.

Very difficult and not practical either.

This debate was basically done in 1988 and 20 years of legislation can't be turned back easily. How did you stand on the FTA ? Do you shop at WAL MART ?

I feel sorry that your operation will likely have to close as a result of new global trade patterns, but unless somebody suggests a realistic alternative that doesn't involve turning back the clock we will probably continue as we have done.

Wal Mart also has bancrupted many companies with their power of purchase and demands that must be met.

As for testing, some of what you say is true - however inspection on imports is very insecure. CFIA is basically incapable of doing the job. In fact it is quite common for complete loads of food to enter with nothing more than a rubber stamp. Not enough people to do the job we THINK they are doing.

Your comments on an icy country ring true - I like to use it as an comparison when folks talk about fuel costs. We produce and export fuel to places where the retail cost is higher. However those countries are smaller and have a far better system of transportation. It is very rare for someone in the U.K. to drive for 100 miles to get to work - yet very common in certain parts of this country. It is also very uncommon for a Euro person to have to heat a house for 6 months ofthe year. Yet we pay world price for oil despite being a major exporter. That is just the way it is.

Countries buy from us for many reasons - one of the major factors is the LACK of risk. It is sometimes not the price but the quality that sells. Very often we buy from other countries simply because it provides profit.

I am not an advocate of free trade because I do not see it as being free. Seems to me we are always in court over it - or under attack from various world trade organizations.

No, I have not darkened the doors of a Wal Mart in many years and no one in my family will either. There is a very personal reason for that and suffice to say it cost us some big money - and closed down some serious businesses in a town we once dealt with.

Their corporate culture is not friendly at all. It is their way or the highway.

I watched them hurt some very fine people and laugh about it in the meeting.

I would personally rather pay more than support this outfit.

You do not have to feel sorry - our operation will not close down - despite my love of profit, we have some serious moral and ethical obligations to some locals who have been with us for years and continue to stay on despite offers from elsewhere.

We still profit share at Christmas every year - never missed in a long time.

Trust me - we will survive - and make money doing it.

Borg

Edited December 16, 2007 by Borg