Cattlemen’s income shrinks along with industry

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Interesting that a shrinking industry would choose to run their organization at a loss.

There used to be a lot of beef farms in this province. Don't you wonder whether past mistakes could be corrected and a long term stable growth plan put in place that would reverse this trend?

Yesterday, for the first time since 1864, there were no beef cows on this farm, and it has do with everything from changing consumer tastes to ethanol to protectionist farm policies, but the last straw was realizing it would take more to buy enough hay to get the cows through the winter than what the cows were worth - better to cut cut the losses on the livestock, and sell the remaining hay. Dairy farmers wouldn't have worried because they could simply jack up the cost of production, and thereby hi-jack consumers even more than before, but the beef industry has too much principle to take legislated advantage of consumers in the way supply management so-eagerly, and so-unapologetically, does. What's worse is that, in the last dozen or more years, beef cows provided a good way for several of my clients to get into farming on a part-time basis, but they are getting out of cows now too - it's bad enough to have to compete with supply management, but to have to also compete with ethanol, is just too much.

Stephen Thompson, Clinton ON

Blaming ethanol for the decline in the Ontario beef industry is silly.

I've seen these kinds of statements here before and wondered why no one corrected them.

Fact: Despite taxpayer subsidies beef production effectively left the province years before the ethanol industry began.

All sound businesses, not just SM, pass along costs to customers. That's how they remain in business without begging for taxpayer $

You're obviously not in the beef business, and obviously also don't understand anything about either economics, or business. Cost increases often don't get passed on to consumers because consumers just stop buying the product completely - sort of like what's happened to milk consumption, but only worse. It is also a fallacy to assume that comsumers willingly purchase the same amount of product when the price of that product increases - it's an even bigger fallacy to believe that consumers care about anyone's cost of production. It is the ultimate fallacy to assume consumers will buy anything at the price you believe you need to have to produce things. Finally, ethanol is, by definition, just as much a tax on food as supply management, and just as much defended by grains farmers for exactly the same incorrect, and protectionist, reasons dairy and poultry farmers use to defend supply management.

Stephen Thompson, Clinton ON

The "ultimate fallacy" Steve, is the illusion that one can remain in the beef or any other business without recovering cost of production from the customer. That doesn't work for for Canadian Tire, Walmart, feed or fuel suppliers etc. Like millions of Canadian consumers I respect the laws of business and pay cost plus, to all my suppliers. Come to think of it I don't have much choice.

Some non-SM producers have been preaching an illusion for years. In fact they are so committed to this illusion that they even want to supply foreign households with meat for less than it cost them to produce it. They have done what it takes to force Canadian taxpayers to fund this illusion. This begging for money makes all farmers look bad. This charity handout goes on with farmers in other countries. That doesn't make it right. It does make it even harder for our farmers to compete in export markets.

I don't want my tax dollars spent to support this craziness. I also hate the thought of the few remaining meat producers quitting or going bankrupt but their illusion is pretty deeply entrenched.

First and foremost, the biggest illusion, and/or biggest fallacy, in your posting is your own - nobody cares about anyone's cost of production, nor should they. If somebody isn't prepared to produce for what the market is prepared to pay, nothing else matters. The consumer isn't there to cover your costs of production, because they, being consumers, are in the marketplace to purchase what they want to buy, and from whomever they want to buy, and from wherever they want to buy it. More to the point, once it's produced, and if it isn't forward contracted, cost is irrelevant because the only thing which matters at that point, is revenue. That, supply managed farmers, is a strange concept called capitalism which, unlike markets protected by tariffs, actually works. Farmers are fooling themselves into believing their costs of production should be covered, anytime, ever.
In addition, you have completely ignored the multiplier effect, and the economic activity (including income taxes paid), generated by consumers who benefit from the subsidies you despise going to livestock farmers. Unlike in supply management which has a negative multiplier because of increased consumer prices, plus the regressive effect of farmers turning their windfall gains into "dead money" in the form of quota, some subsidies to beef farmers actually have a positive effect on the economy (or if not positive, have a way of reducing a horribly-negative effect - ie. BSE-related support) In addition, by exporting, we are creating jobs (and tax revenues) for a lot more people than we can create by imposing 200% tariff barriers, and, as well, exports allow everyone in the production chain to lower their fixed costs, thereby benefiting our own consumers even further (resulting in even more income tax revenue), and producing one more bonus, a solid contribution to our balance of payments equation - none of which is possible under the "ratchet-down" protectionist policies of supply management. The benefit of a cost/volume/profit equation which includes exports, is not an illusion, except in the mind of protectionist dairy farmers.
In addition, what you refer to as supplying "foreign households with meat for less than it cost them to produce it" is, in addition to being nonsense because cost is irrelevant to the sale price of anything once it's produced, simply, in economic terms, reducing the protectionist curse in those countries by allowing their consumers to benefit from lower prices (and the resulting multiplier benefit) than they might otherwise enjoy, thereby increasing their net incomes, with the result that they become better able to pay for what we might export them in the future. It's no illusion that this also benefits Canadian consumers because our producers are able to lower their fixed costs by increasing volumes - another concept completely foreign to the never-never land economics of supply management. And that's why it's so important to get rid of supply management so there are no hindrances to increasing our exports of other products.
I'm sorry, but all of this stuff is what everyone learns in even the most basic course in post-secondary economics, and absolutely learns in the most basic course in ag economics - and it's all, even the concept of the multiplier effect, only common sense.
To summarize, subsidies, in any economic sense, are not the demons supply managed farmers make them out to be, largely because they are based on a progressive tax funding system, and because they don't stifle the multiplier effect, and/or exports - if anything the demons are the sole jurisdiction of the protectionist policies of supply management because that system does stifle the multiplier effect, and exports, and because it is based on a regressive funding model.

Stephen Thompson, Clinton ON

You appear to understand the basic economic law that someone has to pay when something is produced. Beyond that, who pays is a moral and political issue.

You want taxpayers who may in fact be opposed to a particular product, like meat for example forced to subsidize it.

Others might believe that those who want the product should pay what it costs to produce it.

No one in their right mind would want Canadian taxpayers to subsidize a product so that a foreign consumer could eat cheaper. That's morally repugnant.

The spinoff argument you cite is an old saw and applies equally to SM.

I can't think of anything more repugnant than forcing our poorest group of consumers, and I prepare the income tax returns for a number of them, sometimes for nothing, to pay almost 38% more than they need to pay, simply to support the greed, the arrogance, and the smugness, of 15,000 millionaires, and even a few billionaires. And, no, the spin-off argument does not apply equally to supply management, because by the first principles of economics, the multiplier effect of tariff-based systems is always net-negative, and, again by definition, far more negative than subsidy-based systems because of the reasons I've already pointed out. I'm sorry, supply management supporters, but your arguments against subsidies, and for tariffs, are, by any economic principles, simply not supportable - it just doesn't work the way you claim it does, and there's over 150 years of well-documented economic evidence and experience to prove it.

Stephen Thompson, Clinton ON

Well at least you have a non farming job ,lots of farmers has no other side line jobs to turn too. Its easy to blame others for your failure in beef and in the end if you wanted to weather the storm you could have done like the thousands of farmers before and say there,s next year. If you were milking 7 days a week at least you would have your quota to fall back on if you wanted out. Hope there is no name calling, its all comes down to what you wanted out of life and you put your,s in education and beef where some put theirs in the SM farming. Not all SM farmers have a backup job and depends on the quota sale for their retirement income. Are you selling your hay and cattle at a low price or giving it to some young farmer to help them out?

Aren't most beef farmers in Ontario part time?

Any larger size of beef farmer around where I live is strictly farm , I guess it was my mistake I didn,t mean hobby farmer.

You have to compete with other counties, not just the things that go on in Canada. That,s what we get when they open the markets and it is ran either by a large company or a Country. Countries love it when we open our doors so they can back up the dump truck and let it go on us.

we can not keep ahead of the demand for our type of beef...pastured grass fed

I believe this. Grass fed has really taken off. Care to share any details? I would be curious about your marketing costs including processing.

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