Fascinating meeting with this self made entrepreneur. Starting with nothing, Greg started working at this 25,000 head Strathmore feedlot and quickly decided he wanted to end up owning it. Started by being paid in grain which he then sold forward to sell at a profit. 18 years ago he then progessed to asking for and getting a wage of $35,000, a cell phone and a pick-up truck as his income. Every year decided to buy an appreciating asset and quickly accumulated 6000 acres around Strathmore when land was cheap. Decided also to never take income out of the main farm enterprise, but earn enough income from the peripheral enterprises.
9 years later Pat Fisher, a 10% owner of the feedlot, was bought out by Ben Thorlickson (CCA President). Four other owners are also partners at this stage. Greg was then the Operations Manager and worked 18 hours a day for 7 years. In 2002, Greg bought the business together with his wife, and Joe and Karen Gregory, just before BSE hit in 2003.
Began setting up ten year rental arrangements taking on land and machinery. Grew from 8000 to 20,000 acres in 4 years. A 2500 head suckler herd was established. A research facility was also built up. Now focussing more time on the commodity marketing and hedging with RMI Agriculture and Energy company. Focussing on research, genomics, integrated systems management, and risk management.
The grain farming is successful, but feedlot is loss making. The days of cost plus feeding are gone. Commodity trading and hedging are now the focus, with the energy market a key area too. Money is not in agricultural production.
FHMS is involved in research at Cattleland Feedyards and is good at obtaining government grants. The data it obtains is also extremely valuable and the small amount of feedlot clients involved use the data very effectively for their own benefit.
A few quotes:
“You can never gain true wealth working for someone else. Ask the question no-one else is asking. Learn and watch what makes other people successful and absorb like a sponge from them. Be a good manager. Get into a sector when its down, and sell out of it on a high. Be poised to strike when opportunities arise eg buying cattle in a drought. Make sure you have a good right hand man. Be prepared in a meeting. Don’t get too leveraged.”
Check out Paul Ingland at Cactus Feedlots. Largest cattle feeder in the world, killing 1000 cattle per week.
Foothills Forage & Grazing Association event, Sean & Holly La Brie, Didsbury
Kindly invited along to this event by the organisers. Attended by an array of innovative graziers. The LaBries are well organised high density graziers who run 200 cow/calf units on one section, using electric fences to graze and move. After the first light graze, a short rest period of 42 days is used. After the second heavier graze, a longer rest period of 90 days is used. As seen before, swards are grazed at around two feet high. Innovative solar powered mobile water trough with river pump used. A demonstration was also given by an electric fencing manufacturer on the latest products.
Also discussed the ability to train cattle to eat thistles to eradicate them from swards (see Cathy Voth, Montana).
Sunday 15 July 2012
Left Graeme Finn's for the last time and drove to Irvine's Country Store to buy some Wranglers, as these are the only jeans to wear by all accounts. Again in true Canadian style, there were no signs to this place and I eventually found it down a gravel track in the middle of nowhere where an all-girl rodeo was also taking place. Gymkhanas in England suddenly look a bit tame once you’ve seen girls on horseback lassoing wild animals.
Next I headed towards Kananaskis Country and had an amazingly scenic drive through the Bow Valley and stopped off near Canmore at Grassi Lake. Grassi was an Italian who dedicated his time to making hiking trails in the Rockies. Beautifully clear water in Grassi Lake. Hiking back to the car and came across a sign, 'Danger Bears in Area', and proceeded to warn to have 'bear spray' to hand! I presume this is like fly spray but with mace in it?
Then headed south through Kananaskis Country, "the valley of the warm winds", which was extremely beautiful with miles of evergreen trees and a backdrop of huge Rocky mountains that provide winter ski slopes. On this seventy mile drive, I passed around five cars on a road the size of a dual carriageway. England definitely feels overcrowded!
Stopped off in Longview and found a motel and called in to a cafe for a bite to eat. Turns out the lady there originated from Devon, and came over to Canada in the 1970s and married a bull rider. They now breed bucking bulls in Black Diamond. Was invited to a calf branding the next day. Apparently this is quite the social event with a BBQ, beer and carrying on etc. Even the prospect of being served the delicacy of "prairie oysters", or testicles as they're commonly known.
Monday 16 July Larry and Callum Sears, Flying E Ranch
This ranch is a great looking grassy ranch that benefits warm chinook winds off the Rockies. Larry runs 500 commercial Angus cow/calf units on 7800 acres and 300 pure Angus cow/calf units on 5000 acres. Moving away from spring to autumn calving now. Experimented with swath grazing, but found calves wasted too much. Feeding wholecrop barley. Also grazing maize when 5 inches high. Carrying out research on effects of hot branding and castration on animal performance. All vaccinations administered in the neck, and not the rump. First growth implant given at weaning at 5 or 6 months. Creep feeding has been proved to improve marbling. Steers and some heifers are custom finished in his brother’s feedlot and sold under the XL Lakeside and Cargill “Certified Angus” brand.
The TraceBack management system is used. This is operated by Cow/calf Health Management Services (CCHMS) who charge a per cow per year fee. This is an online (not software based) management program developed by Troy Drake, a vet. Managed using an iPad on farm, with around four regional vet practices licensed to act as TraceBack hubs. The Sears vet is Ken Wright. www.cowcalfhealth.com
Larry Sears has held various positions in industry bodies. He was chairman of Alberta Cattle Producers in 1993-94, and chair of the CCA foreign committee between 1998-2001. We discussed various issues. US imports were banned between the 1980s and 2005 due to bluetongue. Larry considers COOL to be costly and ineffective as it reduced the options available to US meat plants. COOL was lobbied against by Canada and Mexico, but promoted by RCALF, an extremist US producer organisation that had a protectionist agenda. Canada is currently making in-roads into Russia and Kazakhstan. Both Russia and China, however, are seen as problematic due to the large influence the state and army have on trade. China and South Korea offer better opportunities than Japan, which has an aging population. In general, the global recession is dampening export efforts. Eventually non-trade barriers will have to disappear for trade to flow where it is needed and food needs to be produced where the cost of production is at its lowest.
Wholecop barley in photo below.
Visited Larry's brother, Dereck Sears, who owns a 36,000 head feedlot, plus other smaller 5,000 head feedlots under the name Chinook Feeders. The processing barns have two handling chutes with automatic push up gates that follow the cattle round the usual semi circle and then slide back to their starting position on a geared chain. Two German made VIA cameras have just been fitted above one of the crushes, one placed behind (photo below) and one looking down on the length of the back. Environmentally sustainable reed wetlands filter waste water until clean.
The handling system is manufactured by Dereck's own company, 2W. This started in 1988 when a group of farmers bought out a failing engineering firm in Nanton. They now have 26 employees and now “aggressively” search for new livestock equipment markets and product lines. We also visited the engineering works at 2W. This was a hugely impressive operation that utilised high tech production processes copied from car manufacturers. This included a state of the art robotic welding facility, automated metal cutting process and automated paint spraying area, all imported from Europe. 2W products are exported all around the world, with the US the biggest market.
Notes from conversations with Graeme Goodsir
In 1998, mandatory price reporting law was introduced in the US, with prices reported to the USDA and published every day. It is illegal for meat plants to discuss pricing with each other.
GIPSA (Grain Inspection, Packers and Stockyards Agency) supervises legal and commercial fairness. An audit oversees the livestock system. Smaller producers are less happy about pricing and lobby GIPSA. The larger NCA are more content. Most smaller producers sell through auctions, but larger feedlots sell forward on contract direct with meat packers.
HACCP (Hazard Analysis, Critical Control Points) was introduced in response to ecoli. The ‘hazard analysis’ relates to the production system, whilst ‘critical control points’ relates to checking and correcting. The government has protected meat packers during ecoli outbreaks, and the government is under pressure to ease rules by the beef lobby. The source of ecoli outbreaks have been protected by the government with the batch recall system controversial due to the high financial cost implications. A recalled batch is cooked to kill pathogens which then reduces the value of the meat.
‘Irradiated’ meat is much less popular now and there is consumer resistance to it as the name is, perhaps, unappealing. Consumer groups can put up petitions as part of their constitutional right to get rid of the practise of irradiating meat. The process originated to combat ecoli pathogens from dirty feedlot carcasses.
In the US, the constitution consists of:
President (administration) Congress (legislation) Supreme Court (judicial – review legislation, non advocate)
On the issue of US scale, if everyone has economies of scale, the advantage can be lost.
In the 1960s, the IBP meat plant broke the unions and drove down wages by de-skilling workers into single task jobs and increasing the line speed. This has, however, caused greater food safety problems and other errors.
Charlie Gracey, data analyst, Email: gracey@sympatico.ca Phone: (905) 304 4262
Some initial conclusions:
North America views the EU market as a net importer of beef, with a very attractive affluent consumer base.
The EU market will be targeted by North American exports and intense lobbying is taking place through the auspices of the WTO to lift what they see as “political trade barriers” that prevent the trade of beef produced with the aid of growth hormones.
North America view the EU CAP framework as a shackle that, together with restrictions on growth hormone and GM technology, make EU food production inefficient, uncompetitive and expensive.
Beef production will transfer to the areas in the world with the lowest cost of production and with the greatest natural resources. Urbanised areas will see food production become more intensive in character due to the lack of land available.
Ecoli is the number one issue in the US beef industry. Lactic acid interventions on slaughter lines are accepted practice and could be something that is eventually seen in the EU.
The lack of mandatory traceability in the US cattle industry is a weak spot that there seems to be an air of complacency around due to issues of constitutional rights over private information. This could hamper their export ambitions and make them susceptible to further food scare events. Their mismanagement of the “pink slime” issue is also indicative of a disconnect in the US between consumers and the politically powerful beef lobby.
The Canadian beef industry, due to its own BSE problems in 2003, has implemented extensive traceability and mandatory multi species individual ear tagging using electronic tags. They are well placed to exploit export opportunities, and have the added advantage of extensive natural resources available to them for food production.
The US is in the unique position of having a huge domestic market to balance carcass utilisation in tandem with exploiting export opportunities.
China, Russia and Asian Pacific rim countries are being targeted as areas with huge export opportunities for North America.
Beef production in North America, however, is under pressure from competition for animal feed from ethanol production, extreme weather events, and competition for land and labour resources from oil and gas production.
The beef industry in both the US and Canada benefit from extensive backing from government, state, research, pharmaceutical and financial institutions due to the importance of the sector in the economy.
Private North American companies involved in the North American beef industry are getting involved in primary production in other countries, like China and Russia, where demand for beef is rising and domestic production is under developed.
An emphasis on lean beef is predominant in North America to promote beef as a healthy option.
The UK beef industry would benefit by adopting certain aspects of North American beef production. These include; greater consolidation of cattle numbers to increase economies of scale, greater integration of research and development on farm, better management of risk and volatility through hedging of all inputs as well as the beef price, incentivising the eating quality of beef by picture grading the rib-eye for marbling and yield, more innovative arrangements of cattle ownership to increase the availability of equity in primary production, use of real time on-line livestock auctions, use of systems management frameworks to improve on farm efficiencies.