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~SH~
Rancher
Joined: 14 Feb 2005
Posts: 5426
Location: South Western SD
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 Posted: Fri Jan 20, 2012 8:16 am Post subject: Packer concentration, captive supplies, and imports. |
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If Packer Concentration, Captive Supplies, and Imports are the reason for lower cattle prices as the "so called" salebarn market experts have been telling us for decades, which of these factors has changed in recent years to allow the cattle markets to reach all time highs????
How do you explain the current markets in light of these three market factors which have been blamed for lower cattle prices historically????
Are packers less concentrated now???
Do packers own less cattle or buy less cattle through captive supply arrangements???
Have imports been reduced???
Common sense would tell you that if these are the only factors that lead to lower cattle prices, as the salebarn market experts have been telling us for decades, that one or more of these factors would have to change to allow cattle prices to go higher.
Or.......could it be possible that the salebarn market experts are really clueless when it comes to the factors that really impact cattle prices???
Stop and think about it and let me know what conclusions you come up with.
Just one more thing, if every $.05 change in a bushell of corn results in a $1 change in the price of feeder cattle, where do you think feeder cattle prices would be today if corn were $2 - $3 per bushell lower ALL OTHER FACTORS BEING EQUAL???
If your ranch profitability depends on reliable market information, are you going to watch the trends in packer concentration, captive supplies, and imports or are you going to look at total beef supplies relative to competitive meats, corn prices, imports vs. exports of not only cattle but beef, beef variety meats, ofal and hides, and cattle, consumer demand for beef, etc.?
At some point you are going to have to ask yourselves who is really looking out for your best interests in the cattle industry.
Breaking up the large packers into smaller less efficient packers will result in lower cattle prices all other factors being equal.
Ending trade will result in lower cattle prices because we export more dollars worth of beef and beef by products than we import.
Ending captive supply arrangements means that you support dictating to the feeders how they can market their cattle. In other words, you think you need to save feeders from their own marketing arrangements. The end result of that logic will be a socialized cattle market that treats all cattle the same regardless of quality. What a sad state of affairs that will be.
At the end of the day, it doesn't matter what you want to believe or who you want to blame for lower cattle prices, all that matters is what the facts will support. Perhaps that will help explain why R-CALF has lost every court case to date.
Sorry if that's not what you wanted to hear but it's the truth just the same.
~SH~
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Soapweed
Rancher
Joined: 11 Feb 2005
Posts: 12096
Location: northern Nebraska Sandhills
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ranch hand
Member
Joined: 04 Jun 2005
Posts: 584
Location: USA
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| Posted: Fri Jan 20, 2012 11:35 am Post subject: |
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| I read that imports are way down do to the value of the dollar. I would think with the numbers down all around would be a major factor too.
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Sandhusker
Rancher
Joined: 10 Feb 2005
Posts: 18244
Location: Nebraska
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| Posted: Sat Jan 21, 2012 7:37 am Post subject: |
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| The exiistence of OPEC, it's control on world oil markets, and world oil prices shoots down your simple theory.
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~SH~
Rancher
Joined: 14 Feb 2005
Posts: 5426
Location: South Western SD
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| Posted: Sat Jan 21, 2012 7:39 am Post subject: |
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| Ranch Hand: "I read that imports are way down do to the value of the dollar. I would think with the numbers down all around would be a major factor too". |
Thanks for the input Ranch Hand. I have not seen the import vs export trade data in quite some time. When I did track it, it was interesting to see the differences between exports and imports in the four categories of beef, beef variety meats, ofal and hides, and live cattle all of which either add or subtract from the value of US cattle. Historically trade has been a price positive situation for US producers.
Yes, it's important to follow total cattle numbers but just as important is following carcass weights. As far as total beef production is concerned, a decrease in cattle numbers can quickly be washed out by an increase in carcass weights. Usually that's more of a problem with cheaper corn and lower cost of gains than we have now.
The point of my thread is simply this. When you really stop and analyze the differences in philosophies between the various cattle organizations it all comes down to the differences in beliefs of what factors affect cattle markets. I am more convinced now than ever before that R-CALF, OCM. etc. has misled a lot of good producers with bad information on the factors that truly affect cattle prices. My research in the past had me seriously questioning the R-CALF logic and the facts of today's market have proven that research correct.
If I am wrong and R-CALF was right then packers should be less concentrated, we should be importing far less cattle, and packers should not be buying cattle through captive supply arrangements yet none of those factors have changed significantly and we have record high cattle prices. That fact alone should have any reasonable cattleman questioning the reliability of the information they receive from R-CALF & Co. because bad information is a real disservice to the industry which is why I chose the path less traveled as opposed to populist opinion.
~SH~
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~SH~
Rancher
Joined: 14 Feb 2005
Posts: 5426
Location: South Western SD
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| Posted: Sat Jan 21, 2012 7:47 am Post subject: |
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| Sandhusker: "The exiistence of OPEC, it's control on world oil markets, and world oil prices shoots down your simple theory". |
Perhaps you would like to explain the similarities between the oil industry and the cattle industry?
The cattle prices of today are not a theory, they are an unarguable fact.
So...............
Are packers less concentrated today Sandhusker?
The answer is no. Theory or fact?
Are packers buying fewer cattle through captive supply arrangements today Sandhusker?
The answer is no. Theory or fact?
Are we importing significantly less cattle than we were historically?
The answer is no. Theory or fact?
Now would you like to try to argue the fact that those are the three primary reasons R-CALF & Co. have given historically for lower cattle prices?? I didn't think so.
As to your OPEC comparison, you will have to make the argument that Tyson, Excel, JBS, and USPB are not in competition with eachother. While you are at it, perhaps you'd like to make the argument that Ford, Chevy, and Chrysler are not in competition either.
Apples to oranges Sandhusker, as usual.
~SH~
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Sandhusker
Rancher
Joined: 10 Feb 2005
Posts: 18244
Location: Nebraska
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| Posted: Sat Jan 21, 2012 8:10 am Post subject: |
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SH, it doesn't matter what market that you're talking about, whether it is oil, cattle, or paperclips. All markets respond the same to the principles of supply, demand, etc....
Now, either explain to me how OPEC does not control the world's oil markets or how the price of oil fluctuates so much while being controlled.
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~SH~
Rancher
Joined: 14 Feb 2005
Posts: 5426
Location: South Western SD
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| Posted: Sat Jan 21, 2012 5:35 pm Post subject: |
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| Sandhusker: "Now, either explain to me how OPEC does not control the world's oil markets or how the price of oil fluctuates so much while being controlled". |
To establish any relevance to your argument you must explain how OPEC controlling the oil industry has anything to do with the concentration situation in the cattle industry IN LIGHT OF RECORD HIGH CATTLE PRICES.
You won't point out the similarities because there are none. The cattle industry is not controlled by a single company so there is no relevance to your argument.
As always when you can't debate the issue you throw out a diversionary argument of no relevance.
Soapweed,
Here's hoping you and your family are happy and healthy.
~SH~
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HAY MAKER
Rancher
Joined: 13 Feb 2005
Posts: 8307
Location: Texas
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| Posted: Sat Jan 21, 2012 7:13 pm Post subject: Re: Packer concentration, captive supplies, and imports. |
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| ~SH~ wrote: |
If Packer Concentration, Captive Supplies, and Imports are the reason for lower cattle prices as the "so called" salebarn market experts have been telling us for decades, which of these factors has changed in recent years to allow the cattle markets to reach all time highs????
How do you explain the current markets in light of these three market factors which have been blamed for lower cattle prices historically????
Are packers less concentrated now???
Do packers own less cattle or buy less cattle through captive supply arrangements???
Have imports been reduced???
Common sense would tell you that if these are the only factors that lead to lower cattle prices, as the salebarn market experts have been telling us for decades, that one or more of these factors would have to change to allow cattle prices to go higher.
Or.......could it be possible that the salebarn market experts are really clueless when it comes to the factors that really impact cattle prices???
Stop and think about it and let me know what conclusions you come up with.
Just one more thing, if every $.05 change in a bushell of corn results in a $1 change in the price of feeder cattle, where do you think feeder cattle prices would be today if corn were $2 - $3 per bushell lower ALL OTHER FACTORS BEING EQUAL???
If your ranch profitability depends on reliable market information, are you going to watch the trends in packer concentration, captive supplies, and imports or are you going to look at total beef supplies relative to competitive meats, corn prices, imports vs. exports of not only cattle but beef, beef variety meats, ofal and hides, and cattle, consumer demand for beef, etc.?
At some point you are going to have to ask yourselves who is really looking out for your best interests in the cattle industry.
Breaking up the large packers into smaller less efficient packers will result in lower cattle prices all other factors being equal.
Ending trade will result in lower cattle prices because we export more dollars worth of beef and beef by products than we import.
Ending captive supply arrangements means that you support dictating to the feeders how they can market their cattle. In other words, you think you need to save feeders from their own marketing arrangements. The end result of that logic will be a socialized cattle market that treats all cattle the same regardless of quality. What a sad state of affairs that will be.
At the end of the day, it doesn't matter what you want to believe or who you want to blame for lower cattle prices, all that matters is what the facts will support. Perhaps that will help explain why R-CALF has lost every court case to date.
Sorry if that's not what you wanted to hear but it's the truth just the same.
~SH~ |
SH are you saying that the so called sale barn experts told you Packer Concentration, Captive Supplies, and Imports are the reason for lower cattle prices period ?
Some of this stuff you come up with is laughable.
adios............
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~SH~
Rancher
Joined: 14 Feb 2005
Posts: 5426
Location: South Western SD
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| Posted: Sun Jan 22, 2012 8:13 am Post subject: |
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| Haymaker: "SH are you saying that the so called sale barn experts told you Packer Concentration, Captive Supplies, and Imports are the reason for lower cattle prices period"? |
That's right Haymaker. Everytime the market dropped it was blamed on packer concentration, captive supplies, and imports. Not once did I ever hear another reason given.
If you believe there is other factors that play on the market, the next time you hear packer concentration, captive supplies, and imports blamed for lower cattle prices, will you then say, "there's other factors playing on the market" or will you simply nod your head in agreement because it's what you want to believe at the time?
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| Haymaker: "Some of this stuff you come up with is laughable." |
I'm sure you can find someone willing to explain it to you.
~SH~
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HAY MAKER
Rancher
Joined: 13 Feb 2005
Posts: 8307
Location: Texas
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| Posted: Sun Jan 22, 2012 10:46 am Post subject: |
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Well hell, Im game, tell me if packer concentration, captive supplies, and imports has nothing to do with the markets, what does ? You just told Sandhusker supply and demand was'nt a factor.
Man I can hardly wait for this answer, I can see Im finally gonna make me some serious money.
good luck
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Sandhusker
Rancher
Joined: 10 Feb 2005
Posts: 18244
Location: Nebraska
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| Posted: Sun Jan 22, 2012 10:55 am Post subject: |
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SH, "To establish any relevance to your argument you must explain how OPEC controlling the oil industry has anything to do with the concentration situation in the cattle industry IN LIGHT OF RECORD HIGH CATTLE PRICES."
No, I don't, as my arguement is that a controlled industry will still have fluctuations in price, some even severe as evidenced by the oil industy. We've seen oil prices in the teens and we've seen them way over $100. Your comment above recognizes the strangle-hold OPEC has on the industry, yet you ignore price action in that controlled industry because it completely blows out of the saddle your hypothesis that prices in a controlled market can't rise.
SH, "You won't point out the similarities because there are none." No, I've already pointed out to you that the laws of economics are universal over all industries. If you want to move this debate forward, you must explain to me what makes the cattle industry so unique that the laws of economics that govern all other industries do not apply.
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