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ANSWER ON TRIM

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Jason

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Conman asks where would we sell all the ground beef. DUH! It is selling in the American market RIGHT NOW!

How can it hurt the American producer when WITHOUT YOUR EXPORT markets prices for cattle are at all time high levels AND THOSE IMPORTS ARE STILL COMING.

Figure it out, ban imports, the price of burger goes up (maybe, will the 50% that could afford it choose to?) lose 50% of your customers for a 10% maybe 20% increase in price?

How many people would prefer the paycheque of $20/hr but limits you to 10 hours a week over one that pays $10 and gives $40/hr.

REMEMBER DEMAND IS PRICE TIMES CONSUMPTION.
 

Econ101

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Jason said:
Conman asks where would we sell all the ground beef. DUH! It is selling in the American market RIGHT NOW!

How can it hurt the American producer when WITHOUT YOUR EXPORT markets prices for cattle are at all time high levels AND THOSE IMPORTS ARE STILL COMING.

Figure it out, ban imports, the price of burger goes up (maybe, will the 50% that could afford it choose to?) lose 50% of your customers for a 10% maybe 20% increase in price?

How many people would prefer the paycheque of $20/hr but limits you to 10 hours a week over one that pays $10 and gives $40/hr.

REMEMBER DEMAND IS PRICE TIMES CONSUMPTION.

Jason, I would like for you to stop in the temptation of calling me names in your posts. You can see from this post, I do not do it to you. As I have told SH, it is a sign that you do not have a legitimate argument and must resort to name calling.

Jason, if you are willing to toss away profits when prices are high and not save for the lean years (which there are many) then you are the grasshopper and not the ant. Since you are in Canada and are able to get taxpayer handouts with ease, this might be a winning strategy for you. That shows how short sighted your arguments are. You may not stay in the industry in the long run if this is your overiding strategy. Short sighted people get short sighted results.

The customers you lose to in your argument were lost to imports. Your objective is to sell more of your meat, not importer meat. Do you not understand that? If all of the meat consumption was imports, you would not be in business. Who cares if beef consumption went up in that sceneario?

I do not have as much a problem with imports as long as there is no market manipulation via the inelastic supply. That is not the case as Pickett pointed out. We are talking about extreme examples to make the points of the arguments in this post. They should not be taken out of context.
 

Jason

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The customers you lose to in your argument were lost to imports. Your objective is to sell more of your meat, not importer meat. Do you not understand that? If all of the meat consumption was imports, you would not be in business. Who cares if beef consumption went up in that sceneario?

I do not have as much a problem with imports as long as there is no market manipulation via the inelastic supply. That is not the case as Pickett pointed out. We are talking about extreme examples to make the points of the arguments in this post. They should not be taken out of context.

The customers lost in my example would be lost due to RESTRICTING imports.

The US has not been able to produce the amount of beef required at the price consumers can afford since 1951.

If imports of cheap trim are used to suppliment the supply of ground beef, AS THEY ARE NOW, it leans up the 50/50 trim off the high value well marbled cattle that are in the system NOW, and makes it more valuable.

Packers all want those high end cattle. There there are more packers than high end cattle. There is more demand for high end beef. More supply of high end beef could be sold at current high prices. With that high end beef comes 50/50 trim, and lower valued end meats as chuck and round. By adding value to those parts of the animal the packers can compete more fiercly with each other for the limited number of high end cattle.

I am not advocating being content with YG 3, 4 or 5 cattle because the ability exists to add cheap trim. I am saying cheap trim is helping move those type of cattle at a profit.

Here is where formula cattle and grids come in to play. Some advanced producers know they are raising YG2 choice cattle and know they are worth EVEN more than the average cattle. Progressive producers want to get paid for those better cattle. Packers want those better cattle because there is more profit in it for them EVEN WHEN THEY PAY A PREMIUM.

The problem results when a guy who just raises calves sees one fellow get 10 cents above commodity price he wants the premium for generic cattle as well. HE DOES NOT DESERVE THE PREMIUM. He did nothing to earn the premium.

The only time there will be a problem with imports is if the economy tanks so hard that consumers don't buy beef. Then the beef industry will be the least of our worries.
 

Econ101

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Jason said:
The customers you lose to in your argument were lost to imports. Your objective is to sell more of your meat, not importer meat. Do you not understand that? If all of the meat consumption was imports, you would not be in business. Who cares if beef consumption went up in that sceneario?

I do not have as much a problem with imports as long as there is no market manipulation via the inelastic supply. That is not the case as Pickett pointed out. We are talking about extreme examples to make the points of the arguments in this post. They should not be taken out of context.

The customers lost in my example would be lost due to RESTRICTING imports.

The US has not been able to produce the amount of beef required at the price consumers can afford since 1951.

If imports of cheap trim are used to suppliment the supply of ground beef, AS THEY ARE NOW, it leans up the 50/50 trim off the high value well marbled cattle that are in the system NOW, and makes it more valuable.

Packers all want those high end cattle. There there are more packers than high end cattle. There is more demand for high end beef. More supply of high end beef could be sold at current high prices. With that high end beef comes 50/50 trim, and lower valued end meats as chuck and round. By adding value to those parts of the animal the packers can compete more fiercly with each other for the limited number of high end cattle.

I am not advocating being content with YG 3, 4 or 5 cattle because the ability exists to add cheap trim. I am saying cheap trim is helping move those type of cattle at a profit.

Here is where formula cattle and grids come in to play. Some advanced producers know they are raising YG2 choice cattle and know they are worth EVEN more than the average cattle. Progressive producers want to get paid for those better cattle. Packers want those better cattle because there is more profit in it for them EVEN WHEN THEY PAY A PREMIUM.

The problem results when a guy who just raises calves sees one fellow get 10 cents above commodity price he wants the premium for generic cattle as well. HE DOES NOT DESERVE THE PREMIUM. He did nothing to earn the premium.

The only time there will be a problem with imports is if the economy tanks so hard that consumers don't buy beef. Then the beef industry will be the least of our worries.

Jason I would agree with you on your cattle yield grade analysis. Almost all cattle markets are priced with yield grade attached. That pricing is already in the market mechanisms.

I also do not argue with no imports. What I argue against is producers getting less because of higher imports when the cattle cycle reaches highs that was due in part to market manipulation. Cattlemen must be able to profit when cattle prices are high. What I see developing is a situation where the cattle cycles of different countries is used to make higher profits for packers who did the manipulation in the first place. Producers lose in that scenario. Those type of scenarios is what the P&S was made to keep from happening. This was not argued in the Pickett case as much because the courts have come up with a new interpretation, and indeed meaning, after the trial was already over. Those plaintiffs were cheated by the legal system.
 

Jason

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Jason I would agree with you on your cattle yield grade analysis. Almost all cattle markets are priced with yield grade attached. That pricing is already in the market mechanisms.

I also do not argue with no imports. What I argue against is producers getting less because of higher imports when the cattle cycle reaches highs that was due in part to market manipulation. Cattlemen must be able to profit when cattle prices are high. What I see developing is a situation where the cattle cycles of different countries is used to make higher profits for packers who did the manipulation in the first place. Producers lose in that scenario. Those type of scenarios is what the P&S was made to keep from happening. This was not argued in the Pickett case as much because the courts have come up with a new interpretation, and indeed meaning, after the trial was already over. Those plaintiffs were cheated by the legal system.

How are producers getting less because of imports? Canada is the only other source of high quality grain fed beef in the world. The climate of South America and Australia for that matter make those places unsuitable to compete with the Northern US and Canada for these type of cattle. However they can raise the ones that supply lean trim at a cost we can't compete on. Why try to be the low cost producer of a product with the least value?

Canada's production of the high end beef has not affected the US prices one bit. Our cattle cycle is the same as yours, except we have missed the peak this time because of BSE.

The packers have no ability to source sufficient numbers of grain fed cattle from anywhere to manipulate anything. The price consumers are willing to pay for the high end beef triggers everything. When high end beef got too expensive due to lack of supply and a booming economy (more people affording the level it was at), the price of high end beef got too high and was removed from some middle scale restaraunts. The higest end places that the wealthiest could afford kept them, but fewer people were eating the high valued cuts. Then as fewer and fewer could afford the top end the supply started to back up slightly, and boxed beef bids were lowered.

There is no way in an industry as large a beef that you can raise consumer prices sufficiently to sustain the huge infrastructure on low volumes. Even if you could it would mean we need less producers.
 

Econ101

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Jason said:
Jason I would agree with you on your cattle yield grade analysis. Almost all cattle markets are priced with yield grade attached. That pricing is already in the market mechanisms.

I also do not argue with no imports. What I argue against is producers getting less because of higher imports when the cattle cycle reaches highs that was due in part to market manipulation. Cattlemen must be able to profit when cattle prices are high. What I see developing is a situation where the cattle cycles of different countries is used to make higher profits for packers who did the manipulation in the first place. Producers lose in that scenario. Those type of scenarios is what the P&S was made to keep from happening. This was not argued in the Pickett case as much because the courts have come up with a new interpretation, and indeed meaning, after the trial was already over. Those plaintiffs were cheated by the legal system.

How are producers getting less because of imports? Canada is the only other source of high quality grain fed beef in the world. The climate of South America and Australia for that matter make those places unsuitable to compete with the Northern US and Canada for these type of cattle. However they can raise the ones that supply lean trim at a cost we can't compete on. Why try to be the low cost producer of a product with the least value?

Canada's production of the high end beef has not affected the US prices one bit. Our cattle cycle is the same as yours, except we have missed the peak this time because of BSE.

The packers have no ability to source sufficient numbers of grain fed cattle from anywhere to manipulate anything. The price consumers are willing to pay for the high end beef triggers everything. When high end beef got too expensive due to lack of supply and a booming economy (more people affording the level it was at), the price of high end beef got too high and was removed from some middle scale restaraunts. The higest end places that the wealthiest could afford kept them, but fewer people were eating the high valued cuts. Then as fewer and fewer could afford the top end the supply started to back up slightly, and boxed beef bids were lowered.

There is no way in an industry as large a beef that you can raise consumer prices sufficiently to sustain the huge infrastructure on low volumes. Even if you could it would mean we need less producers.

Jason, those imports mixed with trim, compete with domestic production. Go re-read the NZ and Australian article posted.

Producers get less money when imports take part of their market away.
 

fedup2

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I have an old friend in his 80’s who uses everything but the squeal when he butchers a hog. He uses the parts others throw away. He makes ‘Head Cheese, liver sausage, pickled pigs feet, etc. He finds value in parts that others don’t.
Why should he or anyone else (packers included), be penalized for this? I understand the damage imports have done to many industries, but I believe Jason asked an excellent question.
“Why try to be the low cost producer of a product with the least value?”

As always, I have more questions than answers.
 

Econ101

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fedup2 said:
I have an old friend in his 80’s who uses everything but the squeal when he butchers a hog. He uses the parts others throw away. He makes ‘Head Cheese, liver sausage, pickled pigs feet, etc. He finds value in parts that others don’t.
Why should he or anyone else (packers included), be penalized for this? I understand the damage imports have done to many industries, but I believe Jason asked an excellent question.
“Why try to be the low cost producer of a product with the least value?”

As always, I have more questions than answers.

Fedup, my argument is not against imports as hard as that may be for others to understand. My argument is against price manipulation that swings markets higher and lower than they would otherwise be and then using imports on the high side. This will reduce the amount of money producers get.

By the way, when we slaughter a beef, we use just about everything also.
 

Jason

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And again I ask where can the packers procure more high quality grain fed beef to manipulate the market in the US?

The only source is Canada, and we have the exact same cattle cycly as the US.

So again how do imports compete against domestic product? It supplies a cheap mix to get rid of an otherwise nearly worthless 50/50 trim.

Go ahead and tell us how we could support new producers who raise thin cattle for trim at pennies a pound?
 

Econ101

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Jason said:
And again I ask where can the packers procure more high quality grain fed beef to manipulate the market in the US?

The only source is Canada, and we have the exact same cattle cycly as the US.

So again how do imports compete against domestic product? It supplies a cheap mix to get rid of an otherwise nearly worthless 50/50 trim.

Go ahead and tell us how we could support new producers who raise thin cattle for trim at pennies a pound?

Jason, captive supplies are not just Canadian cattle. They are any cattle that the packers can use to fill their slots with that push down the price setting cash market. It has been argued that Canadian cattle and beef inventories do the same thing.

Go read Sandhusker's post on the "nearly worthless trim" as you call it. I am not going to tell you to support new producers who raise thin cattle for trim at pennies a lb. That is not my argument, it is your assertion based on a few false assumptions. First you talked about round, then whole fat cows vs. skinny cows and now you are down to thin cattle? Put the trim in dogfood if you don't think it has value. Sell it to Canadian taxpayers if you want. It doesn't really matter to me. The fact is that imports fill a slot that domestic production could have filled. If chucks, flank steaks,rounds, or any of the cuts of domestic meat are used to fill the slot then it makes the leftover chucks, flanks, steaks, or rounds more valuable. If you want to raise skinny cattle to just make hamburger, then that is your business. I will not stand in your way. You supported some very wealthy americans with taxpayer money that are shafting our markets down here and took your fellow countrymen for a ride. I am not surprised at what else you are willing to do.
 

Jason

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Again I ask where will the packers source GRAIN FED HIGH QUALITY cattle to manipulate the US prices down?

The Canadian cattle and beef are already in the system.
 

Econ101

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Jason said:
Again I ask where will the packers source GRAIN FED HIGH QUALITY cattle to manipulate the US prices down?

The Canadian cattle and beef are already in the system.

Are you asking me to predict the future? The packers used captive supplies to do it in the past.
 

Jason

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Econ101 said:
Jason said:
Again I ask where will the packers source GRAIN FED HIGH QUALITY cattle to manipulate the US prices down?

The Canadian cattle and beef are already in the system.

Are you asking me to predict the future? The packers used captive supplies to do it in the past.

Where did they get captive supplies? There are only so many high quality grain fed cattle, and they don't keep forever.
 

Econ101

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Jason said:
Econ101 said:
Jason said:
Again I ask where will the packers source GRAIN FED HIGH QUALITY cattle to manipulate the US prices down?

The Canadian cattle and beef are already in the system.

Are you asking me to predict the future? The packers used captive supplies to do it in the past.

Where did they get captive supplies? There are only so many high quality grain fed cattle, and they don't keep forever.

Jason, do you understand what the term means?
 

Econ101

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Jason said:
I understand the term, do you?

Okay, then explain it. I want to see if you really do know what the term means and how it affects cash prices. I am waiting.
 

mrj

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Econ101 said:
Jason said:
I understand the term, do you?

Okay, then explain it. I want to see if you really do know what the term means and how it affects cash prices. I am waiting.


Econ,

I'm betting Jason would have answered your question had you stated YOUR version and understanding of the definition of the term "captive supplies" and ask nicely if Jason and you agree or disagree upon it?

Your attitude with the repeated adversarial questionning seem rather arrogant, IMO.

MRJ
 

Econ101

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MRJ said:
Econ101 said:
Jason said:
I understand the term, do you?

Okay, then explain it. I want to see if you really do know what the term means and how it affects cash prices. I am waiting.


Econ,

I'm betting Jason would have answered your question had you stated YOUR version and understanding of the definition of the term "captive supplies" and ask nicely if Jason and you agree or disagree upon it?

Your attitude with the repeated adversarial questionning seem rather arrogant, IMO.

MRJ

MRJ, When I want your opinion, I will ask for it.
 

Jason

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When Conman starts answering direct questions I have posed multiple times I will educate him on what captive supplies means. However, it seems rather self explanitory.

Captive...

Supplies....

Of course to Conman he wants to try to say Tyson can make the Earth revolve backwards because of the power they have with captive supplies.
 

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