agman
Well-known member
rkaiser said:
Canadian Packer Profits
- Thread starter Jason
- Start date
Mike
Well-known member
agman said:
If your answer is "NO". Why did you put up that ridiculous claim otherwise?
I have not claimed they are out to break the entire industry. As randy, myself, and others have said, they took advantage of a unique opportunity, ran with it as long as they felt they could get by with it, and pocketed the money. The guys in Canada got the shaft and want to prevent it from happening further.
It has also been said that I would do the same at a cattle sale (by buying cheap bulls at the end), but "I" don't have to worry about national public relations either. Well, to that extent.
I also have not questioned your packer margin data.
rkaiser
Well-known member
You might have me by the short and curlies now Agman. I stabbed myself with a shot of Blackleg vaccine in the left index finger knuckle. Don't know if I can type long enogh to see you completely self destruct.Must have been my lack of knowledge that led to this tragic event.
Agman
That one is your phoney ridiculous view Agman. I am simply saying that the situation needs to be corrected. You must be getting me mixed up with some Rcalf guy talkin about breakin the producer like that?????
Agman
Confutious say "Agman the one confused"!
Pretty hard nosed on this one aren't you Agman. I have said a million times that they did what they did because the could. Tell me why they would have cut back or stayed even on kill numbers. Your talk of killing less and extending the profits just simply makes no sense at all. There was and is an unlimited oversupply of fat cattle in Canada. What difference would it make to price if there was 500 head waiting to be slaughtered of 1000.
As I have said, and admit, your points are clearly ligitimate in a functional market. Canada has had a dysfunctional market for 2 years. Why can't you admit that?
Getting yourself in a corner Agman, the dumb farmer stuff is starting to pile up again.
agman
Well-known member
rkaiser said:
Must have been my lack of knowledge that led to this tragic event.
Agman
That one is your phoney ridiculous view Agman. I am simply saying that the situation needs to be corrected. You must be getting me mixed up with some Rcalf guy talkin about breakin the producer like that?????
Agman
Confutious say "Agman the one confused"!
Pretty hard nosed on this one aren't you Agman. I have said a million times that they did what they did because the could. Tell me why they would have cut back or stayed even on kill numbers. Your talk of killing less and extending the profits just simply makes no sense at all. There was and is an unlimited oversupply of fat cattle in Canada. What difference would it make to price if there was 500 head waiting to be slaughtered of 1000.
As I have said, and admit, your points are clearly ligitimate in a functional market. Canada has had a dysfunctional market for 2 years. Why can't you admit that?
Getting yourself in a corner Agman, the dumb farmer stuff is starting to pile up again.
It is your lack of knowledge and economics that has you talking to yourself. You still have failed to answer my question. Why do you just keep dancing around? You have provided another lenghty dissertation with no results or answer to my simple question. You have gone though the way they did operate as opposed to the way they could have chosen to operate. I will pose another simple question to assist you. Are you suggesting that the short term marginal loss of profitability operating as I suggested offset entirely the extended profitability they would have achieved by doing as I suggested? It is a simple yes or no answer.
rkaiser
Well-known member
I'm sorry you can't understnd my answer agman. Your lack of common sense leaves you running around like a chicken with it's head cut off, trying to prove your point.
Agman -
If the market was functioning normally and "short term" meant less than two years of excessive profit my answer would be No.No.No.
Your turn Agman, tell me again how market price has been, and is established in Canada these past two years.
Remember, my little pissant brain can only see supply and demand, and ultimately the consumer dictating price.
Agman -
If the market was functioning normally and "short term" meant less than two years of excessive profit my answer would be No.No.No.
Your turn Agman, tell me again how market price has been, and is established in Canada these past two years.
Remember, my little pissant brain can only see supply and demand, and ultimately the consumer dictating price.
agman
Well-known member
rkaiser said:
Well, now that I am a chicken with my head cut off why don't you explain to me why they chose not to do as I suggested they could. You are trapped in your own argument of your own making. Have you not suggested they want to keep the border closed to extend their period of excessive profits? Did I misread your earlier statement? Why would they then not have chosen my optional operating method to extend profitability knowing they would seek to keep the border closed. The latter was the conspiracy portion of your claim. This "farm boy" as you called me, which I view as a compliment, has just plowed you under in your own argument.
You know you could have called me a "city slicker" which would have been another gross miscalculation on your part. At least you got one fact correct today. Good night and have a great day tomorrow!!
rkaiser
Well-known member
I realize this may be tough on your ego Agman, but don't let it bother you. You have proven your capabilities over and over again, however things get off track once in a while, and sometimes even WAY off track. Canada is WAY off track.
I have to admit that I will remember your name, and will likely contact you should I ever look for a sound opinion when things get back to some normalcy. I can't help wondering though.
Do you use all this name calling at your job. Do you call people dumb, and blamers, and complainers, if they don't agree with you?
My job very seldom calls for that kind of lack of respect for other humans, so I blast away here on ranchers to have some fun as much as anything else. If you are serious about attacking my character; is it pride, or simply your way of doing business?
You have shown me nothing in the last few days to change any thoughts that I have, and have even made some pretty silly suggestion as per packers caring about the financial health of producers. Cargil and Tyson are setting up camp all over the world, and if they "trap out" Canada so what. I am not suggesting that is their goal, but it is a possibilty. This whole idea of packer profits could be argued forever. You deal with speculation as much as the next guy.
If complicating things as much as you can makes you feel good, KNOCK yourself out. I know I will never convince you of anything Agman.
You can twist and turn with the best of them, and you have proven it on this topic.
Too che' old boy.
If you ask more, I will answer. Not that you will hear me anyway, but I will.
Otherwise, ------- back to being one of the only beef ranchers in Canada who has no off farm job, and started with didlysquat for inheritance. Still surviving despite my clear lack of economic knowlegde as pointed out by yourself.
I have to admit that I will remember your name, and will likely contact you should I ever look for a sound opinion when things get back to some normalcy. I can't help wondering though.
Do you use all this name calling at your job. Do you call people dumb, and blamers, and complainers, if they don't agree with you?
My job very seldom calls for that kind of lack of respect for other humans, so I blast away here on ranchers to have some fun as much as anything else. If you are serious about attacking my character; is it pride, or simply your way of doing business?
You have shown me nothing in the last few days to change any thoughts that I have, and have even made some pretty silly suggestion as per packers caring about the financial health of producers. Cargil and Tyson are setting up camp all over the world, and if they "trap out" Canada so what. I am not suggesting that is their goal, but it is a possibilty. This whole idea of packer profits could be argued forever. You deal with speculation as much as the next guy.
If complicating things as much as you can makes you feel good, KNOCK yourself out. I know I will never convince you of anything Agman.
You can twist and turn with the best of them, and you have proven it on this topic.
Too che' old boy.
If you ask more, I will answer. Not that you will hear me anyway, but I will.
Otherwise, ------- back to being one of the only beef ranchers in Canada who has no off farm job, and started with didlysquat for inheritance. Still surviving despite my clear lack of economic knowlegde as pointed out by yourself.
agman
Well-known member
rkaiser said:
Your final dissertation, sermon on the forum, must be an admission that you cannot answer my simple question without blowing your own baseless theory out of the water. Thanks for the entertainment.
rkaiser
Well-known member
Sorry Agman, I did not say uncle, and I did answer your question over and over again.
Our perceptions are obviously so different that my answers don't suit you, and yours don't suit me. Call me unknowledgeable all you like, your own ridiculous theories are proof that you can not see past the end of your up turned nose, and your lack of common sense holds you back from seeing the potential of two years of unchallenged profit for the packers in Canada, mutinational and domestic.
Our perceptions are obviously so different that my answers don't suit you, and yours don't suit me. Call me unknowledgeable all you like, your own ridiculous theories are proof that you can not see past the end of your up turned nose, and your lack of common sense holds you back from seeing the potential of two years of unchallenged profit for the packers in Canada, mutinational and domestic.
agman
Well-known member
rkaiser said:
When the cattle supply was reduced due to aggressive slaughter rates and reduced supplies of cattle on fed did your market not advance? I believe it did. Was the market functional or dysfunctional? Perhaps you will try to convince me that your market did not advance. What changed, did packers ideology change of did the reduced supply positively impact the price relationship? Now that COF are up 18% from year age levels and prices have retreated has the packer once again changed his ideology or is the market responding to an increased fed cattle supply?
The fact remains that what happened as a result of BSE was not the making of the packer any more than it was of the producer's making. It was and remains a very unfortunate situation that all parties wish could be rectified tomorrow.
agman
Well-known member
Cattleman said:
I did not think it deserved a response since I had already answered the same question? For starters, I am quite certain that I know the fixed cost and marginal cost structure of packing plant operations much better than you. Your response implies that is not the situation. Margins are curvilinear. Well, perhaps sometime you and I will me on an open panel and you can educate me with you knowledge of plant operations. Of course you will allow for some questions and rebuttal from me.
To the economics of my comment. The packer chose to run plants at full capacity to rid the industry of the enormous backlog of fed cattle as quickly as possible. The result of the oversupply of fed cattle while demand was restricted resulted in an extreme imbalance in the market. At this point, I assume you know the difference between demand and consumption. That is critacal to undestanding the next issue.
Could the packer have chosen not to run at maximum capacity thereby creating and extending his period of excessive profitability. The answer is YES. I reach that conclusion since the short term reduction in marginal profits created by reducing the kill level modestly could have significantly extended the duration of the fed cattle backlog. A portion of the reduction in marginal operating costs would have been offset by a higher end-product values reflecting reduced beef output. The allocation of fixed and marginal operating costs therefore would be further marginalized by higher product values. That potential to extend supplies could have been maintained until such time that the combination of reduced placements and existing slaughter rates eliminated the backlog. Fortunately packers chose to run full tilt to help eliminate the backlog ASAP. That was in the best interest of the Canadian cattle industry.
Unfortunately, a significant supply, defined by Canadian herd growth, and demand imbalance prevails today a result of restricted exports. I believe neither party has chosen that event. Politics and unfortunately the courts have served to extend the period of imbalance. To suggest or imply that packers are not aggressively seeking to reopen the border and re-establish exports is illogical, conspiratorial and sad to say ridiculous. I hope I have answered your question to your satisfaction. Have a great day.
Agman, I agree with large part of your points, but there are a couple of things that still urk me. In your economic model you are not considering risk and uncertainty. Did the packers know with 100% certainty, that if they reduced kills to create a large backlog to decrease prices, that the border would not open and all teh backlog would be lost? NO. So instead they took the guranteed profit, and ran at full capacity to maximaize profit. Not to just operate at full capacity "for the benefit of all the cattle industry".
I am not blaming packers, or mad at how they "screwed the industry" they just practiced profit maxization, for their interest, which is fine by me, but a slightly different point than you are selling.
As far as your argument for short term increase in fixed costs at lower slaughter levels, and decreasing prices in the future, we can not make any conclusive statements without solid emperical analysis. How much are they going to cut slaughter rates, what will be the impact on selling and buying prices, for how long will they operate under these different rates to achieve price impacts, etc. Until this is laid out I am pretty sure we can both spin our numbers to get the answer we are looking for.
I am not blaming packers, or mad at how they "screwed the industry" they just practiced profit maxization, for their interest, which is fine by me, but a slightly different point than you are selling.
As far as your argument for short term increase in fixed costs at lower slaughter levels, and decreasing prices in the future, we can not make any conclusive statements without solid emperical analysis. How much are they going to cut slaughter rates, what will be the impact on selling and buying prices, for how long will they operate under these different rates to achieve price impacts, etc. Until this is laid out I am pretty sure we can both spin our numbers to get the answer we are looking for.
Sandhusker
Well-known member
Why would the packers extend profits instead of taking the money as quickly as they could? If that is the question, it is a silly one. Nobody with an ounce of financial sense would take $100 a month for a year when they could get the $1200 up front. Companies certainly recognize the time value of money.
From my years of brokering, I've also noticed that they certainly don't want to miss even a quarter's earnings.
From my years of brokering, I've also noticed that they certainly don't want to miss even a quarter's earnings.
Mike
Well-known member
Leave it to agman, he comes up with some wild scheme to protect the packers integrity and expects us to believe it.Sandhusker said:
I guess when Tyson got caught paying Espy off it was because they felt sorry for him. And when they paid millions for dumping in the creeks and rivers it was because they wanted to feed the fish.
Mike and Sandhusker, Agman's point is that the packers could give up $100 now to collect $200 in the future, and given discount rates, they would be better off. (which I think needs to be emperically tested to even see if that is the case!)
My arguement is slightly different, because I argue the packers were not guaranteed a future profit if the border opened, so then they would certainly forgo definite profit for the "chance" of maybe making more in the future.
My arguement is slightly different, because I argue the packers were not guaranteed a future profit if the border opened, so then they would certainly forgo definite profit for the "chance" of maybe making more in the future.
Mike
Well-known member
Cattleman said:
It only makes sense that if margins here are low and the corporation has a chance to boost its net, then go for the gusto!
You are exactly right! There were no future guarantees. Although they felt like the border would open and Canadian margins would tighten.........then get all you can get, NOW!
Speculating on what they "could have done" is nonsense anyway.
Sandhusker
Well-known member
A beer in hand is worth two in the cooler.
Sandhusker
Well-known member
Agman, "Their view of longterm is not the next three to five years. For starters, you should begin to focus on the next ten to twenty years. Now you are entering into their mindset in terms of time. Have a great day."
I'll agree with you there, Agman. That is why they are expanding into other countries, pushing "free" trade, and fighting COOL.
I'll agree with you there, Agman. That is why they are expanding into other countries, pushing "free" trade, and fighting COOL.
rkaiser
Well-known member
Went up to one of our pastures last night and camped over in my little 12 foot motorhome. Heaven I say. Tucked into a little spuce and poplar bush, with only the sound of birds and the cows and calves searching each other out just before dusk.
Then I got home to Agman's dreamworld.
Agman
The markets advanced Agman because the border opened to boxed beef. Do you think that our govenment would have stood by, after paying out millions in bailout money to Cargil and Tyson, and watched Cargil profit from 30 cent fats. Give me a break. Somehow, and nobody including yourself can explain how, a comfortable price was established, maximizing packer profit without embarassing the government of Canada. And it has nothing to to with supply because there has been a major over supply of Fats in Canada for two years caused by a closed border. NOT THE PACKERS FAULT BUT AN OPPORTUNITY TO BE POUNCED APON.
One simple question for you Agman, which you can answer with a yes or a no.
If a consultant had suggested that Cargil slow it's line in Canada after the boxed beef border opening, would he still have a job working for Cargil?Yes or no?
Then I got home to Agman's dreamworld.
Agman
The markets advanced Agman because the border opened to boxed beef. Do you think that our govenment would have stood by, after paying out millions in bailout money to Cargil and Tyson, and watched Cargil profit from 30 cent fats. Give me a break. Somehow, and nobody including yourself can explain how, a comfortable price was established, maximizing packer profit without embarassing the government of Canada. And it has nothing to to with supply because there has been a major over supply of Fats in Canada for two years caused by a closed border. NOT THE PACKERS FAULT BUT AN OPPORTUNITY TO BE POUNCED APON.
One simple question for you Agman, which you can answer with a yes or a no.
If a consultant had suggested that Cargil slow it's line in Canada after the boxed beef border opening, would he still have a job working for Cargil?Yes or no?