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Captive Supply..To be (lieve) or not to be (lieve)!

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Happy

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Now, what fool wants to tell me there's nothing wrong with this picture: :x

"NFU's February 2005 Concentration of Agricultural Markets update shows that four companies are now controlling 83.5 percent of the beef market."

OMAHA (DTN) -- The National Farmers Union applauds legislation introduced by Sen. Michael Enzi, R-Wyo., that would restrict the percentage of captive supplies allowed by meat packers.

The Captive Supply Reform Act is cosponsored by Senators Byron Dorgan, D- N.D., Tim Johnson, D-S.D., and Craig Thomas, R-Wyo. The bill addresses the problem of captive supply in the livestock industry by amending the Packers and Stockyards Act to require that livestock producers have a fixed base price in their contracts. It would also require packers to put contracts up for bid in the open market. National Farmers Union President Dave Frederickson said the bill will help encourage competition.

"Competition is what the American free market economy was founded on," said Frederickson. "Without competition, cattle producers are faced with a 'take it or leave it position.' Meanwhile, consolidation within the livestock industry continues to increase." NFU's February 2005 Concentration of Agricultural Markets update shows that four companies are now controlling 83.5 percent of the beef market. Increasingly, independent producers are finding it increasingly difficult to participate in a fair, open and competitive market.
 

Bull Burger

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Happy said:
Now, what fool wants to tell me there's nothing wrong with this picture: :x

"NFU's February 2005 Concentration of Agricultural Markets update shows that four companies are now controlling 83.5 percent of the beef market."

OMAHA (DTN) -- The National Farmers Union applauds legislation introduced by Sen. Michael Enzi, R-Wyo., that would restrict the percentage of captive supplies allowed by meat packers.

The Captive Supply Reform Act is cosponsored by Senators Byron Dorgan, D- N.D., Tim Johnson, D-S.D., and Craig Thomas, R-Wyo. The bill addresses the problem of captive supply in the livestock industry by amending the Packers and Stockyards Act to require that livestock producers have a fixed base price in their contracts. It would also require packers to put contracts up for bid in the open market. National Farmers Union President Dave Frederickson said the bill will help encourage competition.

"Competition is what the American free market economy was founded on," said Frederickson. "Without competition, cattle producers are faced with a 'take it or leave it position.' Meanwhile, consolidation within the livestock industry continues to increase." NFU's February 2005 Concentration of Agricultural Markets update shows that four companies are now controlling 83.5 percent of the beef market. Increasingly, independent producers are finding it increasingly difficult to participate in a fair, open and competitive market.


And in the meantime we have record prices for feeder cattle........................along with huge imported boxed beef from Canada................go figure.......................
 
A

Anonymous

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PLEASE GOVERNMENT, WE NEED YOU TO SAVE US FROM OURSELVES AGAIN BY PICKING AND CHOSING WHO CAN AND WHO CANNOT BID ON FEEDER CATTLE.


These idiots would break up the fewer more efficient packers so we could have more less efficient packers bidding on our calves THAT NEEDED A LARGER PER HEAD PROFIT MARGIN TO KEEP THEIR DOORS OPEN.

That's how smart these packer blamers are!

How many of them do you suppose would invest in a packing company and put their packer blaming money where their mouth is?

Why aren't they crying about the concentration in virtually every industry in America?

As if industry concentration is unique to the beef industry?

What a pathetic bunch!


~SH~
 

Mike

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Does being a large company, in itself assure efficiency? Do companies necessarily become more efficient by merely becoming larger? I don't think anyone could say so.

There are many small companies that are efficient and many times get bought by the larger ones to eliminate competition. It's a great reason to start a business, to sell it at retirement and have plenty for golf and those drinks with the umbrellas in them.
 

Sandhusker

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~SH~ said:
PLEASE GOVERNMENT, WE NEED YOU TO SAVE US FROM OURSELVES AGAIN BY PICKING AND CHOSING WHO CAN AND WHO CANNOT BID ON FEEDER CATTLE.


These idiots would break up the fewer more efficient packers so we could have more less efficient packers bidding on our calves THAT NEEDED A LARGER PER HEAD PROFIT MARGIN TO KEEP THEIR DOORS OPEN.

That's how smart these packer blamers are!

How many of them do you suppose would invest in a packing company and put their packer blaming money where their mouth is?

Why aren't they crying about the concentration in virtually every industry in America?

As if industry concentration is unique to the beef industry?

What a pathetic bunch!


~SH~

So, SH, would you mind telling us what those large efficient companies do with their profits?
 
A

Anonymous

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Sandhusker: "So, SH, would you mind telling us what those large efficient companies do with their profits?"

They invest in value added beef processing and food safety technology both of which increase beef demand and benefit U.S. producers.

AND THE POINT YOU THOUGHT YOU HAD IS...............??????




~SH~
 

Sandhusker

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~SH~ said:
Sandhusker: "So, SH, would you mind telling us what those large efficient companies do with their profits?"

They invest in value added beef processing and food safety technology both of which increase beef demand and benefit U.S. producers.

AND THE POINT YOU THOUGHT YOU HAD IS...............??????




~SH~

I see.... so a small packer wouldn't invest in value added beef processing and food safety technology? Is that something only large packers can do?

What else do they do with their profits?
 
A

Anonymous

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I already answered your question........

They invest in value added beef processing and food safety technology both of which increase beef demand and benefit U.S. producers.

NOW GET TO YOUR POINT IF YOU HAVE ONE!



~SH~
 

agman

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Mike said:
Does being a large company, in itself assure efficiency? Do companies necessarily become more efficient by merely becoming larger? I don't think anyone could say so.

There are many small companies that are efficient and many times get bought by the larger ones to eliminate competition. It's a great reason to start a business, to sell it at retirement and have plenty for golf and those drinks with the umbrellas in them.

Response...On most occasions smaller companies are purchased by larger companies because the smaller company is more efficient in serving a smaller specific market. The purpose is to expand and grow that business, not to eliminate competition as you state.
 

Happy

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Agman:
The purpose is to expand and grow that business, not to eliminate competition as you state.

Come on Agman, they want to expand and grow, sure but in the end they are still eliminating competition. Are you a large company that you "KNOW" how pure their big hearts are and they really don't want to monopolize...PLEASE! Get a clue!
 

Sandhusker

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~SH~ said:
I already answered your question........

They invest in value added beef processing and food safety technology both of which increase beef demand and benefit U.S. producers.

NOW GET TO YOUR POINT IF YOU HAVE ONE!



~SH~

No, SH, you skirted my question.

Those companies do many different things with their profits. Included in the list as we have seen is; buying out the competition, buying feed lots,
expanding into foreign markets, contracting cattle in excess of their slaughter capacity, using retained earnings to temporily idle plants, etc.. . The list goes on and on. Some of their actions are beneficial to US producers, some are not. Increasingly, we are seeing the latter. However, benefit to producers is NOT a consideration, as would be expected. They will take those funds and use them to enhance their bottom line in any way that gives them the best return.

You would like producers to believe that they use retained earnings only in ways that benefit producers. That is rediculous.
 

agman

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Happy said:
Agman:
The purpose is to expand and grow that business, not to eliminate competition as you state.

Come on Agman, they want to expand and grow, sure but in the end they are still eliminating competition. Are you a large company that you "KNOW" how pure their big hearts are and they really don't want to monopolize...PLEASE! Get a clue!

Response: Have you ever set in a board meeting of a large corporation? I expect you have not but still profess to know what their objectives and motives are. Do you know how many small companies are acquired by larger companies and they are allowed to operate as autonomous units?
Why is it that if a bigger compay buys a smaller company all you can conclude is that they want to eliminate competition? What about synergies that are beneficial to both companies? Sorry, never thought of that one.
 
A

Anonymous

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Sandhusker,

You as a lender, of all people, should realize that the equity tied up in large packing plants is nothing in comparison with the equity tied up in land, livestock, and machinery.

WHO HOLDS THE BIG CLUB???

The producer does. When they give up control of the cattle, they give up control of the industry.

If the profits in the packing industry are so great and so attractive, there is nothing to stop producers from investing their equity the same way USPB did. Then they control their product from pasture to plate with nobody to bitch about but themselves.

If the beef processing industry is such a wonderful deal, why did Monfort sell to Swift & Co.? Why did ibp sell to Tyson? Why did National sell to USPB? Why did Future Beef go broke?

The facts of the economics of the processing industry do not jive with the "sky is falling" anti corporate fear mongering of the packer blamers.

What did Pickett reveal? It revealed a $26 PER HEAD profit for the most efficient processing plant IN THE BEST PROCESSING YEARS FINANCIALLY?

Where was a lot of that money invested?

VALUE ADDED PRODUCTS AND FOOD SAFETY TECHNOLOGY neither of which have done anything but help consumer demand.

You piss and moan and bitch and whine about the packing industry when you know nothing about it. Typical R-CULTer!



~SH~
 

rancher

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"If the beef processing industry is such a wonderful deal, why did Monfort sell to Swift & Co.? Why did ibp sell to Tyson? Why did National sell to USPB? Why did Future Beef go broke? "

Why did Swift and Co buy Monfort, and the same for Tyson and IBP? Why don't you correct Tam on saying we are hiding BSE cases? Or do you believe that too. I don't know if we are, wouldn't put it past the packers to do that though.
 

Sandhusker

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~SH~ said:
Sandhusker,

You as a lender, of all people, should realize that the equity tied up in large packing plants is nothing in comparison with the equity tied up in land, livestock, and machinery.

WHO HOLDS THE BIG CLUB???

The producer does. When they give up control of the cattle, they give up control of the industry.

If the profits in the packing industry are so great and so attractive, there is nothing to stop producers from investing their equity the same way USPB did. Then they control their product from pasture to plate with nobody to bitch about but themselves.

If the beef processing industry is such a wonderful deal, why did Monfort sell to Swift & Co.? Why did ibp sell to Tyson? Why did National sell to USPB? Why did Future Beef go broke?

The facts of the economics of the processing industry do not jive with the "sky is falling" anti corporate fear mongering of the packer blamers.

What did Pickett reveal? It revealed a $26 PER HEAD profit for the most efficient processing plant IN THE BEST PROCESSING YEARS FINANCIALLY?

Where was a lot of that money invested?

VALUE ADDED PRODUCTS AND FOOD SAFETY TECHNOLOGY neither of which have done anything but help consumer demand.

You p*** and moan and bitch and whine about the packing industry when you know nothing about it. Typical R-CULTer!



~SH~

You're telling me the person who has virtually no control on product pricing has the "big club"? I need further convincing.

I, as a lender, understand return on equity. That is what it all comes down to - how much do I have to put in how much can I take out. I don't know what ROE on a packing plant would be, but compare that to buying 500 head of cows @ $800, 20 bulls @ $1500, 8000 acres @ $200, etc... Ranching is not a huge money making deal.

Packers don't have to own the land and cows to control the industry. I won't even bother to try to explain this to you because you don't want to understand it. Just look at the chicken industry. Don't tell me the big chicken outfits dont' control the industry - do they own the barns?

Your implications that companies buying out their competiton being a direct link to unprofitability is absurd. I proved that once to you, but your memory has convieniently failed again. Look at the banking industry. See any buyouts? Notice any consolitadion?

There is a lot to stop producers from investing in their own plants - it's called huge start-up costs.

So packers ONLY make $26/head? Not bad comparing that to ranchers. $26 turned in two weeks vs $100 in a year? You can't see the whole picture - typical of a R-CALF basher.
 

agman

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[Sandhusker]

You're telling me the person who has virtually no control on product pricing has the "big club"? I need further convincing.

So packers ONLY make $26/head? Not bad comparing that to ranchers. $26 turned in two weeks vs $100 in a year? You can't see the whole picture - typical of a R-CALF basher.[/quote]

Why should the producer have any control over product pricing when his risk ends the minute those cattle are shipped to slaughter? As an R-Calf parrot you should not argue this point since you have been brainwashed to believe that you are only in the "cattle" business, not the "beef" business. Is that not the war cry of R-Calf and its members? Why should you benefit beyond any participation of risk taking at your level of production? If you take no risk upstream why would you expect to benefit from upstream profits?

As a banker, your phony illustration of packer profits earned in two weeks of ownership defies belief. What are their annual profit margins versus sales compared to a producer's annual profits verus sales? BTW, the most producers prosper even in the toughest of times. I am certain you do not only finance the worst 20% of producers, or do you? Perhaps that is why you fail to see opportunity in the "beef" business as so many other intelligent and good cattle producers do. Have a great day.
 

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