Chicken Drives Tyson Earnings

[Jason]

Funny how Econ can't answer the question.... but I will respond to the flawed logic in your widget example.

You say reduce profits to $1. Why?

Corporations would never lower profits for widgets without being forced to, ie. competition. Not the threat of competition real live competition.

So number 1 you just agreed there is competition for Wal-mart and Tyson, yes?

If there is still a $1 actual profit, what happens when another company comes along and says We can sell widgets of the same quality for $.50 less, the market research shows we can capture 50% of their customers with that discount, that's 1 million widgets a year that's good money!!!

You guys say the Widget King will drop profits further, ok let's say he does. He loses $0.50 per widget to match the new company and their efficiencies. He reclaims 50% of the 50% he lost. Now he loses on 75% of his previous volume. He tries to up his price but it means he loses market share. What does he do?

In the real world he would try to match efficiencies but you can't do that while you are losing money. He would rather have a smaller market share at a profit than a majority share at a loss.

Same thing would happen if he did have enough cash to run the new guy out. However a well planned new business will always be more efficient by virtue of the fact that everything improves and price falls with those improvements. Check out what a new 486, pI, pII or even pIII computer is worth today, if you can find one.

Case in point Cargill built a state of the art plant to compete against Canada Packers old tired plants. Cargill's plant is not top of the line anymore. It has aged. If they were to sit back and not compete they would go the way of Canada Packers. Same goes for Tyson. Their plant is even older, and needs to be upgraded on a continual basis to remain competitative.

 

[Sandhusker]

You've got some flaws I'd like to point out, Jason.

First of all, you say corps. would never lower profits? You need to study what the Japanese have done, especially with the auto industry.

There is competition to Tyson and Walmart. However we all can recognize different levels of competition. Some industries, markets, locales, etc... are very competitive while others have very little competition.

I really think you can forget your scenario of a new company coming in. In real life, nobody is going to come along and take Tyson or Walmart head on for many reasons. They will likely not be as efficient. They will probably have a sizable debt load, they will not be as entrenched with suppliers, etc..... They will need investors, and would you invest in an outfit that is going to go after Walmart on their field? I think you could find a safer bet.

Another problem with these super-big boys that inhibits competition and others coming into their world is that they lock up the suppliers. They come at them with a "you're with us or you're against us" deal. If you're on their side, you have access to their millions of customers. If you're not part of their exclusive team, they won't deal. How is somebody going to come in and compete against that?

 

[Econ101]

Econ you said clearly big companies can lower profits to drive out competition.

Agman pointed out to you Wal-mart is profitable.

How did Wal-mart gain market share at the same time as being profitable?

Seems so simple why not answer it?

The biggest answer to that question is that when Wal-Mart's founder died, Walmart went from all american (canadian was included in that) suppliers to the communist china suppliers. That made them more money than anything. They did have predatory pricing, which is outlawed, and predatory competition. Those things were good for the consumer surplus in the short run but in the long run they were negative. Find some of the economic studies in Walmart if you want to learn something. They are starting to come out. Azzam mentioned to me that he had one out. Most of the critical studies are supressed. Recent FDA and drug companies in the news are a pertinent example of that. USDA does not collect the type of data that is necessary, which is one of the criticisms of the Panhandle GIPSA study. No good data, no conclusion. Why can't we expect more out of our regulatory agencies? Ask Kenneth Lay and a whole host of other campaign contributors. Enron played both sides of the track as does Tyson.

It is funny to me that on one hand you think it is okay for Tyson to make more money on thier cattle packing in Canada due to economic conditions of supply and demand of cattle and on the other hand you think that their profits should in some way protected and that taxpayers should subsidize them. You think that producers should pay for a checkoff program whose benefits go directly in the pockets of the packers. You can not understand the mechanics of market manipulation yet you wonder why you can not turn your operation around through efficiency.

On this topic I merely pointed out that Tyson has the ability to drive out competition in this market with their other businesses carrying the losses with higher profits. This will have the effect of concentrating the industry, not because of efficiency, as you say, but because they have the tools to control the markets that much and buy out their competition at reduced rates. Haven't you learned yet that when you lose the industry's largest buyer your sales take a dive? You need to do some of that reading, Jason. There are forces here beyond your imagination. I am just giving you tour guide information. As SH would say, this is elementry to me.

Jason, I wish I had time to teach you all the things you need to know but I don't. Just be careful who you make your arguments for. Greed is a cruel friend.

 

[Anonymous]

Randy Kaiser: "The only thing you have to do with this industry is to search out common sense ranchers like myself and try to create apathy so your mutinational packer buddies can operate with absolutely no reigns and full governement control."

Packer blaming ranchers like you are not common sense, you are senseless. You can't even reason.

I have no connection with the packing industry what so ever. Truth and facts is all that drives me. The same truth and facts that drive you crazy because it's not what your packer victim mentality wants to believe.

If you feed your own cattle, slaughter your own beef, and sell that beef to the consumer, WHICH YOU CAN DO IF YOU REALLY THINK PACKERS ARE SCREWING YOU, WHO CONTROLS YOU THEN?????

Who controls you in that situation Randy? NOBODY BUT YOU!

If you are controlled IT'S BECAUSE YOU CHOSE TO BE CONTROLLED you whining whelp!

Elementary Economics: "Allowing companies the free hand at using market power and their economic strength to squash competition at the expense of all of us in the economy is the problem. Pickett proved it."

Pickett proved nothing and neither have you Elementary!

All you have is empty statements unsupported by fact.

Jason: "Econ you said clearly big companies can lower profits to drive out competition.

Agman pointed out to you Wal-mart is profitable.

How did Wal-mart gain market share at the same time as being profitable?

Seems so simple why not answer it?"

It is simple Jason. So simple that these packer blamers can't comprehend it. It also directly contradicts their market manipulation conspiracy theories. One day packers are "SUPPOSEDLY" manipulating markets to drop cattle prices and the next day they are "SUPPOSEDLY" dropping their profits to remove the competition. Direct contradictions in their arguments and they are too dense to see it.

Sandman: "In real life, nobody is going to come along and take Tyson or Walmart head on for many reasons."

That's what they said about Armour, Wilson, Cudahey, Morris, and Swift then along came ibp, Excel, Monfort, National, and Smithfield.

That's what they said about K-Mart and along comes Walmart.

You can try to crush the American dream with your doomsday prophecy but someone will always come along to do it better than the last guy. Those are the folks that don't attend blamer's conventions and risk the integrity of 80% of our U.S. beef consumption to stop the importation of 5% of our U.S. beef consumption by lying about BSE.

Sandman: "Another problem with these super-big boys that inhibits competition and others coming into their world is that they lock up the suppliers. They come at them with a "you're with us or you're against us" deal. If you're on their side, you have access to their millions of customers. If you're not part of their exclusive team, they won't deal. How is somebody going to come in and compete against that?"

That statement totally defines the crybaby you really are. POOR ME, THERE'S NO HOPE, THERE'S NO COMPETITION, WOE IS ME.......

Meanwhile progressive companies are stepping in everyday to replace other companies because they do it better and they do it more efficiently. Who heard of GEICO or Verizon Wireless 10 years ago?

Thank God every American doesn't share your victim mentality. Makes me want to puke.



~SH~

 

[Anonymous]

Elementary Economics: "Jason, I wish I had time to teach you all the things you need to know but I don't."

ROTFLMAO!

Some education that would be. Even the town drunk has opinions and theories that cannot be supported by facts. Anyone can make statements but only a handful can back them with hard data. Your certainly not one of them. You're a complete phony and you prove it time and time again.


~SH~

 

[rkaiser]

Packerr Super Hero says -

Packer blaming ranchers like you are not common sense, you are senseless. You can't even reason.

I have no connection with the packing industry what so ever. Truth and facts is all that drives me. The same truth and facts that drive you crazy because it's not what your packer victim mentality wants to believe.

If you feed your own cattle, slaughter your own beef, and sell that beef to the consumer, WHICH YOU CAN DO IF YOU REALLY THINK PACKERS ARE SCREWING YOU, WHO CONTROLS YOU THEN?????

Who controls you in that situation Randy? NOBODY BUT YOU!

If you are controlled IT'S BECAUSE YOU CHOSE TO BE CONTROLLED you whining whelp!

OOOOh . Now I've been told. Told by the defender of freedom, the heor of truth and Justice. What a joke.

Go trap some gophers you looser.

 

[Anonymous]

Ok Randy, gopher trapper it is. Whatever you think adds credibility to your baseless packer blaming positions. You can refer to me as the gopher trapper because I grew up doing that and I had a blast doing it.

Haymaker calls me Pr. dog and you call me gopher trapper. Fine by me. Why should I care what a thumbsucker like you calls me?

~SH~

 

[rkaiser]

That's good gopher trapper.

I wouldn't suck my thumb in your industry either,,, touching those rabid little beasts and all. Mine tastes like cow **** too much to suck on it, so I'm afraid your name for me does not fit. You know what cow **** is don't you?