DiamondSCattleCo
Well-known member
~SH~ said:2. Doesn't matter what the jury allowed the plaintiffs to convince them of. The Jury's determination was wrong, was overturned, and upheld. You show me where Judge Strom said that cash market basis contracts have an overall depressive effect on THE ENTIRE CASH MARKET.
The initial quote that I BOLDED for you said the second jury finding of cash basis contracts being bad for you was never overturned, therefore the Judge and all the courts that followed agreed with the juries determination.
~SH~ said:Congratulations, you have just defeated your own argument. With all of these other factors playing on the cash market, HOW THE HELL COULD YOU POSSIBLY SINGLE OUT AND MEASURE THE IMPACT OF CASH BASIS FORWARD CONTRACTS????
I defeated nothing and you only showed your complete and total ignorance of economics. Individual economics impacts can be isolated and formulated. Economists do it every single day. How do you think Agman arrives at his prices? How do you think futures are determined? You think they just dream this stuff up?
~SH~ said:Explain it Rod! You just admitted that there is other factors playing on the market so how can you credit one factor for creating a lower OVERALL cash market??? Hmmmm????
I never once said that just one factor could create a lower OVERALL cash market. Quit putting words into my mouth because you're losing the debate. I said that cash basis contracts have a depressive EFFECT on the cash market price. I've already explained this to you, so go back and read please. I'm tired of typing the same stuff over and over to you.
~SH~ said:Rod: "First, the Mennonite colony has 30,000 head under CASH MARKET BASIS contracts on a permanent basis."
What the hell does that have to do with delivery 2 months later than when the formula arrangement was agreed upon?
Because they agreed to the contract 2 years ago. Good god. Each year, they guarantee delivery of their entire stock of fed cattle with the grid BASIS being whatever the cash market was in the week they called in the delivery.
~SH~ said:Formula contracts are not delivered 2 months later. Futures contracts are.
You don't even know what futures are.
~SH~ said:Make it up as you go just like when your neighbor was supposedly going to give you carcass weights by the end of the week. You bet!
SH, you've called me a liar before. Now you've done it again. You'd better hope that we never meet face to face.
~SH~ said:GIVE ME THE DETAILS OF THESE CONTRACTS SO I CAN SEE FOR MYSELF WHETHER YOU'RE BLOWING SMOKE AGAIN. Nobody that I know delivers formula contract cattle 2 months after the contract was agreed upon.
Grab a grip on reality. Those contracts aren't available for everyone to see. We have a privacy act up here.
~SH~ said:Rod: "Let me see if I can walk you through this:
1) Producers A sign cash basis forward contracts in week 1 for delivery in week 3.
2) Producers B sign cash basis forward contracts in week 2 for delivery in week 4. They have NO idea that producers A will be delivering in week 3.
3) Producers A delivers cattle on cash market basis contract. The packer drops his bids in the cash market, depressing prices. Normal market reaction. However, the packer also knows that he'll be getting more contract delivered livestock next week as well, so he can further drop his bids in the cash market, even further depressing the cash market. Nothing illegal about it. Perfectly normal business practice.
4) Producers B deliver cattle in week 4, receiving a lower price for their animals because the cash market is depressed from week 3. But now, they're receiving an even LOWER price because there were TWO depressions on the cash market price.
Now, drop the lame arguement 'but cash prices can also go up'. We're going to hold ALL other cash price influences steady. Shoot holes in the ABOVE statements SH."
Have you even fed or sold fat cattle? I HAVE! I've sold cash cattle and formula cattle. I've been there, have you?
Formula arrangement cattle that are sold in week 1 are usually delivered in week 2, not week 3.
I'll tell you what is wrong with your example. YOUR EXAMPLE IS ALL WITHIN ONE MARKET!!! NOBODY IS FORCED TO SELL IN JUST ONE MARKET. THAT'S WHAT YOU CAN'T GET THROUGH YOUR HEAD.
My example contained cash markets AND cash basis contracts. I didn't think you could argue against it.
~SH~ said:Remember, you have to sort out all the other factors playing on the market too. See how stupid your logic is? Of course you don't!
I'll type this slow: It doesn't matter about all the other factors, it doesn't change the fact that there was a depressive effect, no matter how big or how small, it was still there. As long as one packer dropped their bids twice, as in my example, there was a depressive effect on the cash market.
~SH~ said:Producers do know when contracts are coming due.
What a load of crap. They know when their OWN contracts are coming due, not the other 1000 contracts out there. Those other contracts are the ones affecting their cash basis pricing.
~SH~ said:Most cattle are delivered the following week.
Not in this area. Most deliveries are two weeks after, and the cash basis is in the week of delivery. It makes no difference if its one week or two weeks. It could be 1 day and 2 days. And yes I've sold fats.
~SH~ said:Using your logic, that would be considered market manipulation.
No its not. Did you not read what I wrote. Everything about cash basis contracts is normal market and company reactions. Nothing illegal or manipulative about it. But they are BAD for the market.
~SH~ said:Here's something else you don't understand. NOBODY IS EVER FORCED TO SELL!!!!!!!!!! IF THEY DON'T LIKE THE OFFER, THEY CAN HOLD OFF.
NOT IF THEY'VE SIGNED THE CONTRACT A WEEK OR TWO AGO! Think.
~SH~ said:You don't know sh*t Rod!
Grab a grip. My 2 year old has a better grasp of ag economics than you do. Where did you say you went to school? I'll want my boys to stay a long ways away.
~SH~ said:Blah, blah, blah! You wouldn't know a fact if it bit you.
<chuckle> I don't think you've even READ an economics paper, yet you spew drivel on and on. Go buy more Tyson stock SH and let the real cattlemen raise their livestock. Thankfully there are more people like me who know the damage of cash basis contracts than there are people like you who would happily allow a market to be destroyed for their own personal gain.
Rod