One of the best things that could happen to the corporate hog farmers in the Carolinas was a limit on new farms because of the waste disposal systems (there was environmental damage after hurricane and floods). The state would not allow new ones to be built.
The reason it was good was that if one of these farmers were to go under, that amount of production would not be replaced because it could not by another factory farm. The packers had to be good to their farmers or they lost supply.
The game packers play with their supply is to make the purchase of the farmers product good enough for farmers to make investments (mostly single use buildings and equipment) and then put the screws to them in subsequent years by requiring continual upgrades the farmers must make on his dime with no compensation or not be able to use the farm investments at all--the packer will cut them off. What continual upgrades do not take out of the farmer's profit, inflation will.
Then packers offer a better deal to new farmers to induce them into the business. They pay more or advantage the new farmers through the things in they control in their contract.
One of the main goals is to have farmers owing debt. When you owe debt, as Dave Ramsey says, you are a slave. The debt does not allow farmers to get out of the business without suffering great financial loss--often their land and homes. Since the contracts are not paid based on just on the product that is produced, but also the facilities are used, the packers have automatically discounted the value of their farms. The packers in this way control their supply going into their plants with no effect if one farmer decides to get out of the ponzi scheme. Another way they control the supply for a particular plant is through the velocity or the rapidity that there is a turn around, if there is one farm that goes under.
They thus are able to keep their farmers
They have built a supply system that is the cheapest -- but off the backs of the farmers- because they pay their existing farmers their variable costs, which does not include profit. The new farmers who are induced into the system are have to be shown to paid a profit, or they would not invest in the operation in the first place. That is the reason they pay them more for the same product utilizing a variety of tricks or unfair advantages, which of course, is outlawed under the Packers and Stockyards Act:
Of course this this the law the packers tried to get rid of legislatively but were not able to.
The Pickett case decision allowed them to do this.
This is why the new farm bill has much of title 10, to correct these problems the courts have not.
Find title 10 by going to agriculture.senate.gov and then go to Section by sections, and look up title 10.
Here is the amendment that will change the liberal court's decision:
The reason it was good was that if one of these farmers were to go under, that amount of production would not be replaced because it could not by another factory farm. The packers had to be good to their farmers or they lost supply.
The game packers play with their supply is to make the purchase of the farmers product good enough for farmers to make investments (mostly single use buildings and equipment) and then put the screws to them in subsequent years by requiring continual upgrades the farmers must make on his dime with no compensation or not be able to use the farm investments at all--the packer will cut them off. What continual upgrades do not take out of the farmer's profit, inflation will.
Then packers offer a better deal to new farmers to induce them into the business. They pay more or advantage the new farmers through the things in they control in their contract.
One of the main goals is to have farmers owing debt. When you owe debt, as Dave Ramsey says, you are a slave. The debt does not allow farmers to get out of the business without suffering great financial loss--often their land and homes. Since the contracts are not paid based on just on the product that is produced, but also the facilities are used, the packers have automatically discounted the value of their farms. The packers in this way control their supply going into their plants with no effect if one farmer decides to get out of the ponzi scheme. Another way they control the supply for a particular plant is through the velocity or the rapidity that there is a turn around, if there is one farm that goes under.
They thus are able to keep their farmers
They have built a supply system that is the cheapest -- but off the backs of the farmers- because they pay their existing farmers their variable costs, which does not include profit. The new farmers who are induced into the system are have to be shown to paid a profit, or they would not invest in the operation in the first place. That is the reason they pay them more for the same product utilizing a variety of tricks or unfair advantages, which of course, is outlawed under the Packers and Stockyards Act:
Of course this this the law the packers tried to get rid of legislatively but were not able to.
The Pickett case decision allowed them to do this.
This is why the new farm bill has much of title 10, to correct these problems the courts have not.
Find title 10 by going to agriculture.senate.gov and then go to Section by sections, and look up title 10.
Here is the amendment that will change the liberal court's decision:
