Farm gate prices flat

[Big Muddy rancher]

In the last western Producer paper, Canada's largest farm paper their were some charts showing the compairison of farmgate prices to food prices. The farmgate prices had been quite flat for the last number of years but food prices had risen dramaticly.

If we were to beleive what we are told on this board is that the multi nationals are raking in all the money but do the people that propose this take into consideration all the costs that get passed along by these margin operators. Fuel, wages ,ect. We all know what the cost of fuel has done lately and wages 10 times high then 20 years ago in some fields.


By the way the US was losest with 6.5% of disposable income used to buy food. Canada was at 9.5% and sweden was the next at 12.5% , the rest went up from there.

 

[Econ101]

In the last western Producer paper, Canada's largest farm paper their were some charts showing the compairison of farmgate prices to food prices. The farmgate prices had been quite flat for the last number of years but food prices had risen dramaticly.

If we were to beleive what we are told on this board is that the multi nationals are raking in all the money but do the people that propose this take into consideration all the costs that get passed along by these margin operators. Fuel, wages ,ect. We all know what the cost of fuel has done lately and wages 10 times high then 20 years ago in some fields.


By the way the US was losest with 6.5% of disposable income used to buy food. Canada was at 9.5% and sweden was the next at 12.5% , the rest went up from there.

BMR, did you not have the same increases? It seems some would gladly excuse their lower profitability while ignoring the economics behind them.

 

[Anonymous]

Conman: "BMR, did you not have the same increases? It seems some would gladly excuse their lower profitability while ignoring the economics behind them."

Oh for crying out loud. Conman can't you figure out that the only new money to enter this industry will come from the consumer???

Every added expense to any segment of this industry will land at the producers feet. If transportation costs increase for the packer/retailer, he pays less for boxed beef. If the packer receives less for boxed beef, he pays the feeder less for the fat cattle. The feeder in turn pays less for feeder calves. When these same transportation costs increase for the feeder, he pays even less for feeder cattle. If feed costs go up the feeder pays less for feeder cattle. THE BUCK STOPS AT THE PRODUCER LEVEL. All the blaming and conspiracy theories of market manipulation will not change that fact. NOT ONE MORE DIME WILL FALL AT THE PRODUCER'S FEET UNLESS THE CONSUMER PAYS MORE FOR BEEF which is precisely why NCBA is focused on the consumer, both domestic and foreign, while R-CULT/OCM is "BWAMING DA PACKAH".

If the packers that process our cattle could not kill those cattle for an average per head profit of $3.88 per head (5 major packers through the 90's), there would be less money available for the producer. They sell everything from the nose to the rectum while smaller less efficient packing plants are paying someone to haul this ofal away and needing more money per head to keep operating. THAT'S WHAT THE CORPORATE PACKER BLAMERS THINK IS A VIABLE ALTERNATIVE TO LARGER MORE EFFICIENT PACKERS. Where's the logic?

How cheaply do you expect packers to slaughter cattle for??? $.50 per head? Then idiots like you turn around and bitch that the major packers aren't paying their employees enough. TALK ABOUT A DIRECT CONTRADICTION. If they pay more for labor, there is even less available to pay for cattle.

You are just so lost in these discussions because your packer blaming mind has been clogged with so much bullsh*t conspiracy information over the years that you can't even reason anymore. Typical blamer!

The dumbest argument of all is this constant, "packers won't pay any more than they have to". YEH, SO WHAT??? MOOT POINT WHEN THEY HAVE TO GET THE CATTLE BOUGHT AGAINST THEIR COMPETITION!!!!!!!!! What they want to do is not what a competitive market forces them to do.


~SH~

 

[Econ101]

Conman: "BMR, did you not have the same increases? It seems some would gladly excuse their lower profitability while ignoring the economics behind them."

Oh for crying out loud. Conman can't you figure out that the only new money to enter this industry will come from the consumer???

Every added expense to any segment of this industry will land at the producers feet. If transportation costs increase for the packer/retailer, he pays less for boxed beef. If the packer receives less for boxed beef, he pays the feeder less for the fat cattle. The feeder in turn pays less for feeder calves. When these same transportation costs increase for the feeder, he pays even less for feeder cattle. If feed costs go up the feeder pays less for feeder cattle. THE BUCK STOPS AT THE PRODUCER LEVEL. All the blaming and conspiracy theories of market manipulation will not change that fact. NOT ONE MORE DIME WILL FALL AT THE PRODUCER'S FEET UNLESS THE CONSUMER PAYS MORE FOR BEEF which is precisely why NCBA is focused on the consumer, both domestic and foreign, while R-CULT/OCM is "BWAMING DA PACKAH".

If the packers that process our cattle could not kill those cattle for an average per head profit of $3.88 per head (5 major packers through the 90's), there would be less money available for the producer. They sell everything from the nose to the rectum while smaller less efficient packing plants are paying someone to haul this ofal away and needing more money per head to keep operating. THAT'S WHAT THE CORPORATE PACKER BLAMERS THINK IS A VIABLE ALTERNATIVE TO LARGER MORE EFFICIENT PACKERS. Where's the logic?

How cheaply do you expect packers to slaughter cattle for??? $.50 per head? Then idiots like you turn around and bitch that the major packers aren't paying their employees enough. TALK ABOUT A DIRECT CONTRADICTION. If they pay more for labor, there is even less available to pay for cattle.

You are just so lost in these discussions because your packer blaming mind has been clogged with so much bullsh*t conspiracy information over the years that you can't even reason anymore. Typical blamer!

The dumbest argument of all is this constant, "packers won't pay any more than they have to". YEH, SO WHAT??? MOOT POINT WHEN THEY HAVE TO GET THE CATTLE BOUGHT AGAINST THEIR COMPETITION!!!!!!!!! What they want to do is not what a competitive market forces them to do.


~SH~

The integration of the packers through the feeders and down will enslave the cattlemen to lower prices just as it has done in poultry. All new increases in prices recieved from the consumers will go into the pocket of the packers, just as it is in poultry. And you are arguing for this to happen.

Markets are not free and economic maximization will not occur under these conditions. Normal supply/demand equilibriums will be and are being altered by the use of market power. GIPSA was meant to stop this but just as the checkoff has become captive to corporate interests, so has GIPSA, and the Secretary of Agriculture. That is why the regulatory authority needs to be taken away from the Secretary of Agriculture. The mostly family run and controlled companies in corporate agriculture are milking the profitability away from farmers in agriculture. You see it in every small rural town in America.

 

[Charlie1948]

Hey guys you all talk and talk and talk .The farmer has gotten the shaft from the beginning of time. We need cost of production pluss a reasonable proffit ( Parity ) All you guys as yourself can we be that nieve to allways take what they want to pay us.Or do we finally get together and price our product like every other business in this great nation.
Remember the old saying if you kick the dog long enough he will bight you don't you think the time has come.
Take care hope you all have a happy New Year.

 

[Jason]

Charlie how can you "price" a commodity?

In a free market economy commodities bring what the consumer will pay. Try to charge too much and the consumer will switch or economize.

Fossil fuels are climbing and so is technology into alternate energy sources. There is a limit to profits that the consumer will allow.

Beef is a commodity and the consumer will only pay so much before switching to other protien sources.

Contrary to what Conman claims, big companies haven't milked anything from producers. Producers get larger and reduce per unit costs. Market signals are clear to those who understand them. Anytime you have competition that can sell the exact same product as you, cheaper than you, you have a problem. The key is to make your product better, different, more desirable to the consumer than the cheaper alternatives.

Looking for a gov't "fix" is what distorts the market signals.

Packers need our cattle, they can't process beef out of thin air. Nor can they make choice and prime marbled beef from lean trim. They cannot pay more for a raw material (cattle) than they receive from the processed product (beef) less their expenses. The same costs of fuel wages taxes etc. that affect producers affect packers as well. The packers are not in business to subsidize producers the same way producers are not in business to subsidize packers. The prices all come from what the consumer will pay.

 

[Charlie1948]

Jason we still need to get the cost of production for or products regardless of what we grow or sell.
Why is it etched in stone that we are the only manufacture that takes what they or the market want to offer.
We are a very diversified operation 600 cows 1500 feeders 500 acres apples-600 to 750 acres of peppers squash cukes so we also have highs and lows .My dad is 86 I am 57 reasonably wealthy. Won't make any difference if the sun shines got a section next to a industrial park Mall complex lays 10 miles from the home farm.I am also a farm bureau director and we are starting a state task force to get down to the problem of ag.Jason when the anticipation of rain in brazill tomorrow dro[s the price of bean 25 cents today and doesn't rain afterall tomorrow in brazil and no recover on the price.When some number cruntcher said that they were going to send 30,000 head across the border a day when it opened.Dropping fat and feeder prices 30 days after opening only 22,800 came across total.That is manuplication and wrong.These squirrels on the board do not have anything invested no weather conditions they just keep on buying yates ,Mercaties ,condos .
Well some time jason you have to stand up for principles and do the right thing .I will keep every one posted on our state procedings.
Take care have a happy New Year.

 

[Jason]

Ag is not the only industry that is a price taker.

Is West Texas Crude a set price? No it rises and falls based on demand and supply.

If you own a copper mine the price of copper rises and falls based on the same principle.

If you cut trees, the logs are subject to the markets.

Fishing the same thing.

Gold, diamonds etc all based on supply and demand.

All those commodities are traded as well. Bad, or good news in any sector can influence the price received for the commodity.

Let's just say for example that a rancher needs $1 a pound for his calves to make a living. What about the guy that raises 500 pound calves and his neighbor raises 600 pounders. Do they both get $1 a pound? Thats just the start of a million scenarios just for calves.

Take that $600 calf and say feed costs are high because corn growers need $4 a bushel so they can make a living. Cost of gain turns up at $0.80 a pound. That calf at 1200 pounds has to net $1080 for the feeder to break even. Do we legislate a $50 profit for him? Were up to $1130. 60% dress yields a 720 pound carcass. The packer needs a profit. The wholesaler and retailer too. Let's just pencil a $25 per hd profit for each for easy figuring. We're at $1205 for a 720 pound carcass that yields roughly 430 pounds of saleable beef. We are already at $2.80 a pound without paying any costs associated with killing or processing or transporting that beef.

Besides the nightmare of trying to keep costs in line as producers who are garanteed a price won't always raise good calves, the market signals of choice/select or or other quality issues will be lost. Consumer unrest won't tolerate generic beef produced at garanteed prices for producers.

 

[Econ101]

Ag is not the only industry that is a price taker.

Is West Texas Crude a set price? No it rises and falls based on demand and supply.

If you own a copper mine the price of copper rises and falls based on the same principle.

If you cut trees, the logs are subject to the markets.

Fishing the same thing.

Gold, diamonds etc all based on supply and demand.

All those commodities are traded as well. Bad, or good news in any sector can influence the price received for the commodity.

Let's just say for example that a rancher needs $1 a pound for his calves to make a living. What about the guy that raises 500 pound calves and his neighbor raises 600 pounders. Do they both get $1 a pound? Thats just the start of a million scenarios just for calves.

Take that $600 calf and say feed costs are high because corn growers need $4 a bushel so they can make a living. Cost of gain turns up at $0.80 a pound. That calf at 1200 pounds has to net $1080 for the feeder to break even. Do we legislate a $50 profit for him? Were up to $1130. 60% dress yields a 720 pound carcass. The packer needs a profit. The wholesaler and retailer too. Let's just pencil a $25 per hd profit for each for easy figuring. We're at $1205 for a 720 pound carcass that yields roughly 430 pounds of saleable beef. We are already at $2.80 a pound without paying any costs associated with killing or processing or transporting that beef.

Besides the nightmare of trying to keep costs in line as producers who are garanteed a price won't always raise good calves, the market signals of choice/select or or other quality issues will be lost. Consumer unrest won't tolerate generic beef produced at garanteed prices for producers.

Jason,

The Texas Railroad commission had the duty of making sure the oil fields of Texas were regulated and did not go through the boom bust cycles that inherently follow supply increases due to discovery and too rapid development of oil fields. Supply management is a key aspect of OPEC.

Copper has its supply management, you already have heard about the Canadian lumber issue, fishing is well regulated as to quantities and seasons, and DeBeers has a monopoly on the diamond business and exercises supply constraint.

The problem with agriculture is and has always been overproduction and some type of market power at choke points. Overproduction is exacerbated by subsidies of commodities and government finance programs to get more young/new people in agriculture.

This all adds up to a field day for those who use the product to make a buck. While I do not advocate supply management in agriculture to the extent that it is exercised in the other industries you mentioned, it sure behooves the current government not to exaggerate the problems with policies that promote overproduction. Not enforcing the law in regards to the exercise of market power is also a major problem as the examples I have posted regarding the water supply in New Orleans points out.

It is time that the farmers/ranchers started influencing the government as much as agri-business to work on the problems. Your solution of doing nothing plays right into the hands of those who use their influence to shift the balance of laws and government resources into their favor to the detriment of the family farmer. Having been a recipient of one of the largest government handouts to cattle ranchers in Canada, I am sure you understand this well.

As to your business example, I am not advocating a handout as you have recieved. I am advocating an open, transparent, and fair market where producers get their fair share and one that is not influenced by market power. Citizens should expect nothing less from their government.

 

[Jason]

We already have a open market that producers who understand the market signals can protect themselves.

Opec is not total supply management, not every oil producing nation is a member.

Debeers isn't the only diamond producer.

Tell copper miners in Montana that lost their jobs due to low copper prices they have a price controlled industry.

Softwood lumber is a tarriff issue not a market price issue.

Care to show your lack of understanding in any other commodity business?

 

[mwj]

We already have a open market that producers who understand the market signals can protect themselves.

Opec is not total supply management, not every oil producing nation is a member.

Debeers isn't the only diamond producer.

Tell copper miners in Montana that lost their jobs due to low copper prices they have a price controlled industry.

Softwood lumber is a tarriff issue not a market price issue.

Care to show your lack of understanding in any other commodity business?

:lol: :cowboy:

 

[Big Muddy rancher]

We already have a open market that producers who understand the market signals can protect themselves.

Opec is not total supply management, not every oil producing nation is a member.

Debeers isn't the only diamond producer.

Tell copper miners in Montana that lost their jobs due to low copper prices they have a price controlled industry.

Softwood lumber is a tarriff issue not a market price issue.

Care to show your lack of understanding in any other commodity business?

:lol: :cowboy:

:nod: :nod: :cowboy:

 

[Silver]

We already have a open market that producers who understand the market signals can protect themselves.

Opec is not total supply management, not every oil producing nation is a member.

Debeers isn't the only diamond producer.

Tell copper miners in Montana that lost their jobs due to low copper prices they have a price controlled industry.

Softwood lumber is a tarriff issue not a market price issue.

Care to show your lack of understanding in any other commodity business?

:lol: :cowboy:

:nod: :nod: :cowboy:

:lol: :lol: :lol2:

 

[cowzilla]

Jason we still need to get the cost of production for or products regardless of what we grow or sell.
Why is it etched in stone that we are the only manufacture that takes what they or the market want to offer.
We are a very diversified operation 600 cows 1500 feeders 500 acres apples-600 to 750 acres of peppers squash cukes so we also have highs and lows .My dad is 86 I am 57 reasonably wealthy. Won't make any difference if the sun shines got a section next to a industrial park Mall complex lays 10 miles from the home farm.I am also a farm bureau director and we are starting a state task force to get down to the problem of ag.Jason when the anticipation of rain in brazill tomorrow dro[s the price of bean 25 cents today and doesn't rain afterall tomorrow in brazil and no recover on the price.When some number cruntcher said that they were going to send 30,000 head across the border a day when it opened.Dropping fat and feeder prices 30 days after opening only 22,800 came across total.That is manuplication and wrong.These squirrels on the board do not have anything invested no weather conditions they just keep on buying yates ,Mercaties ,condos .
Well some time jason you have to stand up for principles and do the right thing .I will keep every one posted on our state procedings.
Take care have a happy New Year.

Good Post Charlie 1948 :!: While we all debate on who,s to blame ( packers, not packers ) we will all slowley go broke . The only farm opperations showing profit these days are the supply management because they have there cost of production covered . I think if CATTLE AND GRAIN are going to survive in NORTH AMERICA supply management is are only option. If someone has a better idea you better let us know soon :?

 

[agman]

In the last western Producer paper, Canada's largest farm paper their were some charts showing the compairison of farmgate prices to food prices. The farmgate prices had been quite flat for the last number of years but food prices had risen dramaticly.

If we were to beleive what we are told on this board is that the multi nationals are raking in all the money but do the people that propose this take into consideration all the costs that get passed along by these margin operators. Fuel, wages ,ect. We all know what the cost of fuel has done lately and wages 10 times high then 20 years ago in some fields.


By the way the US was losest with 6.5% of disposable income used to buy food. Canada was at 9.5% and sweden was the next at 12.5% , the rest went up from there.

Question: The U.S. consumer spends the least amount of their disposable income for food which is correct. Is that due to low food costs or a very high level of disposable income? Do you know the correct answer?

 

[Bill]

Is West Texas Crude a set price? No it rises and falls based on demand and supply.

We already have a open market that producers who understand the market signals can protect themselves.

Opec is not total supply management, not every oil producing nation is a member.

Debeers isn't the only diamond producer.

Tell copper miners in Montana that lost their jobs due to low copper prices they have a price controlled industry.

Softwood lumber is a tarriff issue not a market price issue.

Care to show your lack of understanding in any other commodity business?

Without a doubt OPEC was formed to influence the price of crude oil. Not all exporting nations are members but the major players are. Supply and price management is a huge part of their mandate. Be sure to differentiate between producers and exporters.

 

[RobertMac]

In the last western Producer paper, Canada's largest farm paper their were some charts showing the compairison of farmgate prices to food prices. The farmgate prices had been quite flat for the last number of years but food prices had risen dramaticly.

If we were to beleive what we are told on this board is that the multi nationals are raking in all the money but do the people that propose this take into consideration all the costs that get passed along by these margin operators. Fuel, wages ,ect. We all know what the cost of fuel has done lately and wages 10 times high then 20 years ago in some fields.


By the way the US was losest with 6.5% of disposable income used to buy food. Canada was at 9.5% and sweden was the next at 12.5% , the rest went up from there.

Question: The U.S. consumer spends the least amount of their disposable income for food which is correct. Is that due to low food costs or a very high level of disposable income? Do you know the correct answer?

Both!

 

[Jason]

From anecdotal experience food prices in the States are slightly cheaper than Canadian prices when the exchange is factored.

Some of the difference could be attributed to things like Florida oranges, California produce etc. being cheaper to transport to closer cities in the States.

Disposable income for American's is indeed higher because of lower tax rates. Our "free" health care isn't really free.

Interesting when something like a higher standard of living can throw out a seemingly fair comparison on food prices.

Thanks for the heads up Agman.

 

[agman]

In the last western Producer paper, Canada's largest farm paper their were some charts showing the compairison of farmgate prices to food prices. The farmgate prices had been quite flat for the last number of years but food prices had risen dramaticly.

If we were to beleive what we are told on this board is that the multi nationals are raking in all the money but do the people that propose this take into consideration all the costs that get passed along by these margin operators. Fuel, wages ,ect. We all know what the cost of fuel has done lately and wages 10 times high then 20 years ago in some fields.


By the way the US was losest with 6.5% of disposable income used to buy food. Canada was at 9.5% and sweden was the next at 12.5% , the rest went up from there.

Question: The U.S. consumer spends the least amount of their disposable income for food which is correct. Is that due to low food costs or a very high level of disposable income? Do you know the correct answer?

Both!

Just for you RM.....Which is the most dominate cause - cheap food or a high level of disposable income?

 

[Econ101]

We already have a open market that producers who understand the market signals can protect themselves.

Opec is not total supply management, not every oil producing nation is a member.

Debeers isn't the only diamond producer.

Tell copper miners in Montana that lost their jobs due to low copper prices they have a price controlled industry.

Softwood lumber is a tarriff issue not a market price issue.

Care to show your lack of understanding in any other commodity business?

In every one of those above examples, the supply management has had significant impacts on prices. That is undeniable.

Care to show your total lack of understanding of price determination and the effects of supply management to prices?