Feeders know the fat market?

[Sandhusker]

From the Walmart thread:

Jason, "The information is there everyone knows(or has the ability to know) what fats are trading for. The information of the futures board was used when the calves were placed so the fat price was even known then.

That is incorrect, Jason. The packers know what fats are trading for, but not necessarily the feeders. Not all sales are reported, far from it. If the packer buys enough of the cattle from a certain area (I beleive it is 70% now), they don't have to report - exactly backward for what it should be.

Also, the feeders have no clue how many contract cattle will be sold and when. Only the packers know that. Do you think that knowledge effects bids? Of course it does. Do you think feeders might do something different if they had the same information? Of course they would.

Lastly, there can be quite a difference between futures prices and the spot market.

 

[ocm]

From the Walmart thread:

Jason, "The information is there everyone knows(or has the ability to know) what fats are trading for. The information of the futures board was used when the calves were placed so the fat price was even known then.

That is incorrect, Jason. The packers know what fats are trading for, but not necessarily the feeders. Not all sales are reported, far from it. If the packer buys enough of the cattle from a certain area (I beleive it is 70% now), they don't have to report - exactly backward for what it should be.

Also, the feeders have no clue how many contract cattle will be sold and when. Only the packers know that. Do you think that knowledge effects bids? Of course it does. Do you think feeders might do something different if they had the same information? Of course they would.

Lastly, there can be quite a difference between futures prices and the spot market.

Not to mention the underlying assumption Jason made that it is ok for the futures market to drive the cash market instead of the other way around.

 

[Jason]

Why don't you go back a ways and find Agman's prediction for a low on fats this year? Then tell us how many fats sold lower that that prediction?

I can look every morning and find a repot stating what fats sold for in Alberta, the Southern USA and Northern States.

I also can find what the futures are trading at and often times what the current bid for cattle is.

I don't even subscribe to any service, just the internet. If a feedlot subscribed to a good service from an anaylist like Agman, I am sure the information would be even more valuable.

The ability is there for any feedlot to lock in a profit when it is there. Those that choose to gamble may lose.

 

[Sandhusker]

Why don't you go back a ways and find Agman's prediction for a low on fats this year? Then tell us how many fats sold lower that that prediction?

I can look every morning and find a repot stating what fats sold for in Alberta, the Southern USA and Northern States.

I also can find what the futures are trading at and often times what the current bid for cattle is.

I don't even subscribe to any service, just the internet. If a feedlot subscribed to a good service from an anaylist like Agman, I am sure the information would be even more valuable.

The ability is there for any feedlot to lock in a profit when it is there. Those that choose to gamble may lose.

You get the report on what SOME fats sold for, you don't get the same look at the market the packers get. You still don't have any idea on the contract cattle. The packers claim that is proprietary information - yet it is information that effects the markets.

Sure, feeders can lock into a profit WHEN IT'S THERE. The problem is it's oftentimes not there.

 

[the chief]

Why don't you go back a ways and find Agman's prediction for a low on fats this year? Then tell us how many fats sold lower that that prediction?

I can look every morning and find a repot stating what fats sold for in Alberta, the Southern USA and Northern States.

I also can find what the futures are trading at and often times what the current bid for cattle is.

I don't even subscribe to any service, just the internet. If a feedlot subscribed to a good service from an anaylist like Agman, I am sure the information would be even more valuable.

The ability is there for any feedlot to lock in a profit when it is there.

Those that choose to gamble may lose.

Jason, did ALL that information do you any good when the border was closed and CAnadians were losing their a$$? No, probably not. That was what many in the US went through when IBP was still in business.
I hope your profits are MUCH better now.

 

[agman]

From the Walmart thread:

Jason, "The information is there everyone knows(or has the ability to know) what fats are trading for. The information of the futures board was used when the calves were placed so the fat price was even known then.

That is incorrect, Jason. The packers know what fats are trading for, but not necessarily the feeders. Not all sales are reported, far from it. If the packer buys enough of the cattle from a certain area (I beleive it is 70% now), they don't have to report - exactly backward for what it should be.

Also, the feeders have no clue how many contract cattle will be sold and when. Only the packers know that. Do you think that knowledge effects bids? Of course it does. Do you think feeders might do something different if they had the same information? Of course they would.


Lastly, there can be quite a difference between futures prices and the spot market.

Packers do have to report all sales contray to your statement. The USDA may not report those trades immediately due to rulings adopted in the mandatory reporting regulations.

Any feeder in today's market who does not know what the fat market is should not be in business. There are endless avenues of up to the minute information available, many are free. The information on the number of contract cattle is also widely available.

The cell phone has made every trade a known fact within minutes whether reported immediately by the USDA or not. To not know where the bids, offer and trade is developing is to be sleeping on the job - blame yourself and no one else. The ability to communicate also has condensed trade into a shorter time frame than existed in previous decades. The Pony Express has gone the way of the dinosaur decades ago.

It is the very ability to communicate price so efficiently and quickly that makes product value differentiation so difficult. Everyone wants the same price, especially those producers of inferior valued product who are being subsidized by the producer of superior valued product. Thus came the birth of marketing agreements and grids at the request of progressive producers who tired of subsidizing the producer of inferior valued product. That sector of trade will continue to grow despite the best efforts of those who wish to derail the process and revert to average pricing or the so called "good ol day". Average pricing only produced and encouraged the surplus production of below average product. The latter was a contributing factor in the nineteen year slide in beef demand.

The futures are not a predictor of price at the day of sale unless they are used to hedge a price and there is no basis deterioration from the projected level. Even then the previoulsy heged price may be substantially different from spot market sales. The hedged price could be higher of lower than the spot price. At any given moment futures represent the average value as determined from all the information available to the market at that moment. Right or wrong not all traders interpret the same information the same way. As such, someone will be proven wrong.

 

[Sandhusker]

Agman, "Packers do have to report all sales contray to your statement. The USDA may not report those trades immediately due to rulings adopted in the mandatory reporting regulations"

You want to explain the 70/30 rule, then?

While you're at it, you've been avoiding my other question like the plague.

 

[cedardell]

I read that packer owned feedlots market more cattle in the select range than the average non packer owned feedlots. I get a substantial drop in price if my cattle don't make the choice grade. Yet the spread between choice and select seems to be very little when it's reported. What's the deal?

 

[Econ101]

Sounds like they are skimming the cream off of non packer owned cattle and punishing you if they don't get enough. This is only an uneducated guess on my part.:roll:

Agman, can you answer competently with your vast knowledge of the cattle markets? :roll:

 

[agman]

Agman, "Packers do have to report all sales contray to your statement. The USDA may not report those trades immediately due to rulings adopted in the mandatory reporting regulations"

You want to explain the 70/30 rule, then?

While you're at it, you've been avoiding my other question like the plague.

Why don't you explain it since you brought it up or are you admitting you are just operating on here-say again?

 

[Econ101]

Agman, "Packers do have to report all sales contray to your statement. The USDA may not report those trades immediately due to rulings adopted in the mandatory reporting regulations"

You want to explain the 70/30 rule, then?

While you're at it, you've been avoiding my other question like the plague.

Why don't you explain it since you brought it up or are you admitting you are just operating on here-say again?

Admit that you don't know first, Agman.

 

[agman]

I read that packer owned feedlots market more cattle in the select range than the average non packer owned feedlots. I get a substantial drop in price if my cattle don't make the choice grade. Yet the spread between choice and select seems to be very little when it's reported. What's the deal?

Cedardell, please define what you mean by packer owned feedlots. Are you referring to marketing agreements, formula cattle and/or grid sales? How are your cattle sold? I cannot answer your question unless I know what your reference is. Thanks

 

[Sandhusker]

Agman, "Packers do have to report all sales contray to your statement. The USDA may not report those trades immediately due to rulings adopted in the mandatory reporting regulations"

You want to explain the 70/30 rule, then?

While you're at it, you've been avoiding my other question like the plague.

Why don't you explain it since you brought it up or are you admitting you are just operating on here-say again?

Ooops, sorry, it is the 3/60 rule. I'd be happy to explain it to you. It states that prices are NOT REPORTED if less than 3 packers bid in a certain region or if one packer purchases more than 60% of the animals in a particular time period.

Since I've got you in class, any packer who slaughters less than 125,000 head annual also DOES NOT HAVE TO REPORT.

The packers phone their trades into the USDA, but the USDA feels they have to protect the packers confidentiality :roll: so they sit on the info. Now, with these loopholes, it's pretty obvious that we've got a case of one party having market information the other doesn't. Also, we still haven't considered the packers knowing how many and when contract cattle will be exchanged. How can a fair deal be struck?

Tell us you're on the producer's side again, Agman.

 

[BFW]

Is anyone familar with the Consolidated Beef Producers initiative based out of Canyon, Texas? If so any comments related to the effectiveness or ineffectiveness of this type of fed cattle marketing method would be greatly appreciated. TIA.

 

[agman]

Agman, "Packers do have to report all sales contray to your statement. The USDA may not report those trades immediately due to rulings adopted in the mandatory reporting regulations"

You want to explain the 70/30 rule, then?

While you're at it, you've been avoiding my other question like the plague.

Why don't you explain it since you brought it up or are you admitting you are just operating on here-say again?

Ooops, sorry, it is the 3/60 rule. I'd be happy to explain it to you. It states that prices are NOT REPORTED if less than 3 packers bid in a certain region or if one packer purchases more than 60% of the animals in a particular time period.

Since I've got you in class, any packer who slaughters less than 125,000 head annual also DOES NOT HAVE TO REPORT.

The packers phone their trades into the USDA, but the USDA feels they have to protect the packers confidentiality :roll: so they sit on the info. Now, with these loopholes, it's pretty obvious that we've got a case of one party having market information the other doesn't. Also, we still haven't considered the packers knowing how many and when contract cattle will be exchanged. How can a fair deal be struck?


Tell us you're on the producer's side again, Agman.

It is appropraite that you got the rule right before you took me to class!!!

I am on the producers side and always have been. Anyone who truly knows me understands that. Only a fool would think otherwise. To clarify misinformation regarding any segment of the industry does not mean I support one sector over the other.

First of all you should know the history of the rule. Packers did not initiate the rule, it came from the Justice Department to maintain compliance with Federal regulations pertaining to competition. The rule was adopted under and with the Mandatory Reporting Guidelines. Remember, that before Mandatory Reporting all those trades were reported voluntarily by the packers to the USDA and then to producers at the time of sale. Under the current guidelines they are reported when additional trade occurs so the trade source is co-mingled with other trades. For that aspect of trade the voluntary system was better than the requirements of Mandatory Reporting. Anyone with any real knowledge of the market knows that. That unavoidably excludes you.

Your lack of any real knowledge of the flow of market information is on exhibit again. Do you really believe that the USDA is the only source of trade information? Do you think the feedlots, many in consortiums, do not trade market informion including the number of contract cattle? Are you that removed from the marketplace? If so, you should not even be a junior loan officer in a small bank. You should be playing in your sandbox all day with the neighbor hood kids your age.

As a I stated there are no secrets when it comes to trade. Modern communications has eliminated that event. The very best example is of a cattle feeding group in your state who though their very best efforts cannot keep their early week trades from the market. When a deal is struck the trade knows within minutes. There are no secrets as you surmise. The only secret is how little you truly know. You have an excellent ag radio station in your state that is on top of trading throughout the day; perhaps you should dial in and listen.

Regarding your other so called question regarding "we". I explained that before and it is obvious that explanation was beyond your intellectual capacity. So, as I stated there is no reason to believe you would understand a repeat explanation. Someone such as yourself who belongs to a "me" organization would hardly understand who "we" represents. No need to ask again, you are just wasting your time and much more importantly, my time. I don't operate on bankers hours. As I previously stated, I will not play your little word game that you attempt to play with individuals who post.

 

[agman]

Agman, "Packers do have to report all sales contray to your statement. The USDA may not report those trades immediately due to rulings adopted in the mandatory reporting regulations"

You want to explain the 70/30 rule, then?

While you're at it, you've been avoiding my other question like the plague.

Why don't you explain it since you brought it up or are you admitting you are just operating on here-say again?

Admit that you don't know first, Agman.

What makes you think I did not know the answer? Another one of your baseless alleagtions-how pathetic.

 

[Econ101]

Why don't you explain it since you brought it up or are you admitting you are just operating on here-say again?

Admit that you don't know first, Agman.

What makes you think I did not know the answer? Another one of your baseless alleagtions-how pathetic.

Oh, I knew you knew the answer. Getting it out of you is another matter.

If the packers are so adroit at honest and voluntarily reporting of their market purchases to sellers, why did they not use that as a defense in Aberdeen but instead rely on the USDA to mess things up for their benefit?

 

[Sandhusker]

Agman, "It is appropraite that you got the rule right before you took me to class!!!

I am on the producers side and always have been. Anyone who truly knows me understands that. Only a fool would think otherwise. To clarify misinformation regarding any segment of the industry does not mean I support one sector over the other.

First of all you should know the history of the rule. Packers did not initiate the rule, it came from the Justice Department to maintain compliance with Federal regulations pertaining to competition. The rule was adopted under and with the Mandatory Reporting Guidelines. Remember, that before Mandatory Reporting all those trades were reported voluntarily by the packers to the USDA and then to producers at the time of sale. Under the current guidelines they are reported when additional trade occurs so the trade source is co-mingled with other trades. For that aspect of trade the voluntary system was better than the requirements of Mandatory Reporting. Anyone with any real knowledge of the market knows that. That unavoidably excludes you.

Your lack of any real knowledge of the flow of market information is on exhibit again. Do you really believe that the USDA is the only source of trade information? Do you think the feedlots, many in consortiums, do not trade market informion including the number of contract cattle? Are you that removed from the marketplace? If so, you should not even be a junior loan officer in a small bank. You should be playing in your sandbox all day with the neighbor hood kids your age.

As a I stated there are no secrets when it comes to trade. Modern communications has eliminated that event. The very best example is of a cattle feeding group in your state who though their very best efforts cannot keep their early week trades from the market. When a deal is struck the trade knows within minutes. There are no secrets as you surmise. The only secret is how little you truly know. You have an excellent ag radio station in your state that is on top of trading throughout the day; perhaps you should dial in and listen.

Regarding your other so called question regarding "we". I explained that before and it is obvious that explanation was beyond your intellectual capacity. So, as I stated there is no reason to believe you would understand a repeat explanation. Someone such as yourself who belongs to a "me" organization would hardly understand who "we" represents. No need to ask again, you are just wasting your time and much more importantly, my time. I don't operate on bankers hours. As I previously stated, I will not play your little word game that you attempt to play with individuals who post.

--------------------------------------------------------------------------------

Yada, yada, yada, and more yada - the master of the strawman. However, my statement remains; not all trades are reported as you stated and only the packer knows the whole picture on contract cattle. Are we to ignore the fact that the loudest critiques of the reporting system come from feeders? I tend to believe the wet guy who tells me it's raining, not the weatherman who says it's dry.

I'm just "a junior loan officer in a small bank", and you're Agman - I mingle with fellas with manure on their boots and you talk to government economists so you're supposted to know a lot more than me. The problem is, Agman, you're got a track record here of making some bone-head calls and even pure BSing. I get a daily chuckle out of your prediction that the Japanese would scramble to get our beef. Your own compardre, Bob Wilson, said "growth in beef sales to Japan will be a very slow process". Don't you guys talk? I guess we know who the brains in your outfit are. :lol: You were full of crap trying to tell us that Cargill and Tyson were in Canada to serve the local markets and you were full of crap telling us Japan wasn't asking for tested beef. Your "no protocol" snowjob was a laugher as well. Your credibilty is inversely proportional to your ego.

You never explained who the "we" was in your example, and you ignored the question on what happens to the locals. You're caught and you know it. You've got a pattern of claiming "I'm smarter than you and you wouldn't understand" when you're in a tight spot. Truly impressive.

Every dang producer vs big business issue that has come up finds you against the producer - and you claim you're on the producer's side. More BS. There's quite a few of us who have been around this site for quite a while and have seen 100s of your postings. Why not take a poll and see who believes you?

 

[Big Muddy rancher]

Why don't the sellers of cattle report their sales?

 

[Econ101]

Why don't the sellers of cattle report their sales?

Is that a rhetorical question for you to answer BMR? If so, please go ahead.