Big Muddy rancher
Well-known member
Have any of you sold calves on video auction for fall delivery?
For the R-CALFers
- Thread starter Big Muddy rancher
- Start date
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Sandhusker
Well-known member
No
A
Anonymous
Guest
WHAT? (GASP)
We can't have that. That would be contributing to feedlot "captive supply".
How could anyone think of such a thing?
I think the producers should sue the feeders that buy these "captive supply forward contract cattle" for market manipulation since those feeders now need less cattle in the cash market and that will obviously result in lower cash prices.
Hey wait a minute, isn't that the same stupid backwards logic used in the Pickett case.
Oooops, never mind!
~SH~
Big Muddy rancher said:
why would I promote captive supply? hell I'm trying to promote the captive supply reform act....................good luck PS nope straight to the sale barn where true price discovery lives :wink:
~SH~ said:
SH, Go back and respond to Economic Loss to Picket!!!
Captive supplies do not necessarily mean packers will manipulate the market, it just allows them a mechanism to do it. The case was not as you always frame it. Captive supplies with prices based on the cash market and then a manipulation of the cash market was the main point of the case. You should get your stuff straight before your comments do you in.
Big Muddy rancher
Well-known member
A forward contract is a forward contract. Terms can vary but why is it OK for one segment of the industry to use them but not another. Don't sign them if you don't like the terms. If you can't do business with out the government outlawing them then you won't beable to do business at all.
Sandhusker
Well-known member
Big Muddy rancher said:
It's power of size, BMR. The key is being able to manipulate the cash markets to make it work. Can you do it, can I do it? No. Can Superior? No. Can Tyson? That depends on whether you think controlling a third of the fat market would give then enough power to affect the markets.
Sandhusker said:
If nobody entered into them with any larger packer could the packers like Tyson manipulate anything? Every producer that enters into an agreement is responsible for the power the packers have. If it wasn't Tyson it would be the next guy but who is really to blame? The producers by signing on the bottom line. And why do they sign because it gives them something that the sale barn can't be it a better price or a guarantee that they can take to the bank. Why not sue all those entering into the contracts. I guess that that would mean some of the plaintiffs in this case would have been sitting on both sides of the court room now would they have. You should not be able to pick and choose who should be allowed to use these means of furthering their business. Either it is right for all including the packers or it should be outlawed for everyone including the producers. This is no different than your stand on Canadian beef. we can't ship to the US because of BSE but the US should beable to ship to Japan inspite of BSE. Do as I say not as I do rule applies in both cases. :x
"A forward contract is a forward contract. Terms can vary but why is it OK for one segment of the industry to use them but not another. Don't sign them if you don't like the terms. If you can't do business with out the government outlawing them then you won't beable to do business at all."
If we outlaw the packers from captive supply we need to outlaw the video sales?? or restrict delivery to within 2 weeks of selling??? What is good for the goose is good for the gander! :roll:
If we outlaw the packers from captive supply we need to outlaw the video sales?? or restrict delivery to within 2 weeks of selling??? What is good for the goose is good for the gander! :roll:
Mike
Well-known member
Tam said:
Tam, Think about this for a minute. Sometimes damages are not known until long after the fact, and sometimes not at all.
In the recent case against Vioxx, in which the plaintiff prevailed, had the defendants case been; 'Well, your honor, during the time the plaintiff was living he received relief from the painkiller Vioxx, so how can he be suing us? Dying was just a side effect to the pain relief that he got from our medication.' This would have brought down the house.
Same scenario here.
The Pickett Class Action Suit includes:
"Cattle producers with an ownership interest in cattle who sold cattle to IBP, exclusively on a cash-market basis, from Feb, 1994 through and including the end of the month sixty days prior to notice being provided to the class." Quote from
Court Order dated Dec. 26, 2001)EVERY OTHER PLAINTIFF WAS EXCLUDED!!!!!!!!!!!!
Had there been evidence of price manipulation by other packers using marketing agreements NOW would have been the time to sue them also.
The plaintiffs obviously had no "BEEF" (excuse the pun) with other packers because they would have been brought into the same case. Just because other packers used marketing agreements DOES NOT mean they abused producers with them.
It's not the marketing agreements on trial here. It's Tyson. If there had been no evidence of price manipulation, the case would have never made it as far as it did. The judge knew every piece of evidence before the trial started. Witnesses and evidence was argued for years before the trial, what to allow and what NOT to allow.
A jury trial is for the benefit of the Jury. Not the judge. In a civil trial, everyone who has testimony has been deposed and can be found guilty of perjury should his testimony in trial differ from his deposition beforehand.
Tyson's case was:
1-I didn't do it!
AND
2-I had to do it! (To compete)
Back to work.
So Mike Do you think that all market agreements should be ban as some day they may be harmful to a producer ? What do you think would happen if they told everyone you have no choice you have to take your cattle into the sale barn and sell them on the open market no more back room deal making for future delivery of your cattle. Yes there is a risk that the deal may not turn out to be the best you could get but that is the gamble you take. Maybe the men that have used the sale barn route to market their cattle for years should also beable to sue the sale barn operator if they were to find out that if they had signed a forward contract they would have recieved more for their cattle over the years. Or maybe the producers that lost at the sale barn because of the contracts that the big packers held should also be sueing the producer that signed those contracts. They have half interest in the price manipulating sceme don't they? The plaintiffs are going after Tysons profits what about the profits of those that signed the contracts with them. That should be eazy to figure out take the sale barn price subtract it from the price the producer recieved for his contract and sue for the different. Or is the reason the producers aren't going after the other producers is they see that it was thr smart thing for the other producers to do to better their bottom line.
And comparing the risk of a market agreement for cattle to the risk of someone lossing their life to Vioxx :roll: :roll: :roll: When the FDA pulled Vioxx off the market it was because of the risk of death to the user not because a few users loss some money. And they didn't put any stipluations to who could use Vioxx and who couldn't. Vioxx was ban period because of a risk of DEATH. :roll:
And comparing the risk of a market agreement for cattle to the risk of someone lossing their life to Vioxx :roll: :roll: :roll: When the FDA pulled Vioxx off the market it was because of the risk of death to the user not because a few users loss some money. And they didn't put any stipluations to who could use Vioxx and who couldn't. Vioxx was ban period because of a risk of DEATH. :roll:
Sandhusker I have a question for you. If you had a bank client that had a $100,000 loan and things had been tight for him finance wise, and he came to your office and told you that he was just offered $102,000 for his calves for delivery in Jan. Would you tell him to take the contract or would you tell him to not sign and sell at the town sale barn with a possibility that he wouldn't get enough out of the calves to pay off the loan with your bank? Honestly tell us, what would your advice be to him? On one hand he could pay you off and have enough to maybe pay off a few other creditors he owes that may also be clients of your bank or on the other he may not cover his debts to you let alone to the other bank clients that have him on the books.
HAY MAKER said:
Haymaker can you guarantee the guy $104,000 or is that just an other LMA empty promise. I thought the forward contracted cattle were forcing down prices for the cash market sellers and that is why the plaintiffs were sueing as they lost money at the sale barn because of the contract cattle. :roll:
CattleCo said:
The vast majority of marketing agreement are contracts without set pricing. 98% of such agreements made by Tyson over the 8 year period covered in Pickett were unpriced.
A video sale is always priced. Yeah, they have a slide to accommodate weight differences, but the base is a fixed price, not tied to something to be set at some future date. That key difference makes ALL the difference.
Read the proposed Captive Supply Reform Act Bill.
It says contracts may be entered into, but they must have a firm base price--not a formula.
One thing to keep in mind is that many bigger lots have received preferential contracts where for example they do not get discounted until they have fewer than 30% choice and have frequently been given $20 or $30 a head more for lower quality cattle.
When Tyson was asked to see some of these contracts at trial they couldn't provide any because "most are verbal."
Bottom line--This is VERY different from a video auction.
A
Anonymous
Guest
The 98% unpriced figure is absolutely untrue.
When anyone enters into a captive supply arrangement with ibp, they have a very good idea what the weekly weighted average base price will be or they would not enter the agreement.
OCM, the arrogance of you guys thinking you can regulate feeders into a "socialized cattle marketing scheme" is almost beyond belief.
With the video auctions, you have established the price, BUT YOU HAVE NOT ESTABLISHED THE WEIGHT, YOU HAVE GUESSED AT THE WEIGHT.
Secondly, with a video auction forward contract you are fulfilling part of a feeders needs leaving him to bid less agressively in the cash market for the balance of his needs which is the exact argument you packer blamers have used against forward contracts of fat cattle.
You can't pick and chose where your conspiracy theories will apply. Either the "bidding less in the cash market due to forward contract needs being fulfilled" market manipulation conspiracy theory applys to all forward contracts or to none of them.
In the case of unpriced formulas and grids, you are betting on the ability of your cattle to meet a specific grid and the base price is based on this weeks weekly weighted average. You know that when you agree to the contract.
I have, it's a damn joke just like MPR without reporting value and just like "M"COOL without an enforceable traceback system.
The more laws you guys write, the worse they get.
You packer blamers are not going to force feeders into a "socialized cattle marketing scheme".
WRITE IT DOWN! It won't happen.
It can say whatever you think it needs to say but it will be a dark day in hell before you will force feeders into a "socialized cattle marketing scheme" and away from value based marketing.
One thing to keep in mind is that many bigger producers have received preferential treatment in the sale barns with where in the sale order their cattle will sell as opposed to the smaller producer BUT THAT'S DIFFERENT ISN'T IT?????
~SH~
Northern Rancher
Well-known member
Selling at the salebarn involves HaYStacker's operative word-good luck.
Sandhusker
Well-known member
Tam said:
I hope you realize you're splitting with your buddy, SH, with this question. He doesn't think bankers should give advice. Also, with this question you're asking me to ignore many other considerations that would normally be weighed, but for your sake, we'll consider them "all equal". With that in mind, I would tell him to consider taking it as long as that 102 was firm and any slide wouldn't back door him.
Sandhusker
Well-known member
SH, "WRITE IT DOWN! It won't happen."
With your views concerning giving up sovereignity to join the WTO, I "wrote that down" and you were wrong as wrong could be then. Remember "suggestions with consequences" :lol: :lol: :roll:
With your views concerning giving up sovereignity to join the WTO, I "wrote that down" and you were wrong as wrong could be then. Remember "suggestions with consequences" :lol: :lol: :roll:
