Kindergarten: "Your argument is that there is a time difference between the two and that it is just a reflection of the market moving. It would be the market moving down the supply curve and hence a sign of market manipulation."
Lowering your prices as your needs are met is not market manipulation.
Kindergarten: "It is up to Tyson/IBP to show that there were REAL reasons for this difference."
Wrong! It is up to the plaintiffs to show that there wasn't real reasons for the differences.
The presumption of innocense, REMEMBER?
Kindergarten: "You have offered up the reason that these price differentials were based on real value differences, yet there are at least two years out of the data where the captive supply did not get a premium. If your argument was correct, there would not be these times where captive supply was lower than cash prices."
You are revealing your ignorance again.
Last week's cash price determines this week's formula price. If you don't believe me, believe OCM.
If last week's cash price is lower than this week's cash price, THE FORMULA PRICE WILL BE LOWER THAN THIS WEEK'S CASH PRICE.
Kindergarten: "Your argument changes, however, depending on what you want to "prove", just like your boxed beef prices argument you lost on the Canadian example."
If I was changing my arguments, the desperate packer blamers here would be having a feeding frenzy with it. Once again, talk is cheap!
My boxed beef argument has not changed.
If the U.S. found itself in a situation of having FAR MORE cattle than slaughter capacity, boxed beef prices would not be the driving factor for live cattle prices. Packer profitability would because there would be less competition for more cattle.
We are not in Canada's situation therefore boxed beef prices continues to be the primary driver in cattle prices.
kindergarten: "I might believe you if your arguments did not change to fit the example you use."
I don't care whether you believe me or not. Until you can prove me wrong or prove that my arguments have changed, your discrediting statements are meaningless.
Kindergarten: "If Tyson paid on captive supply grid pricing on last week's price, why would they not do the same pricing on this week's cash market? After all, they want the lowest price."
Two reasons:
1. They have to buy the cattle against their competitors who also need cattle to fill their slaughtering schedule. Mainly Swift, Excel, USPB, and Smithfield.
2. If captive supply base prices are not attractive, feeders will search for other marketing options including holding out for better prices. If an attractive price is not offered in either the cash market or the formula market, THERE IS NO SALE IN MANY SITUATIONS.
Kindergarten: "As I said before, the real way to check this out is if you had the grid pricing structure and compared that to what they were offering on the cash market. There should be no differences between the two unless they were trying to stay out of the cash market to lower it."
YOU STILL DON'T GET IT!!
HOW CAN THEY STAY OUT OF THE CASH MARKET IF THEY NEED CATTLE??????
Normal supply and demand factors which drive boxed beef prices will affect cattle prices weekly. ASK ANY DAMN INTELLIGENT CATTLE FEEDER OUT THERE WHAT DRIVES LIVE CATTLE PRICES AND THEY WILL TELL YOU BOXED BEEF PRICES.
This week's boxed beef price may not be next week's boxed beef price which will pull live cattle prices higher or lower SO HOW CAN THE TWO PRICES BE THE SAME?
You don't know what the hell you are talking about.
When packers fill their needs with formula cattle, their price will fall accordingly.
~SH~
