RobertMac said:
Is it bitching to ask that the laws we have, be enforced fairly?
Texan: I don't have any problem with enforcing the laws that we already have. But just like the gun grabbers do with wanting more gun control laws, many people on here want to keep stacking laws on top of laws. I consider myself a capitalist, so I don't think that makes for a very good business environment. Not to mention the fact that it makes no sense to me to try to pass new laws when we're not even enforcing the ones that we already have, as you and others have indicated.
When we have laws that aren't enforced, it weakens the integrity of our entire legal system. Because of that weakening of our legal system, there is simply nothing to gain and plenty to lose by implementing new laws to make up for our failures in enforcing existing laws.
Anti-trust laws are certainly some of the ones that aren't enforced to my satisfaction. I don't know why it was okay for Tyson to acquire IBP. Just like I don't understand why it was okay for Exxon and Mobil, Chevron and Texaco, and other oil majors to merge. But once something becomes settled case law and all appeals are adjudicated, it's time to move on and work with what we've got.
Econ: If companies use their money to influence the system to their advantage, is it your argument that we should just give up if they succeed? Now I have heard it all, Texan. That is not the spirit of our great state---Remember the Alamo!!! I will remind you that very much of the time, the government and or the court system does not correct illegal anti-trust issues--and that they are not all about mergers. The abuses continue because the courts to not correct the issues and usually the legislators have to step in and do a little more law writing. The break up of monopolies usually comes only after huge abuses are practiced--as in the telephone companies and their breakup, Standard Oil, etc. Lately we have had a bunch of politicians take money from these companies and the anti-trust laws just don't get enforced----and you want to just throw in the towel!!! Were you really born in Texas or did you slide in?
RobertMac said:
Is it bitching to expect a safe food supply?
It's not only bitching, it's
ridiculous to expect that our food supply can be 100% safe. Nobody can guarantee that and still have food that is affordable. Too many times, the 'affordable to the consumer' part of the food safety equation is left out. Yes, consumers deserve a safe food supply. No, it will never be perfect enough for some.
Econ: Excuses, excuses. My grandmother had something to say about that. How does the song go? "If you don't know what you stand for, you will fall for anything." So how much poison is allowed to keep food safe? How many ecoli deaths are allowed? How much do we allow humans to become guinea pigs in the name of "cheap food". To the people who have to pay these costs, the cheap food policy isn't very cheap. Making excuses up all the time allows further irresponsibility. Someone should have had a good grandma around.
RobertMac said:
Do you really think any savings the packers have, will cause them to pay producers more for your cattle?
It won't necessarily "cause" them to pay more, but any savings that adds to packer profits certainly gives them the
ability to pay more. And quite likely, it even gives them the incentive to pay more. It's really a pretty simple concept - as long as people (or packers) make money, they don't mind spending some of that money to make more of it.
Texan: Just as packer losses means they will try to pass those back down to the feeder, and ultimately back to the cow-calf producer, packer profits mean that they have more money to spend. That doesn't mean that they will necessarily spend it, though. Just like when I have years that are more profitable, it allows me more money to spend on equipment, fertilizer, fencing, etc. It allows me more money to invest in the things that make me money. Doesn't mean that I'll necessarily spend it, but I sure as hell can't spend it if I don't have it. I bet you're the same way, so you already know all of that.
Econ: Things that give big packers a comparative advantage allows them to undercut their competition in the market place. What have we seen just recently? 1. Packers hire illegal workers and abuse the labor to gain a comparative advantage in the market place. 2. Packers have avoided the system of accountability by not having to pay for the mistakes they make---they just get the consumers to eat their mistakes before action can stop them. 3. Packers have influenced the USDA so much as to make regulating them a joke. They use the regulators as their attorneys. 4. Packers do not have to have proof that your cattle are not legal---they can deny you payment on the allegation (Van Dyke) and then take it back when their USDA attorneys say, "Wait a minute, you will make us both look bad if we don't do it this other way." 5. Packers can sell MBM for feed additives although it is well known that doing so endangers the cattle who eat that food. There is a comparative advantage in this, but when the sh--- hits the fan, packers don't have to pay for the damages to the industry. 6. Packers who are into the substitutes can manipulate the cattle markets and make up any lost money in the substitutes. They can cheat their producers in the substitutes with no penalty---even though it is against the law. Everyone knows the USDA acts to protect the interests of packers, not producers, even though that is what is stated in the law. If packers say they have a legitimate business interest, even though a jury says they don't, it doesn't matter, judges can overturn those decisions. The high cost is the credibility of the justice system.
RobertMac said:
Do you think packers will continue to pay these high prices for your cattle when there are cattle around the world selling for half our prices?
I'm realistic enough that I don't expect packers to pay any more than they have to. In much the same way that I try to purchase my inputs as cheaply as possible. I assume most of us do that. Why is it wrong when the packers do it?
Texan: My point is that we should expect packers to buy cattle as cheaply as possible. We should expect them to use every advantage, even some unfair and illegal. And while having those expectations, we should structure our business to work within the things that we can't change. We don't have to like that, but it seems to be a fact of life.
Econ: Seems like you are condoning the unfair and illegal here, Texan. You are sounding more and more like the Mexicans in Mexico rather than a real Texan. Perhaps it is okay to overlook a lot of illegal activities if they get in your way of competing, eh? Maybe we should all go back to the days when the sheriff wasn't around and we all had pistols on our belt. If the sheriff doesn't provide law and order, that is where it is headed. That is the mean reason the right to bear arms is in the constitution. You would argue to overlook what is illegal here and seek no justice. I think even our founding fathers saw what happened to societies over time when the law and the law makers were influenced and governments became unfair and unjust. They wrote in the right to bear arms for this very reason. I am not advocating anyone using guns to solve this problem, but I think it bears some reflection.
RobertMac said:
All cost are paid for by the consumer...either from the money government allows them to keep or through the taxes they take!!!! When producers lose the ability to get paid by the consumer, we are at the mercy of those that do and we will ONLY get paid what they see fit!
Texan: Producers have been bitching about packers for 40 or 50 years that I know of. I'm sure it's probably been a lot longer than that. I don't disagree that more competition is usually better, but the big get bigger in every industry. I don't care if we're talking about banks, insurance companies, hospitals, oil companies, or...you name it. Is Tyson and the USDA to blame for all of that, too?
Econ: They are to blame for their part in it, Texan. 1799 of the 1863 odd complaints that were not even investigated!!!! What are they getting paid to do? Judges are the other part. If the jury decision in the Pickett case was upheld, there would have been a restructuring of the industry. It would have been great for competition.
Texan: Even feedlots and marketing channels are consolidating and concentrating. The big get bigger. Look at Superior Livestock. Is it possible that they represent a much greater 'threat' to many producers than more packer concentration does? Should we take them to court? When they have those big sales with 50,000 head or their week-long 200,000 head sales, with all of the deferred deliveries they offer, a buyer can sit there and almost fill all of his needs for an entire year. That takes that buyer out of the cash market when I want to sell my cattle or when somebody else wants to sell their's.
Econ: The PSA doesn't say anything about the size of a company. It does have something to say about the abuse of market power. They are two very different things, Texan, and shouldn't be confused. A public utility, for instance, has the same incentives of abusing market power. The ability of people to profit from these activities has been taken away by taking the profit motive out. The profits from such activities goes to the public. In anti-trust (market power abuses) cases, the courts should do the same thing. They are not. The excuse used? If they are cheating suppliers and giving some of that savings to consumers, everything is okay. Really it is not. What happens is that market power is gained by those who are using illegal activities compared to those who don't, and the cheaters end up winning in the competition game. The courts are obviously not competent to enforce the economic consequences on those who cheat, so the companies continue to do it the more market power they have. Things become so bad that the legislators have to come in and correct things in the end to prevent a revolution. Meanwhile, the cheaters have a great scam going and pay part of their profits to legislators who will help them play the game. Your idea is to confuse illegal activities with legal ones just so you don't lose a buyer? Perhaps you deserve the kind of buyer you end up with, Texan. Some people are a little more bright than that.
If you don't understand the PSA, please refrain from citing it. Would you like me to post the operative part of the law so you can discuss its meaning and economic context as to competitive vs. non competitive markets?
Texan: If market concentration and captive supply is dangerous to our future, then Superior Livestock is certainly dangerous to our future, isn't it? But you don't see me suggesting more government regulation of Superior Livestock. On the contrary - I applaud their success and encourage the producers that want to use them to go right ahead. Why do some of us feel the need to punish success?
Econ: It depends if Superior abuses its market power. In the case of Tyson, it has been shown that they do. The courts were incompetent in being able to enforce the law against them. I don't think there needs to be a whole lot of regulations, but we don't need the incompetence in enforcing the PSA. With proper enforcement, there would need to be no new regulations. It is only after the courts have failed in this regard that it becomes necessary. Superior may or may not be dangerous to our future, it depends on if they abuse market power or not. Tyson did and the courts did not hold them accountable. They also worked illegal aliens and were not held accountable. Sometimes courts need to do their duty so management changes. So far, they have not.
Texan: Whether we like it or not, markets mature and economies mature. Everything isn't some grand scheme to run producers off of their land. It's called progress. Granted, we might not always like progress. We may never like it. But we're seldom able to stop it. We CAN work within it to remain profitable, though. At least, that's what I intend to do.
Econ: It might not be the grand scheme----but it is the result. It isn't called progress. It isn't progressive at all. You need to do a little more studying and thinking on the subject. Read the book, "The Populist Moment" by Lawrence Goodwyn and you will know that you are mischaracterizing it totally. What you are characterizing is not progressive at all-- you are characterizing regressive movement. Perhaps a little more studying of the book will open your eyes. At least you might get the terms correct.
RobertMac said:
I understand the need for packers. This may be the last year my packer is in business and there are no other USDA packers around to take his place. Not following the law is an unfair advantage that makes it hard for those that follow the law to stay in business.
Sorry that you're losing your packer, but everybody has to adjust to the realities of business, whether we like it or not. It doesn't always seem fair and it's not always convenient. Hopefully, you'll be able to find somebody else to kill for you to maintain your growth.
Econ: So there you are again, dismissing illegal activities in the name of big business. This isn't the line of thought that has made Mexico a great economy, Texan. Why do you want to go down the same path?
Texan: Packers that can't compete on a lower cost basis don't have much option but to charge higher prices. Did you offer to pay him more? That's what many of you think that the big packers should do - pay more for labor, pay more for regulatory expenses, pay more for cattle. If it doesn't hurt for the big packers to spend more on their inputs, surely you can adjust to that, as well. I mean...you can just pass those costs on to the consumer, right?
Econ: They shouldn't have to compete with companies who are cheating, breaking the law, and paying big money to politicians to keep them from paying those costs. To give in to that notion is totally unamerican, Texan. I hope you will review your philosophy. If not, maybe you are a fan of the mafia?
RobertMac said:
You can cut Johnny's yard if you like, but not me!
No thanks. I don't have to cut Johnny's yard - NOW. But that doesn't mean that I'm too good to do it if I had to. But if any other producer thinks it's in his best interest to cut it, I encourage him to go for it. I realize that it's none of my business what type of arrangement he makes in his own best interests.
Econ: ...but you don't mind allowing the law to not be enforced so as to make others have to cut Johnny's grass. Why do you think anyone will stand up for you if it happens to you? I am amazed at people who expect this. You call for enforcement of the law so that when it comes your time, the law will be enforced. What if you were Van Dyke and no one stood up for you? What if Swift were able to just sweep the whole episode under the rug and not pay Van Dyke? Do you throw the law away so easily because you don't think it will happen to you?
You can't claim to live in a land that is run by the rule of the law if it is bent by those who wield power. The law is always meant to protect the weak (weaker right trumps stronger wrong and everyone has to play by the same rules) and allow them justice.
RobertMac said:
Don't they still feed most or all of their cattle in South Texas? And the only plant licensed to kill for them down there is Sam Kane's in Corpus, isn't it? I think they had a Swift plant licensed up in the panhandle at one time - not sure if they still feed any cattle up there, though. I've done business with Sam Kane's a couple of times and they're a reputable outfit. But...
....if they only use one plant in South Texas and occasionally another one 700 miles away in the panhandle...and if more packers is good and fewer packers is bad...why would you suggest that I try to fit into a program that only uses one or two packers?
Are you suggesting that it's possible to make the right marketing decisions - to find the right program for our cattle - and still be profitable? That it's possible to still be profitable in spite of having access to only one or two packers? No need to answer - you can consider those rhetorical questions.
Econ: Texan, I think you could argue yourself into a corner. I will also make the observation that you seem to know a little more than the average cattleman when it comes to packers. Do you have link with packers? If so, what is it?
To answer your question, though, no. I haven't called them and have no plans to, even though I agree with you that it's good to support the little guys every time we can afford to. I'm sure you know more about their program than I do, but I'm somewhat familiar with it and I was under the impression that Nolan and his partners started that brand so that they wouldn't have to take the discounts that are so prevalent for quarter and half-eared calves. Isn't that correct?
My calves are all quarter-eared or less - most of them much less. A lot of them are 3/4 continental - they've got enough hair on them to go anywhere. That means I'd probably have to take a little discount to participate in a program that is set up to try to make eared cattle sell closer to the price of mine. Thanks for the tip, though. :wink:
