My Oh My, imagine that...

[Tex]

Again, I'm not claiming to be completely knowledgeable about everything involved in marketing cattle, but I do know it is far more complex than simply blaming packers for being greedy and profiting at producer expense!

Those who want packers punished for market ills are serving no one well, IMO.

mrj

mrj, no one wants to punish packers unless they are the ones who create the market ills.

 

[Cinch]

Again, I'm not claiming to be completely knowledgeable about everything involved in marketing cattle, but I do know it is far more complex than simply blaming packers for being greedy and profiting at producer expense!

Those who want packers punished for market ills are serving no one well, IMO.

mrj

The hog cycle disappeared some time ago. Hog production is not profitable. The chicken cycle is long dead. Now cattle. In a properly functioning market of ANY kind, there will be cycles. That's the idiocy of the current "crisis" mentality. When the cycle is gone, IT MEANS THE MARKET IS BROKEN. There are some good articles that explain this phenomenon. I won't go into it now, but again if there is no cycle, the market is broken.

Admit that much, no matter who you blame.

 

[burnt]

I don't think there is a simple answer as to who is to blame for the broken markets.

I think the underlying reason is that the retailers have too much leverage against the packers because of lack of competition at the retailers level. 1000 large, independently owned and operated stores buying meat will provide some real competition for our product. 1000 Walmarts will not.

The packers can manipulate the markets for several reasons. They can use their owned cattle to kill price hikes when supplies tighten up. Furthermore, making deals with large scale feedlots drives the smaller producers out of business. The big feedlot thinks it is doing well when it is making $30 bucks a head. The small producer with 500 (or even less) head will starve at that rate.

And I do not believe that packers are necessarily making huge profits except for in unusual circumstances like BSE markets. Even then, they are doing what comes naturally to a corporation - putting profits ahead of principles. There is no such thing as "corporate conscience".

The producers carry their share in that most of us have believed that to make more money or improve the bottom line, we must expand production.

Wrong. We have only oversupplied a shrinking market. Plus, by concentrating greater numbers into fewer hands, we have given the buyers the ability to do a better job of divide and conquer. Furthermore, if you can't make a profit on x number of cattle, why would you think you can make more on 10x head?

I believe that to "fix" the markets, there must be action taken to break the stranglehold that the mega retailers have on the meat industry as that would allow more smaller packers to enter the market for live cattle in order to supply the growing number of smaller retail buyers.

Instead what we have happening is a constantly tightening of regulatory nooses that choke off any entrepreneurial efforts. And these regs only help the big packers.

And this does not even bring into the equation the fight for share against cheaper pork and chicken. . . . .

 

[Sandhusker]

Again, I'm not claiming to be completely knowledgeable about everything involved in marketing cattle, but I do know it is far more complex than simply blaming packers for being greedy and profiting at producer expense!

Those who want packers punished for market ills are serving no one well, IMO.

mrj

How many instances can you think of, MRJ, where a packer would NOT take a profit at a producer's expense?

There is nobody to blame when a FUNCTIONING market goes down, because that is part of the deal, functioning markets go up and they go down. But, when you have a NON-FUNCTIONING market going down, there is some blame to shouldered. Part of the reasons that we have no functioning market now is that we have no competition because of the consolidation of the packers and we have no PSA because of legislating from the bench. The cherry on top is that NCBA has been applauding both.

 

[rkaiser]

I kinda think that the problem lies even further up the chain. I don't like the fact that packer concentration allows for manipulation of markets, but price is fixed above the packers.

I worked with a retail meat manager of a large retail chain last summer who laughed when he said that their department was shooting for an 800,000 dollar loss compared to the 2 million they lost last year. Yip one store. When I asked why on earth they were shooting for a loss and not a profit, he simply said that meat, and in particular "beef" is and has been used for years as a lost leader to bring folks in for their cigarettes and gas --- the big ticket profit items.

The problem in our protein industry lies in the fact that we have not pulled the consumer in to a new pricing regime due to this retail game. We have proven --- as many small specialty market operators have --- that the consumer has available money for food. Just look at Europe and the money spent on food in comparison to their pay cheque.

If NCBA or our own CCA would start to talk to the retailers, along with identifying American and or Canadian product as unique and special compared to high seas beef, we could make a bit of headway. Not much point on COOL if the price at the retail level is not affected.

Hi folks....(wink)

 

[burnt]

I kinda think that the problem lies even further up the chain. I don't like the fact that packer concentration allows for manipulation of markets, but price is fixed above the packers.

I worked with a retail meat manager of a large retail chain last summer who laughed when he said that their department was shooting for an 800,000 dollar loss compared to the 2 million they lost last year. Yip one store. When I asked why on earth they were shooting for a loss and not a profit, he simply said that meat, and in particular "beef" is and has been used for years as a lost leader to bring folks in for their cigarettes and gas --- the big ticket profit items.

The problem in our protein industry lies in the fact that we have not pulled the consumer in to a new pricing regime due to this retail game. We have proven --- as many small specialty market operators have --- that the consumer has available money for food. Just look at Europe and the money spent on food in comparison to their pay cheque.

If NCBA or our own CCA would start to talk to the retailers, along with identifying American and or Canadian product as unique and special compared to high seas beef, we could make a bit of headway. Not much point on COOL if the price at the retail level is not affected.

Hi folks....(wink)

Hi backatcha Randy!

Your post is right on the money. And while the NCBA and the CCA do the talking, rcalf can keep on being international good-will ambassadors as usual . . . . . :lol: :lol: :lol:

 

[Sandhusker]

Kaiser, " Not much point on COOL if the price at the retail level is not affected. "

How much will you make if the retail price of wine goes up, Randy? I'll answer for you; Since you don't raise grapes for wine, you make nothing. That nothing is the same nothing you'll make if the packers don't buy your cattle - and they won't buy your cattle if they have full access to that cheap South American beef with no objections from consumers. The retail price of beef can double and you don't get a penny. That is exactly what is going to happen unless you can find a way to get those objections from consumers. COOL is a tool to do that. Do you have any better ideas?

 

[PORKER]

Canada demands South Korea accepts beef
23-Mar-2009
Related topics: Financial & Industry

South Korea must reopen its borders to Canadian beef or face a challenge from the WTO, says Canada Agriculture Minister Gerry Ritz.


According to Reuters, Ritz met South Korean trade and agriculture ministers that they have until the end of this month to reopen the borders to Canadian beef. South Korea, formerly Canada's fourth biggest export market for beef, stopped all imports following the discovery of mad cow disease in the west of the country.


"We left the Koreans with no illusion that the FTA is on hold until we get this beef issue worked through and resolved to Canadian producers' benefit," Ritz reportedly said in a conference call, says Reuters.


"It makes it very difficult to move forward when they want to just hive off a very significant part of our exports and hold it in abeyance while we move forward with all smiles and chuckles."