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NCBA definition of "Captive Supply"

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Mike

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M 1.7 2001 Captive Supply Definition

"BE IT RESOLVED, NCBA petitions the USDA Packers and Stockyards Administration and the Agricultural Marketing Service to change either definition of captive supply to define captive supply as cattle sold in any manner other that a negotiated sale, cattle with more than seven-day pick up, or packer financed/owned or controlled cattle."
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Just goes to show there is more than one definition.
 

HAY MAKER

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On February 17, 2004, a federal jury in Alabama returned a $1.28 billion verdict against Tyson Fresh Meats, Inc. (Tyson) in a nation-wide class-action lawsuit alleging that Tyson manipulated the price for fed cattle that it purchased through the use of long-term contracts (known as captive supply cattle) in violation of the Packers and Stockyards Act (PSA). The PSA prohibits meat packers from engaging in any unfair, unjustly discriminatory or deceptive practice, or engaging in any course of business or doing any act for the purpose or with the effect of manipulating or controlling prices or creating a monopoly in the acquisition of, buying, selling, or dealing in, any article, or of restraining commerce. The plaintiff class of cattlemen claimed that Tyson's store of livestock (via captive supply) allowed Tyson to avoid reliance on auction-price purchases in the open market for most of its supply. Tyson then uses that leverage, the claim is, to depress the market prices for independent producers on the cash and forward markets in violation of the PSA. The trial court jury unanimously found that

1) there was a single national market for fed cattle;
2) Tyson's use of captive supply had an anticompetitive effect on the cash market for fed cattle;
3) Tyson had no legitimate business reason or competitive justification for using captive supply;
4) Tyson's use of captive supply proximately caused the cash market price for fed cattle to be lower than it otherwise would have been; and
5) Tyson's use of captive supply injured each member of the class. The jury then found that Tyson's use of captive supplies from February 1, 1994, through October 31, 2002, damaged the cash market for fed cattle in the amount of $1,281,690,000.

In March, Tyson filed a motion for Judgment as a Matter of Law or for a New Trial, and on April 23, the trial court judge granted Tyson's motion, thereby invalidating the jury verdict. While the trial court judge did not disturb any of the jury's findings, particularly the finding that Tyson's use of captive supply cattle manipulated the cash market price for fed cattle, the judge ruled that Tyson was entitled to use captive supplies to “meet competition” and assure themselves of a reliable supply of cattle. The cattlemen appealed.

On December 17, oral arguments in the case were heard by the United States Court of Appeals for the Eleventh Circuit. During oral arguments, Tyson's counsel admitted that if the PSA prohibits the use of captive supplies, then the “meeting competition” defense was inapplicable. Tyson's counsel was also questioned as to Tyson's claim that the company could not control when captive cattle were delivered, but yet maintained that the use of captive supplies was necessary to achieve a consistent supply of cattle. Tyson's counsel also admitted that the jury was free to believe the cattlemen's expert economist and disbelieve Tyson's expert. In the end, however, the primary appellate issue is the appropriate legal standard for evaluating a claim of price manipulation under the PSA. The trial court judge adopted a Sherman Act “rule of reason” standard, thereby allowing Tyson to defend its actions by showing a legitimate business justification for using captive supplies (such as the assuring a reliable supply of cattle). The question is whether the Sherman Act's rule of reason is applicable under the PSA. An opinion is expected in 2005 by the appellate court. Pickett. v. Tyson Fresh Meats, Inc., 315 F. Supp. 2d 1172 (M.D. Ala. 2004).
 
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Anonymous

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Mike: "Just goes to show there is more than one definition."

That doesn't go to show that there is more than one definition. That goes to show that there is those who want to change the existing definition.

The whole issue of "captive supply" cattle revolves around the baseless conspiracy theory of market manipulation which requires the cattle to be owned for at least 14 days prior to slaughter.

HOW THE HECK CAN YOU MANIPULATE THE MARKETS WITH CATTLE THAT ARE SOLD ON A FORMULA OR GRID USING A BASE PRICE OF THE WEEKLY WEIGHTED AVERAGE WEEK PRIOR???

That price has already been established and the market this week may be moving up or down so how the hell does formula and grid cattle fit into the conspiracy theory of market manipulation???

THEY DON'T!!!

It's just one more shot in the dark by packer blamers who need formula and grid cattle to make the captive supply numbers appear larger than they really are.

The plaintiffs "supposedly" support forward contracts yet they bitch about captive supplies WHICH IS 75% FORWARD CONTRACTS. Where's the logic???? There is none as usual.

Formula and grid cattle are not owned or otherwise controlled by packers more than 14 days prior to slaughter so they do not fit the definition of captive supply.


Quote: "The plaintiff class of cattlemen claimed that Tyson's store of livestock (via captive supply) allowed Tyson to avoid reliance on auction-price purchases in the open market for most of its supply."

Of course if producers forward contract their cattle that is that many less cattle that Tyson has to buy in the open market. DUHHHHHH?????

Yet the plaintiffs themselves testified to using forward contracts???

HOW CAN ANYONE BITCH ABOUT PACKERS CONTROLLING CATTLE WHEN THEY WILLINGLY SOLD THE PACKERS THOSE CATTLE ON A FORWARD CONTRACT???????

WHERE'S THE LOGIC IN THAT?????

It doesn't exist!

That's how incredibly stupid this whole issue really is.


Tyson had no legitimate business reason or competitive justification for using captive supply;

Which spoke to the absolute insanity of the verdict because the plaintiffs themselves testified that IBP did have a legitimate business reason for using captive supplies.

This demonstrates clearly that the jury did not understand the issues.

That's why the judge threw it out on it's butt and that decision will stand.

The whole issue of "captive supply" is nothing more than baseless conspiracy theory to give packer blamers something to bitch about.

The verdict showed ibp's per head profits for this time period was $26 per head.

SOME MARKET MANIPULATION!!!!!


Quote: "Tyson's counsel was also questioned as to Tyson's claim that the company could not control when captive cattle were delivered, but yet maintained that the use of captive supplies was necessary to achieve a consistent supply of cattle."

They wouldn't know the exact date but they had a pretty good idea within a two week period when those cattle would finish. The fact that they are already procured assures a consistant supply of cattle.

There is no conflict in those positions despite what the packer blamers claim.


Quote: "The question is whether the Sherman Act's rule of reason is applicable under the PSA."

In Judge Strom's ruling he specifically stated that there was no violation of the PSA. The Sherman Act claim is nothing more than a "red herring".


Haymaker, all you can do is copy and paste someone else's opinion and make meaningless little statements. You offer absolutely nothing to the discussion. Why do you even bother?


~SH~
 

Mike

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Bill Hawks, Undersecretary of Agriculture:

"Earlier this year, we published our Report on the Issue of Captive Supplies in the Cattle Industry. As you know, we reported several significant findings. First, despite its common usage throughout the livestock and meatpacking industries, there is no common definition of the term "captive supply." In general, we define captive supply as livestock that are owned or committed to a packer more than 14 days prior to slaughter. In follow-up discussions with six of the top beef packers, P&SP officials confirmed that packers have no common definition of "packer ownership." P&SP defines "packer ownership" as livestock in which a packer has any ownership interest."
 
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Anonymous

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Quote: "In general, we define captive supply as livestock that are owned or committed to a packer more than 14 days prior to slaughter."

That was also the definition used in the communist packer ban.



~SH~
 

Mike

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~SH~ said:
Quote: "In general, we define captive supply as livestock that are owned or committed to a packer more than 14 days prior to slaughter."
That was also the definition used in the communist packer ban.
~SH~

Then it's good enough for me! We NEED to ban the communist packers!
 

HAY MAKER

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SH.....
.HOW CAN ANYONE BITCH ABOUT PACKERS CONTROLLING CATTLE WHEN THEY WILLINGLY SOLD THE PACKERS THOSE CATTLE ON A FORWARD CONTRACT???????


SH,if I grabed your scawny ass and squeezed you till you had a rapid bowel movement,WOULD THAT BE A WILLING BOWEL MOVEMENT OR A COERCED BOWEL MOVEMENT????
 
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Anonymous

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Hayseed: "SH,if I grabed your scawny ass and squeezed you till you had a rapid bowel movement,WOULD THAT BE A WILLING BOWEL MOVEMENT OR A COERCED BOWEL MOVEMENT????"

You are such a Neanderthal!

WHY DIDN'T YOU ANSWER THE QUESTION HAYSEED????

If you forward contract half of your calves to a feeder, do you have the right to sue that feeder for being less aggressive in bidding on your cash calves later??? WELL WHY NOT???? It's the insane argument???

You are simply too ignorant to see the comparison.

If you don't believe the GIPSA data on packer profits, why don't you packer blamers invest in a packing company and make your forture?

It's easier to bitch isn't it?

"BWAME DA PACKAH"


~SH~
 

Mike

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It has been "theorized" that the Neanderthals extinction was caused by a disorder called "IDD" (Iodine Defiency Disorder). IDD contributes to physiological problems including "IBS" (Irritable Bowel Syndrome) which leads to severe "Colon Impactions" and "Chronic Constipation".

If Haymaker is a "Neanderthal", as you suggest, it is understandably his desire to relieve the symptoms of "IDD" and "squeeze your scrawny ass" as a means to preserve his brethren.

In other words, his intentions are completely honorable and you should thank him for his concern. :roll:
 

HAY MAKER

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Haymaker, all you can do is copy and paste someone else's opinion and make meaningless little statements. You offer absolutely nothing to the discussion. Why do you even bother?
~SH~
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typical packer response,you couldnt even answer the simpliest question about the pickett/packer case.You sh the prarie dawg,are what is commonly known as a blow hard.And if you dont like to read my posts dont ,that way you dont have to defend the fact you are a ignorant blow hard...................good luck
 
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Anonymous

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Hayseed, you couldn't even define captive supplies so what would make you think you could even discuss the issue?


~SH~
 

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