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Ranchers.net

For those of you that believe packer concentration, captive supplies, and imports are the reason for lower cattle prices, can you tell me which of these factors have changed recently to allow current cattle prices to go higher?

1. Are packers less concentrated?

2. Has the number of captive supply cattle been reduced?

3. Have imports been reduced?


Wouldn't common sense dictate that if these are the reasons repeated by R-CALF & Co. for resulting in lower cattle markets that one or all of these factors would have to change to allow cattle prices to go higher??

Now if you are to suggest that other factors such as cattle supplies, beef supplies, and beef demand also play a role in higher cattle prices, then wouldn't you also have to consider those factors for lower cattle prices?

Do those of you who believe that these three factors are the driving force behind the cattle markets see the corner you have painted yourself into by listening to this empty rhetoric?

Here's something else for you to ponder. Ask any cattle feeder and they can confirm this. A 5 cents bushell change on the value of corn will result in a $1.00 per cwt change in the price of feeder cattle ALL OTHER FACTORS BEING EQUAL. That means a $1.00 per bushell change in the price of corn will result in a $20 per cwt change in the price of feeder cattle. Consider that corn is almost $6.00 per bushell which is $4.00 per bushell higher than what it was a few years back. What that means is that if corn were $2.00 per bushell right now, feeder cattle would be $80 per cwt higher than they currently are ALL OTHER FACTORS BEING EQUAL.

Now what does that have to do with packer concentration, captive supplies and imports? Absolutely nothing, that's what. Now do you see why R-CALF can't win a court case? Who is served by this misinformation?

Cattle prices are driven by fed cattle supplies, beef supplies (carcass weights), beef demand (both foreign and domestic), and cattle prices are relative to the supplies and demand for poultry and pork. These have always been the driving forces behind cattle prices and they continue to be. Not packer concentration, captive supplies, and other popular R-CALF scapegoats.

Look at your 2004 calf check and compare it to 2005. The Canadian border was closed to cattle under 30 months in 2004 and it opened to cattle under 30 months in 2005. What did calf prices do? Did they fall when the Canadian border opened as R-CALF had predicted? No, they actually rose in price proving that there is a lot more to cattle prices than imports. Now I'm not saying imports don't affect supplies because they do but they are not as big a force as our domestic cattle and beef supplies and domestic beef demand. In addition, if you are going to measure the impact of imports you also have to measure the impact of exports. Historically, our cattle and beef trade has been a price positive situation for US producers.

My point is simply this, you cannot credit a single factor for any change in cattle prices without measuring all the factors that affect cattle prices.

Why do some of you continue to listen to these LMA "doomsday cattle market prophets" when they have been proven wrong over and over and over? I don't get it.


~SH~
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