• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Packers Cutting Back

Mike

Well-known member
By Bob Burgdorfer

CHICAGO, Oct 10 (Reuters) - Two of the top U.S. beef companies said on Tuesday they will be cutting production because of poor domestic and export sales and high cattle prices, while a third company said it will continue operating at reduced levels.

The reductions had been expected because beef companies have been losing money for several weeks, analysts and economists said.

High gasoline prices and higher interest rates have reduced consumer spending and hurt beef sales, they said. Also, an abundance of lower-priced pork and chicken have pulled business away from beef.


Top U.S. beef producer Tyson Foods Inc. (TSN.N: Quote, Profile, Research) , and No. 4 producer National Beef Packing Company announced they are cutting production, while No. 3 beef producer Swift & Co. said it will continue operating at reduced levels.

Cargill Inc., the No. 2 beef producer, was not available to comment on its production.

"The timing of this is not a surprise. This is the time of year in recent years when packers have struggled from a profitability standpoint," said Jim Robb, an economist at the Livestock Marketing Information Center.

Tyson Foods said it will slaughter about 12,000 fewer cattle per week for the next six to eight weeks. Swift said three of its four beef plants will operate at reduced hours, and National Beef said beginning this week it will cut production 7.5 to 23 percent at its two beef plants.

"We do not expect market conditions to improve for several months," National Beef said in its statement. Continued...

©
 

PORKER

Well-known member
High gasoline prices and higher interest rates have reduced consumer spending and hurt beef sales,

Was this some Hermit that wrote that story, Gas is below $2.00 Now and Falling everyday!
 

Jason

Well-known member
It was over $3 and can climb back in short order.

Interest on housing can double a payment and many are expected to lose real estate because they over leveraged themselves in.

Once disposable income dips and people stop buying beef at higher prices, it generally takes a severely discounted price to get them back in the mindset they can afford beef.

The article merely relays market signals that should have been obvious.

Funny how the big packers step away from killing and the price of cattle doesn't spike or drop. Looks like some armchair quarterbacks here don't have a clue how this demand thing works.
 

Sandhusker

Well-known member
Jason, "Funny how the big packers step away from killing and the price of cattle doesn't spike or drop. Looks like some armchair quarterbacks here don't have a clue how this demand thing works."

Read the article again. It doesn't say they have pared back. It says they PLAN to.
 

Mike

Well-known member
Sandhusker said:
Jason, "Funny how the big packers step away from killing and the price of cattle doesn't spike or drop. Looks like some armchair quarterbacks here don't have a clue how this demand thing works."

Read the article again. It doesn't say they have pared back. It says they PLAN to.

By putting notions such as this before the producers might be a way to speed the flow of feeders by enticing them to hurry and beat the lower prices in the future and move the market downward.
 

Jason

Well-known member
How long has Tyson had reduced chain speeds?

Check back and see the price of cattle actually went up slightly when they stepped back.
 

RobertMac

Well-known member
Where's SH?....these packers can't cut back....the competition (Cargill) will take advantage of them!!!!!!!!! :eek: :shock: :wink:

What better time to cut back on kill numbers to keep cattle in the feedlots than when the fall calf crop is coming into the feedlots?
 

rkaiser

Well-known member
Jason -
It was over $3 and can climb back in short order.

Interest on housing can double a payment and many are expected to lose real estate because they over leveraged themselves in.

Once disposable income dips and people stop buying beef at higher prices, it generally takes a severely discounted price to get them back in the mindset they can afford beef.

The article merely relays market signals that should have been obvious.

Funny how the big packers step away from killing and the price of cattle doesn't spike or drop. Looks like some armchair quarterbacks here don't have a clue how this demand thing works.

What's all this doom and gloom about Jason. Have you taken over the packer super hero role from Scotty on this site? Farmers say there are problems and you call it doom and gloom. Packers say they have problems and it's reality????? :roll:

Maybe the American Packers in America should also adopt BSE testing for export markets and take on the Ausies and the South Americans in the lucrative Asian free market place. Funny how the communist government of China is starting to look more free than the fascist one here in North America.
 

Sandhusker

Well-known member
Kaiser, "Funny how the communist government of China is starting to look more free than the fascist one here in North America."

That would be funnier if there wasn't so much truth in it.
 

agman

Well-known member
Jason, "Funny how the big packers step away from killing and the price of cattle doesn't spike or drop. Looks like some armchair quarterbacks here don't have a clue how this demand thing works."

Read the article again. It doesn't say they have pared back. It says they PLAN to.


In case you have not noticed from your worldly vantage point kill levels have already been reduced for the past several weeks. The announcement is for additional kill reductions as packers have been unable to advance cutout values despite reduced kills. That is never a good omen for the market. This reflects the continued weakness in beef demand that has prevailed throughout this year. Consumers win every war and this one is ending no differently.

While energy prices have declined many consumers had to finance those higher energy bills and they will not return to make additional beef purchases until those bills are paid.
 

Sandhusker

Well-known member
agman said:
Jason, "Funny how the big packers step away from killing and the price of cattle doesn't spike or drop. Looks like some armchair quarterbacks here don't have a clue how this demand thing works."

Read the article again. It doesn't say they have pared back. It says they PLAN to.


In case you have not noticed from your worldly vantage point kill levels have already been reduced for the past several weeks. The announcement is for additional kill reductions as packers have been unable to advance cutout values despite reduced kills. That is never a good omen for the market. This reflects the continued weakness in beef demand that has prevailed throughout this year. Consumers win every war and this one is ending no differently.

While energy prices have declined many consumers had to finance those higher energy bills and they will not return to make additional beef purchases until those bills are paid.

Go enhance some freshness someplace else.
 

RobertMac

Well-known member
Agman said:
While energy prices have declined many consumers had to finance those higher energy bills and they will not return to make additional beef purchases until those bills are paid.

Why is it ONLY beef that is cut from the budget...why not Blockbuster or Starbucks???????????????????
At least be honest with us, packers are doing what they can to reduce live cattle prices to improve their margins! Consumers can and do pay more for beef...just not what these packers are offering. I guess the added solution margin padding isn't going over so well.
 

agman

Well-known member
RobertMac said:
Agman said:
While energy prices have declined many consumers had to finance those higher energy bills and they will not return to make additional beef purchases until those bills are paid.

Why is it ONLY beef that is cut from the budget...why not Blockbuster or Starbucks???????????????????
At least be honest with us, packers are doing what they can to reduce live cattle prices to improve their margins! Consumers can and do pay more for beef...just not what these packers are offering. I guess the added solution margin padding isn't going over so well.

It would be nice if every consumer were like you or me. The fact is that is not the situation. Beef is the highest priced of the competing meats.
When things get tight beef is the first to go since it is generally the most costly of any item in the shopping basket.

You are dead wrong in concluding consumers are willing to pay more. That simply is not always the case. Why bash Wal-Mart, or were your referring to someone else, when they have helped to drive beef sales volume? That is likely a fact you are totally unaware of in your haste to bash, as is often the case "facts be damned".

Why do you always think packers want prices to be lower? Do you not think they make every attempt to raise beef cutout values or are you so removed from the real market that you simply don't know? Packers made money this year when prices went up in the May-early July period. How do you think that happened? Cash prices advanced $12/cwt during that period. Why did they not lose money per your simplistic and uninformed opinion of packer operations and margins during that period of advancing prices? Why did packers make record profits during 2003 when fed cattle set all time record price highs? Please explain that process to me so that I may learn more about what you think you know. I am all eyes and ears for that lesson.

Tell me RM, how do cattle get to all time record weights? How come do we have record YG-4's. Why is the Chc/sel spread narrowing at a time when it should be advancing seasonally. Are you even aware of these facts? Is that what packers want or do producers have a say in that process? Could it be that most fed cattle producers paid too much for feeders and when that cost is transferred to a fed animal and ultimately the derived retail price consumers are unwilling to pay that price?

Did you not raise the selling prices of your product to the public when fed cattle price advanced during the past several years or are your prices the same as before? If consumers are willing to pay more as you claim why don't you tack $2.00/pound on your product and see what happens to your final sales? Have a cool one.
 

RobertMac

Well-known member
agman said:
It would be nice if every consumer were like you or me. The fact is that is not the situation. Beef is the highest priced of the competing meats.
When things get tight beef is the first to go since it is generally the most costly of any item in the shopping basket.

You are dead wrong in concluding consumers are willing to pay more. That simply is not always the case. Why bash Wal-Mart, or were your referring to someone else, when they have helped to drive beef sales volume? That is likely a fact you are totally unaware of in your haste to bash, as is often the case "facts be damned".

Why do you always think packers want prices to be lower? Do you not think they make every attempt to raise beef cutout values or are you so removed from the real market that you simply don't know? Packers made money this year when prices went up in the May-early July period. How do you think that happened? Cash prices advanced $12/cwt during that period. Why did they not lose money per your simplistic and uninformed opinion of packer operations and margins during that period of advancing prices? Why did packers make record profits during 2003 when fed cattle set all time record price highs? Please explain that process to me so that I may learn more about what you think you know. I am all eyes and ears for that lesson.

Tell me RM, how do cattle get to all time record weights? How come do we have record YG-4's. Why is the Chc/sel spread narrowing at a time when it should be advancing seasonally. Are you even aware of these facts? Is that what packers want or do producers have a say in that process? Could it be that most fed cattle producers paid too much for feeders and when that cost is transferred to a fed animal and ultimately the derived retail price consumers are unwilling to pay that price?

Did you not raise the selling prices of your product to the public when fed cattle price advanced during the past several years or are your prices the same as before? If consumers are willing to pay more as you claim why don't you tack $2.00/pound on your product and see what happens to your final sales? Have a cool one.

Agman, are you trying to tell me that packers are victims of the market and have no ability to influence their own destiny?

If I were to bash Wal-Mart, it would be for strengthening the economy of a country that continually blocks diplomatic efforts directed at our enemies! :mad:

Consumers will pay more if they are offered a product that fits their desires. Trying to force a product on the consumer because it is what can be efficiently produced isn't working. You can never sell a product cheap enough for consumers that buy only on price...and you can never sell cheap product to consumers that buy only on quality! Same thing for the Creekstone, Japanese, BSE testing issue. Why are Organics the fastest growing segment of the food industry????? Because that is what consumers WITH MONEY are asking for!!!!!!!

As for the record YG-4s and weights, I think it goes to the misuse of EPDs and ignoring that Nature adapts genetics to fit particular environments. When you ignore Mother Nature, there is always a price to pay!
And you know that money flows from the consumer back through the system...it doesn't make a bit of difference what a feedlot paid for their feeders if the market breaks...they lose money!

Actually, I dropped my prices from last year, but required my customers to buy in quantity. I felt that reducing my marketing cost was a net gain and this would help build long term loyalty in my consumer base. At 125% of Wal-Mart prices, they are happy and I'm making a decent return. Take care, I'm always here for you! :wink: :D
 

rkaiser

Well-known member
News such as South Korea opening its market to U.S. beef means little,
largely because the rules for export are too onerous. South Korea has
established a zero-tolerance policy for bone fragments and items that were
large sellers to South Korea before the 2003 ban will not be allowed into the
country, such as short ribs. U.S. packers and trade groups have made it clear
they will not be able to market in South Korea under the new rules.

"Packers need the foreign demand, but they haven't been able to put that
puzzle together just yet," Harrington said.

They have put the puzzle together all right. And every single media release is designed to keep the lemmings at NCBA and CCA skipping toward the cliff. Market control in a generally free market can only be acheived through well thought out manipulation. The big packers do not want BSE testing for one reason and one reason only. CONTROL of the captive North American market handed to them by BSE.

The last piece of the puzzle is the easiest one - not the hardest. Test the beef and give the customer what he wants.

Are you unable to answer my question agman?

What are your thoughts on BSE testing to end this North American captive market situation ?
 

Jason

Well-known member
They have put the puzzle together all right. And every single media release is designed to keep the lemmings at NCBA and CCA skipping toward the cliff. Market control in a generally free market can only be acheived through well thought out manipulation.

When did Dr. Evil take over control of the world Kaiser?

I don't know if it's the drugs your on or the drugs you need to be on, but you need some help.

Seriously, the packers control the media now?

We know they already control all the BSE testing in the world :roll:

Your hero Cam finally got it right, he direct markets and takes what the consumer gives him. His $1300 is gross, get him to figure a net for you. It isn't all profit.

Here's a hint, he has the value of the calf at weaning, the feed from weaning to slaughter, death loss, killing fees, disposal costs, processing fees, and his extra time and any gas used hauling beef to customers.

Calf, 600 pounds @ $1.30 = $780
Feed, 600 pounds of gain @ $.60 = $360
Deathloss 5% on the $780 (pretty slim)= $39
Killing fees per head @ $38
Disposal per head @ $20
Processing $0.50 per pound(most are $0.55 now)@ 720 pound carcass=$360

Total $1597

Yep at $1300 he's making a killing!
 

William Kanitz

Well-known member
New FDA rule for Beef Packers ;
Recordkeeping Requirements for Human Food and Cosmetics
Manufactured From, Processed With, or Otherwise Containing, Material
From Cattle

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA) is requiring that
manufacturers and processors of human food and cosmetics that are
manufactured from, processed with, or otherwise contain, material from
cattle establish and maintain records sufficient to demonstrate that
the human food or cosmetic is not manufactured from, processed with, or
does not otherwise contain, prohibited cattle materials. These
recordkeeping requirements provide documentation for the provisions in
FDA's interim final rule entitled ``Use of Materials Derived From
Cattle in Human Food and Cosmetics.'' FDA is requiring recordkeeping
because manufacturers and processors of human food and cosmetics need
records to ensure that their products do not contain prohibited cattle
materials, and records are necessary to help FDA ensure compliance with
the requirements of the interim final rule.

DATES: This rule is effective on January 9, 2007.

ScoringAg and Meat Books cover this recordkeeping
 

William Kanitz

Well-known member
First, the requirement is limited to only
manufacturers and processors of human food and cosmetics that are
manufactured from, processed with, or otherwise contain, material from
cattle and to importers of record of human food and cosmetics that are
manufactured from, processed with, or otherwise contain, material from
cattle. FDA has excluded all of the other persons who may be involved
in the distribution of human food or cosmetics before they reach
consumers but who do not manufacture or process the food.
Second, the recordkeeping requirement not only clearly assists the
efficient enforcement of the act, but is critical to its enforcement
because it is vital to determining compliance with the ban on
prohibited cattle material. There is currently no test to detect
reliably the presence of prohibited cattle material in human food and
cosmetics. If FDA cannot require and access records demonstrating
compliance, FDA may not be able to determine whether a human food or
cosmetic contains cattle material that is prohibited. For example,
without records, FDA may not be able to determine whether cattle
material that may be specified risk material (e.g., brain or spinal
cord) came from an animal that was less than 30 months old, whether the
source animal for cattle material was inspected and passed, whether the
source animal for cattle material was nonambulatory disabled, and
whether tallow in a human food or cosmetic contains less than 0.15
percent insoluble impurities.
Under the IFR, failure of a manufacture or processor to operate in
compliance with the ban on prohibited cattle materials renders a food
or cosmetic adulterated as a matter of law. The introduction or
delivery for introduction into interstate commerce of an adulterated
food or cosmetic is a prohibited act under section 301(a) of the act
(21 U.S.C. 331(a)), and the adulteration of any food or cosmetic in
interstate commerce violates section 301(b) of the act (21 U.S.C.
331(b)). Thus, in order for us to determine whether a human food or
cosmetic is adulterated and whether a manufacturer or processor has
committed a prohibited act, we must have access to the manufacturer or
processor's records.
Third, the burden of the recordkeeping requirement in this rule is
not unreasonably onerous. We would expect the potential for small business shutdown would be
similar for foreign firms that continue to import their products with
cattle-derived materials into the United States. It is possible that
some foreign firms would choose to cease doing business with the United
States if the recordkeeping requirements of this rule are too
burdensome.
 

rkaiser

Well-known member
Jason -
When did Dr. Evil take over control of the world Kaiser?

I don't know if it's the drugs your on or the drugs you need to be on, but you need some help.

Seriously, the packers control the media now?

We know they already control all the BSE testing in the world

Would you like to go toe to toe in the mental health bashing ring Jason? You know how much I love that kind of stuff you dimwhit.

Did I say that the packers control the media, or did I say that what they release has a purpose? Like I have said to Agman in the past, and I will say it to you; thank goodness you are not applying for a job in Cargill's think tank. You would have to show at least an iota of ability to think for yourself let alone think for Cargill to even be considered.

Why do you think that Canada, and the US for that matter are not BSE testing for an export market that is asking for it?
 
Top