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Pig Wrestling, part 2

A

Anonymous

Guest
Sandbag: "I knew you'd bring up the "transportation costs" line again. I just wanted more people to see it."

I knew you couldn't successfully argue the fact either but you can always create the "ILLUSION" that you could.

I'll take that as your inability to argue the fact that not every feedlot has the same transportation costs to the various packers.

This isn't the first exposure of your total ignorance of how this industry operates.


Rod,

Where your theory misses the boat is that not every packer's needs are filled by the formula market at the same time. The more cattle that are procured by formula arrangements by one packer, the less cattle is available in the cash market for another packer.

I said an individual packer can lower their prices in the cash market due to their purchases in the formula market but ONE PACKER is not THE MARKET. ONE PACKER is A MARKET within THE MARKET.

That is a fact that you cannot and will not successfully argue.

There is many times when the cash market is higher than the formula market for cattle delivered within the same week.

The feeding industry does not need conspiracy theorists like you to save them from themselves. There is many marketing options through many different packers available to most feeders. You don't own the cattle anymore, the feeder owns them SO WHY THE HELL DO YOU THINK YOU NEED TO TELL HIM HOW TO MARKET THEM???

You are also confusing "FORWARD CONTRACTS" with formula grid pricing arrangements. Forward contracts are based on the futures market. Some formula grid pricing arrangements use non - negotiated base prices to establish their base price but some use negotiated base prices as well.

Bottom line, the feeding industry does not need you to save them from themselves.


Conman: "An opportunist like SH would not go along with this solution. He would sell out his fellow cattlemen for his own self interest."

Yet another lie from the LYING KING!

Every feeder has the option to negotiate a base price if they so choose but they're smart enough to understand that just because formula purchases my affect one packers bids in the cash market, THAT DOESN'T MEAN THEY AFFECT ALL PACKERS BIDS IN THE CASH MARKET. Cattle taken off the market by Tyson's formula purchases means that there is that many less cattle available in the cash market for Excel, Swift, and USPB but you'd have to know something about the cattle industry to understand that and you've already proven how ignorant and conspiracy oriented you are.


~SH~
 

DiamondSCattleCo

Well-known member
~SH~ said:
Where your theory misses the boat is that not every packer's needs are filled by the formula market at the same time. The more cattle that are procured by formula arrangements by one packer, the less cattle is available in the cash market for another packer.

As long as one companies needs are filled with contracts and takes their bids off the cash market, that means less competition on the cash market and provides a downwards pressure on the cash market.

Even you agreed that filled contracts results in lower prices in the cash market. Do I need to find the exact quote from you again?

~SH~ said:
I said an individual packer can lower their prices in the cash market due to their purchases in the formula market but ONE PACKER is not THE MARKET. ONE PACKER is A MARKET within THE MARKET.

I repeat, as long as one company is taken off the cash market, it results in a downwards price pressure. That is an indisputable fact. The more bids in a system, the more pressure there is for prices to go up. Take away bids, prices go down.

~SH~ said:
There is many times when the cash market is higher than the formula market for cattle delivered within the same week.

And as I mentioned, and you cannot argue, there are MANY factors which combine to set prices. What do you think happens when the formula market is lower than the cash market? Packers attempt to adjust their bids downwards in the cash market the following week to match what they obtained in the formula market. We have more downwards pressure.

~SH~ said:
The feeding industry does not need conspiracy theorists like you to save them from themselves. There is many marketing options through many different packers available to most feeders. You don't own the cattle anymore, the feeder owns them SO WHY THE HELL DO YOU THINK YOU NEED TO TELL HIM HOW TO MARKET THEM???

The feeding industry does not stand alone. If they receive lower prices based on their poor marketing decisions, then that is reflected in my own poor prices when I sell my backgrounders. The industry is all related, and if someone sees me making poor decisions with my livestock, I hope they at least say something.

Feeding bovine animal remains has been proven to be damaging to the industry, through animal health reasons, so it was banned. Should we have allowed that practice to continue? And why is someone making an extremely bad marketting decision any less damaging to the industry? Its not.

There have been plenty of articles posted here, written by qualified economists that echo my exact comments about cash market basis contracts. Oddly enough, there hasn't been a solitary article posted, written by anyone qualified, that states the opposite, or at the very least, argues that cash basis contracts don't hurt the market. Not one. Why is that?

Rod
 

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