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OCM,

On November 25 of 2002, I asked Bill Bullard the following question:

SH: "If packer concentration and captive supplies are the reasons for low cattle prices, what has changed about either of these two factors to allow prices to go higher recently. What was different in year 2001 that allowed the fat cattle price to get to $82 and yearling price to $92? I mean logic would tell you that if packer concentration and captive supply are holding the market down, that one of those two factors would have to change to allow the market to climb. What is creating the rise in the market?"

To which Bill Bullard replied:

Bullard: "Scott, you are talking specifically about the spike increase that we saw back in April of 2001 in which the cattle prices did top over $80. What's interesting is if you will track what the captive supply levels are at the same time, you will find that the captive supply during that same week we saw $80.00 cattle fell from a 50% level down below 40%, and it has been our contention all along that once those captive supplies hit that 40% level that they have tremendous buying power in the market."


Recently, Chase Carter with OCM stated that 80% of the cattle are currently being sold under a captive supply arrangement.


I have two questions for you OCM:

1. Who is telling the truth here? Either Bullard is making up a story regarding the 40% level or Chase Carter is wrong about 80% of our cattle currently being sold under a captive supply arrangement.

As anyone can plainly see, somebody is lying here or they both are.

2. Assuming that Chase Carter is correct on his 80% figure, if captive supplies have a negative impact on our market, why are we seeing the highest feeder calf prices ever recorded if captive supplies are as high as 80%?

Have fun dancing around those questions.



~SH~
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