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R CALF WORKING FOR THE CATTLE MAN AGAIN

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Thanks, fedup2.

This just goes to prove once again, that price controls do not work. They force inefficiencies on the market. Much of the time period in reference's woes were as a direct result of govt. overspending on the Vietnam war coupled with oil shocks. Does that bring to mind anything today?

MRJ, that wreck would not have happened if the president and his govt. had known a little bit about economics. Isn't this the same phenomena with fat cattle that Pickett argued happened in the cash market? Think about it.

To answer your question, the market should determine what is a "fair" level of profits. This should be a free market that does not have all the evils of market power as an influence. Government determining this is called a "state run economy" and you have only to look at China or Russia to see the inefficiencies in an economy that govt. decisions on the free market create.
 
fedup2 said:
Here is a clipped version Econ. I believe this is what MRJ was refering to.

"President Richard Nixon, feeling pressure from consumer
activists, imposed a price freeze on beef on March 19,1973,
and at the same time announced that the freeze would be
lifted on September 12. Cattle feeders, anticipating higher
prices when the freeze was to come off, held cattle until they
were 90 to 136 kg above desired weights.

The Wreck

Thus, when the freeze was lifted on September 12, as
promised, the supply of fed cattle was too burdensome and
prices plummeted, dropping 33% in 3 mo. At the same time,
grain prices increased as much as 65%, triggered by a grain
deal with the Soviet Union. The short-term effect was losses
of $100 to $200/animal on fed cattle.

The long-term effect was numerous bankruptcies and
mergers in feedyards, all of which became known as "The
Wreck." Cattle numbers dropped from a record 175 million
in 1975 to 95 million in 1990. American National Cattlemen's
Association (ANCA) President Gordon Van Vleck of
California testified before the Senate Agriculture Committee
in 1975, "The entire beef industry has sustained operating
losses of $5 billion, plus a reduction in inventory value."

fedup2, thank you for posting the detail of that "Wreck".

I was much younger then, of course, and very busy with our four children, so was less involved in keeping up with issues affecting the cattle industry.

Clearly remembered, however, was the disgust that a consumer organization could cause such devastating harm to an entire industry.

I'm certain the anger over that "incident" took years off my step-fathers life. He was dangerously angry, for a man with a heart problem. Understandably so, because his ranch business was finally recovering from more than 20 years of paying off the costs of losing a child to cancer as well as deaths of his brother (my father), and his parents. An ardent Republican, Nixon taking that action was like the worst imagineable betrayal.

My memories of that devastation are really more of the family based emotion, so reading again of the facts of the devastation bring home even more the actual damage to agriculture that ill-chosen government actions can have.

It demonstrates that giving in to the demands of those consumer activist organizations had far-reaching consequences, and certainly appears to have led to the large corporate cattle feeding operations nearly replacing the family farmer/feeders. Hmmmmmnnnnnn.......do you suppose corporate interests engineered that deal, building up those consumer activist groups, still active today, to get the ball rolling?????? Guess I'm just not "conspiracy minded" enough to believe that!
On the other hand, who funds those groups, and who benefits when government bends to their demands? Something to consider.....and keep an eye on????
MRJ

MRJ
 
MRJ said:
Sandhusker said:
MRJ, "Who among you is willing to tell the investors, including elderly widdows, that they are making too much money off their investments in packing plants?"

Would that be easier than telling tax payers, including elderly pensioner widows, about giving these US companies millions of Canadian tax dollars?

Isn't that comparing apples to oranges? CANADIAN government program to help farmers, with a possible flaw in it that allowed corporate cattle owners to collect right along with family ranches.........compared with market place profits in the USA.

However, it is also getting close to involving government designating who is allowed to own cattle by saying SOME corporate owners should not be allowed disaster payments simply because they are large corporations.

Should that become the law of the land, how long will it be until government decides that hobby ranchers are not allowed to own cattle if corporate or other large packers are not?

If packers and hobby farmer/ranchers are not allowed to own cattle, why should auction barn owners be allowed to own them.......that can present quite a conflict of interest, both at sale time, and in competing for pastures to lease/buy.

Talking about decisions as to whether government should limit who can or cannot own cattle opens up quite a can of worms.

MRJ

I don't think Canada's bailout had a "possible" flaw! :lol: The packers clearly were not in the same boat as they had a very nice "out" for their product - they were doing very well. So, why were they included in the handout? It makes no sense and was a clear case of government mismanagement. I'd say disaster payments should be for those who actually are facing a disaster - the packers were not facing a disaster, even in the broadest measure. In fact, as Randy puts it, they were benefitting from a salmon run.

If you examine various securities markets, you will find regulations that concern who can and who can't own various securities, how many they can have, special requirement for buying/selling, etc... These rules were made with the idea of having the smoothest, fairest marketplace possible.

Take stocks, for example. If you are going to buy a certain % of the outstanding shares of one company (I think it is something like 5% or more), you can't just do it - you have to register your intentions and make them publicly known prior to the trade. Same with selling. The SEC has the common sense to recognize that one person controlling 5% or more of a stock has a certain degree of control and everybody should be made aware of it and what they are doing in the interest of a fair marketplace. Compare that with Tyson and the requirements placed on them.

I could give you a list of other examples, but the lesson is always the same - a fair marketplace demands a different set of rules for certain classes of participants - and the deciding factors are generally size and position.
 

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