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Random Musings From A Random Mind

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DiamondSCattleCo

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Had a random thought cross my mind today while I was working, so I thought I'd pop it onto the forum.

Since people have asked for my opinion on how to fix what I think is a broken cattle market, lets try this idea on for size. Like I say, it was a random thought, nothing fleshed out, so poke some holes in it.

Since the dawn of time, or at least the 1800s, sale barns have been used by cattle producers, both cow/calf and finishing producers to sell their critters to the highest bidder. The sale barn is the essence of the "free market economy". Several guys with big rolls of cash bidding against one another in a free for all. He who has the most cash wins.

I'm not sure when it all began, but one day someone had the bright idea to contact one of the packers direct, and sell a liner load of cattle straight to him. The packer, unsure of this new arrangement but knowing the producer and his cattle, likely offered him whatever market average was last week, or maybe even a couple pennies more. After all, the packer managed to avoid paying their market buyer a commission of 3%. Shipping? Well heck, to show good will, the packer would pick up half the tab (saving them another few bucks in the process). The producer likely jumped at the offer. What the heck, he just risk managed himself a quick guaranteed buck, skipped the commission and barn fees, and saved half the trucking bill.

Win/win all the way around right?

Well maybe. Over the next few months, more and more producers got ahold of the packer with offers to sell direct. The packer went and had a peek at the unknown animals, made his offers (again, likely what the producer would expect to get at the barn, maybe a penny or two more), and raked in the cattle. The packer, seeing how nice it was to have the cattle coming straight to him, started telling his buyer to shave a couple cents off the max price he would be allowed to pay at the next sale. Or, if you're a little less conspiracy minded, perhaps the packer had almost enough animals from direct purchases that his demand at the barn wasn't quite so intense. Either way, the producer lost a couple cents at the barn. So next weeks average was off by a bit, and the guys selling direct were offered a couple pennies less. Oddly enough, all the packers who were buying direct had about the same thought, maybe not in the same time frame, but these guys were good businessmen. It wouldn't take long.

Then someone had the ingenious idea of contract selling to help further manage risk. Boy, the bank sure liked that idea. Less risk = safer loans and lines of credit. The packer liked it too. Price was more predictable, since less buying was being done at the barn. Many contracts were based on a market average + basis (or - basis) and since buying at the barns was beginning to become a little stale, price fluctuations were a little tamer. Even more predictability. Companies like predicitability. What a great idea.

You can see where it goes from here. Everybody thought they were winners, however we were beginning to lose the market mechanism that worked so well for so many years. That mechanism, if not gone in the fed cattle market now, is definitely much different than it used to be. I see similar things happening in the feeder market, with feedlots bidding outside the barns and producers signing market average cost + (or -) delivery contracts.

We're slowly risk managing ourselves to a captive market.

Oh sure, the feedlots and packers all swear this is a good thing for the industry. They don't say much about the downfalls, or possible downfalls.

But then, neither does the drug pusher on 11th Ave.

Sidebar: We don't actually have an 11th Ave in our little town, but it just seems like if you were going to find a drug pusher, 11th Ave would be the place to find it.

But I digress.

I see a problem, or at the very least, a problem in the making, so how about this as a possible fix, or at least a bandaid until an even better solution can be had?

Outlaw direct selling to feedlots and packers. No contract purchasing. If you want to sell an animal, whether it be a fat or a feeder, good quality or poor, you haul that thing to the sale barn and you take what the market is giving that week. If you want to buy an animal to turn into a steak or to feed out, you head on in to the sale barn (or call your buyer who goes there for you. I wouldn't want the businessmen taking the chance of getting manure on their loafers).

To stop the wheeling and dealing that takes place between buyers, and don't anyone try to tell me it doesn't happen (I know too many buyers), we build cubicles for each of those buyers. They have easy viewing of the stock entering the ring, but they can't see one another. They are prevented from socializing before the big event. Oh sure, they could call one another before the sale or find ways around the cubicles, but its just that much more difficult to gossip like little old ladies about their orders.

So, since the packers and feedlots swear that direct buying and contracts are good for the producer, and don't hurt the free market mechanism at all, they really shouldn't have a big problem with this. After all, if the contracts and direct purchasing don't interfere with the free market mechanism, they won't be paying any different for their animals, so whats the big deal? The producer will have to watch for market swings, and ensure that they have the absolute best cattle they can grow to minimize their risk when heading to the barn. By the same token, as long as the sales are big enough and enough buyers are attending the sales, they can be reasonably assured that they are receiving the best dollar that the market is willing to pay at the time.

Its getting a little late now, and I've rambled much more than I ever intended to ramble, so what are your thoughts? Poke some holes in Rod's Theory Of Economic Bliss In The Cattle Market.
 

Econ101

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Random Musings From A Random Mind

You hit the nail on the head. Many of the manipulation games being played in the beef market have had their start in the poultry business. The poultry farmers were put into the PSA protections late in the game but they were empty. There were no enforcement provisions. Arlen Specter had a little to do with that(he is chairman of the Senate Judiciary Committee). Arlen Specter got his start in all of this when he represented Frank Perdue as an attorney in a drunk driving case where Frank Perdue killed someone. Arlen then became governor of Pennsylvania and then a senator from the state. He has always protected the interests of Frank Perdue (east coast chicken magnate with ties to the mob).

Soon the cash market (like you found out with your fat cattle sales) will be of no consequence as a price setting mechanism, if it hasn't been stopped already. With RFID, the cattle population can go under a supply management system as the poultry business already is. Tyson will continue to swing the beef markets, make the money in poultry at one time period while at the same time squeezing their margins and running smaller packers out of the business because Tyson has the money to subsidize beef packing during this time from their poultry operations. Then the supply will go up (takes a few years for this reaction of the market to prices) in beef and beef prices will go back down. During the this time, Tyson can play their market manipulation game they that they did in Pickett(the one you describe in this post) and bring their margins up on the beef side. With the beef making the profit side, they will be able to do the same thing they did with the chicken market and bring the returns negative over there. That will run out anyone that is not playing with them in the poultry business.

The cattlemen who do not see what is happening will lose the market altogether. What do you think will happen when the packers control all the packing plants? They will be able to dictate prices. With Agman's accounting, it will seem as if there are no profit margins in beef processing. The income will be shifted over to the chicken side or hidden altogether. Tyson will take itself private and play as Cargill does on their hidden books.

Keep up the fighting, cattlemen. The easiest way to have your market stolen blind is to keep bickering about who is to blame. Protect your "own" interests while ignoring the bigger play. It is only a matter of time.
 

TimH

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Outlaw direct selling to feedlots and packers. No contract purchasing. If you want to sell an animal, whether it be a fat or a feeder, good quality or poor, you haul that thing to the sale barn and you take what the market is giving that week. If you want to buy an animal to turn into a steak or to feed out, you head on in to the sale barn (or call your buyer who goes there for you. I wouldn't want the businessmen taking the chance of getting manure on their loafers).

Are you suggesting that a law should be passed which would ,in effect, make it illegal to sell cattle through any means other than an auction barn??

Would it then be illegal to buy- cattle from your neighbor?
- bulls from a breeder?

Or are you saying that such a law would apply only to "feeders and packers"?? If so, what does that do to the concept of "everyone is equal in the eyes of the law"?

What would happen to the commissions that sale barns charge if it was mandatory that producers use sale barns? Would there be any incentive for the sale barn operators to keep their rates competitive once there was no legal alternative?
What would happen to the yield and grade premiums that higher quality cattle currently recieve?

These are just a few "random" implications of such a law.
 

Econ101

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TimH said:
Outlaw direct selling to feedlots and packers. No contract purchasing. If you want to sell an animal, whether it be a fat or a feeder, good quality or poor, you haul that thing to the sale barn and you take what the market is giving that week. If you want to buy an animal to turn into a steak or to feed out, you head on in to the sale barn (or call your buyer who goes there for you. I wouldn't want the businessmen taking the chance of getting manure on their loafers).

Are you suggesting that a law should be passed which would ,in effect, make it illegal to sell cattle through any means other than an auction barn??

Would it then be illegal to buy- cattle from your neighbor?
- bulls from a breeder?

Or are you saying that such a law would apply only to "feeders and packers"?? If so, what does that do to the concept of "everyone is equal in the eyes of the law"?

What would happen to the commissions that sale barns charge if it was mandatory that producers use sale barns? Would there be any incentive for the sale barn operators to keep their rates competitive once there was no legal alternative?
What would happen to the yield and grade premiums that higher quality cattle currently recieve?

These are just a few "random" implications of such a law.

Everyone is not equal under the law. The rules and laws that pertain to market power affect only those with market power. Utilities already operate under laws such as these. This is just an argument that those with market power use to maintain their position in the market. It has to do with the economic realities of market power.
 

Sandhusker

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I think a person needs to try as best they can to peer into the future and and the question; "If I do this, what will happen in 1 year, 5, 10, etc..?"

What might be found is that something has to be given up so that something greater can be gained.
 

TimH

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Econ 101 wrote-

Everyone is not equal under the law. The rules and laws that pertain to market power affect only those with market power. Utilities already operate under laws such as these.

Do all utilities operate under these laws, or only some of them?

Would all sellers of cattle be forced to operate under this proposed law or would it apply to only some of them?
 

DiamondSCattleCo

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TimH said:
1) Are you suggesting that a law should be passed which would ,in effect, make it illegal to sell cattle through any means other than an auction barn??

2) Would it then be illegal to buy- cattle from your neighbor?
- bulls from a breeder?

3) Or are you saying that such a law would apply only to "feeders and packers"?? If so, what does that do to the concept of "everyone is equal in the eyes of the law"?

4) What would happen to the commissions that sale barns charge if it was mandatory that producers use sale barns? Would there be any incentive for the sale barn operators to keep their rates competitive once there was no legal alternative?

5) What would happen to the yield and grade premiums that higher quality cattle currently recieve?

1) Yes. And knee jerk reaction (my own at first) says, "Don't restrict me". But I say if cattlemen can't be price makers, then at the very least we need a market that is as free of manipulation as possible. Even if the current market isn't being manipulated, it is much too easy to do so.

2) I considered farm-farm deals. Its definitely a hole in the theory, although most farm-farm deals are at market average pricing, and as such, don't have an influence on the market price anyway. To keep the playing field level, it would have to be considered illegal otherwise it would end up being a loophole.

Breeding stock is an area that I hadn't considered, however I see no reason to force breedstock into the sale barn. For one, its a market that has virtually no effect on feeder and fed prices (its quite the other way around), there are too many special considerations that apply when purchasing breed stock, and there are too many buyers and sellers for competition to ever be restricted.

3) So yes, it would only apply to feeders and fed cattle. And yes I hear you when you ask about everyone being equal. However, I'm only thinking about protection of the cattle industry for the producer.

4) I think we would begin to see sale barn commissions drop as competition opened up. Over the past few years, we've seen barns closing as fewer and fewer cattle went to the barn. These barns are still around, and still standing (for the most part), so it wouldn' take much to get them functioning again. In my area, it was only 4 or 5 years ago that we had twice the number of barns and I had barn buyers constantly calling asking for my stock, offering barn price guarantees and reduced commissions.

If a barn could even post one more sale/week, they'd be able to bring down commissions due to economies of scale. Chances are the barn has a certain number of workers who are on duty for the full week, and chances are they are under-utilized (us cowboys are a lazy lot, we'd prefer to hold up a post than clean around it :lol: ) . An extra sale would allow full utilitization of the existing manpower, open up a few more part time slots for pre-sort and sale day. It would be a small economic boost to the community, but still a tangible one.

5) I'm not sure about your area, but in mine pre-sort sales are still considered the best way to sell an animal. Remember a few years back the promises of bringing Xray machines and other tools into the sale barns to allow live assessment of beef quality? That never came about, mainly because the barns have seen less and less use. I say we bring those ideas back. Pre-sort the cattle into pens of similar quality. Let the buyers know EXACTLY what they're getting. It would actually take a little risk out of the deal for them. Or if you don't think thats workable, we've got our little RFID tags. Once the animal is slaughtered and found to be superior, it can be reported and a "quality first" check issued to the producer or feedlot that produced the animal.

Rod
 

Econ101

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TimH said:
Econ 101 wrote-

Everyone is not equal under the law. The rules and laws that pertain to market power affect only those with market power. Utilities already operate under laws such as these.

Do all utilities operate under these laws, or only some of them?

Would all sellers of cattle be forced to operate under this proposed law or would it apply to only some of them?



Utility companies do because of the economic fact that there is a lot of market power due to the efficiencies of having one company running the electrical lines in a specific geographical location. Can you imagine competition in a city on the electrical grid and having 3 sets of wires in front of your house? Same thing with the phone companies. The govt. has stepped in the telephone business and allowed companies to use the infrastructure that the customers paid for to the Baby Bells in long distance. Sure this might have knocked AT&T out of its dominant position and curtailed some of its earnings, but look what freeing this bottleneck that was being milked by those in control did for the phone industry. It probably never would have happened without that market power being curtailed. It was govt. intervention that allowed the current telecomunications and internet boom.

There are no utilities that operate without these laws that I know of. They are not granted the "license" to operate unless they adhere to the laws that regulate these possible economic abuses.

Deregulation of the energy markets in CA. was a disaster because the economics of the setup were not well understood. Enron and a lot of other for profit companies took the market to the bank using the little games that could be played after deregulation. It was a total disaster for California and anyone who was living there will tell you that.

I wouldn't say that all should have to be included in this law. Only certain sizes or those with market power. Under the PSA, this law applies to packers, not ranchers or their neighbors, or anyone who does not have market power. It is not about regulationg competitive markets, just ones that are not competitive due to market power. The livestock industry has had this same problem in the past. That is why the PSA was passed. We just have a bunch of goobers in power that are unwilling to enforce it or understand it.
 
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Conman throws out stupid statements like, "this would only apply to those with market power" and he can't even present an example of this. Just buzz words that sound good to packer blamers.


DSCC,

There would be nobody that would oppose this more than I would. Why?

1. The salebarn doesn't need to carve another commission out of my profits.

2. SOME salebarns have more corrupt "back room" dealings (you buy my bull for $30,000 and I'll buy your bull for $30,000, preferential treatment of volume customers, rafter bids, etc) than any other segment of our industry.

No, I won't mention names.

3. There is stress associated with selling any cattle in the sale barn. Fat cattle are particularly susceptable to stress resulting in a higher percentage of dark cutters.

Conman, do you know what a dark cutter is?

4. Salebarn sales remove the value based marketing option that pays more money for higher grading and yielding cattle.

5. Forward contracts are a risk management tool where the packer stands the basis risk, not the feeder.

Conman, do you know what "basis" is?

6. The fat cattle feeding industry does not need producers saving feeders from their own pricing mechanisms. The epitomy of arrogance.


~SH~
 

TimH

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Dimond S wrote-

2) I considered farm-farm deals. Its definitely a hole in the theory, although most farm-farm deals are at market average pricing, and as such, don't have an influence on the market price anyway. To keep the playing field level, it would have to be considered illegal otherwise it would end up being a loophole.

Hypothetical scenario-

My neighbor has a pen of 1000 lb. steers. Short keeps. He also has a cash flow problem and needs to sell them.
I want to buy them and bring them home to finish them. I don't like bringing cattle home from the sale barns because I'm paranoid about bringing home more than just steers. I offer him market price plus 5 cents a lb. for his steers. Good deal for him......good deal for me.
This transaction would be illegal under your proposal.
Do you believe this is right? Is it fair? Does it represent free enterprise at work?
 

Sandhusker

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SH, "The fat cattle feeding industry does not need producers saving feeders from their own pricing mechanisms. The epitomy of arrogance."

I wonder how many former independent chicken growers wished someone had saved themselves from their own pricing mechanisms? The arrogance might be on a different foot....
 

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Fats are already in the feedlot. No need to take then to an auction barn.

The proposals I have seen would only require that the forward contract prices be made public at a pseudo-auction. On cash cattle the packer would bid as they do now with prices made public also. This would only enlighten other cattlemen as to the true prices being paid.

I feel it would encourage cattlemen to raise better beef if he saw what other cattle were bringing.

Would not interfere with cattle not going directly to packer. Private treaty between cattlemen would be unaffected.
 

TimH

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Econ 101 wrote-

There are no utilities that operate without these laws that I know of. They are not granted the "license" to operate unless they adhere to the laws that regulate these possible economic abuses.

So ALL utilities do have to operate under the same law.

Would you agree that that was a poor comparison to a law that would NOT apply equally to all sellers of cattle?
 

DiamondSCattleCo

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~SH~ said:
1. The salebarn doesn't need to carve another commission out of my profits.

2. SOME salebarns have more corrupt "back room" dealings (you buy my bull for $30,000 and I'll buy your bull for $30,000, preferential treatment of volume customers, rafter bids, etc) than any other segment of our industry.

3. There is stress associated with selling any cattle in the sale barn. Fat cattle are particularly susceptable to stress resulting in a higher percentage of dark cutters.

4. Salebarn sales remove the value based marketing option that pays more money for higher grading and yielding cattle.

5. Forward contracts are a risk management tool where the packer stands the basis risk, not the feeder.

6. The fat cattle feeding industry does not need producers saving feeders from their own pricing mechanisms. The epitomy of arrogance.

Good points SH, let me see if I can address some of them:

1) I believe with a genuine free market mechanism the 15 buck commission that the sale barn carves out of your profits won't be missed at all. I firmly believe we'd see higher average fat prices.

2) I don't think I'd buy that they have MORE corruption than the other segments. Corruption, heck yes. Hanging out in sale barns, I've watched it. Thats why I brought up the segregation of buyers before the sale. And with the increased competition, it would become more difficult and time consuming to make back scratching deals like the ones you are talking about.

3) That stress can be easily eliminated or minimized by a cooling off period out of the truck.

4) See my post to TimH. Standing carcass evaluation tools are out there, they work, and they are not that expensive.

5) Forward contracts that are based on past market averages don't have any risk for the packer at all, and only open up the market to manipulation. Especially if the contract has packer right of refusal in it, as some do. My father is a grain farmer and he was burned so many times on contract deliveries that I almost beat him the last time he signed a contract. He hasn't signed a contract in 3 years now, hes begun stockpiling his own excess, and his profit margins have increased, despite poorer grain prices. Contracts can be made to sound like they're great for the producer, but they're even better for the corporate buyer, otherwise the corporate buyer wouldn't be using them.

6) Those pricing mechanisms were not the mechanisms that most feeders wanted, but were forced into due to the larger feeders wanting them. I think its time they went away. There are other, more effective risk management tools available to a producer or feedlot.

While I've been gathering numbers for our little gross profit breakdown in the other thread, I ran across something very interesting as I was calling some fat cattle sellers. These guys are restricting competitive pricing without even realizing they're doing it. Virtually all the fat cattle sellers that I talked to only call 2 or 3 packing plants to get bids, and the bids are closed. I was shocked by this. Here was a producer, artificially restricting his own market and competition, without even realizing he was doing it.

Rod
 

Econ101

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~SH~ said:
Conman throws out stupid statements like, "this would only apply to those with market power" and he can't even present an example of this. Just buzz words that sound good to packer blamers.


DSCC,

There would be nobody that would oppose this more than I would. Why?

1. The salebarn doesn't need to carve another commission out of my profits.

2. SOME salebarns have more corrupt "back room" dealings (you buy my bull for $30,000 and I'll buy your bull for $30,000, preferential treatment of volume customers, rafter bids, etc) than any other segment of our industry.

No, I won't mention names.

3. There is stress associated with selling any cattle in the sale barn. Fat cattle are particularly susceptable to stress resulting in a higher percentage of dark cutters.

Conman, do you know what a dark cutter is?

4. Salebarn sales remove the value based marketing option that pays more money for higher grading and yielding cattle.

5. Forward contracts are a risk management tool where the packer stands the basis risk, not the feeder.

Conman, do you know what "basis" is?

6. The fat cattle feeding industry does not need producers saving feeders from their own pricing mechanisms. The epitomy of arrogance.


~SH~

Yes, I know what a dark cutter is. Robert Mac does also. I agree with some of your points here, SH, but you have mixed so many things to come up with such confusion that market power plays can be exerted. Yes, packer backer, I know what basis is.

"1. The salebarn doesn't need to carve another commission out of my profits."

I will let OCM answer this question as it pertains to proposed legislation. What you do with your own cattle and how you sell them as a producer is your own business. The rules should not restrict you as a producer in any way because you do not have market power.

"2. SOME salebarns have more corrupt "back room" dealings (you buy my bull for $30,000 and I'll buy your bull for $30,000, preferential treatment of volume customers, rafter bids, etc) than any other segment of our industry.

No, I won't mention names."

If you have any information on a fraud like that, SH, you should bring it forth. One way to handle that is to not allow anyone to know whose cattle they were that were being bid on. Inuendos of fraud should be no excuse to limit economic frauds. You mentioned before the industry changed names. I would submit if your example happened, it would be a good time for that sale barn to change names (and owners). The people who were defrauded should get the proceeds.

Mention names or shut up about.


"3. There is stress associated with selling any cattle in the sale barn. Fat cattle are particularly susceptable to stress resulting in a higher percentage of dark cutters.

Conman, do you know what a dark cutter is?"

I don't propose that all of Rod's suggestions are all the way thought out, but he is on the right track. I am sure this is one of those that can be adjusted to the realities of the livestock industry.

The proposal that has been put forth (and I haven't read it yet) is that contracts for fat cattle are traded (blindly, of course) so that there can be no market manipulation and discrimination. If no one knows who you are, then it is hard to discriminate against you. Packers could get all their supply through paper trades. Delivery is a different deal than price determination.

"4. Salebarn sales remove the value based marketing option that pays more money for higher grading and yielding cattle."

That is another thing that can be worked out. A paper sales would solve this problem. Getting away from a paper sales being based on a cash market is important. Price determination should NEVER have a base in price that has different supply/demand characteristics than the time period it is determined. There are plenty of applicable quotes on this one from you, SH.

"5. Forward contracts are a risk management tool where the packer stands the basis risk, not the feeder.

Conman, do you know what "basis" is?"

They have also been used to manipulate the cash market as Pickett showed. I have no problem with forward contracts and the risks of time being calculated. Their use as captive supply is a real problem, however. They become a self fulfilling prophecy as Jason has already shown Agman can compute.


Does anyone have the proposed bill that addresses these concerns so we can separate the fear mongering from the facts?
 

DiamondSCattleCo

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TimH said:
My neighbor has a pen of 1000 lb. steers. Short keeps. He also has a cash flow problem and needs to sell them.
I want to buy them and bring them home to finish them. I don't like bringing cattle home from the sale barns because I'm paranoid about bringing home more than just steers. I offer him market price plus 5 cents a lb. for his steers. Good deal for him......good deal for me.
This transaction would be illegal under your proposal.
Do you believe this is right? Is it fair? Does it represent free enterprise at work?

Tim, I understand where you are coming from. As I said, my knee jerk reaction was similar to yours. But while we would restrict transactions of the sort you talk about, I put it to you that the benefits to such a market would outweigh some restrictions.

Perhaps a more workable solution is what Mike has seen proposed. Although I think I would want to see those pseudo-auctions taken one step further into genuine auctions. I think we need that open bidding to ensure our competition remains high.
 

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Here are a few of my random thoughts on the subject. I speak only from Cherry County, Nebraska, experience. My wife and I got married in 1979, moved to our family "south ranch", which was 27 miles south of the home ranch, and there we commenced ranching on our own. As a member of the Sandhills Cattle Association, I always advertised our calves for sale in their bi-monthly publication. For the first seven or eight years, we always sold privately and hardly ever darkened the door of a salebarn except to sell a few cull cows.

In those days, and earlier, during the 'fifties, 'sixties, and 'seventies, I'll bet at least half of the feeder cattle sold out of Cherry County were sold private treaty. Quite a few of the yearling grass cattle were even sold two or three months before delivery on a contract basis. These sales were always "based" on what was happening at the barn. Undoubtedly the market would have been higher had all the Cherry County feeder cattle sold through the barns instead of just half the cattle. There would have been more competition that would have come into play. But, looking back, that is not the way that it happened.

Cherry County was then, and still is, the one county in the United States that has more cows and raises more calves than any other county in the nation. It has size going for it, being 96 miles east to west and 63 miles north to south. But, believe it or not, there was a period of about fifteen or twenty years during the 'sixties and 'seventies when there was not one salebarn in the whole county. Now Valentine has one of the best salebarns in the entire area.

My only point is that things were not always as delightful as they seem in retrospect. At no time this side of the Garden of Eden has life ever been a Utopia. Personally, I think the "good old days" are right now.

We need to let freedom and free enterprise prevail. The more rules and regulations we impose upon ourselves, the more compicated and unfun life becomes. Cream tends to rise to the top, but there are no guarantees that it stays afloat. Just because Walmart and Tyson are riding high at the moment, does not predict that they will always be at the top of the heap. If they practice honesty and integrity, their success will be more likely to last. If they lose their scruples and get greedy, in time the props will get kicked out from under them. Other successful companies will take their place.

Morality and goodness cannot be legislated or regulated, but it should darn sure be encouraged. A person (or company) is only as good as their word. Financial obligations should be honored. Promises should be kept. Those are the threads that are woven into a greater society.
 

Econ101

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Soapweed: "Morality and goodness cannot be legislated or regulated, but it should darn sure be encouraged. A person (or company) is only as good as their word. Financial obligations should be honored. Promises should be kept. Those are the threads that are woven into a greater society."

You are right about this, Soapweed. Go read the chicken case (London vs. Fielddale Farms, I beleive). You will see this is not happening. We have to have a justice system that is working and laws that are being enforced or we all lose. That is what is happening now.
 

DiamondSCattleCo

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Soapweed said:
We need to let freedom and free enterprise prevail. The more rules and regulations we impose upon ourselves, the more compicated and unfun life becomes. Cream tends to rise to the top, but there are no guarantees that it stays afloat. Just because Walmart and Tyson are riding high at the moment, does not predict that they will always be at the top of the heap. If they practice honesty and integrity, their success will be more likely to last. If they lose their scruples and get greedy, in time the props will get kicked out from under them. Other successful companies will take their place.

Morality and goodness cannot be legislated or regulated, but it should darn sure be encouraged. A person (or company) is only as good as their word. Financial obligations should be honored. Promises should be kept. Those are the threads that are woven into a greater society.

A very good post, Soapweed, and one with which I mostly agree with. However, I think those threads of honesty and integrity that are woven into a greater society are growing weaker and weaker. Perhaps my faith in humanity isn't strong enough, but I think some mechanisms need to be in place, and regulated to ensure protection for the little guy, otherwise the little guy is going to be gone. We've seen it come true in the grain industry. The little family producer is gone in the realities of corporate farming. And I think society suffered when that happened. Do we really want it to happen to the family ranch now?

Besides, I theorize if we have one avenue for marketing our cattle, we could end up with fewer regulations. Multiple marketing avenues would require multiple regulations.

Rod
 

Soapweed

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DiamondSCattleCo said:
Besides, I theorize if we have one avenue for marketing our cattle, we could end up with fewer regulations. Multiple marketing avenues would require multiple regulations.

Rod

If salebarns were "guaranteed" to get all the cattle sales through their doors, they would lose their incentive to do their best. Sure, some of the salebarns would try to outdo the others, but there would soon be "sweetheart deals" and there would be collusion among them because they would have a captive constituency. You can bet that commissions on all of them would go up, and service would go down.
 

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