Random Musings From A Random Mind

[Anonymous]

DSCC: "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."

The value of cattle needs to be determined by the value of the beef and beef by products to the consumer, not by middlemen squeezing out more money for themselves under the disguise of "PRICE DISCOVERY".

Not another dime comes into this industry unless it comes from the consumer.

DSCC: "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."

Moot point! Selling fat cattle in the salebarn is unjustified. That option is available today for anyone who prefers to sell fat cattle that way.

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

Wrong! The increase in dark cutters due to the stress of the salebarn is not decreased by making those cattle stand in a foreign environment while the water leaves their muscles.

The ideal situation is for fat cattle to be loaded on a truck, hauled to the packer, and killed as quickly as possible with as little stress as possible.

Not loaded on a truck hauled to the stressful salebarn environment, made to stand around waiting to sell, run around by the whistling whipping boys, made to stand again while they wait for another truck, loaded on another truck and hauled to the packing company where they are made to stand around to get over the stress of what they have just been through. This would absolutely result in more dark cutters and a reduction in value.

You don't know what you are talking about here.

Do you own an interest in a sale barn?

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

Ultra sound adds more to the stress of fat cattle and there is problems with accuracy particularly in measuring rib eye area. Ultra sound also adds another cost. True value based marketing is determined by the value of the hanging carcass, not a guess of that value that adds stress.

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.

A profit is a profit. If someone can lock in a profit with a futures contract, who the hell are you to tell them not to?

DSCC: "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."

For you to tell someone else how to market their fat cattle is the epitomy of arrogance. I'd fight this tooth and nail.

DSCC: "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."

More bidders does not result in more money. MORE MONEY TO SPEND RESULTS IN MORE MONEY. You'd force the sale of fat cattle in sale barns so the greedy LMA could carve their profit niche out so those same fat cattle could sell to those same 2 or 3 packer buyers.

If I sell fat cattle for 10 years and the same 2 or 3 buyers always end up paying the most for those cattle, why the hell would I need to call anyone else?

Ridiculous argument!



Conman,

Define "dark cutter" and "basis" for me. I really want to see if you know what those terms mean. Not tomorrow but today.

Conman: "What you do with your own cattle and how you sell them as a producer is your own business."

I'm glad to hear that you oppose the communist captive supply reform act.

Conman: "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."

Hahaha! Listen to you! You mean like the way you provided proof of "back door meetings" and "market manipulation by large packers"????

GO TO GRASS! You're such a damn hypocrite! This "you buy my bull and I'll buy yours" fraud has been going on forever. I have seen many times when a certain pen of cattle was "supposedly" bought by some order buyer and saw the same cattle sell under a different name a week later".

I simply do not associate with those barns anymore. I hate dishonesty.

Conman: "I don't propose that all of Rod's suggestions are all the way thought out, but he is on the right track."

How can he be on the right track if you just got done saying "what you do with your own cattle and how you sell them as a producer is your own business".

WHICH WAY IS IT????

Conman: "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."

If you weren't such an idiot, you would know that the option to "BID THE BASE PRICE" is available right now and still receive premiums for carcass quality. You simply don't know enough about this industry to even have an intelligent conversation about it.

I thought you just got done saying that "what you do with your own cattle and how you sell them as a producer is your own business" now you are back to telling me how to sell my cattle again.

WHICH WAY IS IT??????

Conman: "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."

Bullsh*t! Pickett proved nothing! Pickett lost and Pickett lost on appeal. Pickett proved nothing!

This is nothing more than cheap talk by a typical packer blamer.


What did Jason say regarding Agman that has anything to do with forward contracts? You are talking out of your ars again.


Why don't you just run away. You continual contradictions and lies are annoying as hell.

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

HAHAHAHA!

The king of fear mongerors wants to seperate fact from fiction when all he ever brings is fiction. You are arrogant, I'll give you that.


~SH~

 

[Soapweed]

Here is another of my random thoughts. I don't like the sound of mandatory identification. It rankles me that it will probably be a fact of life before long, as it will just be more rules and regulations to abide by. I am still dragging my feet about signing up for premise ID.

Maybe I am taking too much of a simplistic viewpoint on the whole concept, but to my way of thinking I blame R-Calf. :wink: They just "had to have" Country of Origin Labeling (COOL). They pushed and pulled, begged and pleaded, until they got COOL passed. The powers that be (whoever the heck that is) realized that mandatory COOL is now a fact of life, but it is meaningless without mandatory individual animal identification to give it credibility and traceback. Now the beautiful dream of COOL is just one step away from a nightmare. Thanks, R-Calf. :wink:

 

[Jason]

Rod says he has seen buyers for different packers talking and letting prices slide to each other. This is illegal if it is happening. I have seen them match loads at the end of a sale where one is full and the other has room.

What happens under the auction method when 1 buyer goes to the bathroom. I've seen the price fall for 5 minutes.

How do buyers decide premiums on cattle they see for 30 seconds through the ring? It turns into whoever gets to the final price set that day on the first few lots gets the cattle.

Years ago I sat beside a fellow I have know all my life and he was buying for Pasco in Washington. I knew the fat market was higher than he was stopping bidding at so I asked him why he quit. He said: "Why tip your hand to how far you can bid when there aren't enough cattle offered to warrant going to the limit?"

The current advances of knowing where the cattle are coming from and how they have graded in the past, and the seller taking the risk with the packer by pricing them after they are killed would not be available under an auction only method.

Every auction comes down to 2 bidders the winning bid and the runner up. If those 2 bidders are there the 3, 5, or 15 other 'also rans' are meaningless.

As for bankers and garanteed profits, yes they can mean the difference between staying in business and not being there next year. Ask the boys who were locked in to $1.08 fats just before BSE. They made out fine never even took a slight loss. The boys that were gambling on the $1.10 coming would up taking $0.50. The same thing can happen if you hit that dead sale or the dead spot in the sale.

The information is sufficient today for everyone to know where the futures are trading and not to accept a lowball price on fats. Packers have very little information that producers don't have. The difference is will a person use that information or sit back and wonder what drove him out of business?

As for conman's phony utility comparisons. Try finding out what a power pool is. Contracted or free flowing pool pricing. Buyers and sellers of a utility have options of what they pay in a deregulated environment. In a regulated environment the gov't sets the prices for both sellers and buyers.

 

[DiamondSCattleCo]

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.

Maybe so Soapweed, maybe so, but with all the barn closures in my area, we've seen commissions rising, not falling, due to lack of competition between the barns. I think if the barns were in genuine competition with one another, and there were plenty of barns, we'd see genuine competition. This is one of those debates that likely will never have a winner unless it comes to pass.

Rod

 

[Anonymous]

Jason: "What happens under the auction method when 1 buyer goes to the bathroom. I've seen the price fall for 5 minutes."

GASP!!! MARKET MANIPULATION!

Where was GISPA?

Where was PSA enforcement?

Jason: "Years ago I sat beside a fellow I have know all my life and he was buying for Pasco in Washington. I knew the fat market was higher than he was stopping bidding at so I asked him why he quit. He said: "Why tip your hand to how far you can bid when there aren't enough cattle offered to warrant going to the limit?""

GASP! MORE MARKET MANIPULATION!

Where was GIPSA?

Where was PSA enforcement?

I'm calling OCM right now......wait, why would I do that when OCM is driven by the LMA?


~SH~

 

[Econ101]

Here is another of my random thoughts. I don't like the sound of mandatory identification. It rankles me that it will probably be a fact of life before long, as it will just be more rules and regulations to abide by. I am still dragging my feet about signing up for premise ID.

Maybe I am taking too much of a simplistic viewpoint on the whole concept, but to my way of thinking I blame R-Calf. :wink: They just "had to have" Country of Origin Labeling (COOL). They pushed and pulled, begged and pleaded, until they got COOL passed. The powers that be (whoever the heck that is) realized that mandatory COOL is now a fact of life, but it is meaningless without mandatory individual animal identification to give it credibility and traceback. Now the beautiful dream of COOL is just one step away from a nightmare. Thanks, R-Calf. :wink:

Soapweed, the additional regulations required in this industry should be applicable to those who are exerting market power, not cattlemen who are not. The PSA does exactly this. MCool does exactly this. Packers are just using the MID to get around rules they don't want to follow. The problem of not having competency in dealing with the problems in the industry is that you have to make more rules to deal with the incompetency. Since it is a problem of market power and not of cattlemen, those regulations and the burden and costs associated with them should fall on those with market power only (packers).

The whole assumption of manditory cool makes it a perrogative of those selling beef from other countries to maintain its sutability for human consumption. Sellers should do that anyway. If Tyson, Cargill, or anyone else wants to sell beef from any country that the USDA does not have regulatory control over (or does not exercise it properly) then it should be their liablility if those items are unsafe. Accountability. They want it from producers, but they don't want it for themselves.

 

[Jason]

Conman are you just plain stupid?

Soapweed said the headaches involved for him as a cattle producer to trace back to source of origin for MCOOL.

How can packers be in charge of identifying cattle they don't even own?

 

[Anonymous]

Yet another round of empty unsupported statements by Conman.

"M"COOL does exactly that??

"M'COOL DEMANDS PROOF OF WHERE BEEF IS "BORN, RAISED, AND SLAUGHTERED".

How the hell do you do that if you don't have a traceback system?

Don't give me the "just mark the imports" song and dance either. Once the hide comes off, it's all the same. If you are going to have a law, it has to enforceable. There is no way to prove where a package of beef was born and raised without an enforceable traceback system.

"M"COOL does exactly that, you bet! ZZZZZZZZZZZZZzzzzzzzz!

Soapweeds point is taken. Both "M"COOL and "M"ID can be driven by the free enterprise system, not by flawed government mandates. If the economic signals are coming from the consumer, that will justify "M"ID and "M"COOL, producers will oblige without government intervention.

Good conservative views Soap!



~SH~

 

[Sandhusker]

SH, "For you to tell someone else how to market their fat cattle is the epitomy of arrogance. I'd fight this tooth and nail."

You had no problem telling Creekstone how they couldn't market their cattle, even though it had absolutly no effect on you or anybody else. Why the double standard?

Take a look at the New York Stock Exchange. There are a number of rules on how you market your stocks - the rules increasing for the number of stock you are selling and your relationship to those companies. Yet, with all those rules, the NYSE is highly regarded for efficiency and honesty. Companies love to get their stocks off the other exchanges and get them onthe NYSE.

 

[Econ101]

SH, packer backer,

Conman,

Define "dark cutter" and "basis" for me. I really want to see if you know what those terms mean. Not tomorrow but today.


Quote:
Conman: "What you do with your own cattle and how you sell them as a producer is your own business."


I'm glad to hear that you oppose the communist captive supply reform act.


Quote:
Conman: "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."



Hahaha! Listen to you! You mean like the way you provided proof of "back door meetings" and "market manipulation by large packers"????

GO TO GRASS! You're such a damn hypocrite! This "you buy my bull and I'll buy yours" fraud has been going on forever. I have seen many times when a certain pen of cattle was "supposedly" bought by some order buyer and saw the same cattle sell under a different name a week later".

I simply do not associate with those barns anymore. I hate dishonesty.


Quote:
Conman: "I don't propose that all of Rod's suggestions are all the way thought out, but he is on the right track."


How can he be on the right track if you just got done saying "what you do with your own cattle and how you sell them as a producer is your own business".

WHICH WAY IS IT????


Quote:
Conman: "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."


If you weren't such an idiot, you would know that the option to "BID THE BASE PRICE" is available right now and still receive premiums for carcass quality. You simply don't know enough about this industry to even have an intelligent conversation about it.

I thought you just got done saying that "what you do with your own cattle and how you sell them as a producer is your own business" now you are back to telling me how to sell my cattle again.

WHICH WAY IS IT??????


Quote:
Conman: "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."


Bullsh*t! Pickett proved nothing! Pickett lost and Pickett lost on appeal. Pickett proved nothing!

This is nothing more than cheap talk by a typical packer blamer.


What did Jason say regarding Agman that has anything to do with forward contracts? You are talking out of your ars again.


Why don't you just run away. You continual contradictions and lies are annoying as hell.


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


HAHAHAHA!

The king of fear mongerors wants to seperate fact from fiction when all he ever brings is fiction. You are arrogant, I'll give you that.


~SH~

"Define "dark cutter" and "basis" for me. I really want to see if you know what those terms mean. Not tomorrow but today."

Do your own homework, SH, and stop trying to get others to do it for you. I don't care how much you rant and rave, I don't dance to your tune.

"Quote:
Conman: "What you do with your own cattle and how you sell them as a producer is your own business."


I'm glad to hear that you oppose the communist captive supply reform act."

Did you hear me say I oppose the captive reform supply act? You just made that up. Without enforcement of the PSA I support the next best scenario. Believe me, there are a lot of them. Captive reform supply act is just one of them. Keep Abramhoff-ing Congress. The truth will come out. It always does.

The PSA does not restrict cattlemen, just packers. Stop trying to say that it does. There are no limitations on cattle producers. Keep trying to hide behind producer interests, packer boy. The packers and producers are different and the law accounts for that difference.

"
Quote:
Conman: "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."



Hahaha! Listen to you! You mean like the way you provided proof of "back door meetings" and "market manipulation by large packers"????

GO TO GRASS! You're such a damn hypocrite! This "you buy my bull and I'll buy yours" fraud has been going on forever. I have seen many times when a certain pen of cattle was "supposedly" bought by some order buyer and saw the same cattle sell under a different name a week later".

I simply do not associate with those barns anymore. I hate dishonesty."

So you are so quick to blame auction barns and not Tyson, Swift, and the others when they do it. Take away the ability to do it is the next step. We would not have as many regulations if we didn't have as many dishonest people in this business. You reap what you sow on this one, SH.

Are you going to mention names? I hate dishonesty.

"Quote:
Conman: "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."


If you weren't such an idiot, you would know that the option to "BID THE BASE PRICE" is available right now and still receive premiums for carcass quality. You simply don't know enough about this industry to even have an intelligent conversation about it.

I thought you just got done saying that "what you do with your own cattle and how you sell them as a producer is your own business" now you are back to telling me how to sell my cattle again.

WHICH WAY IS IT??????"

All restrictions should be left on packers, not cattlemen. I have been pretty consistent on that one.

"

Quote:
Conman: "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."


Bullsh*t! Pickett proved nothing! Pickett lost and Pickett lost on appeal. Pickett proved nothing!

This is nothing more than cheap talk by a typical packer blamer.


What did Jason say regarding Agman that has anything to do with forward contracts? You are talking out of your ars again.


Why don't you just run away. You continual contradictions and lies are annoying as hell."

The only contradictions are the ones you make up. I have been pretty consistent. Lies? You have yet to bring one up that "holds water". I did show how you lied about Mike C. being a perjuror. Either that or you just don't know what you are talking about, same difference.

"HAHAHAHA!

The king of fear mongerors wants to seperate fact from fiction when all he ever brings is fiction. You are arrogant, I'll give you that."

Yes, you do happen to show up quite frequently.

 

[TimH]

Just a couple more thoughts before I get my a$$ back to work......

Diamond S's suggestion of "cubicles" for buyers at the sale barn???
I don't know about anywhere else but at the barns in my area(there are 4 within 50 miles) when the buyers are talking on the phone ,during the sale, they are very careful to cup their hand over their mouth and the mouthpiece of the phone. I always assumed that this was to prevent the other buyers from hearing what they were saying. Is this just an "act"? :shock:

Another hypothetical.........

I own a small packing company with a very specific niche market for a very specific type of beef. Econ 101 owns a small feedlot right across the road from my plant and produces exactly the type of cattle that I need.
Because of these efficiencies, I am able to pay Econ a premium of $150/head over what he could get from anyone else.
A law is passed mandating that Econ must now sell his cattle through a sale barn.He now has to load them up,haul them 30 miles and pay the commission. I can now go to the sale and buy Econ's cattle for $0.025/lb. more than market price.
Good for me(except for the dark cutters and the trucking back 30 miles to my plant)........ not so good for Econ. Be careful what you wish for!!
Gotta run.

 

[Anonymous]

Sandbag: "You had no problem telling Creekstone how they couldn't market their cattle, even though it had absolutly no effect on you or anybody else. Why the double standard?"

There is no double standard. What Creekstone wanted to do was consumer fraud by "SUGGESTING" that BSE TESTED means BSE FREE.

Sandbag: "Take a look at the New York Stock Exchange. There are a number of rules on how you market your stocks - the rules increasing for the number of stock you are selling and your relationship to those companies. Yet, with all those rules, the NYSE is highly regarded for efficiency and honesty. Companies love to get their stocks off the other exchanges and get them onthe NYSE."

Rules at the NYSE might be justified.

The Captive supply reform act has no justification nor does selling fat cattle in a sale barn environment.



~SH~

 

[Sandhusker]

Here is another of my random thoughts. I don't like the sound of mandatory identification. It rankles me that it will probably be a fact of life before long, as it will just be more rules and regulations to abide by. I am still dragging my feet about signing up for premise ID.

Maybe I am taking too much of a simplistic viewpoint on the whole concept, but to my way of thinking I blame R-Calf. :wink: They just "had to have" Country of Origin Labeling (COOL). They pushed and pulled, begged and pleaded, until they got COOL passed. The powers that be (whoever the heck that is) realized that mandatory COOL is now a fact of life, but it is meaningless without mandatory individual animal identification to give it credibility and traceback. Now the beautiful dream of COOL is just one step away from a nightmare. Thanks, R-Calf. :wink:

You knew you would call me out on this one, didn't you Soap? :lol:

Where is COOL? We still don't have it.

Traceback, I don't see any problems there. Imported beef is already labled - the hard work is already done. From what I understand, Mexican cattle get the "M" brand, so they're labeled. Aren't Canadian cattle required to be branded CAN now as well? Everything already is labeled for us. What else needs to be done?

That anti-COOL bunch tell us the packers can't keep everything straight, but then also say most beef is US, anyway. They say it is hard to do, but then say there isn't much to do. :shock: :???: Don't packers keep UTM and OTM seperate? What about their grid cattle? Do they pay extra for those carcasses and then just them on the rail with the burnt-out milk cows?

Everything is labeled. Beef is checked out at the docks for COOL. Live animals are checked at the border for brands. The trace-back question is already solved. Packers have already shown they can segregate. I don't see any big problems.

 

[Econ101]

Just a couple more thoughts before I get my a$$ back to work......

Diamond S's suggestion of "cubicles" for buyers at the sale barn???
I don't know about anywhere else but at the barns in my area(there are 4 within 50 miles) when the buyers are talking on the phone ,during the sale, they are very careful to cup their hand over their mouth and the mouthpiece of the phone. I always assumed that this was to prevent the other buyers from hearing what they were saying. Is this just an "act"? :shock:

Another hypothetical.........

I own a small packing company with a very specific niche market for a very specific type of beef. Econ 101 owns a small feedlot right across the road from my plant and produces exactly the type of cattle that I need.
Because of these efficiencies, I am able to pay Econ a premium of $150/head over what he could get from anyone else.
A law is passed mandating that Econ must now sell his cattle through a sale barn.He now has to load them up,haul them 30 miles and pay the commission. I can now go to the sale and buy Econ's cattle for $0.025/lb. more than market price.
Good for me(except for the dark cutters and the trucking back 30 miles to my plant)........ not so good for Econ. Be careful what you wish for!!
Gotta run.

Tim, all market power laws should be looked at and enforced by the amount of market power one has. In your case, the "little packer" has no real market power. If you were talking chickens and that was the only packing plant that was practical to kill chickens at, it would be a different thing. There would be total market power in that case. These laws should be interpreted with respect to how much market power there is in that particular situation. The wording of the PSA allows that to be subjective. The reason for that subjectivity should be understood in any interpretation of the act. Judges who don't understand this should not preside over these cases or review them. The appellate court showed its economic ignorance in the case with its citation of the Robinson-Patman example.

 

[Sandhusker]

SH, "There is no double standard. What Creekstone wanted to do was consumer fraud by "SUGGESTING" that BSE TESTED means BSE FREE."

Creekstone didn't suggest a damn thing. They stated in plain English that BSE tested did not mean BSE free.

SH, "Rules at the NYSE might be justified."

"Might"? :lol: Of course they're justified. The cow markets are a free-for-all compared to the NYSE - but the NYSE is the one other markets look to for guidance. Figure it out, others have.

 

[Econ101]

Sandbag: "You had no problem telling Creekstone how they couldn't market their cattle, even though it had absolutly no effect on you or anybody else. Why the double standard?"

There is no double standard. What Creekstone wanted to do was consumer fraud by "SUGGESTING" that BSE TESTED means BSE FREE.

Sandbag: "Take a look at the New York Stock Exchange. There are a number of rules on how you market your stocks - the rules increasing for the number of stock you are selling and your relationship to those companies. Yet, with all those rules, the NYSE is highly regarded for efficiency and honesty. Companies love to get their stocks off the other exchanges and get them onthe NYSE."

Rules at the NYSE might be justified.

The Captive supply reform act has no justification nor does selling fat cattle in a sale barn environment.



~SH~

I think the USDA can be convicted of that one more readily when it comes to the BSE issue. You put words into Creekstone's mouth but the words out of the USDA came from Johannes and the NCBA'rs that work there.

Regulators could not adequately regulate the phone companies either. That is why they were broken up.

 

[Anonymous]

Sandbag: "From what I understand, Mexican cattle get the "M" brand, so they're labeled. Aren't Canadian cattle required to be branded CAN now as well? Everything already is labeled for us. What else needs to be done?"

What an oversimplistic look at this issue. An "M" or "C" brand on the hide doesn't trace that animal into the 300 individual packages of beef it becomes. What a joke.

Sandbag: "That anti-COOL bunch tell us the packers can't keep everything straight, but then also say most beef is US, anyway."

That anti packer bunch accuses packers of hiding foreign beef behind a "USDA stamp" then trusts them to label beef without an enforceable system. Talk about hypocrisy.

Sandbag: "Don't packers keep UTM and OTM seperate?"

Those are carcasses that have already been graded "B" maturity. That is hardly comparable to tracking the 300 packages they become at the retail level. Typical ignorant R-CULT oversimplifications.

Sandbag: "What about their grid cattle? Do they pay extra for those carcasses and then just them on the rail with the burnt-out milk cows?"

Once again, you ignorantly compare tracking carcasses to tracking individual beef portions and packages through fabrication and trimming.

Sandbag: "I don't see any big problems."

From the Cody, NE bank, I don't suppose you would!


Every R-CULT member should be forced to take a course in beef processing, fabrication, and pricing.


~SH~

 

[DiamondSCattleCo]

Do you own an interest in a sale barn?

Ok, I was wondering if something like this would happen. Lets get it out of the way right now. I am just a simple cattle producer, who owns no stocks, bonds, shares, interests, or real estate that is any way, shape, or form attached to any company or corporation, other than my own scurvy band of blacks and shorties. I've worked in the corporate world for 17 years as a business analyst, specializing in IT solutions (but not restricted to IT solutions) and I've been raised with livestock my entire life.

I have no vested interest in anything I post, other than a genuine interest to hear what others have to say or to debate what I consider to be inaccurate posts. I make no money, receive no dividends, and win no prizes (except for maybe a Corona and a Sam Adams thus far, and quite frankly the drive to get would be a little spendy).

How about you SH? I don't know you as I haven't been around much. Do you own any interests in packing plants? Stocks? Shares?

The value of cattle needs to be determined by the value of the beef and beef by products to the consumer, not by middlemen squeezing out more money for themselves under the disguise of "PRICE DISCOVERY".

And I believe that consumer demand will trickle down through the layers and that price discovery is truly the only way that we can get a feel for consumer demand.

Not another dime comes into this industry unless it comes from the consumer.

Agreed, but bear in mind that the food industry is one of those industries who truly have the consumer captive. The consumer has no choice but to spend the dimes, and if all food goes up in price, the consumer must divert money from other activities.

Moot point! Selling fat cattle in the salebarn is unjustified. That option is available today for anyone who prefers to sell fat cattle that way.

I wish my economics texts hadn't burned in a fire 7 years ago, as there are terms to describe the options you lay out (I hate getting old and forgetting stuff that I don't use). What it boils down to is this:

1) True competition - These are the options available to the consumer or producer that are truly viable, either economically, or for other reasons.

2) Perceived competition - This is what you are talking about with the sale barn option available to others who want it. But its not a real option as the contracts and direct sales have skewed the marketplace and made selling fats at the barn not economically feasible. So, yes it exists as a perceived option, but its not a true option. This can go back to our Coke arguement. While there were dozens of other brand options, there were really only two options as consumers saw it. Companies will use this to their advantage.

Wrong! The increase in dark cutters due to the stress of the salebarn is not decreased by making those cattle stand in a foreign environment while the water leaves their muscles.

Ok, so then my idea of shipping fats to the barn was a bad one. How about open auctions on the contracts then? Anything against that?

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.

A profit is a profit. If someone can lock in a profit with a futures contract, who the hell are you to tell them not to?

Easy SH, I only presented an idea for debate. I don't want to tell anyone to do anything.

And back to the contracts. I guess this boils down to educating producers. The majority of producers are entering into these contracts under the impression that this is a good thing for them, as they either don't have access to the necessary information or don't care to look it up. I don't want to see an industry destroyed by producer ignorance.

For you to tell someone else how to market their fat cattle is the epitomy of arrogance. I'd fight this tooth and nail.

Again, easy on the personal attacks. If you truly knew me, you'd know that I am not an arrogant man. Attack the idea put forth, not the man putting it forth.

More bidders does not result in more money. MORE MONEY TO SPEND RESULTS IN MORE MONEY. You'd force the sale of fat cattle in sale barns so the greedy LMA could carve their profit niche out so those same fat cattle could sell to those same 2 or 3 packer buyers.

I disagree. More bidders does indeed result in more money. You've been to sales, and seen it with your own eyes. Hell, sale barns who have 10 - 15 buyers at them average 5 to 10 cents more/lb of cattle sold than smaller barns with only 3 or 4 buyers.

I feel the money is in the livestock industry at the packer level (yeah, yeah, I know, heres this debate again), and producers need to have a way to leverage that money out of them. Even if the money is at the consumer level, producers still need as much leverage as they can get otherwise they WILL disappear.

If I sell fat cattle for 10 years and the same 2 or 3 buyers always end up paying the most for those cattle, why the hell would I need to call anyone else?

Eventually those 2 or 3 buyers learn that you never call anyone else, and adjust their practices to suit. Competition has now suffered. Not a rediculous argument at all.

Side note: I've been dealing with my local Dodge dealer my entire life. When I bought my first few vehicles, I took open bids from other dealers and worked them against one another to get my lowest price. My local dealer won the bid, and won the bid on the next 3 vehicles I bought. So I quit with the open bids and told him so. That was a dumb mistake. When I went back in 1998 to buy a truck, the price seemed to be a little high. When I did a price comparison with another dealer, my local dealer was a solid $3000 higher. They'd went from underbidding the competition by as much as $2000 to being higher than the competition by $3000.

My point to this? My dealer is not particularly dishonest, but he IS a businessman. If he sees an opportunity to make some money without truly breaking the law, he'll do it.

This "you buy my bull and I'll buy yours" fraud has been going on forever. I have seen many times when a certain pen of cattle was "supposedly" bought by some order buyer and saw the same cattle sell under a different name a week later".

Has everyone missed where the buyers are segregated?

Rod

 

[TimH]

Econ 101 wrote-

Tim, all market power laws should be looked at and enforced by the amount of market power one has. In your case, the "little packer" has no real market power

What does how much market power ,I may or may not posess, have to do with the fact that I am now able to buy your above average cattle for an average price? The fact remains that you had your $150/head premium legislated away.

Would it be any different if ,in my hypothetical situation, I was a large packer and you were a large feeder?? I don't think so.

 

[DiamondSCattleCo]

1) Rod says he has seen buyers for different packers talking and letting prices slide to each other. This is illegal if it is happening. I have seen them match loads at the end of a sale where one is full and the other has room.

2) What happens under the auction method when 1 buyer goes to the bathroom. I've seen the price fall for 5 minutes.

3) Every auction comes down to 2 bidders the winning bid and the runner up. If those 2 bidders are there the 3, 5, or 15 other 'also rans' are meaningless.

4) The information is sufficient today for everyone to know where the futures are trading and not to accept a lowball price on fats.

Also some good points Jason.

1) It is illegal, and I've watched it at every single sale barn in Saskatchwan. There is no enforcement, and this would have to change.

2) Fall by how much? In an auction market with 10 buyers, all bidding on the same animals with no collusion or side deals, I'd say the price wouldn't drop, or if it did, by a penny or two.

3) So from your above statement, then the buyer who got up and went to the bathroom really didn't have an effect, as he still left 2 people bidding. The more people bidding, the higher the price. Come on guys, have I been the only one to attend farm auctions? Auctions with more buyers net more money. I'm sure everyone has an example of an auction sale with poor prices in which there were hundreds of buyers, but its nothing more than an aberration and there was some other reason for the lower prices.

4) Not so. Older producers don't even know what the internet is, much less how to use it. And while producers talk to one another about the prices they get, its not a big enough sample to accurately gauge market conditions. And a seller of fats probably doesn't have the time to call 10 or 15 packing plants to get bids. He certainly doesn't have time to call them back and tell each of them what each bid, and would they be willing to improve their previous bid? Price discovery through open bidding is the only true way to determine what an entity is willing to pay for your product.

Rod