Ben Roberts: "Yes, I recognize the power of the multi-national packers and that power is devastating, farmers and ranchers world-wide."
How do you explain this "devastating power" in light of the fact that 2005 showed us the highest feeder cattle prices ever recorded?
Did Tyson, Swift, Excel, and USPB reduce their market shares in 2005 for these high feeder cattle prices to occur?
Do you prefer we go back to inefficient mom and pop packing plants that require $40 per head net profit margins and have to pay someone to haul their ofal off as opposed to Tyson slaughtering cattle for $26 per head net profit margins (Tyson vs ibp tesimony) in their most profitable years and selling everything from tongue to the rectum? A 10 year average per head net profit margin for the 5 major packers would be far less than $26 per head.
If you want to make a case for large packers not being as innovate in selling beef and beef by products as some small packers, I think you can make that argument successfully Ben. Big ships are hard to turn. If you want to make the argument that we would be paid better by smaller less efficient packing plants, you're going to have a hard time selling that argument considering the fact that efficiency leads to consolidation. Hell Ben, look around you. What industry isn't dominated by 3 - 5 major companies. Is concentration some new concept specific to the packing industry? Tell that to the beverage industry, the cell phone industry, the fast food industry, the automobile industry, and just about every other major industry.
I have read your book. I read the facts with interest and question your conclusions as I did when we visited in Kadoka.
Ranchers taking back control of our industry? Where have we lost control of our industry Ben? I see ranchers reaping the benefits of their investments in USPB. Where is this loss of control occuring?
I think the biggest challenge facing this industry is for producers to get the facts on many of the issues we face so they can see how R-CULT is leading them down the primrose path with their lies regarding how certain factors affect cattle prices. I can't think of anything that has been more destructive to our industry than the R-CULT "blame everything and everyone" agenda.
R-CULT is being led by certain LMA reps who are trying to save their own collective butts from an industry headed towards owning and controlling their financial destiny which is contrary to the LMA's goals of socialized cattle marketing and keeping those commission dollars rolling in.
You are right, R-CULT does talk out of both sides of their mouth. ("Don't consumers have a right to know where their beef comes from"...."Don't burden me with traceback" ......."USDA doesn't care about food safety" ......"we have the safest beef in the world due to our bse precautionary measures").
Unless you can explain how we are losing control of our industry with specific examples, you're opinions are subject to the same criticism.
BTW Ben, in regards to concentration in the packing industry, tell us what market share Swift, Wilson, Cudahey, Morris and Armour had when they were the "BIG FIVE". You've done that research haven't you?
Rod,
Excellent post!
~SH~
Scott Huber
Kadoka, SD
