Rule2 one step closer.

[DiamondSCattleCo]

1) Rod how many times do you supose the packers call safeway and MAKE them take some beef. Do you supose that those safeway stores that are not moving a lot of beef call in to headquarters and have them send a lot more beef at higher prices so the customers will have a better selection :roll:

2) Rod if any of the cattle are close to the border I would say our packers effect the price. Your beef sells or doesnot sell the same as ours. Do you supose any of those fats can or will make it over the border? Do you think this could change the price in your lot even those that will not cross? The price beef sells for in this country sets your prices even if you do not use the same packers to kill your beef.

1) You and SH appear to feel that demand is an on/off switch. Tell me MWJ, if beef rises 10 cents/lb how much does this affect demand? Safeway is going to move X thousands of lbs of beef each week, and they know it from week to week. If they have to pay more for it, they simply raise the price at the meat counter. Once the price is raised too high, and other proteins are more attractive to consumers, their demand will drop. Tell me MWJ, do you really believe that Safeway dictates prices to the packers? :roll:

2) Another question for you MWJ. How much beef makes it across the border on a daily basis? Can you compare that to our own slaughter capacity up north? We have two major packers with a combined slaughter capacity ten TIMES all the other others combined. Do you really believe that if one of those two major packers have their bids removed from the system for a day that it won't affect prices? Really? And if you do, explain how when JGL stops bidding at Saskatoon, the prices drop 5 cents? Please explain that to me.

SH, feel free to join in since you know so much about the Canadian marketplace.

Rod

 

[DiamondSCattleCo]

So how can packers owning cattle be anticompetitive if they outbid everyone else to buy those cattle?

Let me see if I can explain this to you:

1) Packer buys lights when a deal presents itself.

2) Packer sends those lights to a private concern to be fed out.

3) Those lights fall off the radar, as most small concerns don't report the number of cattle on feed.

4) The packer knows those cattle exist, and has a pretty good idea when they'll be fed out, especially as they near finishing.

Now we have two problems:

5) a) Feedlot doesn't know when those animals that the packer owns are going to hit market, so he's now got an unknown as to when he wants to finish his own fats. He finishes at the wrong time, he loses money. He needs to hedge his own risk, so he drops his bids on weaned and backgrounded cattle. Producer suffers.

5) b) Producer with fats probably doesn't have a clue that the Packer has several thousand head on feed. Loses money while waiting for grids to rebound after the packer takes care of his own stock.

So what we end up with is a packer with fore knowledge of the market that others do not. It ends up hurting producers. I wouldn't have a problem with packer owned cattle IF THEY WERE REQUIRED TO REPORT HOW MANY THEY HAD ON FEED AND WHEN THEY EXPECTED THEM TO SHIP. Just like the feedlots are required to do. Total transparency so that informed producers can make adequate marketing decisions. If they don't report them, and play fair, then I say take away the privelege of allowing them ownership.

Really, I'm surprised that you would be against such a thing SH. Same as you MWJ. There is nothing wrong with transparency in the system so that all can make money. Maybe you guys should sell some of your stock in packing houses and become livestock producers again.

BTW, SH, in response to your idiotic question see my response to MWJ above. Can the idiotic yes/no questions too. This isn't some cheap courtroom TV show. Obviously Canadian producers ship south, but I doubt you have any idea how that compares to our slaughter capacity up north.

Rod

 

[ocm]

OCM,

Does the PSA address the issue of collusion?

Yes or No?


~SH~

Any packers guilty of collusion violates BOTH Sherman Antitrust and PSA. If collusion is suspected the DOJ (Department of Justice-a cabinet level department under the Attorney General which enforces Sherman) and GIPSA (which enforces the PSA) would engage in a joint investigation.

The PSA covers more than collusion but a collusion violation would violate the PSA.

 

[Ben Roberts]

1) Rod how many times do you supose the packers call safeway and MAKE them take some beef. Do you supose that those safeway stores that are not moving a lot of beef call in to headquarters and have them send a lot more beef at higher prices so the customers will have a better selection :roll:

2) Rod if any of the cattle are close to the border I would say our packers effect the price. Your beef sells or doesnot sell the same as ours. Do you supose any of those fats can or will make it over the border? Do you think this could change the price in your lot even those that will not cross? The price beef sells for in this country sets your prices even if you do not use the same packers to kill your beef.

1) You and SH appear to feel that demand is an on/off switch. Tell me MWJ, if beef rises 10 cents/lb how much does this affect demand? Safeway is going to move X thousands of lbs of beef each week, and they know it from week to week. If they have to pay more for it, they simply raise the price at the meat counter. Once the price is raised too high, and other proteins are more attractive to consumers, their demand will drop. Tell me MWJ, do you really believe that Safeway dictates prices to the packers? :roll:

2) Another question for you MWJ. How much beef makes it across the border on a daily basis? Can you compare that to our own slaughter capacity up north? We have two major packers with a combined slaughter capacity ten TIMES all the other others combined. Do you really believe that if one of those two major packers have their bids removed from the system for a day that it won't affect prices? Really? And if you do, explain how when JGL stops bidding at Saskatoon, the prices drop 5 cents? Please explain that to me.

SH, feel free to join in since you know so much about the Canadian marketplace.

Rod

Yes Rod, Safeway,Costco,Wal-Mart,Albertson,Kroger all dictate prices to the packers.

As far as beef crossing the border(going north), I have watched this since 1994,everyday you can see pots hauling cattle(south) because you can look through a pot, what you can't see,is the six to ten loads of dressed beef that leave that same plant in refrigerated trailers going north everyday. The exception to this,is when the border was closed to live cattle, although the dressed beef still crossed the border both ways.

Best Regards
Ben Roberts

 

[Jason]

Somehow we are to believe packers can control information of live feeder cattle in ways feedlots can't.


In Canada, Cor Van Raay is the biggest feeder of cattle, not IBP or Cargill.

If size is the indicator of market power, Cor controls the fed cattle industry in Canada.

Somehow I think he might tell you otherwise if asked.

Cor is a margin operator. He buys yearlings almost exclusively because of sickness/loss issues. He banks on a $7 per head margin. As the largest feeder in Canada his costs would be as low as anyone's. Somehow the packers know all his information yet he hasn't got a clue about the packers cattle?

Canfax calls every feedlot with 1000 head or more capacity at least once per year. The packers aren't going to place cattle in lots that have higher overhead. That would make the case for their feeding costs to be higher than that of feedlots like Cor's, and they would have smaller margins than $7 per head on fed cattle.

Don't the places that feed packer cattle charge for their services? If they are charging custom rates, a profit is built in for the operator, a profit that Cor takes from his $7.

 

[Ben Roberts]

Somehow we are to believe packers can control information of live feeder cattle in ways feedlots can't.


In Canada, Cor Van Raay is the biggest feeder of cattle, not IBP or Cargill.

If size is the indicator of market power, Cor controls the fed cattle industry in Canada.

Somehow I think he might tell you otherwise if asked.

Cor is a margin operator. He buys yearlings almost exclusively because of sickness/loss issues. He banks on a $7 per head margin. As the largest feeder in Canada his costs would be as low as anyone's. Somehow the packers know all his information yet he hasn't got a clue about the packers cattle?

Canfax calls every feedlot with 1000 head or more capacity at least once per year. The packers aren't going to place cattle in lots that have higher overhead. That would make the case for their feeding costs to be higher than that of feedlots like Cor's, and they would have smaller margins than $7 per head on fed cattle.

Don't the places that feed packer cattle charge for their services? If they are charging custom rates, a profit is built in for the operator, a profit that Cor takes from his $7.

Jason, feedlots are like motels,when full they make money. Here in Washington state we have a few feedlots that have empty bunk space,when a packer knows this,or an investor feeder,they will call the feedlot and offer to place cattle in his yard but at a reduced rate,happens all of the time.

Best Regards
Ben Roberts

 

[mwj]

Somehow we are to believe packers can control information of live feeder cattle in ways feedlots can't.


In Canada, Cor Van Raay is the biggest feeder of cattle, not IBP or Cargill.

If size is the indicator of market power, Cor controls the fed cattle industry in Canada.

Somehow I think he might tell you otherwise if asked.

Cor is a margin operator. He buys yearlings almost exclusively because of sickness/loss issues. He banks on a $7 per head margin. As the largest feeder in Canada his costs would be as low as anyone's. Somehow the packers know all his information yet he hasn't got a clue about the packers cattle?

Canfax calls every feedlot with 1000 head or more capacity at least once per year. The packers aren't going to place cattle in lots that have higher overhead. That would make the case for their feeding costs to be higher than that of feedlots like Cor's, and they would have smaller margins than $7 per head on fed cattle.

Don't the places that feed packer cattle charge for their services? If they are charging custom rates, a profit is built in for the operator, a profit that Cor takes from his $7.

Jason, feedlots are like motels,when full they make money. Here in Washington state we have a few feedlots that have empty bunk space,when a packer knows this,or an investor feeder,they will call the feedlot and offer to place cattle in his yard but at a reduced rate,happens all of the time.

Best Regards
Ben Roberts

Are you saying that they will place cattle just to keep there lots full even if there is no profit in the cattle :shock: If that is the case they are not in the buisness very long. I can not see any way that packers can feed there cattle any cheaper thany any other operator. If you do please share the info 8)

 

[don]

Are you saying that they will place cattle just to keep there lots full even if there is no profit in the cattle


it's called contribution margin. if the revenues exceed operating costs and contribute to the payment of overhead it is a good shortterm marginal decision.

 

[Jason]

if the revenues exceed operating costs and contribute to the payment of overhead

That's a profit.

 

[Ben Roberts]

MWJ, you are correct,some of them go broke,i've known cattle feeders that have gone broke,feeding cattle for packers.

Best Regards
Ben Roberts

 

[don]

jason: That's a profit.

not unless the revenues exceed operating costs plus fixed (overhead) costs. if you're serious in saying that's a profit you don't understand why a lot of farmers and ranchers go broke.

 

[TimH]

DiamondSCattleCo wrote-

"So what we end up with is a packer with fore knowledge of the market that others do not. It ends up hurting producers. I wouldn't have a problem with packer owned cattle IF THEY WERE REQUIRED TO REPORT HOW MANY THEY HAD ON FEED AND WHEN THEY EXPECTED THEM TO SHIP. Just like the feedlots are required to do. Total transparency so that informed producers can make adequate marketing decisions. If they don't report them, and play fair, then I say take away the privelege of allowing them ownership. "

"....the PRIVELEGE of allowing them ownership." ????? :shock:

Rod, do you feel you have a legal right to own cattle, or do you consider that ownership a privelege that can be revoked??

 

[Sandhusker]

There plenty of examples where the privilidge of ownership has been revoked due to criminal activity.

 

[Anonymous]

DiamondSCattleCo wrote-

"So what we end up with is a packer with fore knowledge of the market that others do not. It ends up hurting producers. I wouldn't have a problem with packer owned cattle IF THEY WERE REQUIRED TO REPORT HOW MANY THEY HAD ON FEED AND WHEN THEY EXPECTED THEM TO SHIP. Just like the feedlots are required to do. Total transparency so that informed producers can make adequate marketing decisions. If they don't report them, and play fair, then I say take away the privelege of allowing them ownership. "

"....the PRIVELEGE of allowing them ownership." ????? :shock:

Rod, do you feel you have a legal right to own cattle, or do you consider that ownership a privelege that can be revoked??

Its illegal for banks to own land for over a time period, because they could control land values and influence other things- why not limit Packers to ownership of cattle for only 14 days?

 

[TimH]

Oldtimer wrote-

".....why not limit Packers to ownership of cattle for only 14 days"?

Why not??? Well,for starters, that would make it impossible for producer owned packing ventures to operate. Wouldn't it??

 

[Anonymous]

Oldtimer wrote-

".....why not limit Packers to ownership of cattle for only 14 days"?

Why not??? Well,for starters, that would make it impossible for producer owned packing ventures to operate. Wouldn't it??

Not if the law is written correctly....

 

[RobertMac]

Oldtimer wrote-

".....why not limit Packers to ownership of cattle for only 14 days"?

Why not??? Well,for starters, that would make it impossible for producer owned packing ventures to operate. Wouldn't it??

Tim, I own my cattle when I take them to the processor. I own the meat when the processor is finished. The processor never owns my cattle. If I owned the processing plant, what difference would that make?

 

[TimH]

Oldtimer wrote-

".....why not limit Packers to ownership of cattle for only 14 days"?

Why not??? Well,for starters, that would make it impossible for producer owned packing ventures to operate. Wouldn't it??

Not if the law is written correctly....

OK. By "written correctly" you mean what exactly............? How could it be made to apply to one packer and not another?

 

[TimH]

Oldtimer wrote-

".....why not limit Packers to ownership of cattle for only 14 days"?

Why not??? Well,for starters, that would make it impossible for producer owned packing ventures to operate. Wouldn't it??

Tim, I own my cattle when I take them to the processor. I own the meat when the processor is finished. The processor never owns my cattle. If I owned the processing plant, what difference would that make?

I'm not a lawyer, Robert, but I would suspect that since you are paying to have your cattle custom slaughtered, you would still be considered a "packer" in the eyes of the law.

 

[DiamondSCattleCo]

Rod, do you feel you have a legal right to own cattle, or do you consider that ownership a privelege that can be revoked??

The ownership of livestock is a PRIVELEGE that can be revoked, as it should be. If the owner of a group of animals doesn't feed those animals and they starve to death, don't you think his privelege to own those animals should be revoked?

I find it interesting how you equate a CORPORATIONS ownership of property on the same level as PERSONAL ownership of property. This is unfortunately a common viewpoint, and I think its indicative of whats wrong with today's world. Corporations were never intended to have ALL the rights and priveleges as an individual.

Rod