Why don't you smart boys give me a good example of a forward contract from a packer to a producer and then we will have something to talk about. Sounds to me like that is the big thorn in your side.
Quote: Do you think the big packers have the ability to manipulate the cash price and/or access to information not available to producers that would be part of making informed marketing decisions.
What do you mean by manipulate the cash price? The price is the price, no matter where it comes from. If you are selling to a packer or anyone else, you are asking them to set the price, where it comes from makes no difference. How can they manipulate the price if you are asking them what they will give.....they can't buy and sell them both. Try asking for a price and you will find out real quick who will meet your price.
What information access do you need to make an informed decision that is not available to producers? I know several websites where you can go to find out what the previous market was yesterday....just take your pick. There are reports that give the pricing for every cut of beef, what more would you want?
Quote: Defined base prices, not based on a manipulatable cash market is what is asked for, nothing more.
The contracts I have seen are tied to the Kansas top or Texas & Oklahoma Panhandle top cash market the previous week as a base price. Or tied to the futures market of a specific month, with basis pricing up or down. You pick the month for pricing with the basis you can live with. If you prefer to contract cattle with no defined basis price, then that's your problem. Explain why anyone would ever do that!
The trick to beating these contracts is to know what you are marketing so you can beat the averages the contract is describing. Basically what that means is the contract is betting you can't beat them at their own game....if you can't, then they are right and you don't deserve more for your product. If you can, then the premiums are there for the taking.
I don't know what else to tell you.
Quote: Do you think the big packers have the ability to manipulate the cash price and/or access to information not available to producers that would be part of making informed marketing decisions.
What do you mean by manipulate the cash price? The price is the price, no matter where it comes from. If you are selling to a packer or anyone else, you are asking them to set the price, where it comes from makes no difference. How can they manipulate the price if you are asking them what they will give.....they can't buy and sell them both. Try asking for a price and you will find out real quick who will meet your price.
What information access do you need to make an informed decision that is not available to producers? I know several websites where you can go to find out what the previous market was yesterday....just take your pick. There are reports that give the pricing for every cut of beef, what more would you want?
Quote: Defined base prices, not based on a manipulatable cash market is what is asked for, nothing more.
The contracts I have seen are tied to the Kansas top or Texas & Oklahoma Panhandle top cash market the previous week as a base price. Or tied to the futures market of a specific month, with basis pricing up or down. You pick the month for pricing with the basis you can live with. If you prefer to contract cattle with no defined basis price, then that's your problem. Explain why anyone would ever do that!
The trick to beating these contracts is to know what you are marketing so you can beat the averages the contract is describing. Basically what that means is the contract is betting you can't beat them at their own game....if you can't, then they are right and you don't deserve more for your product. If you can, then the premiums are there for the taking.
I don't know what else to tell you.