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Senator Roberts R-Kansas Sides with Packers Over Producers

GLA

Well-known member
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.
 

Tex

Well-known member
GLA said:
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.

GLA, can you tell me what part of your explanation above addresses what I initially posted? Here it is again:

Several amendments offered by Senator Roberts (R-KS) would strike important gains achieved in the Senate Agriculture Committee. Roberts offered one amendment to strike a provision agreed to by the Senate Agriculture Committee that would prohibit any pricing preference based on volume of business unless they reflect actual and verifiably lower costs. Roberts also targeted for elimination a provision making it unlawful for companies not to bargain in good faith with farmers who form or join producer associations. Roberts may also bring amendments to strike the packer ban on owning and feeding livestock and the voluntary arbitration provision.

You may have mistaken what I initially posted and thought it was something else. I will take that as an explanation.
 

Sandhusker

Well-known member
GLA, "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.

Prices can be manipulated. The resulting price is an artificial price. For example; You and I could agree that I'm going to buy a load of mixed cows from you and I'm going to pay the what the average price was at the local sale barn the next sale. I then take all my culls to that sale and talk my neighbors into the same thing. We flood the barn with cutters and canners and that lowers the average cow price for the day. I just manipulated the average price lower which means I will pay you less than what I would of had I not purposefully did what I did.

GLA, "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?"

What more do I want? I want all players in the marketplace to have equal access to the same information that effects prices. I think that is paramount to having a transparent market, and a transparent market is a fair market. We don't have anything close to that now.
 

GLA

Well-known member
OH, B.S. I can find what the market is for any product at anytime. Study your lesson and find those websites that give you that information.

Please understand that I am not a packer fan, but to beat them at their own game, you need to understand how they think. I don't really think a packer has the time to play your kind of games. I have personally seen them get beat by a producer, time and time again and still keep coming back for more.

As yet, no one on this page has given me a contract that I have asked for. If you have one that you think is not meeting your standards, let us all see it so we can find the holes. If you are being cheated, let's see where it is.

Let's stop all this B.S. talk and get down to the real facts so we can solve the problem.
 

Tex

Well-known member
GLA said:
OH, B.S. I can find what the market is for any product at anytime. Study your lesson and find those websites that give you that information.

Please understand that I am not a packer fan, but to beat them at their own game, you need to understand how they think. I don't really think a packer has the time to play your kind of games. I have personally seen them get beat by a producer, time and time again and still keep coming back for more.

As yet, no one on this page has given me a contract that I have asked for. If you have one that you think is not meeting your standards, let us all see it so we can find the holes. If you are being cheated, let's see where it is.

Let's stop all this B.S. talk and get down to the real facts so we can solve the problem.

You still haven't addressed this, GLA:
Several amendments offered by Senator Roberts (R-KS) would strike important gains achieved in the Senate Agriculture Committee. Roberts offered one amendment to strike a provision agreed to by the Senate Agriculture Committee that would prohibit any pricing preference based on volume of business unless they reflect actual and verifiably lower costs. Roberts also targeted for elimination a provision making it unlawful for companies not to bargain in good faith with farmers who form or join producer associations. Roberts may also bring amendments to strike the packer ban on owning and feeding livestock and the voluntary arbitration provision.

I can cite you a lot of examples where packers have the ability to not allow the product even in the packing house. Pork producers and poultry producers face this problem every day. It is tremendous leverage if you have the only packing plant around and don't allow someone the same prices as everyone else you pay.
 

Sandhusker

Well-known member
GLA, "OH, B.S. I can find what the market is for any product at anytime. Study your lesson and find those websites that give you that information. "

They just give you the last reported price at which a transaction occured. That is not "the market". Tyson knows the market. You're going up against them and they know so much more than you do.

Just take the reporting requirements for example. The 30/70/20 rule absolutely guarantees that you don't know the market.
 

Tex

Well-known member
Sandhusker said:
GLA, "OH, B.S. I can find what the market is for any product at anytime. Study your lesson and find those websites that give you that information. "

They just give you the last reported price at which a transaction occured. That is not "the market". Tyson knows the market. You're going up against them and they know so much more than you do.

Just take the reporting requirements for example. The 30/70/20 rule absolutely guarantees that you don't know the market.

This was one of the problems in the court case I sent you, Sandhusker.
 

Tex

Well-known member
Tex said:
GLA said:
OH, B.S. I can find what the market is for any product at anytime. Study your lesson and find those websites that give you that information.

Please understand that I am not a packer fan, but to beat them at their own game, you need to understand how they think. I don't really think a packer has the time to play your kind of games. I have personally seen them get beat by a producer, time and time again and still keep coming back for more.

As yet, no one on this page has given me a contract that I have asked for. If you have one that you think is not meeting your standards, let us all see it so we can find the holes. If you are being cheated, let's see where it is.

Let's stop all this B.S. talk and get down to the real facts so we can solve the problem.

You still haven't addressed this, GLA:
Several amendments offered by Senator Roberts (R-KS) would strike important gains achieved in the Senate Agriculture Committee. Roberts offered one amendment to strike a provision agreed to by the Senate Agriculture Committee that would prohibit any pricing preference based on volume of business unless they reflect actual and verifiably lower costs. Roberts also targeted for elimination a provision making it unlawful for companies not to bargain in good faith with farmers who form or join producer associations. Roberts may also bring amendments to strike the packer ban on owning and feeding livestock and the voluntary arbitration provision.

I can cite you a lot of examples where packers have the ability to not allow the product even in the packing house. Pork producers and poultry producers face this problem every day. It is tremendous leverage if you have the only packing plant around and don't allow someone the same prices as everyone else you pay.

I am still waiting for a response, GLA and RR.
 

GLA

Well-known member
I have a real doubt that Senator Roberts will pass many of his amendments since they look unconstitutional to me.

I am also against banning packers from owning cattle. I think it is against the idea of free enterprise. However, I do understand the issues against them owning cattle for more than 14 days before slaughter.

You take your arguments to the many feedyards who are feeding cattle for the packer's and try to make it out the door with your butt still connected. If I read the reports right, the number of cattle they have on feed is probably not over 5%, but I could be corrected.
 

Tex

Well-known member
GLA said:
I have a real doubt that Senator Roberts will pass many of his amendments since they look unconstitutional to me.

I am also against banning packers from owning cattle. I think it is against the idea of free enterprise. However, I do understand the issues against them owning cattle for more than 14 days before slaughter.

You take your arguments to the many feedyards who are feeding cattle for the packer's and try to make it out the door with your butt still connected. If I read the reports right, the number of cattle they have on feed is probably not over 5%, but I could be corrected.

I will have to agree with you that some of these issues in the farm bill should have been handled by the courts, not requiring new laws. It is the failure of the courts to follow the law that many of the provisions are in the bill and the amendments. I would also agree that they should be looked at in an individual case by case point by the courts. When you get bad judges, you tend to have to get "bad " law to correct the problems they bring.

You are correct GLA that packers owning cattle may or may not have an effect on the cash market price and therefore market manipulation/ civil actions being justified. The ban is to correct this market manipulation tactic, but others will come up as an economist thinks it up, just as Wendy Gramm and her kind helped IBP in the Pickett and Enron market frauds. It is the problem with mixing greed with public policy.
 

Sandhusker

Well-known member
GLA, "I am also against banning packers from owning cattle. I think it is against the idea of free enterprise. However, I do understand the issues against them owning cattle for more than 14 days before slaughter. "

I, too, believe in free enterprise, but I also believe in everybody getting a fair shake. Advocating what amounts to a free-for-all in the name of free enterprise is ultra simplistic. Nobody would even be talking a packer ban if it wasn't for the concentration. It doesn't matter whether it's a school-yard game or the business world, "Big" causes unique problems that need special rules to address those problems. Other wise, as in the case of the school game, the big kids stomp the little ones out and then there is no game. If there is no game (fair livestock markets), we're all toast.
 

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