Socialism?

[Econ101]

Kind of sounds like you think the producers should make a deal in the coffee shop so all his neighbors can witness it for him and make sure he doesn't get taken. If the producers wanted the neighbors to know the details of their cattle deals they would just go to the auction. Those that make individual transactions probably do so, so their neighbors don't know what kind of deal they made. :roll:

What have you got against your neighbors, Tam? Are you always looking for some better deal for the same thing than they? How would you know if you got a better deal than the average if you didn't know the average? Do you trust salesmen?

Insider stock sales are illegal for a reason. Ask Martha Stewart (I personally think that there are a lot worse crooks out there than ole Martha; someone wanted to show that they were "doing something" about white collar crime on wallstreet -- diversion)

Econ when you sign a contract to teach at a school do you have the rest of the teachers and a few students sit in on your meeting when the school and you are negotiating your salary?
ocm described it this way "It only requires that contracts be done in such a way as to be witnessed by any interested party",
If I was interested in what you got paid could I come and sit in on the meeting, I promise I would sit quietly well unless I thought you or the school were getting taken for a ride then it would be my obligation to save one or the other from a bad deal now wouldn't it? I'm sure you think you salary is none of my business so why is my calf check any of yours or any other interested parties business.

Tam, I couldn't care less if you knew my salary (that doesn't mean I am going to tell you it). Your neighbor shouldn't care about your check except to make sure he was getting the same deal on the same type of cattle he sold. That is called market information. You and I both know that the amount in your personal check does not have to be revealed in order to reveal market information. Are you arguing that you don't want market information or that you don't want people to know what your check was? They are two different things.

 

[HAY MAKER]

You packer lovers are trying to twist/divert the "captive supply reform act"why would anyone give a damn what you get for your scrawny steers?The captive supply reform act brings openess to the markets,you know as well as every one reading this its not about me knowing what you get for a pot load of scrawny steers,you insult the readers intelligence and or appear to be ignorant by repeating this over & over.

The captive supply reform act is a remedy for the dishonesty in pricing that exists in the markets today.

Packers have abused the trust given to them by producers,now they are losing that trust, its that simple and I say the sooner the better..........good luck

 

[fedup2]

This looked a little familiar so I looked into my notes and found this. It was from a minority report in a gipsa study on captive supply in 1996.

The first minority report argued that the use of captive supply engenders fear and distrust of market fairness and endangers competitive operation of livestock markets.23 It also argued that "the use of factors within the control of packers as a base price for purchase of captive supply is a violation of section 202 of the Packers and Stockyards Act." Its recommendations on captive supply were:

• Packer feeding of livestock should be eliminated except where the owners of the livestock own the packing facility in a cooperative arrangement. If packer feeding is allowed, the livestock must be offered for sale on an open-market basis, and the price at which these livestock move into the market should be reported separately.
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I want everyone to know that in this case, when some members of the committee felt strongly about something, their reports were included in a 'minority report'. I find many of these types of reports quite biased. I included it here to let you know this type of law was talked about years ago & I didn't want to post potentially biased information without alerting you.

 

[Anonymous]

Jake, please explain how "all [cattle] receive the same price irregardless of quality"? Does that mean us Southerners are going to receive the same prices as you Northerners?

RobertMac, and Haymaker,

I am neither a packer lover, or hater for that matter. I just have ingrained in me the trait that I don't like to see the US heading away from the free market system. The wording in the bill sounds nice, but I can see through that kind of talk to see it for what it really is. I don' think transparency is a bad thing, but who is going to oversee what is fair and what is not. That is where I think the trouble would lie. That is my reference to socialism. If you are ok with all animals of a certain class bringing a seperate price from a better/worse animal, then maybe we could agree somewhat, but I still don't think we need big brother telling us what is/is not a "fair" price.

I hopefully have a lot of ranching years ahead of me, and I want the best for the industry myself, but I don't think this is it. And that is also one of the reasons I split the sheet with R-Calf. I cannot support the kind of politicians that they lean on. Personal preference.

 

[Econ101]

Jake, please explain how "all [cattle] receive the same price irregardless of quality"? Does that mean us Southerners are going to receive the same prices as you Northerners?

RobertMac, and Haymaker,

I am neither a packer lover, or hater for that matter. I just have ingrained in me the trait that I don't like to see the US heading away from the free market system. The wording in the bill sounds nice, but I can see through that kind of talk to see it for what it really is. I don' think transparency is a bad thing, but who is going to oversee what is fair and what is not. That is where I think the trouble would lie. That is my reference to socialism. If you are ok with all animals of a certain class bringing a seperate price from a better/worse animal, then maybe we could agree somewhat, but I still don't think we need big brother telling us what is/is not a "fair" price.

I hopefully have a lot of ranching years ahead of me, and I want the best for the industry myself, but I don't think this is it. And that is also one of the reasons I split the sheet with R-Calf. I cannot support the kind of politicians that they lean on. Personal preference.

I think we agree more than disagree. No one says what is "fair" except th buyer and seller. That information on the trade is what allows each rancher to determine if he is going to sell his cattle this week or next week or whenever he thinks he will get a "fair" deal for his cattle.

Too much of the time in the past, the allegation was that ranchers never had a real clue to what real prices were as the information reported was biased due to it being under the control of the packers. If packers paid everyone 90 cents a lb and then convinced you that they paid only 70 cents a lb, they could cheat you with misinformation. That is the "unfairness" that the law is trying to get at, not your choice of when or where you would sell or at how much.

 

[ocm]

Elements of the Captive Supply Reform Act are patterned after the legal regulations of trade on the stock exchanges.

Regulation is particularly heavy on stock owners who work for the company whose stock they own.

~SH~ needs to explain to us how the New York Stock Exchange is a socialist institution since it is run much like the Captive Supply Reform Act wants the cattle market to be run.

 

[RobertMac]

Jake, please explain how "all [cattle] receive the same price irregardless of quality"? Does that mean us Southerners are going to receive the same prices as you Northerners?

RobertMac, and Haymaker,

I am neither a packer lover, or hater for that matter. I just have ingrained in me the trait that I don't like to see the US heading away from the free market system. The wording in the bill sounds nice, but I can see through that kind of talk to see it for what it really is. I don' think transparency is a bad thing, but who is going to oversee what is fair and what is not. That is where I think the trouble would lie. That is my reference to socialism. If you are ok with all animals of a certain class bringing a seperate price from a better/worse animal, then maybe we could agree somewhat, but I still don't think we need big brother telling us what is/is not a "fair" price.

I hopefully have a lot of ranching years ahead of me, and I want the best for the industry myself, but I don't think this is it. And that is also one of the reasons I split the sheet with R-Calf. I cannot support the kind of politicians that they lean on. Personal preference.

Jake, I'm a packer lover...my packer is a good friend and an ally that turns my cattle into a quality meat product that I sell to consumers. And that's the way I think this market should be...no one will sell beef more enthusiastically than the producers that raise the cattle. With enough producers involved all the way to the consumer, laws like this won't be needed because an open, transparent market with real options will keep it a fair free market system.

 

[Econ101]

Jake, please explain how "all [cattle] receive the same price irregardless of quality"? Does that mean us Southerners are going to receive the same prices as you Northerners?

RobertMac, and Haymaker,

I am neither a packer lover, or hater for that matter. I just have ingrained in me the trait that I don't like to see the US heading away from the free market system. The wording in the bill sounds nice, but I can see through that kind of talk to see it for what it really is. I don' think transparency is a bad thing, but who is going to oversee what is fair and what is not. That is where I think the trouble would lie. That is my reference to socialism. If you are ok with all animals of a certain class bringing a seperate price from a better/worse animal, then maybe we could agree somewhat, but I still don't think we need big brother telling us what is/is not a "fair" price.

I hopefully have a lot of ranching years ahead of me, and I want the best for the industry myself, but I don't think this is it. And that is also one of the reasons I split the sheet with R-Calf. I cannot support the kind of politicians that they lean on. Personal preference.

Jake, I'm a packer lover...my packer is a good friend and an ally that turns my cattle into a quality meat product that I sell to consumers. And that's the way I think this market should be...no one will sell beef more enthusiastically than the producers that raise the cattle. With enough producers involved all the way to the consumer, laws like this won't be needed because an open, transparent market with real options will keep it a fair free market system.

Robert Mac, Don't forget the lessons of Hudson Foods. If you ever become a market maker to any large extent you might find your name substituted for Hudson.

 

[agman]

It only requires that contracts be done in such a way as to be witnessed by any interested party,.........
When many eyes are on the individual transactions it is much more difficult to manipulate them, though not impossible.

Kind of sounds like you think the producers should make a deal in the coffee shop so all his neighbors can witness it for him and make sure he doesn't get taken. If the producers wanted the neighbors to know the details of their cattle deals they would just go to the auction. Those that make individual transactions probably do so, so their neighbors don't know what kind of deal they made. :roll:

This is the way it is done on Wall Street in all of the stock exchanges. You think that is a bad pattern to follow? Got something against sunlight?

One basic problem with your analogy OCM is that stock vales per each company are static. Question: Do all companies trade at the same price or is there price differentiation? In the actual cash trade product differentiation seldom exists unless it is on a grid or formula. When producers hear that X cattle traded at Y price then everyone wants the Y price independent of quality. That is the real world of cash trade. In that environment producers of high quality product subsidize the producer of below average product. Guess what product we produce more of? You got it, more low quality product.

Most astute producers tired of that sytem and set out to change it by establishing marketing agreements based on grids that paid them for their value. Guess who complains most about marketing agreements? You got it, those who generally produce below average product.

 

[RobertMac]

Robert Mac, Don't forget the lessons of Hudson Foods. If you ever become a market maker to any large extent you might find your name substituted for Hudson.

I assume this is what you are referring to...

INDUSTRIAL ESPIONAGE
In 1997, Tyson Foods expressed interest in buying beef giant Hudson Foods. Hudson declined the Tyson offer. Very soon after the rejection of Tyson's bid, a government inspectorate task force under the control of Agriculture Secretary Dan Glickman 'visited' Hudson Foods, where they very conveniently 'found' evidence of e.coli bacteria contamination. By the time Glickman's task force had finished with Hudson Foods, the story had taken on national and international proportions, with the 'beleaguered' company having to recall 25 million pounds of beef, costing the company its largest customer, Burger King. The resultant fallout devalued Hudson corporate stock by 35%. [5] The Wall Street Journal said at the time: "Hudson's rapid tailspin has stunned some meat industry executives, who blame the record beef recall pushed by the Agriculture Department for breaking the back of Hudson. "What happened to Hudson Foods doesn't make sense," said Patrick Boyle, president of the American Meat Institute." [6]

PERFECT SENSE
The presence of e.coli at the Hudson plant was never proven, but the damage had been done. In 1998, Tyson Foods managed to acquire Hudson Foods at a rock bottom price, in a deal described by Leonard Teitlebaum of Merrill Lynch and Coas "adding beautifully to Tyson's distribution and production system." [7] The Wall Street Journal commented, "Hudson's brush with Glickman's gang meant the Tyson's buyout bid was an offer the company couldn't refuse." [8] It is not difficult to see that contrary to Patrick Boyle's comment, the E.coli raid made perfect sense.

http://www.christianvoice.org.uk/kings13.html

Agman, I would think, in a decreasing market, sellers of raw product wouldn't be able to demand "Y" prices...would they???

 

[ocm]

Kind of sounds like you think the producers should make a deal in the coffee shop so all his neighbors can witness it for him and make sure he doesn't get taken. If the producers wanted the neighbors to know the details of their cattle deals they would just go to the auction. Those that make individual transactions probably do so, so their neighbors don't know what kind of deal they made. :roll:

This is the way it is done on Wall Street in all of the stock exchanges. You think that is a bad pattern to follow? Got something against sunlight?

One basic problem with your analogy OCM is that stock vales per each company are static. Question: Do all companies trade at the same price or is there price differentiation? In the actual cash trade product differentiation seldom exists unless it is on a grid or formula. When producers hear that X cattle traded at Y price then everyone wants the Y price independent of quality. That is the real world of cash trade. In that environment producers of high quality product subsidize the producer of below average product. Guess what product we produce more of? You got it, more low quality product.

Most astute producers tired of that sytem and set out to change it by establishing marketing agreements based on grids that paid them for their value. Guess who complains most about marketing agreements? You got it, those who generally produce below average product.

There are ways to accomodate that. Stock prices fluctuate by time as well. But it is against the law for Warren Buffet to get a different price than me when we buy the exact same stock at the exact same time.

The most important aspect of the stock market is its transparency. Quite absent in the cattle market. Try hiding a stock transaction. All are not only reported, but witnessed.

The point is that the stock market is HIGHLY regulated. More so than any other market. And ~SH~ wants to suggest that this kind of regulation (which is designed to keep the markets honest and transparent) is socialistic--ridiculous.

The Captive Supply Reform Act does not prevent contracts from being priced by spec (or grid). It requires a based price to be established at the time the contract is written. That way nobody can manipulate the base. Like many of the regulations on Wall Street, it is preemptive, nothing wrong with that is there?

It is a red herring to suggest that the Captive Supply Reform Act will require all cattle to be priced the same regardless of quality. THAT IS NOT ANYWHERE INCLUDED IN THE ACT.

 

[Econ101]

Kind of sounds like you think the producers should make a deal in the coffee shop so all his neighbors can witness it for him and make sure he doesn't get taken. If the producers wanted the neighbors to know the details of their cattle deals they would just go to the auction. Those that make individual transactions probably do so, so their neighbors don't know what kind of deal they made. :roll:

This is the way it is done on Wall Street in all of the stock exchanges. You think that is a bad pattern to follow? Got something against sunlight?

One basic problem with your analogy OCM is that stock vales per each company are static. Question: Do all companies trade at the same price or is there price differentiation? In the actual cash trade product differentiation seldom exists unless it is on a grid or formula. When producers hear that X cattle traded at Y price then everyone wants the Y price independent of quality. That is the real world of cash trade. In that environment producers of high quality product subsidize the producer of below average product. Guess what product we produce more of? You got it, more low quality product.

Most astute producers tired of that sytem and set out to change it by establishing marketing agreements based on grids that paid them for their value. Guess who complains most about marketing agreements? You got it, those who generally produce below average product.

Agman, If the cash price is so bad, why was it used as a base for the formula pricing?

 

[HAY MAKER]

Jake, please explain how "all [cattle] receive the same price irregardless of quality"? Does that mean us Southerners are going to receive the same prices as you Northerners?

RobertMac, and Haymaker,

I am neither a packer lover, or hater for that matter. I just have ingrained in me the trait that I don't like to see the US heading away from the free market system. The wording in the bill sounds nice, but I can see through that kind of talk to see it for what it really is. I don' think transparency is a bad thing, but who is going to oversee what is fair and what is not. That is where I think the trouble would lie. That is my reference to socialism. If you are ok with all animals of a certain class bringing a seperate price from a better/worse animal, then maybe we could agree somewhat, but I still don't think we need big brother telling us what is/is not a "fair" price.

I hopefully have a lot of ranching years ahead of me, and I want the best for the industry myself, but I don't think this is it. And that is also one of the reasons I split the sheet with R-Calf. I cannot support the kind of politicians that they lean on. Personal preference.

Jake, I'm a packer lover...my packer is a good friend and an ally that turns my cattle into a quality meat product that I sell to consumers. And that's the way I think this market should be...no one will sell beef more enthusiastically than the producers that raise the cattle. With enough producers involved all the way to the consumer, laws like this won't be needed because an open, transparent market with real options will keep it a fair free market system.

Jake,I am not a lover or hater of packers, and I truly appreciate your openess and concern for the industry.
The captive supply reform act is designed to bring Transparency
to the markets,plain and simple.No hate ,no love just plain ole daylite..................good luck PS its my humble opinion that the best way for a cattle man to keep the industry viable for future generations is Transparency . :wink:

 

[Jason]

I have no problem in theory with transparency, but how do you make it happen in real life?

Imagine an auction set up each week where all packers and all sellers gather.

Group 1 a long fed group of source verified Angus based steers from a seller who hit 80% CAB last year on the same genetics. Price $98/cwt

Group 2 a long fed group of source verified Angus based steers from a new seller. Price $96/cwt

What happens when sellers start yelling unfair\unfair?

Who referees that a $2 price diferential is fair for unknown genetics?

Group 3 a long fed group of swamp cattle. Longhorn/Brahamn cross. Price $80/cwt

Again who referees that a $18 price discount is fair?

We don't know the true value in any of these cattle until they are dressed and graded. By that time everyone has forgot the auction day and is focusing on next week.

Then the problem of what R-calf bellows about now: "We only have 1 day to sell on each week."

Talk about regression.

 

[Tam]

What have you got against your neighbors, Tam? Are you always looking for some better deal for the same thing than they? How would you know if you got a better deal than the average if you didn't know the average? Do you trust salesmen?

Insider stock sales are illegal for a reason. Ask Martha Stewart (I personally think that there are a lot worse crooks out there than ole Martha; someone wanted to show that they were "doing something" about white collar crime on wallstreet -- diversion)

Econ when you sign a contract to teach at a school do you have the rest of the teachers and a few students sit in on your meeting when the school and you are negotiating your salary?
ocm described it this way "It only requires that contracts be done in such a way as to be witnessed by any interested party",
If I was interested in what you got paid could I come and sit in on the meeting, I promise I would sit quietly well unless I thought you or the school were getting taken for a ride then it would be my obligation to save one or the other from a bad deal now wouldn't it? I'm sure you think you salary is none of my business so why is my calf check any of yours or any other interested parties business.

Tam, I couldn't care less if you knew my salary (that doesn't mean I am going to tell you it). Your neighbor shouldn't care about your check except to make sure he was getting the same deal on the same type of cattle he sold. That is called market information. You and I both know that the amount in your personal check does not have to be revealed in order to reveal market information. Are you arguing that you don't want market information or that you don't want people to know what your check was? They are two different things.

I'm not arguing against market information as there are ways of getting market information other than letting any interest party sit in on my individual transactions. Like after the fact if a guy wants to brag about his deal listen and ask questions, or go to the auction barn look at the cattle sold and see what the calves most like yours are selling for. If you can't get to the sale barn look on the internet as some sale barns now post the market results on their websites. Watch a video auction from the comforts of your own home. All of these can be done without intruding on the privacy of my individual transaction.. If I don't get the deal I thought I got then I should have been the one doing my homework before I entered into negotiations for my cattle. The way I conduct my business affairs are no bodies business but mine. I don't think many producers that have been in the business for a while think they will need big brother looking over their shoulder making sure everything is fair. As what may be fair to one could be completely different to the next. I believe if you are going to stay in the industry you need to do your own homework and stop blaming everyone else when you didn't.

 

[Econ101]

I have no problem in theory with transparency, but how do you make it happen in real life?

Imagine an auction set up each week where all packers and all sellers gather.

Group 1 a long fed group of source verified Angus based steers from a seller who hit 80% CAB last year on the same genetics. Price $98/cwt

Group 2 a long fed group of source verified Angus based steers from a new seller. Price $96/cwt

What happens when sellers start yelling unfair\unfair?

Who referees that a $2 price diferential is fair for unknown genetics?

Group 3 a long fed group of swamp cattle. Longhorn/Brahamn cross. Price $80/cwt

Again who referees that a $18 price discount is fair?

We don't know the true value in any of these cattle until they are dressed and graded. By that time everyone has forgot the auction day and is focusing on next week.

Then the problem of what R-calf bellows about now: "We only have 1 day to sell on each week."

Talk about regression.

Jason, the law is not about enforcing what people think is fair, it is about ranchers having accurate information on beef trades so they can get the same thing instead of being snookered by someone blowing smoke. More information is always better in markets unless someone is trying to take advantage of someone else. Having the discrepancies in quality as you have described above transmitted to the price is key for markets to work efficiently. When market prices are based on strategic pricing that does not reflect these quality differences, the market does not work as efficient. No one is saying that the above information should not be omitted. If cattle buyers did not know the differences between those groups you mentioned above until the hide comes off as you suggest, why would they get a higher price? Money talks, B.S and S H walks.

 

[Jason]

As soon as one seller for whatever reason gets .25 cents a pound more than another everyone starts yelling collusion. The packers are out to get us. Reality is many factors decide how much is paid for those cattle.

Transportation, filling the end of a load. Filling the days kill, etc etc etc.

One thing a packer buyer said at a meeting I attended a few years back was so simple but so true. He said:" Everybody thinks their cattle are better than they really are."

Having all cattle sold on one day by auction would just revert the industry by 15 years. The buyers would have to average all cattle so there wasn't too much difference between all the "reputation cattle from a reputation outfit".

This kind of regressive legislation only benefits those who would be the middle men for such transactions. Now who do you suppose that would be?

 

[Econ101]

As soon as one seller for whatever reason gets .25 cents a pound more than another everyone starts yelling collusion. The packers are out to get us. Reality is many factors decide how much is paid for those cattle.

Transportation, filling the end of a load. Filling the days kill, etc etc etc.

One thing a packer buyer said at a meeting I attended a few years back was so simple but so true. He said:" Everybody thinks their cattle are better than they really are."

Having all cattle sold on one day by auction would just revert the industry by 15 years. The buyers would have to average all cattle so there wasn't too much difference between all the "reputation cattle from a reputation outfit".

This kind of regressive legislation only benefits those who would be the middle men for such transactions. Now who do you suppose that would be?

Jason, these are laws for the U.S. Do what you want to do in Canada. Go get taxpayers to pay John Tyson and Cargill in Canada. Just don't cry when the Canadian beef has to go through rkaiser's new proposed plant in the name of less international concentration and market power issues. Take your arguments of "free trade" to the WTO like the lumber industry has tried. See how far you get.

 

[Sandhusker]

Agman, "Most astute producers tired of that sytem and set out to change it by establishing marketing agreements based on grids that paid them for their value. Guess who complains most about marketing agreements? You got it, those who generally produce below average product."

So then all of the "astute" producers with the higher quality cattle settle on the grid and the lower quality cattle sell on spot market - the very same spot market the base price of the grids is set to. The grid gives the "astute" producers a step up, but the step is placed on the sinking sand of the spot market. Pretty good shell game there.

 

[Tam]

As soon as one seller for whatever reason gets .25 cents a pound more than another everyone starts yelling collusion. The packers are out to get us. Reality is many factors decide how much is paid for those cattle.

Transportation, filling the end of a load. Filling the days kill, etc etc etc.

One thing a packer buyer said at a meeting I attended a few years back was so simple but so true. He said:" Everybody thinks their cattle are better than they really are."

Having all cattle sold on one day by auction would just revert the industry by 15 years. The buyers would have to average all cattle so there wasn't too much difference between all the "reputation cattle from a reputation outfit".

This kind of regressive legislation only benefits those who would be the middle men for such transactions. Now who do you suppose that would be?

Jason, these are laws for the U.S. Do what you want to do in Canada. Go get taxpayers to pay John Tyson and Cargill in Canada. Just don't cry when the Canadian beef has to go through rkaiser's new proposed plant in the name of less international concentration and market power issues. Take your arguments of "free trade" to the WTO like the lumber industry has tried. See how far you get.

Econ I was talking to my mother the other day (Hint I'm from the States) and I told her about this law and I will not repeat what she said but get this I don't think she thought my brothers needed Big Brother government sticking their noses in where they are not wanted either. I again think that if a rancher is going to compete in the industry he needs to do his homework on what his cattle are really worth by asking questions and watching other cattle sell in a public forum. I also think if a producer wants to sell his product in a PRIVATE DEAL that should be his god given right. Why should he if he doesn't feel he needs supervision have to have it legislated onto him. This is just another law limiting the average persons rights. Those that feel they have been taken advantage of by these deals have other option. They have the option of publicly selling their cattle at auction or asking a more experienced producer to sit in on his negotiations. But why do those that have done their homework, have made good deals and think they can handle their own dealings, have to have a law saying they have to have their dealing in PUBLIC? The cattle industry is a risky business some deal with the risk, others blame.