fedup2 said:TRJake writes:"agman, am I correct that when both parties have been in power, that neither have found against packers on captive supply issues, as far as wrong doing? One would think that the dems could find someone who could find wrong doing? They hate private enterprise and big business you know."
I would have to question the words "wrong doing" & ever. Here is a little history. To be clear, they were never convicted on this, but to answer your question, yes, wrong doing has been found!
"At the urging of the Market Committee of the American
National Live Stock Association, the Federal Trade Commission
conducted a study that was presented to President
Woodrow Wilson in July 1919. It was terribly damaging to
the packers and could have resulted in criminal charges.
The packers then proposed what was called "The Consent
Decree." In it, they admitted no guilt but did consent to the
following, among other things:
To sell all their holdings in public stockyards
To sell all their interests in stockyard railroads and terminals
To sell all their interests in market newspapers
To dispose of all their interests in public cold storage warehouses
To forever disassociate themselves from the retail meat business
To forever disassociate themselves from wholesale groceries
To submit perpetually to the jurisdiction of the U.S. District
Court under an injunction forbidding conspiracy or monopoly.
But cattlemen did not believe the packers would live up
to this consent decree without expensive legal battles for
cattlemen, so they pushed for federal legislation to control
the packers"
This is how the packers and stockyards act was started. (by the group now known as the NCBA)
I posted this site once before but there was no discussion on it. http://www.gipsa.usda.gov/pubs/captive_supply/app_b.pdf
Read all the studies as each draws a different picture. One thing agreed on in 'most' of the studies is that captive supply does affect spot prices. As any other industry, packers do use anything and everything to their advantage. Is it wrong doing? What is wrong doing? Only things punishable by law? Actual convictions? Or is it, if you get away with it, it is not wrong doing?
Again, I have more questions than answers!
Producers need to put large reported packer profits in
perspective. First, profits should be converted to a per head
or per hundredweight basis to be compared with fed cattle
prices.
Second, it can be shown that returning all profits to
cattlemen above a standard return on sales does not add as
much to fed cattle prices as many producers might think.
Sales can be estimated by taking the boxed beef cutout value
times the average dressed weight for fed cattle, then adding
the average hide and offal value times the average live weight
for fed cattle. Multiplying that sum by 1% gives a rough
estimate of average profit per head in fed cattle slaughteringfabricating.
Returning all the higher profits in 1998 above a 1%
return on sales (and nothing indicates that some return above
1% is excessive) to cattle feeders in the form of higher prices
would have meant about $1/cwt. higher fed cattle prices.
Estimated "average" meatpacking profit per head =
[(Boxed beef cutout value x Average dressed weight of fed
cattle) + (Hide and offal value x Average live weight of fed
cattle)] x 1%
Murgen said:Producers need to put large reported packer profits in
perspective. First, profits should be converted to a per head
or per hundredweight basis to be compared with fed cattle
prices.
Second, it can be shown that returning all profits to
cattlemen above a standard return on sales does not add as
much to fed cattle prices as many producers might think.
Sales can be estimated by taking the boxed beef cutout value
times the average dressed weight for fed cattle, then adding
the average hide and offal value times the average live weight
for fed cattle. Multiplying that sum by 1% gives a rough
estimate of average profit per head in fed cattle slaughteringfabricating.
Returning all the higher profits in 1998 above a 1%
return on sales (and nothing indicates that some return above
1% is excessive) to cattle feeders in the form of higher prices
would have meant about $1/cwt. higher fed cattle prices.
Estimated "average" meatpacking profit per head =
[(Boxed beef cutout value x Average dressed weight of fed
cattle) + (Hide and offal value x Average live weight of fed
cattle)] x 1%
http://pods.dasnr.okstate.edu/docushare/dsweb/Get/Document-1733/F-554web.pdf
Murgen, how are those free trade agreements holding up in softwood lumber?
Murgen said:Murgen, how are those free trade agreements holding up in softwood lumber?
Not very well, I guess. The people we signed them with, don't own up to their signed agreements. But there is still time to correct it. But now we'll only take a certified cheque.
How about you, have you ever taken a "bum" cheque or agreement?
anyway, what did my post have to do with surplus?
Elementary economics: "Captive supplies price converge on the cash price with a decrease in time until it is essentially zero. Pickett argued that packers were paying more in captive supply than in cash market so that cash market prices would go down. This lowering of cash market prices would set the price for next week's formula market price and a continuation of this would happen that leads to lower over all prices for all cattle."
Elementary economics: "Do you think that going "select" helped out beef consumption in the long run or just took the quality out of the grocery shelves to unwitting consumers and lowered overall consumption by burning a few housewives that spent their time cooking a home cooked meal?"
What literally trashes this entire theory is the cold hard fact that every feeder has the option to sell in either the cash market or the formula market and every producer has multiple packers to sell to. The obvious is too obvious for a market manipulation conspiracy theorist like Elementary economics.
Once again, you show your complete ignorance of this industry to the world. Nobody "WENT" select. Genetics and feeding environments create "SELECT" and there is not a damn thing you can do about it short of changing genetics. Due to environmental differences, not all breeds of cattle perform equally in the same environments.
Secondly, "high select" is only one fleck of marbling away from "low choice". The direct correlation between marbling and tenderness, based on research is only 10%. When you take "select" beef and age it in cryovac, it will blow the hell out of commodity choice. That is a fact.
Econ101 said:SH:What literally trashes this entire theory is the cold hard fact that every feeder has the option to sell in either the cash market or the formula market and every producer has multiple packers to sell to. The obvious is too obvious for a market manipulation conspiracy theorist like Elementary economics.
Every producer has multiple packers to sell to, eh? Who bought Mike C.'s cattle and was it at the current market price? What about some of the other feeders in the Pickett case? I guess you can tell Jason that since he has multiple buyers, he doesn't need the U.S. market. The "cold hard facts" is what gave Pickett the huge jury award.
SH:Once again, you show your complete ignorance of this industry to the world. Nobody "WENT" select. Genetics and feeding environments create "SELECT" and there is not a damn thing you can do about it short of changing genetics. Due to environmental differences, not all breeds of cattle perform equally in the same environments.
Secondly, "high select" is only one fleck of marbling away from "low choice". The direct correlation between marbling and tenderness, based on research is only 10%. When you take "select" beef and age it in cryovac, it will blow the hell out of commodity choice. That is a fact.
I know the difference. I happen to like dry aged, not cryovac. I thought you said that the packers went select in their pricing because that is what consumers wanted. If the correlation between marbling and tenderness is only 10%, why don't the packers advertise the other 90% (like hereford) to be able to inform the buyers of the higher value and therefore get more money?
agman said:Econ101 said:SH:What literally trashes this entire theory is the cold hard fact that every feeder has the option to sell in either the cash market or the formula market and every producer has multiple packers to sell to. The obvious is too obvious for a market manipulation conspiracy theorist like Elementary economics.
Every producer has multiple packers to sell to, eh? Who bought Mike C.'s cattle and was it at the current market price? What about some of the other feeders in the Pickett case? I guess you can tell Jason that since he has multiple buyers, he doesn't need the U.S. market. The "cold hard facts" is what gave Pickett the huge jury award.
SH:Once again, you show your complete ignorance of this industry to the world. Nobody "WENT" select. Genetics and feeding environments create "SELECT" and there is not a damn thing you can do about it short of changing genetics. Due to environmental differences, not all breeds of cattle perform equally in the same environments.
Secondly, "high select" is only one fleck of marbling away from "low choice". The direct correlation between marbling and tenderness, based on research is only 10%. When you take "select" beef and age it in cryovac, it will blow the hell out of commodity choice. That is a fact.
I know the difference. I happen to like dry aged, not cryovac. I thought you said that the packers went select in their pricing because that is what consumers wanted. If the correlation between marbling and tenderness is only 10%, why don't the packers advertise the other 90% (like hereford) to be able to inform the buyers of the higher value and therefore get more money?
With all due respect there are alot of things that impact the purchase of cattle whether from MC or someone else. The complete story is many times different when both sides are known.
Elementary Economics: "Every producer has multiple packers to sell to, eh? Who bought Mike C.'s cattle and was it at the current market price? What about some of the other feeders in the Pickett case? I guess you can tell Jason that since he has multiple buyers, he doesn't need the U.S. market. The "cold hard facts" is what gave Pickett the huge jury award."
Elementary Economics: "I thought you said that the packers went select in their pricing because that is what consumers wanted."
Elementary Economics: "If the correlation between marbling and tenderness is only 10%, why don't the packers advertise the other 90% (like hereford) to be able to inform the buyers of the higher value and therefore get more money?"
Quote:
Elementary Economics: "If the correlation between marbling and tenderness is only 10%, why don't the packers advertise the other 90% (like hereford) to be able to inform the buyers of the higher value and therefore get more money?"
WHAT????? That doesn't even make sense! What other 90%?
There is only a 10% direct correlation between marbling and tenderness based on the research. I didn't say that only 10% of the beef was tender. You can't even comprehend what you read. NO WONDER!
The consumer perception is that choice is always better because it has a slight tenderness advantage over select (10%).
~SH~
~SH~ said:You still don't get it?????
THERE IS ONLY A 10% DIRECT CORRELATION BETWEEN MARBLING AND TENDERNESS. That means that in 90% of the cases, there is no correlation.
If you look at a graph of tenderness testing between "NON AGED" "choice" and "select" COMMODITY beef, there is a tremendous amount of overlap meaning that there is ALMOST as many tender steaks in the "select" category as there is tender steaks in the "choice" category. To put it another way for those of you in Rio Linda California and Kindergarten Economics, there is almost as many tough steaks in the "choice" category as there is tough steaks in the "select" category. GET IT???? A 10% TENDERNESS ADVANTAGE GOES TO "NON AGED" Choice over "NON AGED" select. In other words, "NON AGED" choice has a 10% advantage over select in being tender according to the research.
Ross Perot: "Are you getting this? Am I going too fast"?
Sheeesh!
~SH~
Elementary Economics: "The industry has gone to boxed beef but the quality characteristics of meat has been lost in the shuffle. My real question was why can't the packers come up with the real factors of tenderness, palatability etc... instead of selling select as a product whose quality is as good as choice?"
Elementary Economics: "The things the packers do to be more "efficient" are reducing the quality of the meat."
Packers are continually adding value to the beef products they provide and they pay for cattle accordingly.
10 minute microwavable products, cryovac aging, seperation of meat muscles, steam vac and pasteurization, precooked, chemical tenderization, and the list goes on and on of recent beef marketing improvements.
Randy: "I thought this was all stuff created by the producer checkoff dollars SH. Which is it?"
Randy: "They pay the least that they possibly can for cattle dork!"
Super Hero Quote:
Packers are continually adding value to the beef products they provide and they pay for cattle accordingly.
Super Hero Quote:
10 minute microwavable products, cryovac aging, seperation of meat muscles, steam vac and pasteurization, precooked, chemical tenderization, and the list goes on and on of recent beef marketing improvements.
.Just because checkoff dollars were used to develop some of these ideas does not mean that packers are not utilizing them
