DiamondSCattleCo
Well-known member
Econ101 said:One day you will know who I am and why I have the point of view that I do. It is not today.
I'm a nub on these forums, and haven't read every single post from the past few years, but why is it important to know who the poster is, and who they work for? I see this request of Econ often, and am just curious, especially since he does appear to have a decent grasp on the realities of agricultural economics.
Or perhaps maybe he's a little on the conspiracy theory side, and that matches my general mindset :lol: But everyone here should remember that one of the basic foundations of a free market economy is self-interest. Everyone is going to operate to maximize their own gains, and with human nature being what it is and corporate enivronments being cut-throat, perhaps those conspiracy theories aren't far off the mark.
Anyway, I don't mean to hijack the thread, but rather to toss in some food for thought. There was a comment made about packers making $3.88 per head, and how many critters it would take a producer to live on if our profit was $3.88, and it made me take notice. Has anyone ever really read up on agricultural history, specifically grain prices, co-operative history and the history of grain elevators?
Long story, short: 100 years ago, many, many independent line companies. Price per bushel: pretty fair, profit margin per bushel: very very very nice. These days, only a few line companies are left. Price per bushel:about the same as it was 50 years ago, some years even lower, profit margin per bushel: nil or negative if I'm the guy trying to grow it (I'm a horrible dirt farmer). So the old family farm is dying out. Its now extremely difficult for one man as a grain farmer to gain enough economy of scale to make a decent living. So the single operator and family farm is slowly but surely dying out and being replaced by corporate farms, with dozens or hundreds of employees.
Anyone see anything similar happening in the livestock market? Its not as bad as the grain market is, but the market signs are there if you know the history.
So, someone asked if they believed the packers would price to drive the producer out of business if they could? I dunno about the poster, but I know I do. A large packer corporation would love to see corporate cow/calf operations of tens of thousands of head. Economies of scale and corporate 'efficiency' would be the story of the day. Profit margin per animal could drop to $100/head or less (I'm too tired to work the numbers right now, and they'd only be theory anyway) without production suffering or significant loss rates.
Rod