• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

The "Salmon Run"

This is the first time I've ever seen anyone say it is illegal to be in competing markets. I don't know of a law that says that but it would be interesting to see.

Could this apply to ranchers that have a chicken barn as well?

How about guys that raise pigs and cows?

Nortel was in the news again last night and they are withdrawing from any market they don't have at least 20% share in. If we start limiting 1 busness I guess we have to limit them all.

Here's an easy question for anyone that cares to answer.

At what point should a packer be limited? Market share and per head profit?
 
Jason said:
This is the first time I've ever seen anyone say it is illegal to be in competing markets. I don't know of a law that says that but it would be interesting to see.

Could this apply to ranchers that have a chicken barn as well?

How about guys that raise pigs and cows?

Nortel was in the news again last night and they are withdrawing from any market they don't have at least 20% share in. If we start limiting 1 busness I guess we have to limit them all.

Here's an easy question for anyone that cares to answer.

At what point should a packer be limited? Market share and per head profit?

Jason, The packers were under court order that limited their involvement in other ag. businesses in previous history in the U.S. I don't know what the deal in Canada was.

Jason, in all your other examples, the farmers DO NOT HAVE MARKET POWER. These issues all are issues of abuse of market power. If you don't have it, it doesn't apply to you. Corporations with market power have different rules they have to follow. Did you already forget the example I gave you about your utilities?

If you don't understand the issue of market power, you will not understand the rules. If you don't want to understand that is a decision you make. Are your utility companies regulated? Were your telecommunication companies? Do you remember when the local service for telephone also had to be your long distance service?
 
Jason said:
1) This is the first time I've ever seen anyone say it is illegal to be in competing markets. I don't know of a law that says that but it would be interesting to see.

It IS illegal to be in competing markets when your position allows you to exert price pressures on the competing markets. It IS anti-competitive.

And such, once again, your rancher analogy doesn't wash. An individual rancher simply doesn't have the market power. Now if a pile of ranchers banded together and also started growing pork and chicken, I'd call for the same kind of inspections and ask for breakup.

Excessive market control is BAD. It cannot be argued against.

Rod
 
That's an important distinction Rod

It IS illegal to be in competing markets when your position allows you to exert price pressures on the competing markets. It IS anti-competitive.

If anyone has proof that packers do exert negative pressure on a competing protien they should step forward to the proper watchdog group.

There are firms that are beef only, firms that are chicken only, and firms that are pork only. Any multi-species company has to compete against those companies as well. For them to drive prices down would take implicit collusion, something never proven.

I agree excessive market control is bad.

So back to an easy question
At what point should a packer be limited? Market share and per head profit?
 
Jason said:
That's an important distinction Rod

It IS illegal to be in competing markets when your position allows you to exert price pressures on the competing markets. It IS anti-competitive.

If anyone has proof that packers do exert negative pressure on a competing protien they should step forward to the proper watchdog group.

There are firms that are beef only, firms that are chicken only, and firms that are pork only. Any multi-species company has to compete against those companies as well. For them to drive prices down would take implicit collusion, something never proven.

I agree excessive market control is bad.

So back to an easy question
At what point should a packer be limited? Market share and per head profit?

Well, Jason, in the U.S. the proper watch dog group is GIPSA. Now we all know how effective they have been. :roll:

Packers should be limited in using market power. You figure out what it is and you answer your own question.

For your information, it isn't necessary to have implicit collusion to drive prices up or down when you have the market share of Tyson in their markets. All the big companies sit on the Broiler Council in chicken. In their respective states, the managers of the different "competing" companies all belong to the same trade association that lobbies their state legislators under the guise of a "producer" led organizations. Are you trying to say the "competitors" don't talk to each other in those meetings?
 
Rod: "I grow weary of seeing that $3.88/hd number, and knowing thats its BS. And this has nothing to do with 'just knowing'. Its got to do with being able to grab a pen, figure out what I just recieved for my product that I sold, then looking at that same product and seeing what it sold for in the store. SInce I know what the markup is at the storefront, thanks to friends in the retail industry allowing me access to their books, its not difficult to calculate a gross margin for the packer. Since I also know what it costs small time butchers to cut, wrap, do SRM removal, SRM disposal, put the lights on, etc, I can use that as a starting point for calulcating packer costs. And I keep coming up with far more than $3.88/hd. So far, I'm back 10 years on my numbers, and haven't even come CLOSE to $3.88/hd."

Yeh Rod, I remember well our little arithmatic. You didn't even know enough to subtract out the bone and fat. You don't have a clue what packers are making.

The $3.88 figure was for the FIVE MAJOR PACKERS through the 90's. That doesn't mean each of them made $3.88 per head. That doesn't mean they always made $3.88 per head. That doesn't mean that some packers may have made more than others. That doesn't mean that they had the same profit levels before or after that time period.

Sometimes ibp made $15 - $25 and maybe even highs of $50 per head but they also have that same level of loss when they are caught with a short supply of cattle and every other packer needs those cattle as badly as they do. SUPPLY AND DEMAND! Why does Tyson close plants? Because there is not enough cattle to meet the demand of all the packers without buying them at a loss.

$3.88 per head AVERAGE through THE 90's IS EXACTLY WHY SMALLER LESS EFFICIENT PLANTS COULD NOT COMPETE.

Not one of you packer blamers can present anything to the contrary. Rod tried and failed miserably. We kept bringing up more and more expenses and he kept shaving and shaving from his original profit estimate which was off by miles. You guys don't have a clue.

Randy, the mindless lemmings are those who simply repeat what they hear. The independent thinkers are the ones who have actually studied the industry.

You don't believe Agman's figures, you don't believe Tyson's figures, you don't believe GIPSA's figures what about USPB's patronage dividends??? A whopping $25 - $26 per head during their startup years.

Future beef went broke. How do you go broke with some of the best minds in the business and a state of the art facility? YOU PAY TOO MUCH FOR CATTLE! Future Beef led the yearling market and they got clobbered for it.

What do you have for proof to the contrary???

NOT A DAMN THING OTHER THAN A NEED TO BLAME.

The only thing you guys can bring to the table is a feeble attempt to discredit that which you don't want to believe. The only bias I have is the truth. If my bias was a need to blame, I'd believe the same garbage you guys sink your teeth into.



~SH~
 
Blame who Scotty. What has the ridiculous nature of continually posting this stupid number have to do with blaming?

You are so hell bent on your job of defending the packers that I am sorry to say that you sir are the only true blamer on this site. Balme anyone who disagrees with you. Blame anyone who challenges your supposed facts, even if they include incredible fairy tales about losses that would break any company in the world in months let alone years.

$3.88 is a joke SH. If this figure means anything, it simply cannot mean what you and your lemmings seem to think it means. It is impossible.

Take off your cape for just a minute and give it some outside thought. It can't work Scott, it simply can't.
 
Randy I give you credit. You are the first one to answer the question of where to limit packer profits. :lol:

Rkaiser said:
$3.89 per head

So if packers are limited there where do we limit rancher profits?
 
~SH~ said:
1) Yeh Rod, I remember well our little arithmatic. You didn't even know enough to subtract out the bone and fat. You don't have a clue what packers are making.

2) Not one of you packer blamers can present anything to the contrary. Rod tried and failed miserably. We kept bringing up more and more expenses and he kept shaving and shaving from his original profit estimate which was off by miles. You guys don't have a clue.

1) <sigh> I ended up using your 40% number, just to appease you, even though that number is higher and you know it. Just because I made an error, and then corrected it, you seem to think it proves something. It doesn't except that you're grasping for straws.

2) Only in your mind was I unsuccesful. I used YOUR deductions, which I might add were way too high, and kept asking for more deductions WHICH YOU COULDN"T PROVIDE. And I used a lower yield than I should have, and calculated based on pure hamburger production. I was phenomenally successful.

Rod
 
Jason said:
Randy I give you credit. You are the first one to answer the question of where to limit packer profits. :lol:

Rkaiser said:
$3.89 per head

So if packers are limited there where do we limit rancher profits?

$3,890.00 per head, with inflation adjustments.

Ask a stupid question........
 
You forgot to ad the wink at the end of my response Jason.

Where do you think we should limit the ranchers profits Jason?

Getting any inside information from your brain team at Cargill who work on this number every day.
 
The copy/paste function doesn't pick up emoticons. I did get a chuckle out of your answer though.

I don't think anyone's profits should be limited, packers or ranchers. However if one is the other should be as well. Fair is fair.

Packers look after themselves, ranchers should as well.

A guy who has a few hundred bucks and an acreage thinks he is a rancher if he buys a cow and starves her to death. Lot's of city boys get a quarter section because it's cheaper than a 10 acre parcel and think they can run 20 cows in their spare time. Some learn the business some don't. Some become good cattle people, some become a liability.
 
Econ101 said:
Jason said:
This is the first time I've ever seen anyone say it is illegal to be in competing markets. I don't know of a law that says that but it would be interesting to see.

Could this apply to ranchers that have a chicken barn as well?

How about guys that raise pigs and cows?

Nortel was in the news again last night and they are withdrawing from any market they don't have at least 20% share in. If we start limiting 1 busness I guess we have to limit them all.

Here's an easy question for anyone that cares to answer.

At what point should a packer be limited? Market share and per head profit?

Jason, The packers were under court order that limited their involvement in other ag. businesses in previous history in the U.S. I don't know what the deal in Canada was.

If it is illegal for a meat processor to be involved in two competeing meat products, why did the courts rule in favor of IBP in June of 2001 when Tyson the Chicken processor wanted to back out of their deal with IBP the Beef and Pork processor? Why wouldn't the court stop the merger from ever happening in the first place if it was illegal?

From Rod
3) I also wouldn't have an issue with Tyson modernizing and turning our beef into the best possible product. At least then they are returning some value back to the producer. However they have used the profits from the beef side to buy into competing arenas (chicken and pork), and are no longer focused on beef. This I do have a problem with. I'm funding my competition now.
This was taken from the Tyson Web site- History on Tyson Foods Corp.
1952 By 1952, 19 other companies in the Springdale area had jumped on the poultry bandwagon. Don Tyson left his agricultural studies at the University of Arkansas to join his father's battle against a vulnerable and fluctuating market. When their rollercoaster ride hit a low, with the market and poultry diseases taking their toll, the Swanson Company offered to buy the Tyson business. But now, as in the past, adversity fueled John's determination. With his son at his side, the "Tyson Team" pushed forward.

1957 Tyson built its first processing plant on the north side of Springdale.


1961 Tyson entered the commercial egg business.


1963 The corporation went public. The name was changed to Tyson's Foods. The circle already complete from egg to processing plant, Tyson made its first significant acquisition with the purchase of Garrett Poultry Company in Rogers, Arkansas. With an "expand or expire" strategy, 19 other acquisitions marked the path between 1966 and 1989.


1966 Don Tyson was named President of the company.


1967 Tragedy struck the Tyson family. John and Helen Tyson were killed in a car/train accident in Springdale.


1968 Tyson opened retail outlets called "Chicken Huts."


1970 With broiler sales reaching 72 million, Tyson's Foods hit the Fortune 1000 chart.


1971 The name was changed to Tyson Foods, as it is to this day.


1977 Tyson purchased hog-production facilities in North Carolina. By the end of 1979, Tyson was shipping 7,500 hogs a week, distinguishing it as the nation's largest hog producer.


1982 Tyson Foods debuts on the Fortune 500 chart.


1983 Diversification continued with the purchase of Mexican Original in Fayetteville, Arkansas. Before long, Tyson was the leading producer of corn and flour tortilla products in the nation.


1986 Tyson advanced to the number-one position for poultry processing. The Tyson Management Development Center, located in Russellville, Arkansas, was opened.


1987 Corporate headquarters expansion projects were started at the Springdale Complex.


1989 Pushing forward with the acquisition of Holly Farms, the nation's third largest poultry firm, Tyson nearly doubled its already impressive 13.5 percent of the national market share.


1992 Marking another big diversification, Tyson leaped into the seafood business with the purchase of Arctic Alaska Fisheries, Inc., and Louis Kemp Seafood.


1994 Tyson was shipping products to 54 countries abroad.


1995 Tyson brought both Cargill's U.S. broiler operations and McCarty Farms, Inc., into the fold. Tyson also purchased Culinary Foods of Chicago, which manufactures some 700 complementary food items from French toast to seafood entrees. About 45 percent of Culinary's business is supplying food for airlines.


1997 Tyson acquired Mallard's Food Products of Modesto, California, an innovator in culinary development and manufacture of refrigerated-fresh entrees. Mallard's is also the nation's third-largest producer of refrigerated gourmet pasta and sauce products.


1998 Tyson solidified its position as the world's largest poultry producer by merging with long-time competitor Hudson Foods. John Tyson becomes Chairman of the Board.


1999 Tyson reorganized to concentrate more on the customer. Business groups were created to realign as specific marketing groups, such as retail, foodservice and international.


2000 Tyson Foods celebrates its 65th anniversary with family gatherings across the country. John Tyson adds title of CEO.


2001 Tyson becomes the world's largest processor and marketer of not only chicken, but also red meat with the acquisition of beef and pork powerhouse, IBP, Inc.
Now Rod, Tyson didn't take their beef profits and invest them in the competition it was the other way around.
 
Tam said:
Econ101 said:
Jason said:
This is the first time I've ever seen anyone say it is illegal to be in competing markets. I don't know of a law that says that but it would be interesting to see.

Could this apply to ranchers that have a chicken barn as well?

How about guys that raise pigs and cows?

Nortel was in the news again last night and they are withdrawing from any market they don't have at least 20% share in. If we start limiting 1 busness I guess we have to limit them all.

Here's an easy question for anyone that cares to answer.

At what point should a packer be limited? Market share and per head profit?

Jason, The packers were under court order that limited their involvement in other ag. businesses in previous history in the U.S. I don't know what the deal in Canada was.

If it is illegal for a meat processor to be involved in two competeing meat products, why did the courts rule in favor of IBP in June of 2001 when Tyson the Chicken processor wanted to back out of their deal with IBP the Beef and Pork processor? Why wouldn't the court stop the merger from ever happening in the first place if it was illegal?

From Rod
3) I also wouldn't have an issue with Tyson modernizing and turning our beef into the best possible product. At least then they are returning some value back to the producer. However they have used the profits from the beef side to buy into competing arenas (chicken and pork), and are no longer focused on beef. This I do have a problem with. I'm funding my competition now.
This was taken from the Tyson Web site- History on Tyson Foods Corp.
1952 By 1952, 19 other companies in the Springdale area had jumped on the poultry bandwagon. Don Tyson left his agricultural studies at the University of Arkansas to join his father's battle against a vulnerable and fluctuating market. When their rollercoaster ride hit a low, with the market and poultry diseases taking their toll, the Swanson Company offered to buy the Tyson business. But now, as in the past, adversity fueled John's determination. With his son at his side, the "Tyson Team" pushed forward.

1957 Tyson built its first processing plant on the north side of Springdale.


1961 Tyson entered the commercial egg business.


1963 The corporation went public. The name was changed to Tyson's Foods. The circle already complete from egg to processing plant, Tyson made its first significant acquisition with the purchase of Garrett Poultry Company in Rogers, Arkansas. With an "expand or expire" strategy, 19 other acquisitions marked the path between 1966 and 1989.


1966 Don Tyson was named President of the company.


1967 Tragedy struck the Tyson family. John and Helen Tyson were killed in a car/train accident in Springdale.


1968 Tyson opened retail outlets called "Chicken Huts."


1970 With broiler sales reaching 72 million, Tyson's Foods hit the Fortune 1000 chart.


1971 The name was changed to Tyson Foods, as it is to this day.


1977 Tyson purchased hog-production facilities in North Carolina. By the end of 1979, Tyson was shipping 7,500 hogs a week, distinguishing it as the nation's largest hog producer.


1982 Tyson Foods debuts on the Fortune 500 chart.


1983 Diversification continued with the purchase of Mexican Original in Fayetteville, Arkansas. Before long, Tyson was the leading producer of corn and flour tortilla products in the nation.


1986 Tyson advanced to the number-one position for poultry processing. The Tyson Management Development Center, located in Russellville, Arkansas, was opened.


1987 Corporate headquarters expansion projects were started at the Springdale Complex.


1989 Pushing forward with the acquisition of Holly Farms, the nation's third largest poultry firm, Tyson nearly doubled its already impressive 13.5 percent of the national market share.


1992 Marking another big diversification, Tyson leaped into the seafood business with the purchase of Arctic Alaska Fisheries, Inc., and Louis Kemp Seafood.


1994 Tyson was shipping products to 54 countries abroad.


1995 Tyson brought both Cargill's U.S. broiler operations and McCarty Farms, Inc., into the fold. Tyson also purchased Culinary Foods of Chicago, which manufactures some 700 complementary food items from French toast to seafood entrees. About 45 percent of Culinary's business is supplying food for airlines.


1997 Tyson acquired Mallard's Food Products of Modesto, California, an innovator in culinary development and manufacture of refrigerated-fresh entrees. Mallard's is also the nation's third-largest producer of refrigerated gourmet pasta and sauce products.


1998 Tyson solidified its position as the world's largest poultry producer by merging with long-time competitor Hudson Foods. John Tyson becomes Chairman of the Board.


1999 Tyson reorganized to concentrate more on the customer. Business groups were created to realign as specific marketing groups, such as retail, foodservice and international.


2000 Tyson Foods celebrates its 65th anniversary with family gatherings across the country. John Tyson adds title of CEO.


2001 Tyson becomes the world's largest processor and marketer of not only chicken, but also red meat with the acquisition of beef and pork powerhouse, IBP, Inc.
Now Rod, Tyson didn't take their beef profits and invest them in the competition it was the other way around.

Tam, I do not know the competition laws in Canada. The Tyson/IBP deal was a U.S. deal and obviously did not fall under the Canadain laws that are mentioned by Rod.

There was a lot of concern over the additonal market power in the meat industry with that purchase. The resistance to that merger or buyout was not fully vetted during the time period in question.

IBP going to court and forcing Tyson to go through with their contract of purchase was not a legal action to look into the matter of the market power issues.

Courts often do get things wrong. The Supreme Court has reached down and corrected the legal decisions regarding Tyson twice in the last year.

You are right that the lessons learned in the poultry biz were applied to the cattle biz when it comes to market frauds. If you knew the math of both these frauds (which is WAY over your head) you would see this correlation.

Tam, in the setup that Tyson has, they are able to play out some of these frauds in a round robin fashion. The time periods being compared are important because of this. You have obviously missed this in your blind attempt to support the Tyson view. I am sorry that you do not see it that way for the producers that you "represent". It is to their detriment.
 
I can see that I should have been a little more careful using Tyson as a generalized example. Yes Tyson used their position in chicken to buy into other markets, including beef, however there were other packers that went the other direction. It doesn't matter which direction its going, its still wrong to have a company able to float over rough times by using their position in a COMPETING market.

And before you ask, again, if we should stop ranchers from diversifying, I'll say it, again, that an individual rancher has NO market power and as such it doesn't matter how many markets they are involved in.

I'm really beginning to wonder if the people backing the corporations on here are actual producers.

Rod
 
DiamondSCattleCo said:
I can see that I should have been a little more careful using Tyson as a generalized example. Yes Tyson used their position in chicken to buy into other markets, including beef, however there were other packers that went the other direction. It doesn't matter which direction its going, its still wrong to have a company able to float over rough times by using their position in a COMPETING market.
And before you ask, again, if we should stop ranchers from diversifying, I'll say it, again, that an individual rancher has NO market power and as such it doesn't matter how many markets they are involved in.

I'm really beginning to wonder if the people backing the corporations on here are actual producers.

Rod

Rod you said it was illegal and Jason said he had never seen a law against it so I emailed the CFIA and asked and this was their reply back to me this morning

The Competition Act http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=148&lg=e is administered by the Competition Bureau at Industry Canada and is the federal law governing most business conduct in Canada. It contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace.

Its purpose is to maintain and encourage competition in Canada in order to:

- promote the efficiency and adaptability of the Canadian economy
- expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada
- ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy
- provide consumers with competitive prices and product choices.

The provisions of the Competition Act does not preclude companies from participating in more than one segment of a sector (for example Maple Leaf Foods operates both pork and poultry establishments) but would have provisions dealing anti-competitive behavior and abuse of dominant position in the market.

Thank you for using the CFIA web site.

Now you do remember who the Competition Bureau is, they are the ones that said "We found no evidence of collusion or abuse of dominance by beef packers or grocers,"


Rest assured we are producers Rod. That care enough about the industry to want the truth be what we make decision on.
 
Tam said:
Now you do remember who the Competition Bureau is, they are the ones that said "We found no evidence of collusion or abuse of dominance by beef packers or grocers,"

<sigh> Interesting how you keep eliminating the part of the document thats IMPORTANT:

They found no evidence of collusion or abuse, WITHIN THE CONFINES PLACED ON THEM BY THE COURTS! Do not keep insisting that law clerks are capable of performing financial audits.

Rod
 
Then why, Tam, did you not make sure the Alberta report on the packing industry answered the questions that producers were asking instead of diverting it to a market power issue? Do you just not understand the difference? If you do understand the difference, why did you argue that the report ehonnerated the packers from the allegation?

If you are a producer, I wonder what would make you take the positions you take on these issues?

Is it the influence of Uncle Tyson, Uncle Cargill, or Uncle Sam?
 

Latest posts

Back
Top