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What is happening to Packer Margins?

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Econ101

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Agman:
What portion has the packer taken? Has it increased or decreased?
Since you never know anything factual I will inform you that the packers share has declined by approximately three percentage points more than the producer's share since 1970. One more of your phony theories just got shot down a black hole.

Agman, everything depends on time periods when doing market power analysis. Do you understand that? You claimed that packer margins have decreased 3%. In fact, broiler prices for Tyson, and they are the largest broiler producer in the world, are up from about 52 cents per lb. to some pretty big highs down to right now around 72 cents for the whole bird. For your convenience, I have used Georgia Dock prices for the poultry and I have used the whole bird number. That gets rid of your little processing adds value argument.

When you go up from 52 cents to 72 cents, that is an increase of 20 cents per lb. but an increase of 38.46%. During this same time, feed prices have decreased. The actual dollar amount the farmers recieved for this increase on a real basis actually declined.

This makes your little 3% decrease a little suspect, doesn't it? Stop calling the victory in your little posts when you don't have all the facts. It kind of makes you look a little stupid to be calling other people names of judgement when yours has been lacking. Your arguments are a little more than phony.

You are probably just a Tyson market analyst that sometimes gives a little information about what you know on this board to make it look like you know so much and your judgement should be trusted. Talk about a black hole.
 

agman

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Econ101 said:
Agman:
What portion has the packer taken? Has it increased or decreased?
Since you never know anything factual I will inform you that the packers share has declined by approximately three percentage points more than the producer's share since 1970. One more of your phony theories just got shot down a black hole.

Agman, everything depends on time periods when doing market power analysis. Do you understand that? You claimed that packer margins have decreased 3%. In fact, broiler prices for Tyson, and they are the largest broiler producer in the world, are up from about 52 cents per lb. to some pretty big highs down to right now around 72 cents for the whole bird. For your convenience, I have used Georgia Dock prices for the poultry and I have used the whole bird number. That gets rid of your little processing adds value argument.

When you go up from 52 cents to 72 cents, that is an increase of 20 cents per lb. but an increase of 38.46%. During this same time, feed prices have decreased. The actual dollar amount the farmers recieved for this increase on a real basis actually declined.

This makes your little 3% decrease a little suspect, doesn't it? Stop calling the victory in your little posts when you don't have all the facts. It kind of makes you look a little stupid to be calling other people names of judgement when yours has been lacking. Your arguments are a little more than phony.

You are probably just a Tyson market analyst that sometimes gives a little information about what you know on this board to make it look like you know so much and your judgement should be trusted. Talk about a black hole.

Psst, over here...what does a change in Georgia dock whole chicken prices have to do with beef? Do you even know what the Georgia dock price represents? Are you trying to divert once again to cover your total lack of knowledge regarding the beef industry? Do you have the reading comprehension problem that you are always so quick to accuse others of? Why did you divert from answering a direct question regarding beef margins over time and change the subject to Georgia Dock whole chicken prices? Are you a chicken?

The spread you cite for broilers says absolutley nothing about total operating costs or margins does it? If that is the depth of your analytical ability you should sign up for classes at your neighborhood Montessorie school.

You are right about one observation. I do only provide a little information for you and it is very apparent that amount is way to complex for you to grasp. Your total lack of any real knowledge regrading the beef industy and I might add competing meats becomes more evident everytime you post. With your laughable interpretation of events you might qualify for a comedy act at your local grade school. You can start by playing out the your claim your phone is tapped!!
 

Econ101

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agman said:
Econ101 said:
Agman:
What portion has the packer taken? Has it increased or decreased?
Since you never know anything factual I will inform you that the packers share has declined by approximately three percentage points more than the producer's share since 1970. One more of your phony theories just got shot down a black hole.

Agman, everything depends on time periods when doing market power analysis. Do you understand that? You claimed that packer margins have decreased 3%. In fact, broiler prices for Tyson, and they are the largest broiler producer in the world, are up from about 52 cents per lb. to some pretty big highs down to right now around 72 cents for the whole bird. For your convenience, I have used Georgia Dock prices for the poultry and I have used the whole bird number. That gets rid of your little processing adds value argument.

When you go up from 52 cents to 72 cents, that is an increase of 20 cents per lb. but an increase of 38.46%. During this same time, feed prices have decreased. The actual dollar amount the farmers recieved for this increase on a real basis actually declined.

This makes your little 3% decrease a little suspect, doesn't it? Stop calling the victory in your little posts when you don't have all the facts. It kind of makes you look a little stupid to be calling other people names of judgement when yours has been lacking. Your arguments are a little more than phony.

You are probably just a Tyson market analyst that sometimes gives a little information about what you know on this board to make it look like you know so much and your judgement should be trusted. Talk about a black hole.

Psst, over here...what does a change in Georgia dock whole chicken prices have to do with beef? Do you even know what the Georgia dock price represents? Are you trying to divert once again to cover your total lack of knowledge regarding the beef industry? Do you have the reading comprehension problem that you are always so quick to accuse others of? Why did you divert from answering a direct question regarding beef margins over time and change the subject to Georgia Dock whole chicken prices? Are you a chicken?

The spread you cite for broilers says absolutley nothing about total operating costs or margins does it? If that is the depth of your analytical ability you should sign up for classes at your neighborhood Montessorie school.

You are right about one observation. I do only provide a little information for you and it is very apparent that amount is way to complex for you to grasp. Your total lack of any real knowledge regrading the beef industy and I might add competing meats becomes more evident everytime you post. With your laughable interpretation of events you might qualify for a comedy act at your local grade school. You can start by playing out the your claim your phone is tapped!!

Agman, are you saying that in the last 3 years the operating costs in the broiler industry put a big dent in that increase I posted? If that is the depth of your analitical ability to refute what I say, you might not make it in your neighborhood Montessorie school. Where is your argument against what I have posted?

If you have refutable (and independent) information on this topic which you brought up after Jason did not answer his question, then bring it to the discussion.

I refuted your little 3% claim with real facts. You have only brought your opinion becuase you don't have any facts to bring to the board. I have been consistent in what I have been saying and everytime you have posted some fact that disputes what I have said, you have been shown wrong. Then on to the name calling. Your tell is showing.

Jason can try to add on operating costs on to a hamburger if he wants to. I thought you could bring something better to the dinner table.
 

STAFF

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One Factor is the cost of recalls like this one with contaminates;

Listeria concerns result in ConAgra product recall

By Lorraine Heller

EU scientists call for listeria alert network for food
Tougher rules proposed on food safety policy in plants
Food industry demands quicker pathogen testing
Contamination, undeclared ingredients drive recalls
Listeria hijacks transport machinery to invade cells


12/2/2005 - ConAgra Foods has recalled nearly 47,000 children’s lunch kits that may be contaminated with listeria, the US Department of Agriculture (USDA) announced yesterday.


The recall, which affected the company's Armour Lunch Makers kits produced between 18-23 November and distributed nationwide, was prompted by ConAgra's own microbiological tests on ham, turkey and bologna used in the kits, said the USDA.

Listeria monocytogenes can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. It is mainly carried in raw and ready-to-eat meat, poultry, seafood and dairy products, and has prompted numerous product recalls, which have led to large financial losses for the food industry and numerous health scares.

According to a ConAgra spokesperson, the latest recall has not resulted in any reports of illness.

“We discovered listeria on some of the products during a routine quality food and safety check,” said the spokesperson.

“As a precaution we recalled all the kits containing components produced using the same equipment on that day. We do not yet know what the cause is, but we are conducting tests and will take corrective action,” she told FoodNavigator-USA.com.

Each year in the US alone about 2,500 people are infected, of which one-fifth die. Pasteurisation and cooking kill the bacterium.

Because of its high case fatality rate, listeriosis ranks among the most frequent causes of death due to foodborne illness. It ranks as the second leading cause of fatalities from foodborne diseases after salmonellosis in the US and France, and fourth in England and Wales.

Tougher regulatory standards and the increased reporting of food contamination in restaurants, supermarkets and processing plants has pushed companies to put a higher priority on safety, shelf life and cleanliness. The trend has fueled the demand for more stringent and rapid testing and tracing systems for food products along the supply chain to the consumer.

Effective prevention and control measures have worked to bring down the rate of the illness. Programs in France have reduced the incident rate to about a third of what it used to be, and in the US by half. The reduction was attributed to increased regulatory activity, the implementation of Hazard Analysis and Critical Control Points (HACCP) programs throughout the food industry, and specific recommendations to high-risk groups.

Further instances of potential contamination with Listeria monocytogenes that have resulted in recent product recalls include Oklahoma-based Allison's Gourmet Kitchens' BBQ Beans and Latin Food Group of Miami's Queso Seco Cheese.

According to the UN-backed World Health Organisation (WHO) changes in farm practices, more extensive food distribution systems and the increasing preference for meat and poultry in developing countries all have the potential to increase the incidence of foodborne illness.
 

pointrider

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Howdy! Here are some questions for both Agman and Econ 101.

Do you think the Georgia dock price really matters? To the best of your knowledge, is Tyson a company of profit centers (which might take the wholesale value of a chicken into account when assigning costs to the processing profit center which, in turn, gets passed on to the marketing profit center, etc.), or is Tyson a totally integrated company with cost centers and one "profit center", the combined company? If it is an integrated company with cost centers, what do you think is actually involved in setting the prices of the various chicken products that Tyson actually sells to its customers, both retail and foodservice?

I have my own opinions, but I would like to hear yours first, please.
 

agman

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Econ101 said:
agman said:
Econ101 said:
Agman:


Agman, everything depends on time periods when doing market power analysis. Do you understand that? You claimed that packer margins have decreased 3%. In fact, broiler prices for Tyson, and they are the largest broiler producer in the world, are up from about 52 cents per lb. to some pretty big highs down to right now around 72 cents for the whole bird. For your convenience, I have used Georgia Dock prices for the poultry and I have used the whole bird number. That gets rid of your little processing adds value argument.

When you go up from 52 cents to 72 cents, that is an increase of 20 cents per lb. but an increase of 38.46%. During this same time, feed prices have decreased. The actual dollar amount the farmers recieved for this increase on a real basis actually declined.

This makes your little 3% decrease a little suspect, doesn't it? Stop calling the victory in your little posts when you don't have all the facts. It kind of makes you look a little stupid to be calling other people names of judgement when yours has been lacking. Your arguments are a little more than phony.

You are probably just a Tyson market analyst that sometimes gives a little information about what you know on this board to make it look like you know so much and your judgement should be trusted. Talk about a black hole.

Psst, over here...what does a change in Georgia dock whole chicken prices have to do with beef? Do you even know what the Georgia dock price represents? Are you trying to divert once again to cover your total lack of knowledge regarding the beef industry? Do you have the reading comprehension problem that you are always so quick to accuse others of? Why did you divert from answering a direct question regarding beef margins over time and change the subject to Georgia Dock whole chicken prices? Are you a chicken?

The spread you cite for broilers says absolutley nothing about total operating costs or margins does it? If that is the depth of your analytical ability you should sign up for classes at your neighborhood Montessorie school.

You are right about one observation. I do only provide a little information for you and it is very apparent that amount is way to complex for you to grasp. Your total lack of any real knowledge regrading the beef industy and I might add competing meats becomes more evident everytime you post. With your laughable interpretation of events you might qualify for a comedy act at your local grade school. You can start by playing out the your claim your phone is tapped!!

Agman, are you saying that in the last 3 years the operating costs in the broiler industry put a big dent in that increase I posted? If that is the depth of your analitical ability to refute what I say, you might not make it in your neighborhood Montessorie school. Where is your argument against what I have posted?

If you have refutable (and independent) information on this topic which you brought up after Jason did not answer his question, then bring it to the discussion.

I refuted your little 3% claim with real facts. You have only brought your opinion becuase you don't have any facts to bring to the board. I have been consistent in what I have been saying and everytime you have posted some fact that disputes what I have said, you have been shown wrong. Then on to the name calling. Your tell is showing.

Jason can try to add on operating costs on to a hamburger if he wants to. I thought you could bring something better to the dinner table.

How did you refute my beef data without real beef facts? You presented data on wholesale whole bird prices? Wake up-what planet are you on?
 

Econ101

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pointrider said:
Howdy! Here are some questions for both Agman and Econ 101.

Do you think the Georgia dock price really matters? To the best of your knowledge, is Tyson a company of profit centers (which might take the wholesale value of a chicken into account when assigning costs to the processing profit center which, in turn, gets passed on to the marketing profit center, etc.), or is Tyson a totally integrated company with cost centers and one "profit center", the combined company? If it is an integrated company with cost centers, what do you think is actually involved in setting the prices of the various chicken products that Tyson actually sells to its customers, both retail and foodservice?

I have my own opinions, but I would like to hear yours first, please.

Tyson is going to do what it can to make the most money--and that includes donating food items. This is not necessarily a bad thing, it is the way it is. They are in business to do business. That is not necessarily a bad thind either.

I quoted the Georgia Dock prices because it has the whole bird price that is one of the closest to a market price in poultry you can get for the raw product. The profit centers of increased processing like cut up chicken, whole breast, split breast, processed boxed pieces,etc... goes on and on and all use the base product. I did not want all that stuff in there to confuse the issue of the base product that all of these further processing "added value" stuff can be positive or negative in the return on investment. The flat iron argument did that in the beef discussion. It can really confuse the point.

Tyson is a totally integrated company and they don't mind using the profits from one profit center subsidizing another to run out the competition. That is my allegation in the market structure when they own big stakes in both beef and chicken. In those situations, producers lose.

Agman probably has personal knowledge on your last question on setting numbers but I doubt he will share it.
 
A

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Conman,

Why did you divert Agman's question?

What has happened to packer margins in the beef industry? Have they increased or decreased or don't you know that either?


~SH~
 

Econ101

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~SH~ said:
Conman,

Why did you divert Agman's question?

What has happened to packer margins in the beef industry? Have they increased or decreased or don't you know that either?


~SH~

SH, read the previous posts. Does Agman need you to answer for him? you must be related to MRJ.
 

mrj

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Econ101 said:
~SH~ said:
Conman,

Why did you divert Agman's question?

What has happened to packer margins in the beef industry? Have they increased or decreased or don't you know that either?


~SH~

SH, read the previous posts. Does Agman need you to answer for him? you must be related to MRJ.


Econ, who crowned you the King who could decree only those directly addressed by a question were allowed to express an interest in a post?

MRJ
 

fedup2

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Agman, As I am trying to educate myself a little on ag economics, (I could write what I know now on the back of a match book cover!) I have been doing some research. As usual I find myself confused again! LOL!

You write to econ: “
I will inform you that the packers share has declined by approximately three percentage points more than the producer's share since 1970.”

Is this something that just happened in the last couple of years? I do not doubt your numbers, it just that the articles that I have been finding are pointing the other way. The one quoted below has charts that show the packers share increasing while the producers decreasing. (this to 2001, that is why I am asking if this decline is recent)

This is from an article: “The average producer’s share of retail value has declined from 62.2 percent in 1984 to 47 percent in 2001. The average packer’s share of retail value was 5.1 percent in 1984, reached a low of 4.7 percent in 1992 and increased to 9.5 percent in 2001. The average retailer’s share of retail value has increased from 32.7 percent in 1984 to 43.6 percent in 1998 and was 43.5 percent in 2001. Again, these percentages only reflect average percent of gross value and do not account for costs at any sector or reflect net profit margins.”

Again from the same article:
“Regardless of which price series are used, other analysis shows that the trends towards decreasing producer shares of the retail value of beef and increasing packer and retailer shares.” would still prevail. However, the magnitude of the change in spreads would be smaller.”
 

PORKER

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The average retailer’s share of retail value has increased from 32.7 percent in 1984 to 43.6 percent in 1998 and was 43.5 percent in 2001. Again, these percentages only reflect average percent of gross value and do not account for costs at any sector or reflect net profit margins.”

They gotta make enough to buy those ******** in Washington a trip to Macaa for wine and dance.
 

fedup2

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Sorry Agman but I just noticed that I never posted a url for you as per the article I quoted.
http://www.extension.iastate.edu/agdm/livestock/html/b2-60.html

I posted the sites on everything before until SH said he didn't have time to read all the sites posted on this forum and I should just ask the question. I feel its important to know the source of ones information.
 

agman

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PORKER said:
The average retailer’s share of retail value has increased from 32.7 percent in 1984 to 43.6 percent in 1998 and was 43.5 percent in 2001. Again, these percentages only reflect average percent of gross value and do not account for costs at any sector or reflect net profit margins.”

They gotta make enough to buy those ******** in Washington a trip to Macaa for wine and dance.

Now explain what the farm to retail spread does not explain. Once you understand those factors you will see the folly of the farm to retail price spread you cite. Please provide your explanation....I am anxiously waiting.
 

agman

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fedup2 said:
Sorry Agman but I just noticed that I never posted a url for you as per the article I quoted.
http://www.extension.iastate.edu/agdm/livestock/html/b2-60.html

I posted the sites on everything before until SH said he didn't have time to read all the sites posted on this forum and I should just ask the question. I feel its important to know the source of ones information.

Thanks for the post. I am very familiar with their analysis. They are still missing several key points. All the carcass is not consumed at retail as the calculation implies. Additionally, no retail price series accurately reflects the actual weighted average price retailers receive. They did make a relevant point and that is to say any spread represents only gross values which has no bearing on actual net profits.
 

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fedup2 said:
Agman, As I am trying to educate myself a little on ag economics, (I could write what I know now on the back of a match book cover!) I have been doing some research. As usual I find myself confused again! LOL!

You write to econ: “
I will inform you that the packers share has declined by approximately three percentage points more than the producer's share since 1970.”

Is this something that just happened in the last couple of years? I do not doubt your numbers, it just that the articles that I have been finding are pointing the other way. The one quoted below has charts that show the packers share increasing while the producers decreasing. (this to 2001, that is why I am asking if this decline is recent)

This is from an article: “The average producer’s share of retail value has declined from 62.2 percent in 1984 to 47 percent in 2001. The average packer’s share of retail value was 5.1 percent in 1984, reached a low of 4.7 percent in 1992 and increased to 9.5 percent in 2001. The average retailer’s share of retail value has increased from 32.7 percent in 1984 to 43.6 percent in 1998 and was 43.5 percent in 2001. Again, these percentages only reflect average percent of gross value and do not account for costs at any sector or reflect net profit margins.”

Again from the same article:
“Regardless of which price series are used, other analysis shows that the trends towards decreasing producer shares of the retail value of beef and increasing packer and retailer shares.” would still prevail. However, the magnitude of the change in spreads would be smaller.”

In 1970, using the USDA price series the spread between the producer share and the packers share was 13 percentage points. In the last year I calculated, 2004, the spread was only 9 percentage points. For the third quarter of 2005 the spread was only 8 percentage points. In the early 90's the packer spread narrowed to 6 percentage points difference. The point is that if price manipulation actually occurs this spread would have expanded, not contracted as it has during the time frame mentioned. I just updated this series today to properly answer your question. Thanks, have a cool one.
 

fedup2

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Thank you for taking the time to do those numbers Agman and for responding. My head is like my computer in the way that if I put garbage in, I will get garbage out!
Have a nice weekend.
 
A

Anonymous

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CONMAN,

What has happened to packer margins in the beef industry? Have they increased or decreased or don't you know that either?

Don't you think your diversion of this question is quite obvious?


Fedup,

If you go to the old Ranchers.net site you will find a publication on price spreads on the home page of the original site where USDA explains the falacy of calculating price spreads.

Herman Schumacher, R-CALF director, stated in Washington D.C., "there is no greater proof of market manipulation than the retail to fat cattle price spread".

Nothing could be further from the truth.

USDA "all choice" retail price reportings do not calculate all the "select" product or "standard" or "no roll" or "featured prices" or discarded product that is not sold by expiration date. The old retail to fat cattle price spread was misleading because it calculated "choice" product which does not reflect all retail beef sales. That is precisely why USDA changed their reporting in recent years.

This price spread data is based on USDA's retail beef price data so consider USDA's interpretation of that data.


~SH~
 

Econ101

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agman said:
fedup2 said:
Agman, As I am trying to educate myself a little on ag economics, (I could write what I know now on the back of a match book cover!) I have been doing some research. As usual I find myself confused again! LOL!

You write to econ: “
I will inform you that the packers share has declined by approximately three percentage points more than the producer's share since 1970.”

Is this something that just happened in the last couple of years? I do not doubt your numbers, it just that the articles that I have been finding are pointing the other way. The one quoted below has charts that show the packers share increasing while the producers decreasing. (this to 2001, that is why I am asking if this decline is recent)

This is from an article: “The average producer’s share of retail value has declined from 62.2 percent in 1984 to 47 percent in 2001. The average packer’s share of retail value was 5.1 percent in 1984, reached a low of 4.7 percent in 1992 and increased to 9.5 percent in 2001. The average retailer’s share of retail value has increased from 32.7 percent in 1984 to 43.6 percent in 1998 and was 43.5 percent in 2001. Again, these percentages only reflect average percent of gross value and do not account for costs at any sector or reflect net profit margins.”

Again from the same article:
“Regardless of which price series are used, other analysis shows that the trends towards decreasing producer shares of the retail value of beef and increasing packer and retailer shares.” would still prevail. However, the magnitude of the change in spreads would be smaller.”

In 1970, using the USDA price series the spread between the producer share and the packers share was 13 percentage points. In the last year I calculated, 2004, the spread was only 9 percentage points. For the third quarter of 2005 the spread was only 8 percentage points. In the early 90's the packer spread narrowed to 6 percentage points difference. The point is that if price manipulation actually occurs this spread would have expanded, not contracted as it has during the time frame mentioned. I just updated this series today to properly answer your question. Thanks, have a cool one.

Agman, the price manipulation benefit for Tyson is not necessarily found in the beef industry where you keep trying to look. Keep looking under the shell without the pea and saying that you win the game. Pickett didn't want to give up his money in that crooked game and I don't blame him.
 

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Econ101 said:
agman said:
fedup2 said:
Agman, As I am trying to educate myself a little on ag economics, (I could write what I know now on the back of a match book cover!) I have been doing some research. As usual I find myself confused again! LOL!

You write to econ: “
I will inform you that the packers share has declined by approximately three percentage points more than the producer's share since 1970.”

Is this something that just happened in the last couple of years? I do not doubt your numbers, it just that the articles that I have been finding are pointing the other way. The one quoted below has charts that show the packers share increasing while the producers decreasing. (this to 2001, that is why I am asking if this decline is recent)

This is from an article: “The average producer’s share of retail value has declined from 62.2 percent in 1984 to 47 percent in 2001. The average packer’s share of retail value was 5.1 percent in 1984, reached a low of 4.7 percent in 1992 and increased to 9.5 percent in 2001. The average retailer’s share of retail value has increased from 32.7 percent in 1984 to 43.6 percent in 1998 and was 43.5 percent in 2001. Again, these percentages only reflect average percent of gross value and do not account for costs at any sector or reflect net profit margins.”

Again from the same article:
“Regardless of which price series are used, other analysis shows that the trends towards decreasing producer shares of the retail value of beef and increasing packer and retailer shares.” would still prevail. However, the magnitude of the change in spreads would be smaller.”

In 1970, using the USDA price series the spread between the producer share and the packers share was 13 percentage points. In the last year I calculated, 2004, the spread was only 9 percentage points. For the third quarter of 2005 the spread was only 8 percentage points. In the early 90's the packer spread narrowed to 6 percentage points difference. The point is that if price manipulation actually occurs this spread would have expanded, not contracted as it has during the time frame mentioned. I just updated this series today to properly answer your question. Thanks, have a cool one.

Agman, the price manipulation benefit for Tyson is not necessarily found in the beef industry where you keep trying to look. Keep looking under the shell without the pea and saying that you win the game. Pickett didn't want to give up his money in that crooked game and I don't blame him.

Dancing around again are you?!!! You have switched from your accusation that price manipulation by beef packer is selective to now they manipulate the competing meats. Are you now admitting that Dr Taylor failed to find any eveidence of price manipulation? If so, that would be the first correct conclusion you have ever drawn since your appearance on these forums.

Sorry that you are such a total fraud which you display for all readers to witness in every post you make. Yes sir, you were set to put all of us mortals down with your self annointed Economics and Legal prowess. You have confirmed your complete failure once again with your aforementioned comment. However, your most hilarious statement is the one stating that "if supply does not go down prices cannot go up". Are you going to dance around that comment? I am waiting to see you do the TWIST on that one. That twist was made famous by Chubby Checkers. How low will you go!!
 
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