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What is the General Health of the Beef Business?

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Econ101 said:
agman said:
Econ101 said:
Pointrider, there are a lot of things for the beef industry to do. On the producer side there are actions like Jason suggested that makes him more efficient. On the packer side, there are things that Agman has suggested that add value (convenience meals, etc.). I am interested in the market side; that relationship between the producers and the packers. This side has to work efficiently for the other things to add value to the producers. Pickett showed that they were not.

Call me a one man issue if you want. It is the most important issue. It is the big game.

When you did not know that USDA graders determine the quality grade of carcasses, not packers, why should anyone believe you understand anything regarding the beef industry. Factors that are just very basic knowledge you do not even know so how do you formulate your unending stream of allegations with no knowledge? You have a great imagination for manipulation theories but you have demonstrated no other ability.

Agman, if you want to get technical here, feeders and the ration as well as the time on the ration, genetics, and a whole lot of other factors determine the quality grade. USDA graders just put their best guess on it.

Why would you think I didn't know that USDA graders put the stamp on it? If you can't win an argument you just have to make one up, I guess. Everyone should believe you, then they would not have to think. :lol: :lol: :lol:

Psst...dreamer, have you forgotten your earlier post when you accused the packer of fleecing the producer through their grading of cattle? Do you recall that you were informed at that time that USDA graders grade the cattle, not the packers? Doing the twist again....are you? Of the fctors you mentioned that determine grade which ones do the packers control? I can't wait to her your explanation for that question. Sorry, I forgot that you have never answered a direct question. You have insufficient knowledge to do so.

Get technical?...You do't have a clue what technical is. You have yet to learn the basics. That has been demonstrated repeatedly. Who do you think you are kidding, me or the other readers?
 
agman said:
Econ101 said:
agman said:
When you did not know that USDA graders determine the quality grade of carcasses, not packers, why should anyone believe you understand anything regarding the beef industry. Factors that are just very basic knowledge you do not even know so how do you formulate your unending stream of allegations with no knowledge? You have a great imagination for manipulation theories but you have demonstrated no other ability.

Agman, if you want to get technical here, feeders and the ration as well as the time on the ration, genetics, and a whole lot of other factors determine the quality grade. USDA graders just put their best guess on it.

Why would you think I didn't know that USDA graders put the stamp on it? If you can't win an argument you just have to make one up, I guess. Everyone should believe you, then they would not have to think. :lol: :lol: :lol:

Psst...dreamer, have you forgotten your earlier post when you accused the packer of fleecing the producer through their grading of cattle? Do you recall that you were informed at that time that USDA graders grade the cattle, not the packers? Doing the twist again....are you? Of the fctors you mentioned that determine grade which ones do the packers control? I can't wait to her your explanation for that question. Sorry, I forgot that you have never answered a direct question. You have insufficient knowledge to do so.

Get technical?...You do't have a clue what technical is. You have yet to learn the basics. That has been demonstrated repeatedly. Who do you think you are kidding, me or the other readers?

What I accused the grading process on was the transparency of the grading. I said that ANYONE should be able to see how USDA was grading cattle. Whether or not anyone was being "fleeced" (I see you are a sheep man too, Agman) should be determined by a jury. Transparency of the grading process, since grading is a main determinate of actual dollars to the cattleman, is required. If there is no transparency there then "formula" cattle sales have the possibility of being corrupt.

I picked up the possibility of the "fleecing" as you say, from the article that Mike posted on the reported sidebar discussion article on Mike C., I believe it was. I know for a fact that transparency of pay basis is a problem in the poultry side of Tyson's business.

Agman, if the cattle are fed by Tyson, they have almost complete control over the factors that contribute to the grade of cattle short of the biological contraints God provides. Is that direct enough? I can't read your mind.

As far as technical is concerned, I have tried many times to post some data on this forum but have not been able to keep the data in the tabular form when posted. The computations on the data analysis would probably not be understood by most people that browse this forum. If they most don't understand why the base price for the formula cattle being based only on the cash market, and not on the market as a whole is cheating the producer, the calculations would not be very helpful.

I don't happen to like the technical aspects of the calculations as it is akin to calculations on the calculator, however I do know how to do them and all the theories behind the calculations. As I stated before, this is not the proper forum for that analysis. What has been apparent is that SH and you, Agman, do not know the theories behind the numbers, or you just want to avoid them and divert from them as the truth does not fit your needs.
 
Conman: "What I accused the grading process on was the transparency of the grading. I said that ANYONE should be able to see how USDA was grading cattle. Whether or not anyone was being "fleeced" (I see you are a sheep man too, Agman) should be determined by a jury. Transparency of the grading process, since grading is a main determinate of actual dollars to the cattleman, is required. If there is no transparency there then "formula" cattle sales have the possibility of being corrupt."

I already told you that USDA graders are subject to periodic audit and that cattlemen can watch their cattle being graded.

More importantly, a grade that favors the packer, favors the producer. Another conspiracy theory shot to hell and one more example of your total ignorance of this industry.

You don't post any data because you don't have any that could stand up to scrutiny. All you have is a desire to blame and create an illusion that you understand this industry. You are a complete phony and you proved it again with your USDA carcass grading transparency conspiracy.



~SH~
 
SH wrote:
More importantly, a grade that favors the packer, favors the producer. Another conspiracy theory shot to hell and one more example of your total ignorance of this industry.

So...........you're telling us that a calf that was graded a "Yield Grade 4" that was actually a "Yield Grade 1"..........the producer would be favored?

Seems that the producer would be paid less for his part and the packer would receive more yield. Just wondering about this statement?
 
Mike,

You really bit off more than you can chew this time.

First, how do you change a USDA Y4 STAMP into a USDA Y1 STAMP?

Once a carcass has been graded, IT HAS BEEN GRADED!

Second, do you honestly believe that any USDA grader would be so incompetant as to grade a carcass Y4 when it should have been a Y1?

Good grief Mike?

Where do you guys come up with these crazy notions?



~SH~
 
~SH~ said:
Mike,

You really bit off more than you can chew this time.

First, how do you change a USDA Y4 STAMP into a USDA Y1 STAMP?

Once a carcass has been graded, IT HAS BEEN GRADED!

Second, do you honestly believe that any USDA grader would be so incompetant as to grade a carcass Y4 when it should have been a Y1?

Good grief Mike?

Where do you guys come up with these crazy notions?
~SH~

Come down to earth a little. I never mentioned changing a "Stamp".

I have no idea how "competent" these people are, I know that I take their word for it and move on.

Your statement is what I am addressing......please explain it.

More importantly, a grade that favors the packer, favors the producer.

YOU have alluded to the fact that any "mis-grading" would be as beneficial to the producer as it would be to the packer.
 
For you Mike, I will explain it.

First, a USDA grader is not going to confuse a Y4 with a Y1. Anyone could take an accurate measurement of ribeye, KPH, and BF and see whether a carcass was correctly graded or not. Trust me, nobody is that incompetant. Well, perhaps Sandbag and Conman but they're not USDA graders.

Second, if a carcass is misgraded "LOWER", it is a detriment to both the packer and the producer. If a carcass is misgraded "HIGHER", it is a benefit to both the producer and the packer.

Once a carcass has been graded and stamped, that is the grade that will follow that carcass to the retail level and that is the grade that a packer will get paid for and in turn pay the producer for.

The opportunity for fraud would be a packer paying a producer for a lower grade than a carcass actually received but USDA graders are accountable to that. Any producer should be able check to see if the USDA graders grade on a certain lot of cattle matched the producer's grid pricing on a certain lot of cattle. That is why USDA has periodic audits.

The packer already has his profit factored into the base price. He would be foolish to try to misrepresent the grade. I hate talking about hypotheticals. Either there is proof of grading fraud or there is not.


~SH~
 
OK, now I see what you are saying.

But if I could show you where 94.4% of all carcasses (and 11% that were adjusted a minimum of 1/2 of a yield grade)were mis-graded in a peer-reviewed study...would you believe that there could be a potential atmosphere for fraud in grading?
 
Mike: "But if I could show you where 94.4% of all carcasses (and 11% that were adjusted a minimum of 1/2 of a yield grade)were mis-graded in a peer-reviewed study...would you believe that there could be a potential atmosphere for fraud in grading?"

I could believe that there is certainly a potential for misgrading but there is no incentive for USDA graders to misgrade against producers and packers so it cannot be considered "fraud". No USDA grader has any incentive to misgrade a carcass other than in favor of the packer and producer because they don't have to deal with the consumer on a daily basis. They deal with the packers. If carcasses are being misgraded, it is far more likely to be in favor of the packer and producer than against them. Like I said, we found this out with PM Beef Group.

Video grading cost the PM BEEF group producers money in three ways:

1. Incompetancy in those running the machine.
2. The cost of the machine and the individual to run it.
3. The border lined carcasses were not thrown in our favor as they are with many USDA manual graders.

Video grading is something that we thought would take care of the concern about misgrading carcasses but we found out we were much better off with a USDA grader and a periodic audit.


Next time you come out to SD, look me up. We'll go do some shooting/hunting and leave the issues here.


~SH~
 
SH and Mike, a quick question, please.

Do you think there would be complications if a lot of carcasses were misgraded if most of them went to cut up plants like the new Tyson cut up plant at Sherman, Texas?

Personally, I think misgraded carcasses would cause a lot of problems. Those plants, especially a new, state-of-the-art plant like the one at Sherman is geared to produce certain case ready products in an efficient manner and in the proper grade. As the industry shifts more to cut up and case ready products for the consumer, the packer will become more demanding in knowing exactly what is coming into and going out of those plants.

Just my opinion.
 
Pointrider, I don't know what problems would be caused in the specific situation you mentioned. I think any misgrading of carcasses is a problem in this industry. In contrast, automated grading can also have problems. I think this industry will eventually go towards more automated grading.


~SH~
 
Once a carcass has been graded and stamped, that is the grade that will follow that carcass to the retail level and that is the grade that a packer will get paid for and in turn pay the producer for.

Does a "YIELD GRADE" grade stamp accompany the carcass to the retailer? This is where my question of potential fraud would come under play.

Scenario: A carcass is graded a yield grade 1.5 when it is actually a 1. To my knowlege there are no audits to rectify this, the producer is paid for the 1.5 and the packer would benefit from the increase in yield.

The Graders check initially comes from the packer. Who has incentive for mis-grading?

It could very easily be done. I don't know that it is...but who knows that it don't?

Just wondering if the producer is protected against it.
 
SH, I agree with you. I think there will be more automated grading in the future. The demands of the very specific cut up/further processed product plants will push it that way. Also, problems are only opportunities for the entreprenurial mind. If the guys who are claiming abuses keep it up it will only hasten the change. I think, in the long run, the kinds of abuses in the past will be just that - in the past. However, the producer will also have a new set of challenges. The new demands and technology for showing exactly what is in that carcass will put more pressure on producers to produce what is wanted to bring top prices. But that will be good, too. Overall quality will be better, and that's good for all.
 
pointrider said:
SH, I agree with you. I think there will be more automated grading in the future. The demands of the very specific cut up/further processed product plants will push it that way. Also, problems are only opportunities for the entreprenurial mind. If the guys who are claiming abuses keep it up it will only hasten the change. I think, in the long run, the kinds of abuses in the past will be just that - in the past. However, the producer will also have a new set of challenges. The new demands and technology for showing exactly what is in that carcass will put more pressure on producers to produce what is wanted to bring top prices. But that will be good, too. Overall quality will be better, and that's good for all.

My compliments too you. You got it right.
 
Mike: "Does a "YIELD GRADE" grade stamp accompany the carcass to the retailer? This is where my question of potential fraud would come under play.

Scenario: A carcass is graded a yield grade 1.5 when it is actually a 1. To my knowlege there are no audits to rectify this, the producer is paid for the 1.5 and the packer would benefit from the increase in yield.

The Graders check initially comes from the packer. Who has incentive for mis-grading?

It could very easily be done. I don't know that it is...but who knows that it don't?

Just wondering if the producer is protected against it."


I'm not sure there is a Yield Grade Stamp to the retailer because once the carcass is trimmed, the yield grade, as far as backfat, is no longer an issue. Backfat is only a pricing issue to the value of the initial carcass before it's trimmed.

Now when it comes to a Yield grade stamp in relation to the size of the Ribeye, I'm not sure what information accompanies that product or how it is priced to the retailer in relation to the size of the ribeye.

Perhaps Beefman is reading this and could answer. He seems to have a solid understanding of retail beef pricing.

As far as the difference between a Y1 and a Y1.5, that is the USDA graders discretion based on ribeye size and backfat. I don't believe a USDA grader has any incentive to misgrade those carcasses.

The graders check does not come from the packer, it comes from USDA.

When I said the grade stamp accompanies the carcass, I meant quality grade. I am not sure about yield grade.


~SH~
 
The graders check does not come from the packer, it comes from USDA.

The packer has to pay the USDA for the grading services. That's why I said "initially".

It's just another open door for fraud is all I am saying. Where the producer could be on the short end of the stick.

"Could", I said, not "IS".

Us "conspiracy" deviates have to analyze every possible angle.

:wink:
 
Mike: "Us "conspiracy" deviates have to analyze every possible angle."

The first step in overcoming a problem is in the recognition of that problem. LOL!


~SH~
 
Recognize this problem:

On October 27, 1999, 21 people, including eight USDA inspectors, were arrested at the Hunts Point Terminal Market located in Bronx, New York, and were charged with bribery. These arrests were the result of a 3-year investigation by the USDA's Office of Inspector General, appropriately code named Operation Forbidden Fruit.
Federal prosecutors were able to obtain the convictions for all eight of the USDA inspectors. Seven of the eight convicted inspectors received sentences ranging from 15 to 30 months in prison, as well as fines and forfeitures totaling $169,000 in May of this year.
The investigation revealed how owners of 12 produce firms at the Hunts Point Market had routinely paid cash bribes to the USDA inspectors in exchange for lowering the grade of the produce being inspected. This saved the produce wholesalers a substantial amount of money per load, and at the same time defrauded farmers out of tens of millions of dollars.
I consider this to be an extremely serious situation. Bribery and fraud in the USDA inspection program represent a dangerous threat to America's system for grading produce. Even more, when public officials fill their profits with bribes, effectively stealing from the very producers that they are supposed to serve, they undermine and erode every American's confidence and trust in their Government.
This subcommittee, therefore, is determined to fulfill its responsibility by learning from the events that occurred Hunts Point, understanding how these activities proceeded without detection for so long, and determine what can be done to keep it from reoccurring—in short, what went wrong and how it is being fixed.
I am glad to say that some initial steps to repair the integrity of our produce inspection system have already been taken. As a member of the Crop Insurance Conference Committee, I worked to include over $11.5 million in that legislation for infrastructure improvements and modernization at the USDA expressly to prevent fraud and corruption in the grading system. Additional language was included directing the USDA to address economic losses to the produce industry and to evaluate the suitability of restitution. The report was due on July 19.

Page 9 PREV PAGE TOP OF DOC

Today we will hear about this issue from many sides. I expect that we will get a bit of an education as to how these types of businesses often operate, as well as some lessons in greed and how some people's greed knows no limit.
I look forward to today's testimony and I welcome our witnesses, especially those who have traveled a long way to be here. Your efforts are appreciated.
I would like to turn to the ranking member, Mr. Peterson, for his opening statement.
OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA

Mr. PETERSON. Thank you, Mr. Chairman, and thank you for holding this hearing today on the illegal activities at the Hunts Point Marketing Terminal.
First of all, I associate myself with your opening remarks and echo the seriousness of today's topic. The public and industry confidence in the inspection program has been, regrettably, shaken.
I think that most of us agree that the overwhelming majority of inspectors are professional and do their jobs honestly and according to the law. It is unfortunate that the actions of a few can do such damage.
Secretary Glickman made it clear when the arrests were announced in October 1999 that he has no tolerance for this kind of inappropriate and illegal behavior at USDA. I believe the Secretary has signaled the administration's firm intent to make changes necessary to restore full confidence in the program. I hope that we can work closely with them in this effort.
Although there are several different questions to answer about Hunts Point, one of the more challenging is the question about damages to shippers and growers. I recognize the complex nature of the circumstances of illegal activity involving thousands of inspections over the course of many years; however, in order for the Congress and the administration to develop the most appropriate response to damages, we must work hard to measure the true cost. I hope that we can address this question today.
 
Perhaps facts get in the way of your arguments again, SH. Maybe a little less "packers are always right" mentality should be replaced with a few more checks to potential fraud, as I have advocated.

Should you turn into one of those "conspiracy nuts"?

You already are one.

You believe in the conspiracy of 12.

I believe in it is the money and its influence that is the basis of the conspiracy in the cattle markets.

History is on my side on this one.
 
Mike: "Does a "YIELD GRADE" grade stamp accompany the carcass to the retailer? This is where my question of potential fraud would come under play.

Scenario: A carcass is graded a yield grade 1.5 when it is actually a 1. To my knowlege there are no audits to rectify this, the producer is paid for the 1.5 and the packer would benefit from the increase in yield.

The Graders check initially comes from the packer. Who has incentive for mis-grading?

It could very easily be done. I don't know that it is...but who knows that it don't?

Just wondering if the producer is protected against it." show you where 94.4% of all carcasses (and 11% that were adjusted a minimum of 1/2 of a yield grade)were mis-graded in a peer-reviewed study...



I'm not sure there is a Yield Grade Stamp to the retailer because once the carcass is trimmed, the yield grade, as far as backfat, is no longer an issue. Backfat is only a pricing issue to the value of the initial carcass before it's trimmed.

Now when it comes to a Yield grade stamp in relation to the size of the Ribeye, I'm not sure what information accompanies that product or how it is priced to the retailer in relation to the size of the ribeye.

As far as the difference between a Y1 and a Y1.5, that is the USDA graders discretion based on ribeye size and backfat. I don't believe a USDA grader has any incentive to misgrade those carcasses.

****Really,,,In the ScoringAg database the records that have been entered go with the product and there is proof of even who entered the record with date and time and the data cannot be changed.

ps.Sure are enjoying the warm Florida weather after opening our winter home.The horses sure are feeling their oat's with the great green pasture.
 

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