You, as a producer

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You, as a producer

Post by HDRider » Wed Nov 27, 2019 1:57 am

Know how much profit you make per head.

Gains in cash cattle prices did not translate into higher profits for feedyards last week. Cattle traded at $116, about $1 higher, but feedyard margins declined $35 per head to a modest average profit of $24, according to the Sterling Beef Profit Tracker. The decline was due to higher feeder cattle prices calculated against last week’s closeouts.

Packer margins also slipped modestly, but packer profits still totaled an average of $363 per head. The packer/feeder margins spread was $339, about $1 higher than the previous week.

A year ago cattle feeders found profits of $39 per head on closeouts the third week in November, while packers saw profits of $224, for a spread of $185.

https://www.drovers.com/article/profit- ... slip-lower

https://cdn.farmjournal.com/s3fs-public ... 112619.pdf


bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

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Re: You, as a producer

Post by HDRider » Wed Nov 27, 2019 7:08 am

Think about that $363. That is done with proper accounting.

That $363 is after all capital expenses and depreciation, after operating expenses, after taxes, after salaries, wages, insurance, and benefits.

On a gross profit basis, that $363 is closer to $500 profit per head.
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

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Re: You, as a producer

Post by Bright Raven » Wed Nov 27, 2019 7:19 am

HDRider wrote:
Wed Nov 27, 2019 7:08 am
Think about that $363. That is done with proper accounting.

That $363 is after all capital expenses and depreciation, after operating expenses, after taxes, after salaries, wages, insurance, and benefits.

On a gross profit basis, that $363 is closer to $500 profit per head.
There is such a disparity between the producer and feeder on one end and the packer on the other. Having said that, isn't that the way Capitalism is suppose to work? You prosper if "you can" and you go out of business if "you can't".
"Looking for an honest man".
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Re: You, as a producer

Post by HDRider » Wed Nov 27, 2019 7:20 am

I have to say, this is the only value chain I have experienced where a necessary link is run as a not for profit.
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

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Re: You, as a producer

Post by Bright Raven » Wed Nov 27, 2019 7:23 am

HDRider wrote:
Wed Nov 27, 2019 7:20 am
I have to say, this is the only value chain I have experienced where a necessary link is run as a not for profit.
That is because in most cases nonprofit components eventually disappear. That is why industrial America vanished.
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Re: You, as a producer

Post by HDRider » Wed Nov 27, 2019 7:23 am

Bright Raven wrote:
Wed Nov 27, 2019 7:19 am
HDRider wrote:
Wed Nov 27, 2019 7:08 am
Think about that $363. That is done with proper accounting.

That $363 is after all capital expenses and depreciation, after operating expenses, after taxes, after salaries, wages, insurance, and benefits.

On a gross profit basis, that $363 is closer to $500 profit per head.
There is such a disparity between the producer and feeder on one end and the packer on the other. Having said that, isn't that the way Capitalism is suppose to work? You prosper if "you can" and you go out of business if "you can't".
It is a distorted form of capitalism. It is distorted by government rules and regulations. Some of those regulations have their intended consequences, and some have negative, unintended consequences.
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

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Re: You, as a producer

Post by Bright Raven » Wed Nov 27, 2019 7:24 am

HDRider wrote:
Wed Nov 27, 2019 7:23 am
Bright Raven wrote:
Wed Nov 27, 2019 7:19 am
HDRider wrote:
Wed Nov 27, 2019 7:08 am
Think about that $363. That is done with proper accounting.

That $363 is after all capital expenses and depreciation, after operating expenses, after taxes, after salaries, wages, insurance, and benefits.

On a gross profit basis, that $363 is closer to $500 profit per head.
There is such a disparity between the producer and feeder on one end and the packer on the other. Having said that, isn't that the way Capitalism is suppose to work? You prosper if "you can" and you go out of business if "you can't".
It is a distorted form of capitalism. It is distorted by government rules and regulations. Some of those regulations have their intended consequences, and some have negative, unintended consequences.
There are lots of historical parallels in other businesses.
"Looking for an honest man".
Diogenes.

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Re: You, as a producer

Post by HDRider » Wed Nov 27, 2019 7:24 am

Bright Raven wrote:
Wed Nov 27, 2019 7:23 am
HDRider wrote:
Wed Nov 27, 2019 7:20 am
I have to say, this is the only value chain I have experienced where a necessary link is run as a not for profit.
That is because in most cases nonprofit components eventually disappear. That is why industrial America vanished.
Here, in this business model, American producer are being replaced by low cost foreign producers, like we saw in manufacturing.
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

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Re: You, as a producer

Post by Bright Raven » Wed Nov 27, 2019 7:25 am

HDRider wrote:
Wed Nov 27, 2019 7:24 am
Bright Raven wrote:
Wed Nov 27, 2019 7:23 am
HDRider wrote:
Wed Nov 27, 2019 7:20 am
I have to say, this is the only value chain I have experienced where a necessary link is run as a not for profit.
That is because in most cases nonprofit components eventually disappear. That is why industrial America vanished.
Here, in this business model, American producer are being replaced by low cost foreign producers, like we saw in manufacturing.
Yes. Exactly.
"Looking for an honest man".
Diogenes.

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Re: You, as a producer

Post by HDRider » Wed Nov 27, 2019 7:25 am

Bright Raven wrote:
Wed Nov 27, 2019 7:24 am
HDRider wrote:
Wed Nov 27, 2019 7:23 am
Bright Raven wrote:
Wed Nov 27, 2019 7:19 am


There is such a disparity between the producer and feeder on one end and the packer on the other. Having said that, isn't that the way Capitalism is suppose to work? You prosper if "you can" and you go out of business if "you can't".
It is a distorted form of capitalism. It is distorted by government rules and regulations. Some of those regulations have their intended consequences, and some have negative, unintended consequences.
There are lots of historical parallels in other businesses.
Such as?
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

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Re: You, as a producer

Post by Bright Raven » Wed Nov 27, 2019 7:27 am

HDRider wrote:
Wed Nov 27, 2019 7:25 am
Bright Raven wrote:
Wed Nov 27, 2019 7:24 am
HDRider wrote:
Wed Nov 27, 2019 7:23 am


It is a distorted form of capitalism. It is distorted by government rules and regulations. Some of those regulations have their intended consequences, and some have negative, unintended consequences.
There are lots of historical parallels in other businesses.
Such as?
Metal fabrication is one. There are lots of examples. Where the suppliers disappear because the product they supply can be supplied cheaper in countries with a low standard of living to support.
"Looking for an honest man".
Diogenes.

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Re: You, as a producer

Post by HDRider » Wed Nov 27, 2019 7:36 am

Bright Raven wrote:
Wed Nov 27, 2019 7:27 am
HDRider wrote:
Wed Nov 27, 2019 7:25 am
Bright Raven wrote:
Wed Nov 27, 2019 7:24 am


There are lots of historical parallels in other businesses.
Such as?
Metal fabrication is one. There are lots of examples. Where the suppliers disappear because the product they supply can be supplied cheaper in countries with a low standard of living to support.
I understand global markets.

My point is more about how capitalism has been corrupted by rules that freeze someone out of markets. Mega corporations have used government regulations to kill small producers and their ability to exploit small markets. The number of custom meat processing facilities is getting closer to zero every day.

I worked in manufacturing for almost 40 years. I saw globalism in action. Globalism, and cheap foreign wages hurt domestic manufacturers, and eliminated many low margin domestic manufacturers, but the government did not purposely, at the behest of a select few, fix the game.

The mega packers ability to disguise foreign beef as US beef is doing US producers a disservice.
bball wrote: "The juice wasn't worth the squeeze."
Dun said, "You gotta be flexible. Do whatever you have to do for the best results within your limitations."

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Re: You, as a producer

Post by Bright Raven » Wed Nov 27, 2019 7:44 am

HDRider wrote:
Wed Nov 27, 2019 7:36 am
Bright Raven wrote:
Wed Nov 27, 2019 7:27 am
HDRider wrote:
Wed Nov 27, 2019 7:25 am


Such as?
Metal fabrication is one. There are lots of examples. Where the suppliers disappear because the product they supply can be supplied cheaper in countries with a low standard of living to support.
I understand global markets.

My point is more about how capitalism has been corrupted by rules that freeze someone out of markets. Mega corporations have used government regulations to kill small producers and their ability to exploit small markets. The number of custom meat processing facilities is getting closer to zero every day.

I worked in manufacturing for almost 40 years. I saw globalism in action. Globalism, and cheap foreign wages hurt domestic manufacturers, and eliminated many low margin domestic manufacturers, but the government did not purposely, at the behest of a select few, fix the game.

The mega packers ability to disguise foreign beef as US beef is doing US producers a disservice.
Understand. The ills you identified may be selective against one enterprise more so than another.

Speaking on a much broader economic basis. Economist agree that fundamentally, in a global world market, their will be discrepancies created by the unbalance in the standard of living.

In the US, employers provide extensive benefits other countries do not. US employees work for higher wages and demand those fringe benefits. Until the global standard of living equalizes, expect the playing field to remain unlevel. As you know, this is elementary economics.
"Looking for an honest man".
Diogenes.

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Re: You, as a producer

Post by bball » Wed Nov 27, 2019 7:55 am

Bright Raven wrote:
Wed Nov 27, 2019 7:19 am
HDRider wrote:
Wed Nov 27, 2019 7:08 am
Think about that $363. That is done with proper accounting.

That $363 is after all capital expenses and depreciation, after operating expenses, after taxes, after salaries, wages, insurance, and benefits.

On a gross profit basis, that $363 is closer to $500 profit per head.
There is such a disparity between the producer and feeder on one end and the packer on the other. Having said that, isn't that the way Capitalism is suppose to work? You prosper if "you can" and you go out of business if "you can't".
Let's investigate this a bit further.
Capitalism:
an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. (Per dictionary)

Many of our nation's economic policies are dictated by our govt(state). As recently evidenced by the announcement of a major farm bill, in which a foreign owned CORPORATION(nameless, faceless, legally protected entity who happens to be backed by the Brazilian Development Bank) will receive over 70 million USD (taxpayer dollars). JBS, a Brazilian-owned company, received $22.3 million from the USDA farm bailout package of 2018. (Wikipedia).

Historically, in a capitalist market, govt involvement focused on protecting consumers and small producers, from monpolies and trusts. Afterall, the biggest benefit to capitalism was creating an environment of competition so fresh ideas and products could flourish and be available to the consumer. This competition also kept manufacturers in check on price gouging. We now have a small group of corporations, being financially supported by multi national banks and govts, controlling an important leg of our food supply.

That doesn't sound like capitalism to me. Capitalism, similar to words like liberty and freedom, often require a deeper look behind the curtain to verify what is actually happening against what one is being led to believe... :tiphat:
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Exercising compassion provides the most linear and fulfilling state of happiness.

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Re: You, as a producer

Post by Bright Raven » Wed Nov 27, 2019 8:10 am

bball wrote:
Wed Nov 27, 2019 7:55 am
Bright Raven wrote:
Wed Nov 27, 2019 7:19 am
HDRider wrote:
Wed Nov 27, 2019 7:08 am
Think about that $363. That is done with proper accounting.

That $363 is after all capital expenses and depreciation, after operating expenses, after taxes, after salaries, wages, insurance, and benefits.

On a gross profit basis, that $363 is closer to $500 profit per head.
There is such a disparity between the producer and feeder on one end and the packer on the other. Having said that, isn't that the way Capitalism is suppose to work? You prosper if "you can" and you go out of business if "you can't".
Let's investigate this a bit further.
Capitalism:
an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. (Per dictionary)

Many of our nation's economic policies are dictated by our govt(state). As recently evidenced by the announcement of a major farm bill, in which a foreign owned CORPORATION(nameless, faceless, legally protected entity who happens to be backed by the Brazilian Development Bank) will receive over 70 million USD (taxpayer dollars). JBS, a Brazilian-owned company, received $22.3 million from the USDA farm bailout package of 2018. (Wikipedia).

Historically, in a capitalist market, govt involvement focused on protecting consumers and small producers, from monpolies and trusts. Afterall, the biggest benefit to capitalism was creating an environment of competition so fresh ideas and products could flourish and be available to the consumer. This competition also kept manufacturers in check on price gouging. We now have a small group of corporations, being financially supported by multi national banks and govts, controlling an important leg of our food supply.

That doesn't sound like capitalism to me. Capitalism, similar to words like liberty and freedom, often require a deeper look behind the curtain to verify what is actually happening against what one is being led to believe... :tiphat:
It is common practice to use these terms loosely. The term "Capitalism" is often employed to describe commerce when more precise terms should be used. In the same vain, we often over emphasis government when we are discussing economics.

The fundamental issue with the ills of America's competitive status is the unbalance in the standard of living on a world basis. The government cannot fix that.
"Looking for an honest man".
Diogenes.

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