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Defending beef, Packer ownership, etc..

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HDRider

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A very complicated issue that I wish someone would simplify for the simple minded like me.

This did jump out..
Cow/calf producers clearly receive the residual prices after everyone else’s margins and profits have been subtracted. Over the last 25 years the producers share of the retail beef dollar has fallen from more than 60% in 1990 to 45% in 2015 ( See Figure 8 ).

 

HDRider

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This too.

Breaking up the packers would, of course, be the most direct method to restore competition. Economic research has suggested that all economies of scale in meat packing are met in one of the large modern packing plants capable of slaughtering 2% to 3% of the national daily kill. This means that there could be 25 to 30 packing companies, all competing against each other without a diminution of production efficiency.

I would suggest even more competition could result by some purposeful relief by defined segments of custom and retail meat processing. These are my words - HDR
 
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Nesikep

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I like the final few paragraphs... where it showed that during the Canadian BSE crisis US feeder prices went up 25%,... which is inexplicable from a pure supply/demand perspective.. the packers were using Canadian beef imports as an EXCUSE to pay less.. and exactly the same is happening with Brazilian/Argentinian beef now.. that is a serious problem and it's not good for the beef producers on either side! (I believe oil prices are similarly manipulated).
The same story repeated itself with the droughts in Texas a couple years ago, and the subsequent "shortage" of cattle... both of them exaggeratedly affected prices, and the ploy was to drive up retail prices.. Now that (farm gate) prices have come back down, they're sure taking their sweet time reducing retail prices to bump up demand again (Again..happens with oil as well).

The one thing that would help me the most is STABLE prices.. Where I could bank on next year, or 5 years from now that I get a fair shake on my calves.. But that goes against everything the speculators need.. wild fluctuations!
I don't ever plan on getting a loan.. but if it came down to it, I'd be much more inclined to if I had stable markets to make a major investment.. As it stands, you better save every extra penny during a good year because you might not get another for a decade.
 
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Nesikep

Nesikep

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Where were the imports to stabilize beef prices as they were soaring artificially high??? nowhere!.. As soon as the prices were coming down anyhow, suddenly there are imports.. destabilizing and crashing things as hard as possible.. SOMEONE made money!
 

HDRider

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Nesi I think you are right that speculators drive wild fluctuations. Oil, gold, cotton, beef, is any commodity or equity immune from speculation?

To me the REAL problem with speculation is when the ability to speculate is concentrated in the hands of a very small group.
 

sim.-ang.king

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Retailers don't mind selling Brazilian beef at high prices, and making US farmers look like they are the reason for high prices. Which in turn makes less demand which drives the higher grade US beef lower. Just ask the NCBA president he'll tell you how Brazilian and assuy beef is needed...
I'm sure glad he's putting my dollars to work! ;-)
 

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