Packer ownership of livestock

[Bluestem]

Word on the street- Looks like the provision of the farm bill -Banning packer ownership of livestock, to prevent the huge meat packing corporations from controlling market access and livestock prices has been removed. Looks like we were not politically involved enough to support our own interests. The road ahead looks kind of rough. What do we call a chicken coop full of cows?

 

[Oldtimer]

Get your chicken coop ready Bluestem....Sounds like in a few years we won't have any more arguments over what breed is best- or any worrying about what sire to use...We will all be using "Toro Grande" sons..... ;-)

JBS announces 'bank of cattle breeding'



Staff Reports

The Tribune

July 22, 2008



JBS S.A., the parent company of Greeley-based JBS Swift & Co., has announced it has created a "bank of cattle breeding."



With $18.7 million in starting capital, JBS Banco aims to help farmers develop production of bulls and cows, according to Meatingplace.com.



"We created this bank with products and services directed toward cattle breeding. Clients that will have accounts in this bank will need to prove to be a cattle producer," JBS President Joesley Batista told Meatingplace.com.



Batista said JBS also plans to establish similar banks in the United States, Argentina, Australia and Italy.



JBS has a cash flow of some $3.7 billion per year for cattle breeders in Brazil.



Regarding JBS's proposed acquisitions of Smithfield Beef Group, National Beef Packing Co., and Five Rivers Ranch Cattle Feeding, Batista expressed confidence that the U.S. Department of Justice would approve the deals.



"We have supported many American livestock associations, and our process is very consistent," he said. "Nobody invests $1 billion in an acquisition without doing his homework," Batista told Meatingplace.com.



greeleytribune.com

 

[Oldtimer]

Bad enough we have Cartels in the oil business- but as these corporations keep "integrating" soon we will only have a few multinational conglomerates controlling the food of the world too...

Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.
Ronald Reagan

We need another Teddy Roosevelt trust buster President....

Our goal is to spread prosperity-and see that that prosperity is spread around...
Teddy Roosevelt

Brazilian Beef Clan Goes Global As Troubles Hit Market



By LAUREN ETTER and JOHN LYONS

Wall Street Journal

August 1, 2008; Page A1



SÃO PAULO -- With grain prices high, the meat business in much of the world is reeling. Cattlemen are losing money fattening their herds on pricey feed. Meatpackers are struggling to turn a profit.



JBS SA, based here in Brazil's business hub, smells blood, and has set out to assemble a global beef empire. Its premise is simple: Meatpackers, at the moment, are cheap. Demand for beef is rising in developing nations. Beef prices, eventually, are likely to surge as well.



Thanks to an acquisition binge, JBS has become one of the world's largest processors of red meat, surpassing Minnesota-based Cargill Inc. It owns Colorado's Swift & Co., Tasman Group of Australia and a majority stake in Italian meatpacker Inalca SpA. If it completes several pending deals, including the purchase of National Beef Packing Co. of Missouri, it will own operations in 22 countries.



The strategy is risky, because it isn't clear when meatpackers will return to consistent profitability. JBS itself posted a large quarterly loss on Thursday. After hitting record highs in June, corn prices have dropped by about 20%, but they remain far higher than a year ago. Grain prices had jumped 76% world-wide over the year ending June 30, due in part to surging demand in Asia and the diversion of land to growing crops for biofuel, according to the United Nations' Food and Agriculture Organization. Beef prices rose by a more modest 11% over that period, the group says.



Members of the Batista family, which founded JBS and continues to control it, say their strategy of striking when the industry is down is well thought out. "Sometimes we make very aggressive movements," says Joesley Batista, the 36-year-old son of José Batista Sobrinho, the family patriarch. But "we have never done something before having all the pieces in place."



JBS's big bet is part of a broad tumult in the global food industry. While farmers and grain traders are reaping benefits, rising food prices are stressing economies all over the world. In poorer countries, sharply higher prices for flour, corn and rice have exacerbated hunger and sparked unrest. Some nations are using exports tariffs to try to keep grains and other food items from being sold outside of their borders. That's causing hardship in nations such as Haiti and Bangladesh, which rely on imports.



Several factors have kept beef prices in check. When grain shot up earlier this year, ranchers sent more cattle than usual to feedlots, in part so they could grow crops on some grazing land. Those animals have been going to slaughter, temporarily flooding the market with cattle and depressing prices for beef. Prices jumped briefly in recent weeks, but are now falling again.



This temporary spike in cattle boosted results for some meatpackers in the second quarter. But JBS posted a net loss of $233 million Thursday, which it attributed in part to higher cattle prices in Brazil and to the appreciation of the Brazilian currency. Its U.S. operations turned a profit, partly because of rising exports.



Meatpackers are bracing for another problem. After ranchers finish culling their herds, there will be fewer animals going to slaughter, and the fixed costs of running packing plants will become more onerous. The combination of a shrinking herd and rising cattle costs "is just going to murder the packer," predicts Stephen Koontz, a professor at Colorado State University.



U.S. beef companies haven't posted solid profits since 2003, before the detection of mad-cow disease in the U.S. caused some nations to ban U.S. beef imports. Those nations since have resumed buying U.S. beef, but a few key markets, including Japan and South Korea, imposed new restrictions. Exports to Asia are nowhere near what they once were.



"The opportunities for JBS to really be profitable in the next several years look rather more challenging than they did 12 months ago," says Steve Kay, editor and publisher of Cattle Buyers Weekly. Because consumers are stretched by higher prices for gasoline and other food items, he explains, there is a limit to how much more they're willing to pay for beef before trading down to cheaper meats like chicken or pork. That's especially true in the developing world.



Nevertheless, many food experts say that over the long term, higher beef prices are inevitable as the nation's cattle supply shrinks and grain prices remain high. The U.S. Department of Agriculture expects beef prices to rise by as much as 7% next year, faster than any other food item.



Kevin Good at Cattle-Fax, a cattle-marketing information service based in Englewood, Colo., says he sees a "price explosion" on the horizon. Retail beef prices would need to rise by as much as 20%, he says, just to offset the additional production costs incurred by the industry over the past two years.



JBS says a key part of its strategy is positioning the company to cash in on rising demand for meat in the developing world. The Paris-based Organization for Economic Cooperation and Development has forecast a 26% increase in meat consumption in developing countries over the next decade, as standards of living improve.



Grains like wheat and corn have long been viewed as global commodities. For many years, the beef industry has been different. Producers generally have confined their production operations to their own countries, and branded their products accordingly: USDA prime beef, grass-fed Argentine beef, and Japanese Kobe beef, for example. Not since the Vestey Group -- a 19th-century British beef company that expanded globally alongside the British Empire -- has a beef company tried to establish a significant global presence.



JBS wants to do just that. By acquiring footholds in many different countries, it aims to work around trade barriers and other obstacles to selling beef globally. It is also hoping that it can operate more efficiently than its competitors and offset losses in one market with gains in another.



'No Limits'



"There are no limits" to expansion opportunities, says José Batista Jr., the founder's 48-year-old eldest son, who is member of the JBS board.



The senior José Batista got his start a half century ago buying cows and selling them to meatpackers in Anápolis, in the Brazilian state of Goiás. Feeling that meatpackers were underpaying him, in 1953 he opened a butcher shop and began slaughtering one cow a day. In 1957, as Brazil government was moving the capital from Rio de Janeiro to Brasília, Mr. Batista followed, opening one of the first slaughterhouses in the region.



As Brazil's economy expanded, meat consumption grew, and so did Mr. Batista's business, which he named Friboi. Between 1993 and 2005, the company acquired 12 meat-processing companies, becoming one of Brazil's biggest beef producers.



His three sons -- José Batista Jr., known as "Junior;" Wesley, 38; and Joesley -- skipped college to work at the company, starting out by supervising workers who skinned and deboned cows. Three Batista daughters helped with administrative and managerial tasks.



Today the brothers call the shots at JBS, although their father, now 74, continues to advise them and to help buy and sell cattle. Every Sunday, the family gathers at his home outside São Paulo, or on a telephone conference call, to discuss the week's activities. The brothers talk almost every day by phone.



In 2004, the company moved its headquarters to an old meatpacking plant in São Paulo, where the senior Mr. Batista had sold cattle decades earlier. The company was thriving, and the Batista family routinely traveled over the city by helicopter and to their ranch on the Paraná River -- where they entertained customers and prospective investors -- by private jet.



Friboi rankled some Brazilian ranchers. In 2005, the Brazil-based National Agriculture and Cattle Federation filed a price-fixing claim against a group of meatpackers, including Friboi, alleging that they kept cattle prices artificially low. Before the investigation was done, Friboi reached a $13.8 million settlement with the government. Later, four other meatpackers were declared to have formed a cartel and were fined 5% of their 2004 revenue. The Batistas say the matter is behind them.



Foreign Acquisition



In 2005, the company made its first foreign acquisition, buying Argentine meatpacker Swift Armour. In 2006, the company changed its name to JBS -- the senior Mr. Batista's initials. The following March, JBS went public on the Brazilian stock exchange, becoming the first Brazilian meat company to do so. The offering raised nearly $800 million to expand further in South America.



By then, Brazil's currency, the real, had appreciated against the dollar. That made Brazilian exports more expensive, slowing export growth. Since more than one-third of JBS's beef is exported, that presented a challenge.



It also offered an opportunity. "Foreign assets became very attractive," says Marcus Vinicius Pratini de Moraes, a JBS board member and former agriculture minister in Brazil. "Instead of complaining that was hurting exports, [the Batistas] looked at alternatives."



Establishing a presence outside South America, the family felt, would help JBS hedge risks of trade barriers and sanitary restrictions, which threaten beef processors whenever there's a disease outbreak like mad cow. Exporting fresh Brazilian beef to many European countries, for example, requires time-consuming inspections due to concerns about foot-and-mouth disease. JBS now can export beef there from its Australian facilities.



The Batista brothers had been touring meatpacking facilities for years, trying to figure out how to get better access to global markets. During a trip to Egypt around 2000, Wesley Batista saw a market for halal beef, which is produced according to Islamic law; the family then adapted some of its packing plants to produce beef that way.



JBS moved to provide more options suited to cultural preferences -- livers in Egypt, tripe in Spain, heart in Russia. "You can't just sell rib-eyes around the world," says Andre Nogueira, chief financial officer of JBS's U.S. operations.



The world's biggest beef-consuming market, the U.S., was a logical target. The American market has long been fragmented. U.S. meatpackers have little control over the supply of cattle. Unlike chicken and pork producers, they rarely own the animals before they go to slaughter. For years, meatpackers have had excess slaughtering capacity, making their plants inefficient.



Swift & Co., which traces roots to the 19th century, had been struggling with its beef business for years. In December 2006, Immigration and Customs Enforcement officials raided Swift plants in six states, arresting more than 1,000 workers. Swift estimated that the incident cost it about $50 million. In January 2007, Swift announced it was considering a sale.



JBS had been interested in the company for years. At least two other big meat companies, Cargill and Smithfield Beef, also expressed interest in buying it. In May 2007, JBS agreed to buy it for about $225 million, plus the assumption of $1.23 billion in debt. In order to complete the deal during the U.S. credit crunch, JBS turned to Brazil's government bank for $600 million of equity financing, which left the bank with a 13% stake.



In December, JBS bought a 50% stake in Italian meatpacker Inalca, a unit of Cremonini SpA, largely because of its operations in Russia, Eastern Europe and North Africa, all growing beef markets.



In March, JBS said it was buying National Beef Packing, the fourth-largest beef processor in the U.S., Tasman, the Australian beef processor, and Smithfield Beef, the fifth-largest U.S. beef processor.



In the U.S., the Smithfield and National Beef deals still must be cleared by the Justice Department on antitrust grounds. If they go through, JBS will be the largest U.S. meatpacker, controlling about 30% of U.S. beef processing, according to Cattle Buyers Weekly. Some American cattlemen, worried that decreased competition will cause cattle prices to fall, have urged the Justice Department to block the two deals.



Late last year, JBS restarted a second shift at one of its Greeley, Colo., packing plants, returning about 1,350 workers to the payroll. Its goal is to run the plant more efficiently, which means processing more cattle -- even if that requires bidding a bit more for cattle over the short term.



Some analysts think JBS will try to use its deep pockets to take market share away from its competitors. "These guys have a lot of money," says Rich Nelson, director of research at commodity-research company Allendale Inc. in Chicago. "The game," he says, is to see which company can tolerate losses "for the longest period of time."



online.wsj.com

 

[Oldtimer]

Commstock on the JBS Merger
Tuesday, 19 August 2008
The CommStock Report - 08/18/08
Copyright 2008 CommStock Investments, Inc.

David Kruse


The NCBA seems like it can't wait for Justice Department approval of the JBS purchase of National and Smithfield Beef so the beef industry can become more integrated like pork and poultry and feedlots can become contract producers like the other meat industries. It normally takes 8-16 months for the Justice Dept. to put a deal like this through anti-trust scrutiny.



This sale is being pushed through a justice department that was recently revealed has been politicized. Instead of being a civil service, the Justice Department now has lawyers servicing political interests. The Bush administration really hasn't seen a propsed merger that it considered damaging to competition. Iowa Senator Chuck Grassley noted, "I've been pressing the Justice Department about consolidation in agriculture, but the Department doesn't appear to think there is a problem. Quite honestly, I don't know how much longer they can continue to let these mergers slide by. Now producers will only have 3 major beef packers to sell their livestock to. Is it going to take only one packer in the industry for the Justice Department to say there isn't competition?"
DTN reported, "Sen. Charles Grassley, R-Iowa, also expressed concern on Wednesday about the merger, but added that 'based on the dozens of letters' he has written to the U.S. Department of Justice in the past 15 years about agriculture mergers, the senator doesn't hold out much hope that Department of
Justice will make major changes to the proposed purchase. Grassley said he does not think the Department of Justice has much expertise in agriculture and therefore approves most agricultural consolidation with little concern about the impact on producers."
The size of captive supply in the cattle industry is directly proportional to the concentration of packers. Some now believe that only 35% of cattle prices are discovered by the cash market in a competitive or limited competitive manner. The JBS deal will shrink major buyers from 5 to 3. This will intensify the negative impact captive supply of cattle held by fewer packers will have on competition for cattle. The Five Rivers Feedlots, 810,000 head one time capacity, are owned by Smithfield Foods and is part of the sale to JBS. That's a huge addition to captive supply for JBS.
OCM General Counsel, Michael Stumo noted, "Smithfield sells its approximately two million cattle per year to other packers, because it owns no Great Plains packing plants where its cattle are fed. Post-acquisition, the cattle become JBS' captive supply, taking 1.75 packing plant equivalents off the market for cattle buying purposes (one plant processes about 1.25 million cattle per year.) The basic case is this. The cattle market is only marginally competitive now. The acquisition will substantially lessen competition. The reasons are: (1) Only three top tier buyers will remain; (2) The captive supply (Five Rivers) will enable market manipulation and price depression; and (3) Cattle are perishable, needing to be sold within two weeks, which means feeders have little market power."
JBS will own 30% of the U.S. daily beef slaughter capacity and be the largest meatpacker in the world. How did it come about that a Brazilian meat packer could end up owning such a share of the U.S. beef industry? The Brazilian company's buying power was a result in part of the decline in the U.S. dollar. In 2004, the Brazilian real was trading 3-1 to the dollar. Today, the currency exchange is closer to 1.5 to 1. U.S. assets priced in Brazilian currency are now 50% on sale.
That's what happens in a global economy when you debase your currency. George W.'s administration fiscal policy resulted in the significant decline in the dollar. Now the Justice Depart is basically being asked to help JBS cash in on it. JBS also consummated the sale when U.S beef packers were losing money; now they are not. JBS has multi-national beef packing experience. Beef Magazine's contributing editor, Wes Ishmael, agrees that "At least conceptually, the move gives U.S. producers a foot through the door of true international beef marketing. No one but JBS probably understands exactly what that means at this point. Possibilities become clearer when you think about the competitive advantages packers can exploit domestically in terms of owning packing and processing facilities close to where the cattle are, and increasing market leverage with size. The same rules should apply when U.S. operations become a regional asset within a global supply/marketing chain."
You can tell what side of the issue Beef Magazine is on. Former NCBA lobbyist, Chandeler Keys, is now fronting for JBS. The pay is better and he was working for packers even when he was being paid by NCBA. Joesley Batista, son of the patriarch that founded JBS, told the WSJ, "Sometimes we make very aggressive movements. But we have never done something before having all the pieces in place."
That's a profound and powerful statement. JBS is a global player and the U.S. acquisitions are just one piece of several that they believe they now have in place that will give them enormous global market power. I believe JBS hoped to benefit from expanded U.S. beef exports to Japan and South Korea, something they are good at. While USDA mucked it up, JBS will grease the gears to improve exports. U.S. cattlemen may benefit from that but JBS will benefit more. The WSJ noted, "By acquiring footholds in many different countries, it aims to work around trade barriers and other obstacles to selling beef globally. It is also hoping that it can operate more efficiently than its competitors and offset losses in one market with gains in another."
The WSJ revealed "In May 2007, JBS agreed to buy it for about $225 million, plus the assumption of $1.23 billion in debt. In order to complete the deal during the U.S. credit crunch, JBS turned to Brazil's government bank for $600 million of equity financing, which left the bank with a 13% stake." I would think that someone in Washington will have a real problem with the Brazilian government bank owning 13% of the largest packer in the U.S. But then again, maybe not.
While opposing the JBS acquisition of National and Smithfield Foods, I do respect the skill, tenacity and audacity of the Batista Family. The father, Jose, started JBS packing company in 1953 by slaughtering one cow a day. The family has built an impressive global enterprise in the last 55 years.

http://www.competitivemarkets.com/index ... &Itemid=20

 

[Oldtimer]

DOJ aims to block JBS-Swift's purchase of National Beef

By Tom Johnston on 10/20/2008


The U.S. Department of Justice filed a civil antitrust lawsuit Monday in U.S. District Court in Chicago to block JBS-Swift & Co.'s proposed acquisition of National Beef Packing Co., contending the deal would cause financial hardship on consumers and producers and harm industry competition.

The Attorneys General of Colorado, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas and Wyoming are joining in the lawsuit.

The DOJ concluded that combining JBS-Swift and National Beef, the third- and fourth-largest U.S. beef packers, respectively, would result in lower prices paid to cattle suppliers and higher beef prices for consumers. In court documents, the department deal also would eliminate a "competitively significant" packer and place more than 80 percent of domestic cattle slaughter capacity in the hands of three companies: JBS, Tyson Foods Inc. and Cargill Inc., the department said.

"The combination of JBS and National will likely lead to grocers, foodservice companies and ultimately American consumers paying higher prices for beef," Thomas O. Barnett, assistant attorney general in charge of the the DOJ's Antitrust Division," said in a statement. "It will also lessen the competition among packers in the purchase of cattle that has been critical to ensuring competitive prices to the nation's thousands of producers, ranchers and feedlots."

JBS announced in early March it had reached agreements to purchase Kansas City, Mo.-based National Beef ($465 million), Smithfield Beef Group ($565 million) and Australia's Tasman Group ($150 million).

A DOJ spokesman said the department is not challenging JBS's proposed purchase of Smithfield Beef Group, the nation's fifth-largest beef packer, or the Five Rivers cattle feeding operation.

 

[RanchManager]

I havn't thought this through very thouroughly, so someone please explain to me why packer ownership of cattle is a bad thing. My first thought is, "Great it's just more buyers bidding on my calves. That's a good thing." It seems OK to me if they want to control all the cattle, they own, after they buy them from me. Many folks seems upset about this so I must be missing an angle somewhere. What am I missing?

 

[Bez+]

I havn't thought this through very thouroughly, so someone please explain to me why packer ownership of cattle is a bad thing. My first thought is, "Great it's just more buyers bidding on my calves. That's a good thing." It seems OK to me if they want to control all the cattle, they own, after they buy them from me. Many folks seems upset about this so I must be missing an angle somewhere. What am I missing?

In a nut shell - it allows them to control the price.

Here is how.

Buy a bunch of cattle when prices are in the range they want to pay. Hold some of them over. Continue to buy more in that price range to feed the kill line.

If cattle prices start to rise - stop buying - use the cattle they are holding over to supply the kill plant until the price falls to where they are willing to buy again.

Price will fall as there are less people interested in buying animals.

When prices drop - buy cows and repeat the process.

Finally - you DO NOT have more people buying - in fact you have less. Consolidation makes this happen. Then collusion on "what I am willing to pay" begins to happen between buyers.

Packer owned cattle leads to monopoly and cartels - you will see more and more folks go down - prices are not controlled by the seller.

You are a price taker. The price is controlled by the buyer.

When was the last time you saw a hardware store owner take YOUR price for HIS hammer?

Why are you doing it then? Because you are in a situation where the buyer controls YOU!

When was the last time you told a buyer your price? If you did you would be laughed at - cattlemen as a rule are good folks and stinking rotten business people.

Packer owned cattle will lead to "packer controlled" industry. Think it is good?

Ask the chicken guys and gals what they think.

It is coming.

So much for your independant cattleman.

Old Timer is a pain in the @ss and he is a crotchety old bawstard - in this case we are on the same side - through and through.

Bez+

 

[Nesikep]

I'll confess, I was diligently reading, but I stopped where it said

"While farmers and grain traders are reaping benefits, rising food prices are stressing economies all over the world"

I don't see how anyone has been making any money these days, when we started out in 1991, and calf prices at 1.30 CDN for 500 pounders, that was about what you needed to get by (with only 12 head at the time we were losing our shirt then too), but now, with 100% increase in fuel costs, etc, and you have to be happy when you get 80 cents for the same animal, I don't see who's making any money.. Right now, the grain farmers might be, grain prices are decent, and so they should be, considering if grain prices doubled, the true increase in the cost of a loaf of bread would be at most 10 cents, but every time grain prices rise, big buyers use it as an excuse to not buy cattle

I honestly don't think conglomeration of packing plants is good, but realistically, at our local stockyards, we only have 1 buyer there anyhow... At some point, some day, when all the little guys have sold their 200 head ranches to rich lawyers who use them as a tax writeoff, and the lawyers are tired of losing more money on it than they bargained for, and there just isn't anyone doing cow-calf operations anymore, maybe prices will come up a bit again... it will really suck for everyone who loves doing this though

 

[Alberta farmer]

At my local sale barn there are basically three cow buyers. Cargill, Tyson, and XL. There are a few others, usually buying younger cows for the USA market. Cargill doesn't buy a lot of cows as they have a few sweetheart deals to supply some big steakhouses in California/Pacific northwest etc. with quality beef. Cargill owns and feeds a lot of cattle up here...more than most people know about!
Tyson Lakeside(our biggest packer with capacity of 28,000 wk.) has decided to get out of Canada and are selling out to XL. This is a case of the mouse swallowing the elephant! In all probability the Calgary XL plant would be shut down as the land under it is worth a fortune for developement.
Basically the two main bidders on cull cows are Tyson and XL? What happens when they merge? One week the Tyson buyer never showed up and the price dropped around 6 cents a pound! When XL becomes the only buyer our cows are going to be worth a lot less.

 

[Oldtimer]

Old Timer is a pain in the @ss and he is a crotchety old bawstard - in this case we are on the same side - through and through.

Bez+

Thanks Bez-- best compliment I've had in a long time ;-)

But you are right- in this battle against monoply control of the feeding/packing industry and captive supply we all need to be on the same side fighting it....Alberta Farmer has described it to a T...

 

[Alberta farmer]

Oldtimer: Unfortunately our cattle organizations up here are all for packer ownership? They seem to think it is just peachy! Well I should say the Alberta Beef Producers and the Canadian Cattle Mans Association...I don't think the Western Stock Growers or Beef Initiation group support that position.
However WSG and BIG are voluntary groups while ABP and CCA are supported by a mandatory checkoff...$3/head. Very few cattle producers have much use for ABP.
Cargill not only feeds its own cattle but has contracts with feeders that are not open to scrutiny. It works on a grid system and I guess some guys can make it work. Most people don't know that one large private feedlot is actually owned/controlled by Cargill.
Nothing will happen in Canada unless the USA changes the system of packer ownership? Basically the federal government we have up here is a "branch plant" of the USA government! Hopefully this new guy Obama will change this system, as he said he was going to do? If he does, suddenly our wizards in Ottawa might see the light!

 

[George Monk]

Several years ago I was a 60 sow farrow to finish guy with a full time job. I was there to see the packers swallow each other until the local buying stations could no longer put enough hogs together to sell to the packers. We were trying to put pot loads together ourselves and succeded for awhile. Then they tighten the days that they would take hogs and made it really hard on those of us with outside jobs to sell. I had to get out because I could not sell at a convenient time for our operation. Last weekend I talked to a great friend who was the LAST 60 sow producer in our county and he has given up because they won't buy hogs from small farmers anymore. That will leave only one hog producer in our county .... a small 300 sow operation....I imagine his time is short.

I have just recently expanded into cattle thinking maybe this is the last bastion of free agriculture. This news saddens me because this is exactly the tact taken in the hog industry. I see nothing but doom in this message. :cry2:

 

[Alberta farmer]

George: I think Obama promised he would limit packer ownership and bring transparency back into the market? I think it is right there in his agriculture platform? He also is not all that keen on factory farms?
Maybe he is naive and doesn't know how the world works...or maybe he really will change things?
In Alberta our hog business is basically done. Just about all the hog farms are gone except for a few big mega barns. Pretty sad as hogs bought a lot of farms and raised a lot of farm families with a good income.

 

[Carlos D.]

I to went through the pig cycle --and left with my a$$ burnt--You know whats really sad --an old farmer who was my nieghbour used to say --Oh!-- good money in pigs---I paid for the farm with hogs --Always had 4 or 5 sows ---never broke when you have a few pigs-----How times have changed ---Now you could't pay for the farm with 400 sows
I started here 16 years ago with no money worked out pumped every cent into the place thought I would gather up 40 cows and retire live off my wife and make a few bucks off of the cattle and farm until I died --cause thats what I wanted to do
Silly idea --It's sure quit being fun the last year or so--and I can't say that I enjoy those cows anymore ---because I have finally realized that I will work my fanny off next year to put up hay ,fence ,and keep my old machinery going ---and thats all that will happen (I'll work )---and pay the bills and not have anything left for me--
On the other hand about 9 years ago my wife brought 2 sheep home from a trip to saskatchewan (I ranted on about how we didn't need sheep around here )--we now have 45 ewes --And guess what I've never lost money on sheep

carl

 

[mobgrazer]

Alberta farmer
How can one man know how to run everything for a country? I say the president is more of a hit man then anything else since he is the one on the pedestal. Yep he is the one that gets voted for to bring in his staffing to do the work. If he was the one doing all the work that everyone says he dose then he would be working 80 + hours a day every day. He can not just walk in and change something or stop something. You still have the 2 houses to deal with. Yes he can help to slow something way down or to speed it up but there are still houses 2 deal with.

He was there to try to persuade to get the votes. Dose the majority of people know how the food market works? Dose the majority of people know how the health insurance market works? I say no to both of these but I doubt he dose when it comes down to it. I bet he was schooled on what the people want to hear for the place he is talking. I saw so many times he would say stuff against his written plans.

I don't want to but heads on this I'm just trying to say it's not going to change with one man. Yes he did say some stuff that was great but there was some stuff that he should have been knocked off his rocker for.

 

[George Monk]

Al Farmer - We had the same saying .......that you could pay the mortgage with hogs

We sold out in '94 because I took a job that had a long commute. That was the last year that I showed a profit on my farm.

You and I had many of the same thoughts. I hope to retire with my wife at my side raising some bred heifers and a few registered bulls/cows. I am still going to try but it sure doesn't look as hopeful. My 17 year old son would love to be a farmer.....knows he can't so he is going to study large animal vet...wonder who he will work for in the future? My kids all love animals. My oldest daughter has a nack for them and cares deeply about livestock. I wonder how she will be able to utilize these talents?
What is going to happen to acreage???????????????all in CRP and hunting leases???????????

I just feel like this is a painful slow death for independent agriculture.

I put absolutely no faith in any politician to fix any problem. Especially in today's political climate. The good of the party has overridden the good of the country. I fear that the regulations set down to "control" factory farms is a ruse to placate environmental wacko's and will have detrimental effect on all farming.

 

[Bluestem]

George- Son graduated college with a Ag degree. Tried to talk him into something else (not to hard though). He give Ag a good try. About went broke. Just got a job doing Ag research. Pay is very good.
I don't know who will be left to use all this research though. And I lost a good farm partner.

 

[Alberta farmer]

mobgrazer: Of course you are right...one man can't change the world. However the president of the United States is a pretty powerful position and he does have two houses of the same party, who can probably work with him?
Hopefully he surrounds himself with good people who will work towards the same goals he has? Sometimes even a small change can bring big results.
I don't know enough about American politics to make any predictions about Obama but doubt many would agree with a lot of the policies George Bush brought in? Seems to me the American people are pretty sick of George Bush?
To George and bluestem: It is hard sometimes to not be discouraged by agriculture. I guess the trend to big farms/agribusiness has been happening for a long time. I don't have any magic bullet solution but figure the best bet is to just keep plugging away and do whatever you have to do to survive. Not much different than any other small businessman? Try to enjoy the things that are possible and realize that sometimes life isn't fair. For every one of us there comes a time to quit, whether that is selling out, changing careers, retiring to the old folks home or dying? Enjoy your life...because that is about all there is.

 

[Oldtimer]

R-CALF United Stockgrowers of America


"Fighting for the U.S. Cattle Producer"



and the
Organization for Competitive Markets



Honesty. Prosperity. Economic Liberty.


For Immediate Release Contact: Shae Dodson, Communications Coordinator
February 20, 2009 Phone: 406-672-8969; e-mail: [email protected]



Groups Welcome JBS' Withdrawal from Proposed Merger



Billings, Mont. / Lincoln, Neb. – R-CALF USA and the Organization for Competitive Markets (OCM) are pleased with today's announcement reported by Reuters, Sao Paulo, that Brazilian-owned meatpacker JBS has abandoned its bid to take over National Beef Packing Co. (National Beef), the fourth largest U.S. meatpacker. According to th e Reuters article, JBS abandoned the takeover due to a "lack of satisfactory conditions."



R-CALF USA CEO Bill Bullard said this takeover bid was defeated by a combination of aggressive opposition from R-CALF USA and OCM, which led first to a hearing by the U.S. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights last May and then to an unprecedented enforcement action by the U.S. Department of Justice and 17 state attorneys general against the merger.



"R-CALF USA and OCM members should be proud that they have achieved their goal of blocking this monumental, anticompetitive merger," Bullard said.



OCM Executive Director Fred Stokes said this news is extremely welcome and represents a very positive start on what will be a long, hard fight to restore competition to the U.S. cattle market that has already been lost due to previous mergers which resulted in the U.S. cattle market being one of the most concentrated markets in the U.S. economy.



"Now that we've stopped this ongoing merger, we must focus our collective efforts on reversing the anticompetitive mergers of the past, including JBS' 2008 acquisition of the nation's largest feedlot company when it acquired Smithfield Beef Group," said Stokes.



Since March 2008, R-CALF USA and OCM aggressively opposed the JBS/National Beef merger on the grounds that it would exacerbate the distortions already evidenced in the U.S. cattle market and would strengthen JBS' ability to use packer-owned cattle and other forms of captive supplies to manipulate prices paid to hundreds of thousands of independent cattle producers.



"Given the unbridled concentration and consolidation that has occurred in our markets over the past two decades, this is a David versus Goliath type of victory," said Bullard. "JBS and National Beef are among the most powerful and influential food manufacturing corporations in the world and their attempt to lock up our cattle market has now been defeated by U.S. family farmers and ranchers."



"U.S. cattle producers should express their appreciation to the Department of Justice and the 17 state attorneys general that stepped up to help our industry preserve the competitiveness of our markets," concluded Stokes.

 

[George Monk]

Whew!!! :clap: