Frankie I am shocked at reading your reply. What you have said really sets me back in my hope for the cattle industry from the producer side. I had no clue that people would be so tolerable to a business that took that much money out of the final product. You know you read these board and we see people talk about how they cut back by using tractors that have a bit of age on them, and trucks that probably need to be replaced. Also they are using land that they are not counting in the expense of raising that beef which every other business in the world counts. How far could they stretch that extra 500 dollars a head on their cattle if they had a chance to use it instead of sending it down the line to fill the pockets of the rich packers? And you are standing up for them when they have admitted to making those margins in black and white.
I'm not taking up for anyone. I'm just pointing out that your post was a one sided missive from R-CALF.
My post is one sided and it is on the right side which is what is fair.
You are taking up for the packers. This is a huge injustice and it is putting people out of business, and taking food off the table of hard working men and women. These men and women have no voice or at least the voice they have is not speaking up for them at all.
And this means what? So the cost to raise a calf was high. So were the salaries of people who got the calf from weaning to the consumer. You've got lots of transportation, death loss, wages, insurance, overhead to come out of that $2,168 (if indeed that's an accurate price. And, frankly, I don't trust R-CALF.)
I think you have lost perception of what we are talking about. These farmers have lost money. They got no salary, but paid someone to take the cattle off their hands for working an entire year for free or even better yet in the hole. You quickly point out these expenses
1. Transportation- this is a one time cost for the packer because the producer/feedlot already paid the cost to get it near the packing house.
2. Deathloss. The figure that they are quoting, 1059 dollars, is the price in which the packing houses were buying the cattle from the feedlots. The death gain from their purchase is 100% because as soon as they bought them they killed them. So the farmer takes about 500 to 600 dollars and the feedlot guys got about 400 dollars the rest went to the packers. The feedlots and the producers were the ones who took the expense on the deathloss.
3. Wages- to get a cow cut up at a local butcher cost about 250 to 350 dollars. Killing fee is about 50 bucks. 350 dollars typically covers the processing fees. I would imagine a guy with the right equipment could cut up to 2 animals a day if he worked hard. Like I said hard work but nice wages.
4. Insurance and overhead –The butcher pays that all day long in their $350 dollar fee.
5. Marketing expense is the expense you left out. And final marketing of the beef at the local market should be counted, but 200 bucks should cover that generously.
There are tax breaks for the producer, too. Many people wouldn't be in the cattle business if not for those tax breaks. Are you suggesting ranchers should be subsidized, like grain farmers? I certainly hope not.
You are not suggesting that the cattle producing business exists only for those who can afford to take
tax breaks are you? I do not know about anyone else, but I want right –ons... not right offs. I am doing everything I can to make money and the consumer is paying full price for the product and the money is in the pockets of the packers. So if you subsidize the farmer, all that you are doing is enriching the packers more and keeping the farmer in business. No there is plenty of money to go around, it is just that the producer is the one getting hit.
OK, now I never heard of a second lawsuit. I understood the packers lost the case in a jury trial and won the appeal. Am I missing something?
The appeal is sometimes referred to as a second suit. You understood perfectly and there is not a second different suit but a continuation of the original claim.
Yes, they have other operations and many cattle producers have second jobs, too. So what's your point.
My point is that the losses incurred by these corporations did not come in the beef side of the business but in their other interests. I assure you that showing a gross margin of over 100% is not going to translate into a per share loss at the next stockholders meeting.
Why would the packers want to put cattle producers out of business? Where will they get their inventory if we all go broke and stop raising cattle?
This is the point I am driving to. They are putting the cattle farmer out of business. I know many that are getting out. Bez+ just told you that he cut his heard back to what he and his neighbours can eat. The packers drove him out of business. It will get worse if they do not pay attention to what is going on. I am sure we can import beef from other countries but why in the world would you want to destroy one of the last production businesses in America left. We can't manufacture anything else why put the farmer out of business!
Gardiner Angus did get involved. They helped form and finance a program called US Premium Beef. You might look into it. R-CALF had the opportunity to get into the packing business when the nice updated Future Beef packing plant went on the market. They didn't offer to buy that plant and go into the meat business. I wonder why?
My quarrel is not which program is the best. I am for giving a man a fair day's wages for his work. Weather you are the producer, feedlot guy, packer, trucker, or even the final seller. The consumer is still paying retail and there is enough money to go around. I just do not like to see one segment of the market get so greedy that it undermines the remaining components. People have to make a living including the producer. And just because you control the market, it should not give you the authority to money whip another segment of the market out of business.
