Will cattle go the way of hogs?

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does anyone know if this is a big concern in other countries... i've always wanted to go to new zealand, maybe its time to start considering it.
 
Willow Springs":1oozfrtp said:
I think that your still forgetting that the slaughter plant decides what they will buy and if they decide that they will only buy certain products and those certain products are the breeding stock from their genetically tested herd you will have to use their genetics our start marketing your own beef to stay in business. The marketers and packers have total control over what we produce and those that don't produce what they want are already being penalized.
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I only said those things might help. But if you enforce some antitrust law and actually have some competition it wouldnt be as easy for them to dictate specifics.

Another restricting factor for them is they have to aquire a large enough supply keep the plants fully stocked. It may take awhile before they can get to that level. They may also have to fight geography, if they don't want any brahman influence that eliminates a large number of cattle coming from the south.

RIght now they still have to buy from what is supplied.
 
Busterz is right. With a declining cattle population the packers are perennially chasing cattle to fill shackle space. One packer COULD decide to pay big premiums to producers that bought composite bulls from XYZ ranch; BUT could they really convince their grocer and restaurant buyers to pay more than what the packer on the other side of the state is charging for all the other cattle (he paid less for)?? Really to implement this system the three biggest packers would have to collude (probably illegal).
 
Hereford76":9yv46nfl said:
does anyone know if this is a big concern in other countries... i've always wanted to go to new zealand, maybe its time to start considering it.
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Better go with a lot of cash - tough place to get into - they watch their immigration VERY closely

Bez+
 
I have to chuckle at the responses - you ALL appear to have missed one thing

If a corporation believes it can make a profit at it - and they have the financial backing - they CAN make a run at it.

IF they do - a lot of small folks will go down

Never come up with all the negatives without realizing that PROFIT drives everything.

As for anti trust laws - I depend upon them as much as I depend upon wet toilet paper to clean my butt.

Profit determines everything and they have a pile of folks on retainer to do the work for them.

So - despite the negatives - realize vertical integration has ALREADY started to control the price. How many people actually make money in the biz and do not have an off farm job? Not many. Corporations like that a lot.

Control does not have to happen over night - but it CAN happen.

Have fun folks - but always be aware - packers control most things in our lives - and they sooner or later will control who even gets in the kill plant - or they will move the kill to off shore (already happening) and provide you all with imported beef.

When the time comes it will be an easy job to get those desparate to hang on - to sign those contracts similar to hog and chicken folks

He who has the gold makes the rules

Cheers

Bez+
 
Boy, this post is overwhelming. It's funny this post it up since a friend and I had a conversation very similiar two weeks ago. Does anyone remember when small dairies were being bought out in droves? I was just young so I only remember what I was told about a small local (1/4 mile away from our place) dairy going out of business. It seemed that the government? paid the dairy to quit? bought them out? I remember it being said to control the price of milk. My friend feels the same about the primus i.d.'s, electronic ear tags, microchips, and Ag. enhancement programs. He says the government will require so much that the small farmer won't be able to afford it then be forced to get out, thus leaving the large cattle farmers who they will control with there wallets. I know I'm not talking about breed specific but the whole idea makes great sence to me. What about the crops? Seeds really aren't seeds anymore. We can't grow our own food from produce we purchase in the store. You now have to have Heritage seeds to grow anything. Of course the Americans have chosen to elect someone who is a socialist, who likes government control.
 
Packers can't stay in business if they don't turn a profit. Prices all go back to the consumer. If they're not willing to pay for lower quality beef, the packers aren't going to pay for cattle they think will produce Select or lower quality beef.
 
I hope you guys are all R- CALF members they are the only org.taking a stand against these issues!
 
In a sense, JBS is already pushing things in this direction. In South/Latin America they have set up a "bank" to loan money to producers to buy cattle "approved" by JBS.
 
Frankie":20v7b8kd said:
Packers can't stay in business if they don't turn a profit. Prices all go back to the consumer. If they're not willing to pay for lower quality beef, the packers aren't going to pay for cattle they think will produce Select or lower quality beef.
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Ever see the number of steaks they cut out of cull dairy cows? And lots of burger as well. Costs the packer nothing and the profit is good - even when those discount steaks and burger get sold - lots of beef goes into soup and stew cans as well.

Trust me - there are a pile of people out of that 300 plus million in your country that are prepared to pay for that lower quality beef - and the packer can make it happen with real cheap meat. The average consumer has no clue whether the beef comes from a Simmie or a Maine - or if it comes from the loin of a Holstein steer or dairy cull - and trust me there is a lot of Holstein beef on that red meat counter. It comes cheap to the packer and it goes out the door "on special" and folks snap it up - the profit is there even at the lower price.

Profit - driven by fear and greed will run the market

I agree quality is an issue - but the fact remains the Mrs. Joe Six Pack in her tenth floor chicken coop apartment is the big buyer - and she wants burger at the cheapest price possible - it is easy for the packer to contol buy prices so they can make a profit with lower quality beef and lower prices - and here is how they do it:

1. Packer starts by purchasing lots of cattle and holding them - arguably to guarantee a steady supply of beef for future kill. And they will tell you that is why they buy large lots and hold them. We call this retained cattle - often on contract. Remember - contract - so someone is already getting into bed with the packers - so it starts.

2. Packer buyer buys cattle on the open market to kill - those go straight to the plant and enter the kill line - price starts to get up as buyer pressure drives it up - and when it is out of the purchase price range the packer is willing to pay - packer stops buying and runs their own retained cattle into the kill line. Packers know to the penny when they will start to buy on the open market and when they will stop buying on the open market - well in advance of the time the do the actual buying.

3. Prices start to drop when no major buyers pull the trigger at the sale. Bringing the packers back into the game.

4. Prices drop to the buy price the packer is willing to pay (all planned ahead of time - they know to the decimal point what price they need to make on a buy to make a profit) and the packer will buy. Packer buys to refill the hold overs and to fill the kill line.

5. Price starts to rise - packer stops buying and uses those retaned cattle until price drops.

They have been doing this for several years now to refine the process and have taken out a lot of competition. There are - from memory only folks - about three companies that now control more than 85% of the market - they are not concerned about the other 15% until they have the initial cut under control. The remainder will come.

In the process they have also taken out a lot of smaller producers - and you might see a consolidation of larger operations over the next few years - in my mind that has already started. All it takes is a contract to provide beef to a packer as per their specifications. Just like the hogs folks. Then the packer has the producer bound by a contract - as the contract nears the end - if the contract is not renewed the producer is in trouble - businesses get bought for pennies on the dollar for reasons of financial hardship.

Suck in the larger producer - nail their foot to the floor and and the legal process can be used to help acquire that business.

Ownership of land and infrstructure is not even needed - a lease or rental situation is better for the corporation as it is 100% tax deductible - making it more profitable.

In the end one should never EVER doubt the will of a corporation when it has billions - yes billions - of dollars at its' disposal and reams of accountants and lawyers and finally - politicians who believe consolidation is better - and those exist - and usually they are voter based - urban folks - who really do not care about the health of YOUR business - as long as there is safe beef on the table 2.3 times per week. The corporation now has the power to decide what you will eat. Not as far fetched as it might seem.

Where that beef comes from is an issue - but to the majority living in the chicken coop - they will buy it on price long before they will buy on a flag.

You can argue price to flag til the cows come home - but sooner or later Mrs. Joe Six Pack will buy what FITS the BUDGET.

We all do this - because if you can buy a chainsaw for 250 dollars that is built in Sweden or one for 600 dollars that is built in Des Moines Iowa - and they are comparable in every way - are you honestly going to buy the 600 dollar saw? Even if the one built in Des Moines is slightly better?

Honestly?

Fear and greed - it drives the markets.

And money is the end result.

Never say it cannot happen - I believe it has already started.

I guess we will all see how smart or stupid I am in time.

Bez+
 
There are two differences between pigs, chickens and dairy. First cattle can graze and they can take the protein of the land and turn it into great amounts of food. Second big corporations cannot afford the capital it takes to own big ranches. There are millions of acres still out in the USA that a pig, chicken, or a dairy cow can't do a thing with. Push come to shove cattlemen can sell a great product right off the cow wieghing 600 lbs. Now I know what everybody is thinking . Dressing percentage, cost of production .We've killed calves at this weight that dress at 65%. This is young beef and should sell for $1.45 at todays market or better . This will bring $565.50 per calf. Our production cost per calf weaned is $510. The problem is to get this killed and into the market. And now we get into the problem with big corporations because they own 98% of the kill plants.
 
Guys Bez+ has it figured out pretty close to what is actually going on. Our whole country has consolidated to take advantage of economies of scale. The first glitch in that scenario came this past year when the banking system buckled, and the stock market retreated. Let's face it corporate America has figured out how to run the system. In our industry, the real money is made in the packing side of the business, and the government has paved the way for them to make sure that only a few could have enough money to enter the business through countless restrictions to prevent effective competition. So if they do not money whip you, they get Uncle Sam to pass regulations to prevent only a few who have enough capital to enter into the business. Keep singing your song Bez+ because you are music to my ears, and should be every cattle farmer in America.
 
Icc - As I stated - land ownership is not required - people need to forget the ownership excuse - it is NOT too expensive for corporations to complete that control. Control of land can take place in many ways - legal, rental, lease and finally political

Ddg1263 - To prove my regulatory point through politics here is the first paragraph from Drovers

Obama's regulatory pick blocked over animal lawsuits

Several farm groups have raised concerns over President Obama's candidate for regulation czar, Harvard law professor Cass Sunstein, because Sunstein has argued that animals should have the right to sue humans in court.

You can read the whole article here: http://www.drovers.com/news_editorial.a ... ed_id=5700



This guy may not get in but imagine the next one and the next one and the next on - sooner or later some of these whackos will get in and they will wreak havoc - all because the vast majority of ag folks - do NOT act, do NOT care, do NOT know or do NOT believe it to be possible.

Far too many folks in the ag business LOOK very hard for reasons to believe nothing is happening or can happen.

What they should be doing is SEEING what is actually happening and realizing the puzzle is coming together - and sooner or later the little guy will be in even worse trouble than he is today.

The big operations are serious candidates for lucrative contracts from the corporations - those contracts will look real good - at first!

Then they are hooked and they go the way of the hog or the chicken people.

Protect your industry folks - never say it cannot happen - those corporations - along with compfortable government money at low and no interest can guarantee jobs and because of that get nearly anything they want from the feds.

In my opinion retained cattle is the key - price control has started and corporations is now reaping profits through record high beef retail pricing and the primary producer requires off farm income.

On this board if there are more than 10% who are making money after the final pencil hits the table I would be totally surprized - the rest are hobby folks that are dreaming - and they will never get to profit because it cannot be done. We all talk technique to make a dollar - but in fact raising cattle and working off farm simply makes us work harder - for something we cannot make a living off of.

Do not get into the love the business or the hobby - that is not where I want to go - we are all in this together.

Even those of us who love the business are working harder and smarter to save our pennies - and our prices are dropping - yet the folks controlling the final product are making it quite well - and the threat of going off shore with those jobs keeps the feds from butting in.

In closing - on this board AND the Ranchers net - total ALL the people up - I bet you a steak dinner that less than 10% are making it without outside income - trust me that does not hurt the corporations heart - it helps their control.

Just keep your eyes open and really watch what is happening

Cheers

Bez+
 
Bez+":1i39w56l said:
Icc - As I stated - land ownership is not required - people need to forget the ownership excuse - it is NOT too expensive for corporations to complete that control. Control of land can take place in many ways - legal, rental, lease and finally political

Ddg1263 - To prove my regulatory point through politics here is the first paragraph from Drovers

Obama's regulatory pick blocked over animal lawsuits

Several farm groups have raised concerns over President Obama's candidate for regulation czar, Harvard law professor Cass Sunstein, because Sunstein has argued that animals should have the right to sue humans in court.

You can read the whole article here: http://www.drovers.com/news_editorial.a ... ed_id=5700
It's as clear as the nose on your face !! Great Post---- :wave:


This guy may not get in but imagine the next one and the next one and the next on - sooner or later some of these whackos will get in and they will wreak havoc - all because the vast majority of ag folks - do NOT act, do NOT care, do NOT know or do NOT believe it to be possible.

Far too many folks in the ag business LOOK very hard for reasons to believe nothing is happening or can happen.

What they should be doing is SEEING what is actually happening and realizing the puzzle is coming together - and sooner or later the little guy will be in even worse trouble than he is today.

The big operations are serious candidates for lucrative contracts from the corporations - those contracts will look real good - at first!

Then they are hooked and they go the way of the hog or the chicken people.

Protect your industry folks - never say it cannot happen - those corporations - along with compfortable government money at low and no interest can guarantee jobs and because of that get nearly anything they want from the feds.

In my opinion retained cattle is the key - price control has started and corporations is now reaping profits through record high beef retail pricing and the primary producer requires off farm income.

On this board if there are more than 10% who are making money after the final pencil hits the table I would be totally surprized - the rest are hobby folks that are dreaming - and they will never get to profit because it cannot be done. We all talk technique to make a dollar - but in fact raising cattle and working off farm simply makes us work harder - for something we cannot make a living off of.

Do not get into the love the business or the hobby - that is not where I want to go - we are all in this together.

Even those of us who love the business are working harder and smarter to save our pennies - and our prices are dropping - yet the folks controlling the final product are making it quite well - and the threat of going off shore with those jobs keeps the feds from butting in.

In closing - on this board AND the Ranchers net - total ALL the people up - I bet you a steak dinner that less than 10% are making it without outside income - trust me that does not hurt the corporations heart - it helps their control.

Just keep your eyes open and really watch what is happening

Cheers

Bez+
Click to expand...
 
Bez+":55f6qaud said:
In closing - on this board AND the Ranchers net - total ALL the people up - I bet you a steak dinner that less than 10% are making it without outside income - trust me that does not hurt the corporations heart - it helps their control.
Click to expand...

Why wouldn't people hedge their bets by having other income streams??? I have never understood why it would even be a goal to have all of your livelihood gambled in the cattle biz. I don't see anything at all wrong with diversification. Whether that is a cow herd and a job (losing the job is just a likely as cow prices being down....though hopefully both don't happen at the same time), a cow herd and a farming operation (in the good years the cows eat the stubble....in the bad years the cows eat the crops), a cow herd and a diverse financial portfolio (when cows are up live off the cows....when cows are down live off the investments), a cow herd and a business (excavating, tractorwork, gas station, roofing, hunting guide, whatever), a cow herd and rental income, a cow herd and timber investments, a cow herd and oil well royalties, a cow herd and a pension, etc. Heck I would like to have cows, investments, timberland, a business, a salary, a pension, and oil wells!!
 

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