Menu
Forums
New posts
Search forums
What's new
New posts
New media
New media comments
New profile posts
Latest activity
Media
New media
New comments
Search media
Members
Current visitors
New profile posts
Search profile posts
Log in
Register
What's new
Search
Search
Search titles and first posts only
Search titles only
By:
New posts
Search forums
Menu
Log in
Register
Forums
Cattle Boards
Breeds Board
Will cattle go the way of hogs?
JavaScript is disabled. For a better experience, please enable JavaScript in your browser before proceeding.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an
alternative browser
.
Reply to thread
Help Support CattleToday:
Message
<blockquote data-quote="Bez+" data-source="post: 674996" data-attributes="member: 6797"><p>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.</p><p></p><p>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.</p><p></p><p>Profit - driven by fear and greed will run the market</p><p></p><p>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:</p><p></p><p>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.</p><p></p><p>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.</p><p></p><p>3. Prices start to drop when no major buyers pull the trigger at the sale. Bringing the packers back into the game.</p><p></p><p>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.</p><p></p><p>5. Price starts to rise - packer stops buying and uses those retaned cattle until price drops.</p><p></p><p>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.</p><p></p><p>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. </p><p></p><p>Suck in the larger producer - nail their foot to the floor and and the legal process can be used to help acquire that business. </p><p></p><p>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.</p><p></p><p>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.</p><p></p><p>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.</p><p></p><p>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.</p><p></p><p>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?</p><p></p><p>Honestly?</p><p></p><p>Fear and greed - it drives the markets.</p><p></p><p>And money is the end result.</p><p></p><p>Never say it cannot happen - I believe it has already started.</p><p></p><p>I guess we will all see how smart or stupid I am in time.</p><p></p><p>Bez+</p></blockquote><p></p>
[QUOTE="Bez+, post: 674996, member: 6797"] 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+ [/QUOTE]
Insert quotes…
Verification
Post reply
Forums
Cattle Boards
Breeds Board
Will cattle go the way of hogs?
Top