Rcalf has a point here

[farmers_son]

Myself, I believe the packing plants do indeed manipulate the price of live cattle, certainly here in Canada. I do quite a bit of reading, cannot say I have read Mr. Roberts book but I think the financial statements of Tyson Foods make an interesting read:

http://ir.tyson.com/phoenix.zhtml?c=65476&p=irol-reportsAnnual

Tyson Food Inc. has 104,000 employees, that is more than the number of men, women and children in the city of Red Deer. In fiscal 2007, Tyson exported products to more than 80 countries, including Canada, Central America, China, the European Union, Japan, Mexico, Russia, South Korea and Taiwan. Tyson is the world largest meat protein company. It would be naïve to suggest that companies with that kind of market power would not manipulate the live cattle price.

I do not think there was any question that the packing plants fixed the price of live cattle in 2004. Did it make any difference whether they owned any live cattle at the time. No it did not.

Tyson alone has 13 beef processing plants, it has the resources to arbitrarily decide to lower the live cattle price paid at any one of its plants. Tyson does not need to own live cattle in order to do that.

I guess I see the best protection we have against the packers manipulating the live cattle price is not to restrict who can and cannot own live cattle but to have access to other packing plants that are paying a fair price. Since the border has opened to live cattle trade we have that (although it is threatened by COOL). I do think cattle producers need to be able to sell their cattle to whoever they want, whenever they want and we do not want to put restrictions on that.

Besides that how can you ever stop someone from owning an animal? The U.S. law that R-Calf was pushing would have restricted packers from having legal title for more than 14 days. While legal title may have significance for the income tax people it would not stop the packers from controlling when live cattle came to market, one way or another. These kind of laws do not work and only serve as a smokescreen.

And I cannot say that I have much use for anything R-Calf supports. Just my opinion.

[grassfarmer]

You agree packers manipulate live cattle prices, I would suggest owning live cattle prior to slaughter is the easiest way for them to accomplish that. I have moved resolutions at ABP meetings to ban or limit packer ownership of cattle - thus far ABP refuses to approve these resolutions. I have also moved resolutions that would lobby for stronger anti-competition laws to control the packer manipulation of fed prices. Again, ABP refuses to approve these resolutions.

ABP - Against Beef Producers - facilitators of US packer manipulation of Cdn cattle prices.

[rkaiser]

Did not make a difference in 2004 farmers_son? Maybe you could consider the multi millions of dollars that were pumped in to Lakeside farms from Federal and Provincial aid payments. Is that a difference? Had producers owned those cattle - those aid dollars would have gone to producers. If Lakeside farms had not been able to bid on those cattle - would the prices to the cow calf changed much. Not in the theory of trickle down that Shirley and your ABP gang talked of in those years. And in fact some of those millions may have trickled down more the next year had producers received those dollars rather than shareholders of a company who could give a rats ass if this industry survives or not.

Just as they could truly give a rats ass right now. Do you see Tyson or Cargill coming up with any game plans as to how to make things work? Hell no. Just threaten to leave ---

You say that market manipulation will occur whether they own cattle or not. Fine then - taking away the right to own cattle should not hurt them or our system then. A replacement buyer will be found. It may actually create more competition as the fear from private feeders will be less.

How is it that you know more than the feedlots on this issue farmers_son. Why is it that resolutions about packer ownership at the ABP AGM come from the feedlot sector? Do you think they can think for themselves or do you feel like so many other issues that ABP executive needs to decide.

Once again one of the problems with ABP structure. In no way does the current ABP structure allow for sharing of concepts within all aspects of our industry. There is more than ample division at the ABP AGM between sectors of the industry.

The system is out of control like I said on the other thread and a lot of it has to do with leadership from folks like farmers_son who will not find ways for all sectors of our industry to work together.

[wd40]

Boy what planet do you get off at. FmSon

Whats not mentioned in this concept is the timing. The packers only need to have cattle in their ownership at the RIGHT TIME.
They have a microscopic view of retail needs (which they totally control) [fact] Therefore they only (as was the case is Canada) get into the market in a significant way at THE RIGHT TIME.

Packer ownership in Canada is not as big an issue now as they now have renched control from producers anyhow.

When Northwest Cattle Producers packing plant proposal (Alberta)was working on our business plan our 5 consultants who were ex-CFO's, CEO's, and COO's from Tyson and Excel(Cargil)including a independent packing plant GM would give you a sever change of mind FarmSon.

A typical board room meeting consisted of "Well we've keep the beef industry on it's knees long enough it's time to let them up for air". One member mad it clear that Cargill will not build a significant capital project without being sure it can capatilize it out in 3 to 4 years.


"If packing plants were prohibited from owning cattle that would instantly end any prospects for producer owned packing plants".

You better pull out the plug to your light bulb and reverse the current.

Packer owned cattle is the reverse of producer owned packing plant.

[farmers_son]

I understood that Grassfarmer had moved resolutions about packer ownership. It was a good resolution and packer ownership is an important issue.

So is the right of backgrounders and the cow calf producers to sell calves whenever we want to whoever is willing to pay the highest price. That is an important issue too.

Laws on packer ownership just plain do not work. There are too many laws besides making more that will do nothing. We will be far more successful taking our limited resources and lobbying government for reduced trade barriers with the United States. Maintaining and improving market access with the United States will do more to improve our live cattle prices than any attempts we could make to fall into bed with R-Calf.

[rkaiser]

Talk aboput sqirming you way out of this one FS.

Which trade barriers are you talking about now? There are more feeder cattle moving into the USA right now than we have ever seen in history.

Nobody is talking about getting in to bed with anyone. In fact it is time to get out of bed with the Uncle Sam.

Time to work with the Americans with some dignity for one.

You know FS - I am starting to think that Tyson and Cargill may be willing to make changes before you and the gang at ABP/CCA.

WD 40's quote - "Well we've keep the beef industry on it's knees long enough it's time to let them up for air".

Guess who is talking with the B41/4 group these days farmers_son.......

[vagabonddreamer]

i laugh when i think back to the start of the BSE thing...a VERY good friend who ranches in wyoming...told me that the US burried (literal and figurative) MANY cases of BSE that were never made public...at that time...he told me..and i quote ..."its not the BSE or the US cattle market that will cause problems....its the packers...they will manipulate this BSE thing in their favour...guaranteed"...i have been reflecting on this...because with the US border open...the prices have actually gone DOWN...we have all been waiting impatiently for the border to open???....so what were we all waiting for in actuality??? vs

[grassfarmer]

That's very true - I farmed in the UK from the start of the BSE cases in 1985/6 through until 2000 and there were huge BSE problems for the beef industry. Consumer confidence collapsed - beef was not saleable at any price. Export markets were severely affected for 15 years and totally closed for 10 of those years. This was a real case of BSE caused disaster.
What we have seen in North America is totally different - consumer confidence and consumption was never affected. Exports off this continent have been affected but this is only a drop in the bucket relative to North American domestic consumption. So I would suggest the problems we have experienced were not caused primarily by BSE but by the packers, politics and to a lesser extent fools like R-CALF.

[kato]

The way I see it, with the limited number of packers in Western Canada right now they can manipulate the prices quite nicely without using packer owned cattle to do it, with their ability to maneuver the market by killing or not killing cull cows.

Not that they don't own cattle too. Their own cattle are just the frosting on the cake. .

Now that is a sad state of affairs.

Packer ownership is just one item that should be on the agenda. We need to address industry concentration as well, and the lack of competition that comes with it.

In a perfect world, cattle should go straight from farm to plant with the profits being shared up the line equally, and there should be honest competition for those same cattle.

If only we lived in a perfect world eh?

[grassfarmer]

"We need to address industry concentration as well, and the lack of competition that comes with it." DING DING you get the prize Kato - right on the money!!
Unfortunately this crucial issue is ignored or swept under the carpet by ABP/CCA, the Provincial and Federal Governments and most other commodity groups. This is the true cause of the farm crisis for beef, pork and sheep producers.
Most ag producers don't even believe this is the problem they have been fed so many lies - blame drought, BSE, the high dollar, high grain prices, oversupply, undersupply, cost of fuel etc etc.
A simple question for anyone who doubts that corporate concentration is the main cause of our problems: How does the price of beef in the store compare with 2002 levels?? is it higher or lower. The answer is considerably higher. So why are cow/calf and feedlot operators going out of business in big numbers currently?? It's not simply the high dollar, high feed cost or BSE it's because the processors and retailers have virtually eliminated competition in their sectors and can pay a low price for live cattle, sell them as record high priced beef and pocket the proceeds. Given the price beef is bringing in the stores what justification is there for paying under $80/cwt for fat cattle? sheer greed.
Time for some proper anti-competition laws and these should include packer ownership laws.