Packing House's conspire

[Bruce14]

When are we going to say enough is enough. I'm tired of seeing beef prices in the store remain high when the packers rob us blind. I tired of the argument that the packers need to be assured of a consistant supplie to keep the plan running. Balderdash! If they want more cattle for the line all they have to do is pull out thei wallets. All the cows in the country that raise a calf will see their calve get fed and slaughtered, so if we could get price discovery back in the hands of the producer the Mega-Conglomerates might come back to earth and pay what things are worth not take what you get from a 2 bid tag team that rides on the same bus.

[jmillang]

There are a couple of more steps between the packinghouse and the meat counter. There is the wholesaler, then there is the meat cutters, who may or may not be in the store or even employed by the store and then the retail store.

Marketing consumer materials revolves around pricing your product to a level that the consumer will pay. If you need to move more product then you drop the price. Retail pricing rarely is related to raw inputs or even cost of production. With carcass weights continually climbing (especially in the US) and we keep killing more head there is more and more beef in the market place. So the packers have all that they need to supply wholesalers, who don’t have big orders from retailers, who are not selling as much as they used to, and the cycle continues.

I was reading a US beef processor magazine a while back. In the article they are saying that the beef industry has got what they wanted, the consumer to consider beef as a premium product. Not that its premium it’s the first product to feel any price changes or consumers reduced spending. I also was talking with a meat manager a while back and the price of beef has gotten so high compared to other meats that even if stores wanted to use Beef as a lost leader to get people in the store they still would not buy it chicken pork are still cheaper in the consumers mind (note I said in their mind weather or not that is the fact).

Now throw in what the consumer wants and is willing to pay for, they get their beef meal one night a week now instead of 2 and we have dropped consumption by 50%. Consumers have backed away from beef and are likely to do so the rest of the winter. Beef is not the meat of choice 365 days of they year for most consumers (although I sure try) so summer is where we shine and winter turns to chicken, turkey and pork.

I a perfect pricing system yes the retail price would be reflected to the raw input but ask the steel miners if they have seen the price of steel rise with the price of cars.

[ValueChainFX]

jmillang
Your comments Jeff fall pretty well in line with what most of the producers have heard for many years. (and I do agree with your words to a point)

The challenge producers and those in the industry have in my eyes, is that our industry needs to look outside the box for solutions. We all know the big guys own the commodities, and not just the big packers, but also the marketers, wholesalers and retails.

When a producer looks at the supply chain as a whole and cuts cost where he can and takes even a stable market price then we can survive as an industry. (With a few changes)

Anyone that believes the industry does not need to be re-engineered from start to finish has been sleeping to long, sat in too many meetings, or needs to return to their roots.

I do respect the Xperts in the industry and know they have done many good things for the industry in the past, but I also respect the producers enough to at least offer them choices, not say "That is the way it is, take it or leave it"!