I agree with farmers-son that our industry is at a crossroads and we can’t go back to the way things were, as it’s probably not there any more.
In the past we were the same as the R-CALFer’s and looked at the auction barn, feedlot operator, or packer as the source of money in the cattle business. I think we have to remember that the only source of money is the consumer (and the Government). Since BSE there has actually been a net gain in money going into beef as retail is at an all time high and the government has supplemented it with billions more. Where did this money go? Not to the producer due to an imbalance in packing capacity. Yet prices for beef are so good it attracts offshore product when our cows are near worthless.
I have also come to realize that a token investment in packing capacity will not save our operations. If you sell 10 head at a better price, that won’t significantly affect your bottom line. We need to make an investment proportional to our herd size. Where does the money come from? Catch 22 is it must come from borrowing against your equity. That is gone because we haven’t been getting our share.
In the past we were the same as the R-CALFer’s and looked at the auction barn, feedlot operator, or packer as the source of money in the cattle business. I think we have to remember that the only source of money is the consumer (and the Government). Since BSE there has actually been a net gain in money going into beef as retail is at an all time high and the government has supplemented it with billions more. Where did this money go? Not to the producer due to an imbalance in packing capacity. Yet prices for beef are so good it attracts offshore product when our cows are near worthless.
I have also come to realize that a token investment in packing capacity will not save our operations. If you sell 10 head at a better price, that won’t significantly affect your bottom line. We need to make an investment proportional to our herd size. Where does the money come from? Catch 22 is it must come from borrowing against your equity. That is gone because we haven’t been getting our share.
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