|
western colorado | Posted this in another thread and though it might get some good discussions;
The main reason that everyone questions the integrity of the packers is lack of transparency. No export reports are made on boxed beef. How would the corn market work if there were no export reports? They also feed the majority of fat cattle in their own lots. To make another analogy comparing grain markets to cattle it would be very similar to the elevators owning and operating the majority of the farm ground that services that particular elevator. The only grain that they have to buy is to top the bins off. This would be how the price is set what ever they need to top the bin off. Now they are in a position that cattle are short enough they can't top the bins off and they are actually biding against each other for the first time in a long time. We are getting a small glimpse of just how profitable they have been. So yeah there is a fair amount of unsavory pricing schemes out there for cattle. Making things more transparent would solve most if not all the problems. COF should be broken down into 2 very distinct parts packer owned and privately owned. Weekly boxed beef export data should be available just like the grain markets. Destination, price and tonnage. Those 2 simple changes would level the playing feild considerably. There has also been talk of replacing the LC trade with boxed beef, but to do this accurately you must have good export data. Now maybe you can understand why there is "cartel" reference now and again!
I'm sure I'm missing some important points if anyone would like to add. | |
|
Lack of transparency in the cattle market
