Death comes to us all. Life's but a walking shadow | What you are saying is correct. But what you are effectively saying is: "we don't like the direction of the spread so we'll just correct it to our advantage." Now this leads us to the topic of "market power." Pat H can correct me if I'm wrong but I don't think "basis" exists in the livestock market. This is because the packers hold all the market power. It will be interesting to see as the price of livestock becomes more competitive due to the short supply if they begin to play such games. They already do to some extent with the difference between select, choice and prime. And with the live weight vs. hanging weight. But that's really a different problem of grade and yield.
Sorry Kggonzo if I off-topic. |
end users might start singing a different tune
