| mikado - 8/17/2018 10:55 Kookier, can you shed some light on the $50/ hd profit for packers? The data I saw was non integrators were at the $50/ hd but vertical guys were closer to $12/hd. The usual taking money from the packing side to subsidize the actual physical raising hogs. Is this accurate? Also do you think the vertical packers will change their business model...”why are we giving up profit when the farmers can carry the loss on the actual raising”?
Yes its pretty accurate.
No, I don't think they'll change their business model. If they didn't own a large % of the hogs they killed they would actually have to bid on hogs to fill the packing plants. All of the hogs would cost them more because they'd be forced to bid up to and above the cost of production.
The only way they (the publicly traded companies) change their business model is if some shortsighted uninformed big time share holders force the issue. The privately held companies no what they're doing and why they're doing it. They won't change anything unless it quits working.
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Hogs
