AFF Sentinel Vol.4#6

That doesn't include contracted cattle, and it shouldn't. Packers don't hand out contracts to feeders like a dealer at a poker table dealing cards. They compete to get those contracts, and feeders don't even have to sit in the game. The feeders request contracts. That's not packer control. The so- called "captive" supply is just a made-up pejorative misapplied to a feeder and a packer agreeing to a cattle deal.

After a couple more "whereases" -- including examples of yellow journalism like "the open market in poultry is gone and growers are serfs on their own land" and the implied indictment that "less than ten percent of market hogs are sold on the open market" - - comes the real hyperbole. (Don't you wonder how most of the industry exists without auction markets? It's a major benefit for livestock, but they imply if everything live is not auctioned or sold on the cash market, the markets are non-competitive and dysfunctional.)

Our various marketing methods result from buyers and sellers working out ways to satisfy the needs of both. The efficiency of the market, over time and millions of transactions, insures survival of the best options for marketing and managing risk.

"Whereas, supply and demand have little relevance in livestock markets where conditions are dictated by corporate bureaucrats and category captains;"

The correlation between supply and price charts, cattle cycle charts and demand plots flatly contradicts that statement.

What "conditions" are "dictated" by corporate bureaucrats? And "category captains?" Is that from The Jungle or The Godfather? "Corporate bureaucrats" must mean processors. If processors had their unfettered way, we guarantee conditions would be different. The cattle supply would be larger, plants would run nearer capacity, prices would be down where packers had consistently positive margins, and higher volume would lower costs/head ... and that's just for starters. Packers have bemoaned "conditions" and red ink for years. If they "control" things, why are they losing money?

R-CALF's next "whereas" is preposterous.

"Whereas, America and American agriculture was made strong by fair, open and competitive markets, as well as the individual innovation and entrepreneurship of rural agricultural citizens;"

If any group has lost English language rights to the word "innovation," it's R- CALF. No group has demagogued more and spent more on attorneys to thwart innovation in agriculture. They've opposed contracting, alliances and branded beef programs. They've fought "captive" supply, packer ownership, mandatory individual animal identification, and the successful, cattlemen- designed check-off. They've opposed trade and the global market like reclusive, 19th century Far Eastern emperors. R-CALF recognizes neither innovation nor competitive markets when they see them.

We love their reference to "open" markets. Open as in "I want to see how many calves my neighbor sold at what price," but not "I don't want my cattle information in a secure, confidential database government veterinarians access only in case of disease." These guys must really miss listening in on telephone party lines!

Like all LAG* partners, who believe more government is the solution to nearly every problem, R-CALF's next "whereas" is typical.

"Whereas, our children have no future in agriculture without strong governmental corrective action ..." Invoking children, summoning government fixes - these are typical, liberal, socialist prescriptions.

Now for the coup de grace.

R-CALF calls for Congressional "legislation requiring divestiture by the five major beef packers and five major pork packers of all livestock production assets, all contractual relationships with livestock producers (to take delivery of livestock more than two weeks after commitment), and all but one slaughter plant each (possibly processing plants) by January 1, 2008, in essence reverting to the Consent Decree of 1920."

Upton yet lives!

How stunningly na?ve! How would you like to be Outback Steakhouse or Kroger faced with the beef production chain capabilities of the 1920s? As a consumer, how would you like the product and the price -- adjusted for inflation and colossal processing inefficiencies -- of the 1920s? Why should alliances and branded beef programs be illegal?

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