# Beef Price Collapse Questioned



## Vol (Jul 5, 2009)

If it smells like a rat.....from DTN.

Regards, Mike

http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/free/news/template1&paneContentId=5&paneParentId=70104&product=/ag/news/topstories&vendorReference=b88006fa-b53c-4980-88e5-e3a4e3a4d33e


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## Tim/South (Dec 12, 2011)

Follow the money.

I doubt anything will be proven. The tracks have long been swept away. Maybe just knowing the sniffing dogs are working will keep things on the up and up.


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## Waterway64 (Dec 2, 2011)

The DOJ has rubber teeth and the whole world can turn up side down befor any action would be taken. I have little doubt that there are grounds but we must remember this would be a battle of lawyers, not Navy seals. We have seen to falls with phony prices. In part it shows some manipulation but it also shows psychology of buyers and sellers. Last years I had friends and other producer who were buying cattle in the face of record high prices because they were confident prices would keep going up. After taking serious losses this fall they are sitting out of the maarket when they can pencil a reasonable profit. Oh yes with so few packers and grocery store chains with their interlocking boards of directors are playing us. I hope we will find a realistic price range this year.


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## somedevildawg (Jun 20, 2011)

As an outsider looking in.....it seemed to follow the housing market in terms of the boom to bust cycle just not as far either way. The prices were skyrocketing and then crashed.....surely the market needs investigated if for no other reason than to get to the reasons of the volatility. No doubt, as Tim said, "just follow the money"


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## steve IN (Jan 13, 2010)

Maybe there was a flood of cattle going to market all at once. I know that I took advantage of high prices and sold everything but a few head for freezer beef. I am looking to restock at lower prices. I sold 500 pound feeders last summer for over 3$ a pound. Sold cows that I paid $1000 for four years ago, got four calves and sold them for $1500. An old timer told me once that everything is for sale. When the price is too hard to believe , it's time to get out and look for another opportunity. Look what happened to grain.


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## Tim/South (Dec 12, 2011)

The issue with this last crash in prices was there was no reasoning behind it. Cattle numbers were still down and weekly slaughter numbers were still 100k per week below normal. Prices were steady and in two weeks fell in half.

The USDA is partially to blame for releasing numbers suggesting the national herd had almost recovered. Later those numbers were adjusted to where we still had a domestic shortage. Bankers and stock brokers go by government statistics and that is used to set future prices and operating loans.

There is a very strong opinion that the packers and retail buyers worked to push pork and chicken as affordable protein and caused cattle numbers to back up on the feed lots. Fed/Fat cattle can not be held over long like calves and stocker cattle waiting for profitable prices.

Packers and retailers have made huge profits from the decline in prices paid to cattle owners.

Follow the money.


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## luke strawwalker (Jul 31, 2014)

Tim/South said:


> The issue with this last crash in prices was there was no reasoning behind it. Cattle numbers were still down and weekly slaughter numbers were still 100k per week below normal. Prices were steady and in two weeks fell in half.
> The USDA is partially to blame for releasing numbers suggesting the national herd had almost recovered. Later those numbers were adjusted to where we still had a domestic shortage. Bankers and stock brokers go by government statistics and that is used to set future prices and operating loans.
> There is a very strong opinion that the packers and retail buyers worked to push pork and chicken as affordable protein and caused cattle numbers to back up on the feed lots. Fed/Fat cattle can not be held over long like calves and stocker cattle waiting for profitable prices.
> 
> ...


Why all those USDA reports should be BANNED...

IF all farmers treated their production information like the PROPRIETARY BUSINESS INFORMATION that it is, we'd ALL be a lot better off...

Let the MARKET figure out what the supply is and price accordingly-- STOP giving the speculators inside information so they can manipulate prices...

Later! OL J R


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## Tim/South (Dec 12, 2011)

There is mandatory reporting to USDA on the number of cattle on feed (feed lots with over 1,000 head) each week. There is also price reporting when feed lot to packer transactions take place. Each week there is a show list that tells how many head a feed lot has that are ready to be processed. Packers make an offer and the feed lots either accept or decline.

The mandatory reporting is system is obsolete. Cattle sold on future delivery, sold on a formula or grid, does not have to be reported.

The price being reported to the USDA is the cheaper by nature cattle i.e. Corriente (Mexican) and Holsteins. Only about 10% of the fed cattle sold are reported. The other 90% are better cattle and sold on some type of formula and do not have to be reported as cash sales. Thus the lower 10% is used to determine value and futures price.

If Futures are $133 and you sell for $135 it makes you feel like you were just thrown a steak when in fact you are just chewing your tail.


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## Waterway64 (Dec 2, 2011)

When you "follow the money" there are all kinds of little trails and perks...


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## Ray 54 (Aug 2, 2014)

Thing would be better if there where more than 3 major packers controlling 75 to 90% of the beef,pork,and chicken in the US.And biggest of the bunch is headquartered in Brazil. The goverment could see no reason to not let the buy outs and mergers to not happen for the last 20 years. The big packers have the feed lots sucked into the formula pricing giving them control of when slaughter happens as well.

Between no computation and the record high prices you knew it couldn't stay as good as last year but this price drop is not really about supply and demand.Packer could so they did.


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