Packer concentration study DONE

[wd40]

I am positive that the ACFeeders paid for this study already. They hired some "qualified" team of experts from the US with the leader a home grown Canadian. Gave the report maybe 2 yrs. ago at the Feb. meetings in Red Deer. To my grey headed memory his conclusion was (some one correect me please) that the packers needed 15% of the supply captivated, hence it wasn't a problem. He bragged that they had (again my memories fuzzie) 8 MBA's on staff and a herd of "pail bunters".

I know I'm not that bright but my "cow sense" said that it wasn't so much the annual percentage as the timming of the "packer owned" volume where the real problem lies.

So "toe to toe" I asked him why they hadn't pondered the timing of the ownership. Answer - "hmm that's a good point, never thought about that".

My response - and you said you had a team of 8 MBA's working on this? da

[grassfarmer]

WD40, Your post confuses me - did the study you mention indicate that less than 15% were captive supply and thus we don't have a problem? If so I'm not sure what they were looking at for data. Was that the percentage of owned cattle directly on feed at Lakeside etc? Captive supply in the broader sense covers forward contract and grid cattle as well.
From the NFU report "using CanFax Data on transactions with the big Alberta packing plants....captive supplies usually comprised 50-60% of total reported sales in Alberta....peaking at 70% in some months"
It also states that 10-30% of slaughter volume is actual packer owned cattle.

[wd40]

Like I said, that was back a few years, so my memory has tried to block out the BS. :-( You'd best phone Alberta Cattle Feeders for a copy of the report. I am sure that it was Beef Industry check off dollars that paid for it, motivated by those who are in bed with the packers.

But my main point is that you have very poor data if you don't model in the timeing of the controlled cattle.

There are market conditions during which the packer don't want to own or controll their own inventory.

And the converse is also true where we have seen them own 75% of the cattle on feed.

They have the perfect pulse on supply and demand. Therefore timinmg is everything.

[wd40]

I also noticed in a different thread, talk about heating up Ranchers Beef facilities. That is a good way to sink more money into a bottomless pit.
Not that I disagree with producer owned packing capacity, infact I was part of one of the failed (largest propositions for one).

However research would show you that it wasn't designed to be a beef plant, and the equipment sitting out in the snow was very outdated. So don't go there!