R-calf Link Producer Woes to Dominant Meat Packers

US - A South Dakota rancher and cattle feeder has suffered losses exceeding $260,000 from the sale of three pens of cattle (984 head) sold to Tyson since January 1, 2009. R-calf USA claim this is further evidence of unfair producer troubles caused by dominant and unrestrained meat packers.
calendar icon 8 July 2009
clock icon 2 minute read

Schumacher’s three pens of cattle were top performers, says cattle group R-Calf. According to R-calf, his 984 cattle gained an average of 459 pounds in just 136 days, representing an average daily gain of 3.37 pounds. Schumacher (the producer in question) lost an average of over $265 per animal when he sold his cattle to Tyson, which resulted in a total loss to Schumacher of nearly $261,000.

“Schumacher’s cattle were obviously of high quality, and his losses cannot be explained by market fundamentals,” said R-CALF USA CEO Bill Bullard. “The only conclusion to be reached is that the cattle market is being manipulated by the dominant meatpackers. Otherwise, consumers would not still be paying near record beef prices for the meat derived from devalued cattle sold by Schumacher and other cattle feeders.”

The average retail price for Choice beef in the first quarter of 2009 was over $4.33 per pound, significantly higher than the average price during the same period last year which was $4.16 per pound. However, the average price that Schumacher and other cattle producers received for their cattle in the first quarter of 2009 was $8.62 per hundredweight less than what they received during the same period in 2008.

“Due to their unrestrained exercise of market power, the dominant meatpackers are severely exploiting both consumers and cattle producers, resulting in financial ruin for Schumacher and others, but windfall profits for the meatpackers” said Bullard

On June 11, 2009, Tyson filed legal action presumably to publicly embarrass Schumacher for daring to protect the U.S. cattle market against manipulation by the meatpackers. Tyson has taken legal action in an effort to seize Schumacher’s home.

Bullard said the U.S. cattle industry is under attack by these dominant meatpackers, which are following the same market-control model that resulted in the loss of 90 percent of U.S. hog farmers and 80 percent of the nation’s dairy producers since 1980.

“The small independent cattle feeders, who typically feed 1,000 head or fewer, are on the front lines of this market manipulation fiasco, and 5,000 of these smaller feeding operations were eliminated from our industry between 2007 and 2008,” he pointed out.

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