Full-Service Cattle Sales & Marketing serving the Fallon, Nevada and Outlying Areas.
Feeder Sale will be held on the 3rd Friday of each month
Our sales can be seen live at www.DVauction.com
Just when I start to feel like I am beating a dead horse & nobody is listening, I get several calls and messages saying, for example, “Thanks for stepping up & saying what the rest of us are thinking” or “hey we really appreciate your efforts on behalf of the ranchers and we normally send our cattle here or there, but we would like to support your market so we are sending them to you.” I really want to see our industry be successful and for future generations to carry on this way of life. If calling attention to failing competitive markets and do nothing Cattlemen’s Associations gets me more customers, then I will take that as a win. Ranchers are the world’s busiest people. Ranching is mastering the art of selective
neglect. Ranching is saying “things will slow down a little next week, over and over until we die”. That’s how our Cattlemen’s Associations have gotten away with serving themselves and their small circle of elite friends for the last decade or so. This is not the association your parents were proud members of. Those leaders may not have been perfect, but they could look you in the eye and give you a yes or no answer. Nowadays they have to get ahold of NCBA to answer the simplest questions. When we ask questions about competitive cattle markets, we are told “Ignorance is Bliss” like we are too dense to understand this complex packer situation. Trust me it is not that complicated. Packers have several different tools in their toolbox they are using to disassemble the cattle industry, just like like they did pork and chicken.
1. CAPTIVE SUPPLIES. They always have enough of their own slaughter ready cattle on hand that they can outlast the feedlot operator. It’s smart business on their part. We see it in the butcher cow and bull market as well. Just when we think supplies are tightening and we might see a fight over cows and bulls, the packers draw from their own inventory for a week or two until the market is flooded again. THAT is why we are pushing for Senator Grassley and Tester’s Minimum Cash Negotiated Trade. If we could get this legislation passed, the packers could continue to process their “captive supplies” but would have to buy 50% of their needs within 14 days of delivery on a negotiated basis. It would be a game changer for the struggling cattle feeders and maybe they could make a profit for once. I guarantee it would trickle down to the yearlings and eventually the calves.
2 FOREIGN BEEF. A bag of cherries says “Product of Canada”. A bag of jalapeños say “Product of Mexico”. Foreign beef only has to be here 24 hours before the packers label it “Product of the US”. NCBA is petitioning USDA to change it to “Processed in the US.” So I guess by asking to have it changed are they finally admitting that they have been lying to the American consumers while putting the screws to the American cattle industry?? Imported beef is just like captive supplies. Just when supply starts to shorten up a few giant barges show up with Brazilian beef. I have always wondered what else was on those barges. JBS and the Batista boys have already proven what they are capable of so nothing would surprise me.
3 RETALIATION. Imagine you are the cattle feeder and you have a pen of finished choice cattle ready to be shipped. The feed meter is running at approximately $5 per head per day. You have run your break-evens (feed, death loss, interest, meds, labor, equipment payments and repair and heaven forbid you pay yourself minimum wage). Cattle weigh 1400 and you need $1.30 to break-even. A profit would be unheard of. You pick up the phone and call your local JBS, TYSON, NATIONAL, or CARGILL fat cattle buyer and tell them what you have. That’s when they start using every trick in the book to psych you into thinking they are doing you a huge favor by taking your cattle off your hands. “Man, we are full for at least two weeks out and with all the labor shortages due to COVID 19 if I were you I sure wouldn’t hang onto them. It could be 30 to 45 days before we might have a slot again. I could maybe pull some strings and get you $1.90 on the rail, if you paid the freight and stood any deducts for hard bones and yield grade 4s and 5s. Be sure to get back to me in the next hour or so because my phone is blowing up and this offer won’t last long.” Now it’s up to you if you’re going to pay the freight and get your head ripped off with “grade and steal” on cattle that are already losing $140 a head or hold out for a better price. If you decide to hold on in hopes of more money that’s when Mr. Packer Buyer teaches you a lesson and the tool of retaliation gets used. As he pulls out of your driveway, he is calling the other 3 buyers to tell them what he offered. You don’t think they go to dinner at night and vacation together? That was illegal back when USDA had teeth. Now at $5 per head per day feed costs you can’t get anyone to pick up the phone for 30 days. Now you have over-fed cattle & are looking at a $290 per head loss. Finally Mr. Packer Buyer picks up the phone and you, with hat in hand, ask him to bid the cattle again.
If he offers $1.15 or $1.80 dressed are you going to take it? You bet you are because you realize you have no other option. And we wonder why there are less and less independent cattle feeders every day. The only way to survive is to crawl in bed with the packer and basically “WORK” for them. They let you pretend you have some control so you can keep some of your dignity but in reality, you don’t. You are simply an employee of THE BIG FOUR. Sad but true, and I can’t stress enough how important it is that we get some legislation that gives Ranchers, Stocker Operators, and Cattle Feeders a fair percentage of today’s $3.30 a pound boxed beef. If you get paid $1.90 dressed and they sell the beef for $3.30 they are only making $1200 per head, not counting the $150 in drop value. I am no fan of Government intervention, but I am realistic about what it’s going to take to fix this noncompetitive market. We have always thought money runs downhill, but we have finally realized it runs towards money. Sadly it appears that the same thing has happened to the representation of the livestock industry, be it cattlemen’s association or politicians.
If a married couple decides to get a divorce and they both use the same attorney, whichever one slips the most money under the table is going to get the mine while the other gets the shaft. The struggling livestock industry can’t scrape enough pennies together to replace a leaking water trough let alone bribe politicians or lobbyists. It’s pretty easy to see the packers are in control and will stay in control until supplies reach record lows or we get legislation for fair cattle markets.
There’s talk about more regional packing facilities, which is great news, but not sure if the industry can hang on that long with sky rocketing expenses and flat cattle prices. Call the Nevada Cattlemen’s Association and National Cattlemen’s Beef Association and ask where they stand and what they are doing to help the industry survive. You will be shocked to hear how aligned they are and the catch phrases they have so well rehearsed. For example “The market goes in cycles and right now its the packers turn” or “We are working to get government funding to help the packers put in more hook space” Uh oh! I thought they didn’t want the government involved?! Why should American taxpayers have to foot the bill to expand billion dollar companies while they invest their profits into fake meat production. JBS reported record breaking profits this year. No surprise there.
Join US Cattlemen’s Association, RCALF and The Farm Bureau. They need a much bigger membership base to stand a chance of legitimacy against packer controlled NCBA. Don’t give up the fight and don’t trust what the koolaid cowboys are telling you. Take a step back and ask the questions we have failed to ask in the past. In closing, I don’t want to paint all Cattlemen’s Association members with the same brush as some I consider personal friends, and I honestly think they want wants best for you, me and our future generations in the livestock industry.
Jack Payne, Owner Nevada Livestock Marketing
Have a great day and we look forward to seeing you soon