Smokey is going "Unplugged"This blog is tweaking its focus to the food industry, food politics, and sustainable food marketing (though he will still include healthy eating and "buy local" articles as well). In essence, Smokey is going to give his opinions on both "what is right and wrong" with our current food production system. In addition, he will offer his thoughts and ideas for possible solutions.
"In the cattle auction market, it sometimes seems, you have about as much chance of making a living buying and selling cattle as you do surviving a gun fight while holding a knife." (overheard in a discussion between two old ranchers watching their cattle go through the auction ring)
Tweety Bird and Sylvester The Cat are famous cartoon adversaries. In our society they represent the predator (Sylvester) and the prey (Tweety Bird). In real life, the predator will use cunning and brute force to conquer it's prey. In the Loony Tunes version Tweety represents the underdog. Despite this perceived disadvantage, he consistently reverses their traditional roles by being nimble, thinking ahead, and able to adjust quickly to the situation. Meanwhile the cat is tunnel visioned and slow to adjust. In a sense, this seemingly silly cartoon is a metaphor for the current agricultural commodity system and, perhaps, presents lessons the agricultural community can learn from.
We, as agricultural professionals, ply our trade in a nation founded on and based upon the free market system. But, in its present form the livestock market presents itself as a formidable conundrum within the free market. In the arena of livestock marketing there are two main players. The producer and the buyer. My particular interest lies with a producer with less than 200 head of "mama cows" and how he/she is to survive in the current system as it exists today. My premise is simple, the cattleman is viewed as prey and the buyer as predator. I know, this may seem a little outlandish, after all the current system provides an auction/bid system where every producer has an outlet and equal opportunity to sell their animals. The system though, is set so as to allow the producer no control over the price he/she will receive and really no reliable way of accurately projecting a true profit/loss scenario BEFORE selling the livestock.
In a free market system, a manufacturer offers their "widget" at a wholesale price that They Set. Any adjustments to the price are made by the manufacturer in order to entice the potential buyer and still make a profit (or at least break even). A cattle producer is also a manufacturer...calves, the essential. ingredient to making beef...except he/she does not set their own wholesale price. Instead, they produce the product, with all it's inherent "production costs", and enter into a buying system with no idea on whether they will get those costs back, much less make a profit.
In the coming posts, I will discuss:
- Who and what a commercial cattle buyer is and how they set their price
- The economics to the producer and how this affects the consumer
- Discuss the "SOLE" movement and how it's principles may improve the quality of life for both producers and consumers
- Redirecting "Political dollars" to the community and the sustainable economic impact these dollars would create
Author's Note: All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things)(Though I would think there are going to be some similarities). The information represents my opinion and are based on personal experiences. Any factual information will be "backed up" with references when possible, but be aware, the majority of the content is personal conjecture.