Open letter: Competitive market needed
To Whom It May Concern:
My name is Bob Edington, my family and I have owned and operated the Coleman Livestock Auction since 1961. I am also in the cattle business running yearlings, cows and feeding cattle. I am not new to the business.
The only cattle I buy and raise are American cattle. It is a wonderful opportunity for anyone but in the last 4-6 years it has become a very corrupt business. All we want is a fair and competitive price for our fat cattle, this would help all producers from a baby calf to a feeder yearling.
My customers are dissatisfied about taking less for their cattle than what they are worth. The Chicago Mercantile Exchange has a lot to do with what fats and feeders are worth. If the futures go down the cattle go down. If the futures go up, there is no price change in cattle unless there is a drastic up trend, but even then, it is usually a slow process. Supply and demand do not mean a thing. I watch the DTN markets daily and have noticed that Colorado does not quote their markets because they are confidential. Why is that?
The packers have as much as 80-85 percent of the daily kill which consists of captive supply (already owned cattle in feedlots) every day. The minority group is 15-20 percent, which is people like me that sell on a weekly market. This has taken the competitive bidding out of our market; therefore, the minority has no market. Until these yards quit giving them a captive supply, and start selling our cattle on a competitive bid, our livestock marketing will never change. We must have competitive bidding. If we do not, we will never have a market. This is a monopoly, it is time to do something.
I am frustrated about selling my cattle $30-$50 per hundred weight under what they are worth. The week of the Tyson fire, futures broke as much as $10 per hundred weight, in just 2-3 days, they took $5 off fat cattle. The packers put $25 per hundred on dressed beef. For example, I sold 224 steers on 8/14/19 with a pay weight of 1,483 pounds at $1.05 which is $5 per hundred less than the previous week. Which is $74.15 less per head. The same animal at 1,483 pounds at 63.5 percent dressed equals 942 pounds dressed. They put $25 per hundred on the meat that week. Which made the packers profit $235.50 per head. They added another $309.65 to their already outrageous profits. I am not saying that I do not want the packers to make money but $400-$600 per head is a slap in our faces when our cheap feeder cattle are losing money. THIS IS ROBBERY.
As producers and feeders, we pay a beef checkoff, $1 ($2 in Texas) on ever head we sell. The packers and retailers do not participate. The cattle industry is paying for advertising and promotion. The packers are the only ones benefiting from this. Beef is moving at high prices over the meat counter.
Ranches and farms are vanishing due to years of debt, droughts, and bad markets. How much longer can this cycle go on? With the prices we are getting for our product, there is no encouragement for a young cattle producer. If something is not done soon, the industry we once knew will be over. As producers and feeders, we have the finest product in the world, but how long will the cattle industry survive? Is there a future in the cattle business? We do not want a handout, we are looking for a fair and competitive market for our product.
Coleman Livestock Auction