Riding Herd Saying things that need to be said. March 15, 2022 • www.aaalivestock.com
Volume 64 • No. 3
Held Captive BY LEE PITTS
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hirty five years ago we warned that the big beef and pork packers were going to use the same contracts the chicken processors used to make beef producers “serfs on their own land.” In an attempt to find a nicer sounding word than “contracts” packers came up with terms like “committed supply”, “committed procurement” and “alternative marketing arrangements”, or AMA’s, which seems to be the least offensive phrase according to academics. The producers called it something else entirely...”take it or leave it pricing.”
Tournament Pricing
NEWSPAPER PRIORITY HANDLING
Chicken markets started using AMA’s back in the 1960s and since then the poultry industry has become so packer-dominated that they effectively control all aspects of production. Twenty-five years ago we were able to get our hands on one of those contracts the chicken processors were using. It was a 24 page contract for captive chicken producers that identified the responsibilities of both buyer and seller. The responsibilities of the packer were outlined in three paragraphs on the front page and the other 23 pages identified the duties and responsibilities of the chicken grower. The contract producers had to buy all their chicks from the processor, all their pharmaceuticals and all their feed. You could not have one house for Pilgrim’s Pride and another for Tyson. Any dead chickens were the responsibility of the grower and the contracts were for mul-
tiple years. The contract DID NOT include the price paid for the chickens. That would be based on a formula of the packer’s making and the prices paid for the best chickens were dropped from the average used to calculate the final price. Have you ever heard of an av-
locality.” To get bank financing for hog and poultry operations today it is now often contingent upon entering into one of these AMA’s.
Crime Pays When we predicted 35 years ago the same thing would hap-
Life is simpler when you plow around the stump.
erage where the higher numbers were excluded? According to R CALF the chicken processors used “tournament pricing which pits captive producers against each other and uses secretive formulas to rank producers and determine their final pay after chickens are delivered.” This despite the fact The Packers & Stockyards Act specifically prohibits any packer from giving “any undue or unreasonable preference or advantage to any person or
Aerial Snipers The U.S. Forest Service’s Latest Livestock Management Tool
BY CAREN COWAN
pen to cattlemen our detractors said that would be impossible because beef production was spread over millions of acres and could not be dominated like chicken houses and pork palaces. Oh, yeah? Seventeen years ago we reported there were 36,688 head of fat cattle per week being “held captive”, that is, sold under contract where no one saw the prices paid for the cattle except the packer and the cattle
feeder. Twelve years later that average had risen to 40,303 head and as of February 10, 2022, there were 54,000 cattle being held captive per week. See a trend here? But it could never happen to the beef business, right? According to R CALF, “In 1977, the four largest beef packers only accounted for 25 percent of the market, but as of 2018, the four largest packers controlled 85 percent. In beef, AMA’s are increasingly becoming the normal course of doing business with unintended consequences. In the last 15 years, the percentage of cattle purchased on the spot market plummeted from 52 percent to 23 percent in 2020. This is due to the emergence of these captive supply contracts which negate or significantly reduces the need for packers to participate in the cash market.” Four years ago the government did a study and found that, “On a week-to-week basis, higher levels of AMA procurement were associated with lower negotiated cash prices. This finding is consistent with the complaint and with many previcontinued on page 2
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f you ever thought the Old West was harsh, those outlaws and renegades had nothing on today’s US Department of Agriculture’s (USDA) U.S. Forest Service (USFS) and Wildlife Services. On February 10 and 11, 2022, Wildlife Services aerially gunned down 65 head of cattle in the Gila Wilderness. They did it with a sniper in a helicopter. The cost was $40,000. The USFS paid for it. The Center for Biological Diversity (CBD) applauded it. The sniper shot 29 bulls, 32 cows and four calves. The large continued on page 4
The reason cited for this government killing spree was supposed damage along stream beds. Other than the bull shot in the eye, does this stream bed display damage?
by LEE PITTS
Cowboy Diversity
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here’s been a slow drift towards cultural diversity amongst the cowboy clan and it hasn’t always been pretty. I witnessed this trend firsthand when I leased a ranch from a cheapskate owner that was bordered on the back side by two more cheapskate owners each waiting for the others to fix the deplorable fence that divided us. (I think they were afraid of cutting their carrying capacity). As an astute barb wire collector I can tell you that the first wire strung on the old fence was of the Kettleson Half Hitch genus and species that was patented in 1878 and some of that wire was repaired and replaced with a more modern version, Wright #2 to be specific, patented in 1894. The only other wire on the old cedar posts was a patch job here and there with the “Japanese Suicide, Scars, Scabs and Stitches” brand. Thanks to the huge prices we were getting for calves back then (not) the three owners decided to each contribute one cowboy to the job with the cost to be shared equally. (The cost budgeted would have been more than their ancestors had paid for their entire ranches!) On the morning of fence-fixin’ day we all arrived on horseback, which was the only way to get to the bad fence. It was a clash of cultures so diverse war almost ensued. I was there as a proud representative of the vaquero tradition and a Texas cow puncher was present wearing his pants stuffed into very tall boots and huge batwing chaps that were heavily scarred by South Texas brush. Displayed prominently and resting in a pommel bag on his saddle was a six gun, which frightened me because I had come to the fence-fixin’ unarmed. The two of us twiddled our thumbs until the third ranch representative arrived. It seems the Great Basin buckaroo was late because it took him 30 minutes to dress his horse. I’d never seen so many ropes and fancy knots! He wore a flat brimmed hat and what he called “packer boots”, which were lace-up cowboy boots which I thought defeated the whole purpose of boots because cowboys wear them so we don’t have to tie any laces.
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