Meat prices...inflation or greed...

[DallasSooner 279]

https://www.reuters.com/business/retail-consumer/tyson-foods-beats-revenue-estimates-higher-meat-prices-2022-02-07/

 

It's been blamed on everything from rising corn prices to labor shortage but in the end it's the simple fact they can charge more and are doing so. 

[Hermanator 7050]

That's what all of this is about. Corporations using the pandemic as well as made up excuses to price gouge and the toothless government is invalid after decades of certain people removing proper regulations to protect consumers. Its only going to get worse. 

[52-80 19157]

What's an acceptable gross margin for a meat supplier like Tyson ? How much is gouging?

[Chopper 17235]

Just like in the ports and railroad industries, and in many other American industries, there's monopoly power in the meat processing industry. They've limited supply, driven up prices and are making money hands over fist. Consolidation beginning in the 1980s has led to 4 companies dominating the meat market - Cargill, Tyson, JBS and Marfrig.

side note - I almost solely buy meat from a nearby butcher who sources his supply locally.

Quote

Some claim that meat processors are forced to raise prices to the level they are now because of increasing input costs (e.g., things like the cost of labor or transportation), but their own earnings data and statements contradict that claim. Their profit margins—the amount of money they are making over and above their costs—have skyrocketed since the pandemic. Gross margins are up 50% and net margins are up over 300%. If rising input costs were driving rising meat prices, those profit margins would be roughly flat, because higher prices would be offset by the higher costs. Instead, we’re seeing the dominant meat processors use their market power to extract bigger and bigger profit margins for themselves. Businesses that face meaningful competition can’t do that, because they would lose business to a competitor that did not hike its margins.

The WH has an initiative to try to boost local ranchers and thereby drain market share from the Big 4 oligopoly. You can read more here. https://thecounter.org/big-four-meatpackers-antitrust-consolidation/

Edited February 10, 2022 by Chopper

[gsoda3 3260]

who's price gouging if the big 4's prices are less than local places?

[Kennythetiger 9382]

It’s a jungle out there. 

[Catpfish 618]

19 minutes ago, Kennythetiger said:

It’s a jungle out there. 

Disorder and confusion everywhere

[52-80 19157]

2 hours ago, Chopper said:

Their profit margins—the amount of money they are making over and above their costs—have skyrocketed since the pandemic.  Gross margins are up 50% and net margins are up over 300%.

Changes in percentages should be quoted in absolute values (bps).  If you earned 1% interest on your savings account, and later it became 1.5%... you didn't get a 50% improvement in earnings, you got a 50 basis points improvement (delta of 0.5%).

Same concept if Tyson's gross margin was 6% one year and 9% the next.  That's not a gouge.

[Pescado_Rojo 19416]

JBS recently paid $52.5M to setting a price fixing lawsuit. The other three are still involved in a class action suit brought by several rancher and producers organizations. 

https://www.lonesomelands.com/new-blog/2022/2/6/the-truth-about-beef-price-fixing-and-why-jbs-525-million-settlement-is-not-justice?fbclid=IwAR0dHVLK0VJ2QYVWI68bkS9yyYVGZx8IdoBp69vWTAeq6zyu5v_wMh1qse4

 

[next2naus 439]

So we have a market chain here called Uncle Giuseppe's, it's an Italian focused grocery store, somewhat premium in products and prices. They had what I would characterize as small chunk of trimmed brisket, could not have been more than a pound or two....$35. 

[elguapo 4586]

 

[52-80 19157]

10 minutes ago, elguapo said:

 

"The company 3M, which produces N95 masks (and other things) crowed on its earnings call that “the team has done a marvelous job in driving price. Price has gone up from 0.1% to 1.4% to 2.6%." The CFO told investors, "We see that to be a tailwind."

 

Yes, the company that makes cleaning supplies and adhesives and polishing compounds and sand papers ... is really getting its corporate juice from selling fucking N95 masks.  Thanks, aide to Sr Warren.

[irishtexan 11519]

4 hours ago, Chopper said:

side note - I almost solely buy meat from a nearby butcher who sources his supply locally

I'm curious - What's the cost compared to grocery-store bought meat? 

[jeevsie 3734]

2 hours ago, Kennythetiger said:

It’s a jungle out there. 

[DefinitelyNotHollywoodColt 12301]

1 hour ago, 52-80 said:

"The company 3M, which produces N95 masks (and other things) crowed on its earnings call that “the team has done a marvelous job in driving price. Price has gone up from 0.1% to 1.4% to 2.6%." The CFO told investors, "We see that to be a tailwind."

 

Yes, the company that makes cleaning supplies and adhesives and polishing compounds and sand papers ... is really getting its corporate juice from selling fucking N95 masks.  Thanks, aide to Sr Warren.

Why are you the way you are?

[Kel Varnsen 8460]

I listened to this podcast the other day from NYT. Pretty much talking about meat production has been consolidated to just a few companies and they are lowballing and strong arming the ranchers and fixing the prices. 

http://nytimes.com/2022/01/28/podcasts/the-daily/beef-prices-cattle-ranchers.html

Edited February 10, 2022 by Kel Varnsen

[52-80 19157]

14 minutes ago, DefinitelyNotHollywoodColt said:

Why are you the way you are?

cuz your mom touches herself at night

[elfenix 34240]

1 hour ago, Kel Varnsen said:

I listened to this podcast the other day from NYT. Pretty much talking about meat production has been consolidated to just a few companies and they are lowballing and strong arming the ranchers and fixing the prices. 

http://nytimes.com/2022/01/28/podcasts/the-daily/beef-prices-cattle-ranchers.html

what's a little rent seeking amongst friends?

[F250 28774]

Price of beef shoots up while the price of cattle drops. Seems a little fucked up. All of that profit and the American ranchers are losing money.

 

[Sbbruin 21853]

Don't we have a resident cattle/hog guy?  A KC guy I think?  Help me out.

[WhatTheBuck 28781]

6 hours ago, Catpfish said:

Disorder and confusion everywhere

No one seems to care. 

[Biff Tannen 45683]

3 hours ago, DefinitelyNotHollywoodColt said:

Why are you the way you are?

He can't let go of this fantasy that the "free market" is actually free.

[deadshank 24653]

Every cattle rancher I know from 4 in Texas, one in Colorado and one in Montana say the same thing.  The prices are controlled by the meat packers.  The packers’ margins are high while the ranchers’ margins are very low.  
 

I do my best to buy from local butchers in Uvalde (Uvalde Meat Market slaughters stock from local ranches and Chaparral Feed lot at their own facility).   Their beef is top notch.  
 

Also, Nunley Bros. is selling all wagyu beef from their own ranch  at their storefront named Cattleman’s Beef in Sabinal.   It is fantastic product.  I do not know who slaughters the beef.   
 

Per the meat market / slaughter house guys I know they say smaller  packers could open up; however, they will need a state inspector for product shipped within the state and a USDA inspector for product shipped across state lines.
 

Getting a full-time USDA inspector assigned to and actually live in a tiny market like La Pryor (which a guy is trying to pull off) is quite a tall task.  
 

Further, the USDA and the EPA are making new slaughter facilities difficult to open with more and more stringent construction, safety and operating guidelines.  It’s kind of like the guys already in the club are protected to a degree.  
 

The key to making it work is the slaughter house under your own control and not relying in the bigs.  Of course, the bigs have scale and get to cruising altitude more quickly.  Smaller guys are usually pricier but have better product. 

[Gil Bang 25957]

1 hour ago, Sbbruin said:

Don't we have a resident cattle/hog guy?  A KC guy I think?  Help me out.

No idea about cattle, but our hog guy is Vic. 

[elguapo 4586]

5 hours ago, 52-80 said:

"The company 3M, which produces N95 masks (and other things) crowed on its earnings call that “the team has done a marvelous job in driving price. Price has gone up from 0.1% to 1.4% to 2.6%." The CFO told investors, "We see that to be a tailwind."

 

Yes, the company that makes cleaning supplies and adhesives and polishing compounds and sand papers ... is really getting its corporate juice from selling fucking N95 masks.  Thanks, aide to Sr Warren.

I'm sure the WSJ doesn't know what it's talking about either, dumbass

https://www.wsj.com/articles/3ms-n95-mask-sales-climb-lifting-revenue-as-omicron-drives-demand-11643136555

[DalTxHornFan 3101]

36 minutes ago, deadshank said:

Every cattle rancher I know from 4 in Texas, one in Colorado and one in Montana say the same thing.  The prices are controlled by the meat packers.  The packers’ margins are high while the ranchers’ margins are very low.  
 

I do my best to buy from local butchers in Uvalde (Uvalde Meat Market slaughters stock from local ranches and Chaparral Feed lot at their own facility).   Their beef is top notch.  
 

Also, Nunley Bros. is selling all wagyu beef from their own ranch  at their storefront named Cattleman’s Beef in Sabinal.   It is fantastic product.  I do not know who slaughters the beef.   
 

Per the meat market / slaughter house guys I know they say smaller  packers could open up; however, they will need a state inspector for product shipped within the state and a USDA inspector for product shipped across state lines.
 

Getting a full-time USDA inspector assigned to and actually live in a tiny market like La Pryor (which a guy is trying to pull off) is quite a tall task.  
 

Further, the USDA and the EPA are making new slaughter facilities difficult to open with more and more stringent construction, safety and operating guidelines.  It’s kind of like the guys already in the club are protected to a degree.  
 

The key to making it work is the slaughter house under your own control and not relying in the bigs.  Of course, the bigs have scale and get to cruising altitude more quickly.  Smaller guys are usually pricier but have better product. 

That USDA inspection requirement seems to have been a big impediment to local slaughter facilities.  A bunch of them have closed and it has limited the options for sellers.

When I was growing up, we never bought beef at the store.  We'd go halves with the slaughter house to process our animals.  The other side of that coin was that I had no idea how wonderful aged beef could be.  "Belle" would be sliced up and frozen in white butcher paper at home the next day.

[Chopper 17235]

6 hours ago, irishtexan said:

I'm curious - What's the cost compared to grocery-store bought meat? 

Well, bacon is $12 per pound. If you compare to grocery store, which is 8 or 12 oz packages, it's pretty close or cheaper. Also we're talking about some of the best bacon you've ever tasted and it puts anything from a grocery store to shame, including the more expensive brands. While ribeye or filet is maybe $20/pound, you can also find less expensive cuts of beef like a bistro tender, which I prefer over pretty much anything but a ribeye ($12/pound) or a Vegas cut, which is also awesome for less than $10 per pound. (But a cow only yields 1 of these cuts so you won't find at a grocery store.) I think ground beef is $5/pound. Pork chops are maybe $7/lb off the top of my head. Friendly Nick's Butcher in Fort Collins.

[TwiceHorn 31469]

32 minutes ago, elguapo said:

I'm sure the WSJ doesn't know what it's talking about either, dumbass

https://www.wsj.com/articles/3ms-n95-mask-sales-climb-lifting-revenue-as-omicron-drives-demand-11643136555

From what I can see, WSJ just says 3M had increased sales, which one might expect given their presence in the PPE market.  I doubt that the article says anything specifically about pricing of N95 or other PPE.

Here's a transcript of the earnings call.  https://www.fool.com/earnings/call-transcripts/2022/01/25/3m-mmm-q4-2021-earnings-call-transcript/

It only speaks of their "aggregate" pricing, which includes everything they make.  Doesn't speak to specific price increases on N95s or PPE more generally.

[TwiceHorn 31469]

Also, while you do want to control/curb unlawful behavior that leads to the ability to raise prices in a gougy, monopolistic or collusive manner, I don't think even the most liberal poster here, maybe bad_teammate, would argue in favor of outright price controls, except on a temporary, emergency basis.

To the extent that producers are raising prices in the face of increased margins and in the midst of a pandemic, what I think it does reflect is that corporations as a whole have lost their moral compass, their sense of any duty to the consuming public, and their employees, and the public at large.

That is most likely the product of "deregulation" and the general laissez faire atmosphere we have promoted for the last several decades.  It doesn't mean we should enact price controls or punitive measures, but we need to back off this "corporations can do no wrong and all the good benefits everyone" bullshit.  That is clearly not true.

I'm still a fan of capitalism.  But that system vitally needs curbs and restraints or we get what we've got.  We've seen what happens when you leave it to its own devices, and that is create an oligarchy.  

Edited February 11, 2022 by TwiceHorn

[TwiceHorn 31469]

Another thing raised here is that regulatory agencies, like USDA and EPA, do actually raise artificial barriers to competition and reinforce bad corporate behavior, sometimes wholly unintentionally and sometimes with a boost from big business lobbies and Congress.

That doesn't mean the agencies should be abolished, or their regulatory power restrained.  It means the agencies need to be fine tuned to take into account issues other than their basic remit (food safety, drug safety, environmental protection), when rule and policy making.

[deadshank 24653]

https://animalscience.tamu.edu/2020/07/06/so-you-want-to-build-a-slaughter-plant/
 

Of course, this is aggy but the obstacles and math are laid out to poke at and sniff. 
 

So, who’s in?  
 

At a minimum it is one more thing we can over analyze, argue over and run our mouths about if we all go in to business together.  We wouldn’t even be able to give it a name. 

[DefinitelyNotHollywoodColt 12301]

48 minutes ago, TwiceHorn said:

To the extent that producers are raising prices in the face of increased margins and in the midst of a pandemic, what I think it does reflect is that corporations as a whole have lost their moral compass, their sense of any duty to the consuming public, and their employees, and the public at large.

“Whats the problem here?”

- @52-80

[F250 28774]

34 minutes ago, deadshank said:

https://animalscience.tamu.edu/2020/07/06/so-you-want-to-build-a-slaughter-plant/
 

Of course, this is aggy but the obstacles and math are laid out to poke at and sniff. 
 

So, who’s in?  
 

At a minimum it is one more thing we can over analyze, argue over and run our mouths about if we all go in to business together.  We wouldn’t even be able to give it a name. 

We could float the idea of a University of Texas Slaughter House. Talk about how it will be an elite facility. Then we start one called The Fighting Texas Agums or whatever. Hit up the aggy GoFundme and promote it as an aggy responsibility to build a better facility.

Use funds to start business. Rename it to ShaggyBevo and make profit.

 

[maninblack 7974]

Inflation unless you're a fucking idiot

[Hook1997 5354]

9 hours ago, 52-80 said:

"The company 3M, which produces N95 masks (and other things) crowed on its earnings call that “the team has done a marvelous job in driving price. Price has gone up from 0.1% to 1.4% to 2.6%." The CFO told investors, "We see that to be a tailwind."

 

Yes, the company that makes cleaning supplies and adhesives and polishing compounds and sand papers ... is really getting its corporate juice from selling fucking N95 masks.  Thanks, aide to Sr Warren.

The only surprising thing there is the percentage was so low, it’s basic economics 101 freshman year….  It’s called supply and demand.  You in your post say cleaning supplies and then N95 masks, would you really expect those numbers by simple economics to be lower somehow than that?

[Sam Lin 3558]

5 hours ago, deadshank said:

Per the meat market / slaughter house guys I know they say smaller  packers could open up; however, they will need a state inspector for product shipped within the state and a USDA inspector for product shipped across state lines.
 

Getting a full-time USDA inspector assigned to and actually live in a tiny market like La Pryor (which a guy is trying to pull off) is quite a tall task.  
 

Further, the USDA and the EPA are making new slaughter facilities difficult to open with more and more stringent construction, safety and operating guidelines.  It’s kind of like the guys already in the club are protected to a degree. 

This is very correct, and not only in this industry (see: medical). Cost of compliance with regulations acts as a huge barrier of entry for new, less-funded participants.

[52-80 19157]

4 hours ago, Hook1997 said:

The only surprising thing there is the percentage was so low, it’s basic economics 101 freshman year….  It’s called supply and demand.  You in your post say cleaning supplies and then N95 masks, would you really expect those numbers by simple economics to be lower somehow than that?

That whole twitter thread was singling out companies to demonstrate the viciousness of capitalism, "bragging about their ruthless profit-rigging schemes...while hiding behind 'inflation'". 

She cited a maker of N95 as one of them, as if they 2x the price of masks with a unit cost of <$1/pc. This is not Martin Shkreli 5000x a pharmaceutical pill. 

3M sells $20 of vinyl wraps and masking tape and spray lubricant for every $1 they sell in masks.  Their gross margins have been on a 5 year decline. 

It's sensationalistic and populist bullshit designed to rouse the peanut gallery.  See in case:

8 hours ago, elguapo said:

I'm sure the WSJ doesn't know what it's talking about either, dumbass

https://www.wsj.com/articles/3ms-n95-mask-sales-climb-lifting-revenue-as-omicron-drives-demand-11643136555

 

[52-80 19157]

Let's quote the entire article and see if @elguapo can tell which line is the smoking gun to bring these guys to a Congressional hearing.

 

Quote

3M Co. said rising N95 mask sales helped deliver higher-than-expected revenue in the materials company’s most recent quarter, as the Omicron variant drove U.S. confirmed Covid-19 infections to record levels.

The St. Paul, Minn.-based manufacturer said new federal guidance around masks has helped drive additional sales of 3M’s N95 disposable respirators, and executives said 3M also might benefit from a government program to distribute 400 million American-made N95 masks free of charge.

“People recognize the protection they get with an N95,” said 3M Chief Executive Mike Roman. “Government officials have been public about that. It has heightened people’s awareness.”

3M is the biggest U.S. respirator manufacturer, and struggled to meet a surge in demand in the early days of the pandemic as government guidance on wearing masks shifted and many workplaces and state and federal agencies issued mask requirements. The U.S. and the world faced a shortage of medical-grade face masks for much of 2020, and 3M and other companies responded by boosting production in and outside the U.S.

Supplies have since improved for both the general public and hospitals, industry officials have said, with high-quality masks widely available in stores and online.

The Centers for Disease Control and Prevention said in updated guidance this month that to prevent the spread of the more highly transmissible Omicron variant, people should consider wearing N95 masks—which are effective at trapping small particles—and other face coverings that are more protective than cloth masks.

For the quarter ended Dec. 31, 3M said it logged an additional $40 million in mask sales above its expectations set before the Omicron variant began to spread.

A Biden administration program to hand out N95 masks free of charge at pharmacies and health centers should also support demand, the company said. The masks are sourced from the Strategic National Stockpile, and that would likely translate to additional orders if the stockpile gets replenished, Mr. Roman said.

Even with the recent increase in mask demand, 3M expects overall demand to fall as the year progresses. The company said mask sales fell 25% in the fourth quarter compared with the same quarter in 2020, though not as sharply as expected.

3M’s mask sales peaked in the first quarter of 2021. The company said it had $1.5 billion in N95 and other mask sales in 2021, compared with $1.4 billion in 2020 and $600 million in 2019, before the pandemic.

Companywide sales for the fourth quarter of 2021 increased 0.3% to $8.61 billion. Earnings per share declined 10 cents to $2.31, as 3M said lower production volumes for some products made them more expensive to produce. Shares in 3M were down 0.3% in afternoon trading.

Whoa, they sold $40M more masks than they expected to, due to federal masking guidance.  And possibly they might benefit from the administration wanting to distribute 400M masks?  And company leader is happy people are recognizing the importance of N95 designation?  And their EPS declined?

 

STRING THEM UP!!

[52-80 19157]

here's the change in wheat and sugar and cattle and rice and oat and other agricultural commodities.  all up double digits.

maybe there's some credence to this zero interest rate policy and inflation thing afterall. 

[Royalfan5 2354]

Cattle wise we are on the downside of the cattle cycle which is going to shrink ready packers numbers for another 18-24 because we’ve started the herd liquidation due to drought and cow/calf profitability and biology doesn’t let you change that on a dime. Some additional bigger packing capacity has started to come on line which is important because there is no slack for cattle right now, which is the biggest thing hurting producers. (Although most are making money now) Boxed beef remains well of the highs which should help after we come off the peak of seasonal tightness in April. Adding small processors helps at the margins but it takes a lot of them to move the needle when we need to kill 125-127k head of cattle per day.

Hog wise we are past the Prrs issues of last years and have plenty of capacity it’s just going take more labor to keep up as numbers of ready hogs pick up post summer. Takes more skilled labor to process a hog and while packers are paying more a lot people don’t like working in packing plants 

[Incredulity 11671]

The “I’d gladly pay more” crowd has up and vanished like a fart in the wind.  Telling.

[52-80 19157]

5 minutes ago, Incredulity said:

The “I’d gladly pay more” crowd has up and vanished like a fart in the wind.  Telling.

Can't wait to hear about how Big Oil and its corporate greed is also back, after voluntarily getting its ass stomped in for the last 8 years.

Explanations are so much funner when you base it on a conspiracy!

 

[TwiceHorn 31469]

7 hours ago, Hook1997 said:

The only surprising thing there is the percentage was so low, it’s basic economics 101 freshman year….  It’s called supply and demand.  You in your post say cleaning supplies and then N95 masks, would you really expect those numbers by simple economics to be lower somehow than that?

The earnings call said they did manage to increase prices .2% over gross margins across the board.

I'm not defending 3M in particular or corporate America.  Even that tiny increase in these times reflects a certain tone deafness, at least.

But that tweet doesn't seem to be chock full of solid evidence of profiteering.

Edited February 11, 2022 by TwiceHorn

[DefinitelyNotHollywoodColt 12301]

15 minutes ago, Incredulity said:

The “I’d gladly pay more” crowd has up and vanished like a fart in the wind.  Telling.

Tell me more about this crowd…genuinely curious…”I‘ll gladly pay more if…?”

[52-80 19157]

5 minutes ago, TwiceHorn said:

The earnings call said they did manage to increase prices .2% over gross margins across the board.

the sheer audacity

[midtown 3345]

Only poors look at prices

[Mo Horn 8840]

If a company came out and said we're going to give everyone a raise, and reduce employee's healthcare costs, but we're going to have to increase our prices to do it, then I would gladly pay more for their product. But history shows that most profits just line the pockets of millionaire ceos and the regular worker sees very little benefit. 

[Incredulity 11671]

22 minutes ago, Mo Horn said:

If a company came out and said we're going to give everyone a raise, and reduce employee's healthcare costs, but we're going to have to increase our prices to do it, then I would gladly pay more for their product. But history shows that most profits just line the pockets of millionaire ceos and the regular worker sees very little benefit. 

Then you should be happy. Everyone is making more money.  It’s not keeping up with inflation, but wages are way up.

[elguapo 4586]

1 hour ago, Incredulity said:

Then you should be happy. Everyone is making more money.  It’s not keeping up with inflation, but wages are way up.

Ah yes, we should be happy that our billionaire overlords allow us to pick up whatever scraps they can't hoard.

https://www.reuters.com/business/pandemic-boosts-super-rich-share-global-wealth-2021-12-07/

[Incredulity 11671]

Asset bubbles…how do they work.