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USDA Economic Research Service (ERS) has new data on farm income for 2007. Naturally, dairy farm income is up in 2007.
Beef operations get very little income from farming operations. Probably beef producers can count on even less farm income now that Wal-mart has signed a deal with Brazilian corporate giant JBS S.A. to produce all Wal-Mart’s beef in Brazil. Since much beef, especially ground beef is from cull dairy cows, the JBS Wal-Mart deal cannot bode well.
One important thing for all to note is the heavy reliance of dairy farm families on farm income.
As mentioned in a very early post, citing the 1940 “Yearbook of Agriculture” all economic question are really moral questions.
I watch trends, not specifics. The pork industry has trended to corporate farms and few "players" in the industry to the detriment of the private pork producer...very interesting. The beef industry has historically been many smaller producers with a larger number of "players" in the market, but that is changing faster than I would have expected, it's still probably (for now) better-off than pork, for how long I can't say?
ReplyDeleteJBS S.A. has quickly become a major player in the U.S. beef market. Two years ago they bought Argentine meat packer Swift Armor (as a side note all of McDonalds beef comes from Argentina or Brazil, so keep that in mind when you order that next quarter pounder). Last year JBS bought U.S. National beef Packing Co. and the beef unit of Smithfield Foods, Inc. (they also bought Austrailian Tasman group). The U.S. purchases made JBS the largest beef producer in the U.S. with about 35% of the market share, (and rising fast) they now hold at least 12% of the world beef market.
Tyson and JBS control about 60% of the U.S. beef market...fewer companies in the beef market equals less money to beef producers in my book.
There are also rumors that JBS is now looking at our largest poultry producer, Pilgrim's Pride Corp. who as most of you, know filed for bankruptcy earlier this year.
In closing JBS has many beef operations and packing plants - what the future holds is anyone's guess. But the meat industries are trending toward fewer in the market, bigger companies with more market control and packers who produce their own meat. Is dairy next?
Jeff Suehring
Jeff ,
ReplyDeleteI have presonally admired your fearlessness and your honesty in this mess. I am sixth generation dairyman and I think I have found the solution to all our problems. according to hoards dairyman there are 9000000 dairy cattle in the u.s. and there are 60000 dairy farms this equals out to about 150 cows per farm average.(this works wether you are a 40 cow grazer or a 5000 commercial who uses rBgh). We need supply management but I don't want the money to go to NMPF or worse yet to USDA so here is my plan based on the average 150 cow herd. whenever the price of milk goes below $18 every herd in the country culls 10% of their cows. this 10% extra cull rate should be more than enough to right the wrongs that the dairyman is facing. If your coop or dairy has a problem with that it is time to drive a hard bargain as to what your milk is worth. now I know that it is hard to convince a 2000 cow dairy to part with 200 head but this is my main question, Is it harder to part with those cows and their milk money for a month or for 8 months as we have done in 2009? Now I know that every herd in the U.S. has all the room they need for dry cows and bred heifers, but if your extra culls freed up room for the animals that would make money next lactation what the hell, why not get rid of a few more deadheads
Robert J lieb
I think supply management would beat what we have now which is go out or be driven out. Supply management might be structured so that one wishing to exit the business could sell their portion to someone else thus allowing cash for retirement needs as an example. When you have operations doubling or tripling there numbers every couple of years and few small operations to gobble up you have the same problem just the scale of the problem is larger. It's about "control" or monopoly; Boardwalk wins!!
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