Billings, Mont.Herreid, S.D., rancher and cattle feeder Herman Schumacher has suffered losses exceeding $260,000 from the sale of three pens of cattle (984 head) sold to Tyson Fresh Meats Inc. (Tyson) since January 1, 2009, yet Schumacher's three pens of cattle were top performers. His 984 cattle gained an average of 459 pounds in just 136 days, representing an average daily gain of 3.37 pounds. Schumacher lost an average of over $265 per animal when he sold his cattle to Tyson, which resulted in a total loss to Schumacher of nearly $261,000.
"Schumacher's cattle were obviously of high quality, and his losses cannot be explained by market fundamentals," said R-CALFUSA CEO Bill Bullard. "The only conclusion to be reached is that the cattle market is being manipulated by the dominant meatpackers. Otherwise, consumers would not still be paying near record beef prices for the meat derived from devalued cattle sold by Schumacher and other cattle feeders."
The average retail price for Choice beef in the first quarter of 2009 was over $4.33 per pound, significantly higher than the average price during the same period last year which was $4.16 per pound. However, the average price that Schumacher and other cattle producers received for their cattle in the first quarter of 2009 was $8.62 per hundredweight less than what they received during the same period in 2008.
"Due to their unrestrained exercise of market power, the dominant meat-packers are severely exploiting both consumers and cattle producers, resulting in financial ruin for Schumacher and others, but windfall profits for the meat-packers" said Bullard.
On June 11, 2009, Tyson filed legal action presumably to publicly embarrass Schumacher for daring to protect the U.S. cattle market against manipulation by the meat-packers. Tyson has taken legal action in an effort to seize Schumacher's home.
Bullard said the U.S. cattle industry is under attack by these dominant meat-packers, which are following the same market-control model that resulted in the loss of 90 percent of U.S. hog farmers and 80 percent of the nation's dairy producers since 1980.
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