At the same time, cattle producers are going bankrupt and liquidating this nation's cowherd. Today, university economists blame oversupply and lost market share for low cattle prices as we continue to import increasing pounds of foreign beef to meet the record demand. Total consumption exceeds domestic supplies by approximately 18 percent while consumers pay the highest prices for beef on record. Something is wrong. The problem is a packer monopoly and its abusive market power.
Captive supplies are probably the number one weapon packers use in depressing prices.
Captive supplies are inventories of cattle under the control of the packer and outside of the competitive cash market. The cash market sets and determines the price for the captive supplies. There seems to be a conspiracy of silence in the feeding industry today. Few feedyards are willing to speak out in fear of being blackballed by the packers. With the highly perishable and time critical nature of livestock production, that fear is real.