It has been proven that IBP uses captive supplies, those inventories of cattle available to IBP outside of the competitive market, to lower prices paid to producers. The nearly non-existent cash market determines the value of these captive cattle. The big packers do business with each other. In a move that made cattle feeders livid and has drawn attention from government regulators, ConAgra sold cattle to IBP for slaughter in late January. In today's market a sale of this volume causes the entire industry to flush their inventories of cattle at the going low price.
Feeders have only minutes to decide on the take it or leave it offers by the big packers.
It is called stealing. A past ConAgra executive recently informed cattle producers and feeders that ConAgra has consistently used their own cattle inventories from their own feedlots, although not market ready, to keep their packing houses full to stay out of the cash market. Many packer promoted studies show there is no problem with concentration and captive supplies. Any feedlot manager with a Monday morning show list knows this is untrue. When you don't ask the right questions you don't get the right answers.