Additionally IBP is now the largest cow killer. They are positioned well for the forced liquidation. The packer and commercial feeder are both essentially processors and margin operators. When faced with changing costs and selling prices they both simply adjust their input costs, eventually showing a profit. The problem with the agreement between the packer and feeder to no longer discover price leaves no one defending the price forward to the retailer or backward to the cow-calf producer.
Retailers are price driven.
They skillfully read the packers profits and share in those profits. If this lack of price discovery continues, the cow herd will be basically wiped out. Last fall calves were close to half price compared to three years ago. Add the increase in grain prices and the problem becomes overwhelming. Finished cattle are far undervalued and likewise, so are the calves produced by the cowman.