Livestock Meeting Cattle Feeder Cattle Hogs b

would be an awful bad shape wouldn't with I know there's many of you that's been with the organization since 1955 and there's been a lot a lot of battles I think some of the first examples of the organization and where that went out to do its bargaining are quite interesting because if you think back in it 20 years ago to what it is today it's quite a change because the first bargaining with processors went something like this you have an interesting proposition you may have some merit but we see no reason to do business with you because we have no problem getting our supplies you know then came the holding actions and we were termed a militant group but I don't know about being termed a militant group I do know that out of that we did receive some verbal commitments as time went on we needed some sort of system to deliver our products so a collection dispatch in a delivery system was developed and again the organization grew and for many I guess it got a little bit too big because major lawsuits and hostile government actions and gross misunderstandings by the news media began and you know something ladies and gentlemen they were just more battles to fight the slaughter cattle division grew with the organization back then how many of you here today can remember those first written agreements in Minnesota and Wisconsin South Dakota there's some of you here today can remember him if you remember him right there were two dollars and 50 cents under the yellow sheet I guess it isn't that important to what it was because it was in the market at that time but to think back at what we're doing today and what we were doing back in 68 and 69 seems phenomenal to me in June of 1969 as Gary pointed out I came to work for the National Farmers Organization I became the first person of the packing industry to come to work for the NFL and I felt that I certainly knew how to bargain and market and sell your cattle and I felt that I could be probably one of the best quarterbacks that the national farmers ever saw but we had one problem without a team you don't need a quarterback without a team who was going to catch that pass in the end zone because you didn't have a receiver there's some of you people sitting here today that I recognize that were staff members back then in 1962 and 3 I could hold a staff meeting in the men's restroom in the home office and that isn't very big ladies and gentlemen but we'd still have more room for our staff it got a little bit tiresome to keep on fighting and fighting and not getting much done you know a quarterback without a team is just another man in the field so in 1973 I left the organization and I didn't go far I kept quite well in touch with the with the home office people and I knew most of the people in the field at that time and I knew in in 1960 or 1980 it was I had an opportunity to come back to work for the organs and I saw a team that was starting to take shape about a year prior to that I saw a team of people in the field that would represent your cattle that you wanted to market and that the Packer would take that representation and I saw negotiators in the home office that had Packer respect not only did the slaughter cattle team not only would it was there a team in the slaughter cattle but it was in the whole livestock division and I was impressed with that slaughter cattle team it was one that I was glad to work with and build as a blocks of cows and fat cattle grew over the past years so did the prices he received I wonder how many of us back in nineteen 763 would have ever thought that the National farmers would be the only organization the only individual in the country that could forward contract Cole coughs they don't have a market for it but we did it we've been doing it how many of us back then would have thought that we could have that we could price our fat cattle and our fat hogs months in advance you know that's what we all join the organization for that's why I'm working for the organization for the cost production plus a reasonable profit sure there are times people that you can't always do it you can't always lock in a price due to market conditions but when you can you have to use these forward contracts just to keep you in business we've talked to a little bit about the packer and a little bit about the organization and the cattle feeder I'd like to discuss a little bit about marketing at this time how many of you here des would like to sell your product no matter what it is on the top of the market how many of your hands well sold I'd definitely and there's nothing wrong with wanting to do it but how do we know when the top of the market has been reached who can tell me the gentleman's right you always know when you've reached the top of the market when it starts going south on you there's a transparency that's been around some time one I like it has to do with marketing do you know that three percent of the product is bought at the top of the market when it's on its way down and seven percent of the product is bought when the markets on its I got to reverse that three percent when the markets going up seven percent when the market is going down now three and seven or ten you take 10 away from 100 you end up with 90 right where's the other 90 percent market it's marketed at the bottom third of the market ninety percent of farm commodities some time ago I had the opportunity to be in a marketing seminar and in this seminar and in this seminar there was an individual by the dot the name of dr. Dennis biggie and dr. biggie has taken a survey and I have used this for several years and I've kind of changed it I've my name for it is Who's Who in the marketing well if you take everything equally if you take choice tiers for instance that will yield 61% and they'll grade 80% choice 20% goods and they weigh in the vicinity of eleven and a half to whatever twelve weights the grades and the quality are all equal dr. Biggie's survey indicated that any individual selling ten head of livestock or less would fall in the bottom category of the market an individual that would market ten head or more would fall in that middle proportion of the market and an individual that would market ten head or more have the knowledge of the market and have some relationship with that buyer of that product would fall in the top category of the market now many of you people looking at the Omaha market or any of your live markets always see a range you might see it from 58 to 60 dollars you might see it from whatever that range but if you got a two to three dollar range in it this is an example of why that happens there are other reasons but generally speaking this is what happens now to me that isn't that interesting because anybody who has been in marketing over a period of years knows that that's been going on since the beginning of time the bigger the better right you know the more volume you more you get all this good stuff but the ironic thing about it is that it took so long for it to come to the public's eye just a couple of years ago let's get into some of the bigger and better and so forth one of the most glamorous and prosperous segments of our industry today happens to be the feedlot industry in the southern plains you know the ones I've talked about with the 60 16 thousand head or more and and all that volume let's let's look at kind of how they operate you know the national farmers started collective bargaining in 1958 the large feed Lots started their operations around 1965 but they had a system and they had a team that system all begins with the feed yard now you know you can't throw 16,000 hit or more into one large pen and expect to accomplish anything with it you'd have no control over it so they divide that they divided in sections and each section has responsibilities of doing whatever that type of whatever the type of cattle that they have in there they may have heifers in one area they may have steers and another top choice and another low goods they got it all broke up first of all they need a an individual to mix the feed for them because it's no you know normal that they all don't have the same feed ration then of course they have to have someone to keep an eye on so they've got Cowboys in there that'll ride these pens daily and see if there's any distressed cattle in there and if they are they're pulled out and they put into a little sick area where the vet can care for and then of course you got an individual that's got to clean that pin so you got that team right there in each section you got a team they may vary in different feed yards but there's one thing that they have in common and that is a central located office in that yard where one man knows what's going on in each section and he has we and he has people telling him what's going on he has people telling him how many days each pen has been on feed and what the rations they have been on feet and he controls that he knows when pen X and so-and-so is ready to go not within weeks but within several days they will be put on the show list well what happens when they get on the shoulders that individual buyer doesn't go in and talk to the cowboy or the veterinarian or something about a given law pen of cattle in those areas he goes directly to the sales office and that sales man in that office tells him how many days those cattle bed on feed what the quality of the cattle are and what they're going to cost you remember I told you about those eight plants and that southern plains area all killing over a half a million head annually and those two plants that could had the cat kill capacity of over two million well those plants need these feed yards they need him bad and if they're going to pass any of the cattle in this feed yard that's fine with that salesman because he knows that there's going to be another Packer buyer following him and very very seldom do they ever get hung up with any cattle you can read week after week how their current that meaning that they're pretty well sold out for the week we get the reports on how many they kill in a week sell on a weekly basis and many many times you'll see that their current well earlier I kind of mentioned about the big money people and the outlook for that small feeder doesn't look too good and I said we may have to have an attitude of if you can't beat them join them I think I may have to change that terminology a little bit I'm going to have to say if you can't if you can't beat them be like them after all they have followed the pattern of the National Farmers and collective bargaining that's a perfect example of collective bargaining right there but how do we do it we don't have the feed yards to put the nation's cattle in in these yards and compete with these people so what we're going to do what we have done and what we're going to do more is build our own feed yards we're going to build our feed yards by state though and they're going to stay on the farm but they're going to be representative as feed yards and how it all works I guess the best example that we have is the block of cows that it that is marketed bargained for on a weekly basis in Minnesota and Wisconsin it's a good true form of collective bargaining because it starts with you as the individual you may want to sell one cow that week or you may want to sell two loads of cattle you remember dr. biggie in his 10 head whatever well the national farmers through collective bargaining has more than that ten head they have thousands the national farmers knows what the markets are and we have deep we have developed a respect towards the packing industry the packing industry will accept the national farmers sooner than they will accept any other organization in the country and time and time and time again it has been brought to my attention from the packing industry through that the national farmers kind of reminds me of that cigarette commercial you know the one I'm talking about with the gal you came a long way baby remember that well the organization has I want to give you a little example of our collective bargaining will take and use county structure to build that individual feed yard let's say that this is the state event of Wisconsin right now we have three staff members in the state and let's use them as examples of what I'm going to talk about when an individual member in the state of Wisconsin or Minnesota or for that matter in many states but the organization is in if they have something to sell they will call a county meath committeeman or a designated individual in that county now if you don't have that can't that that type of structure this is what our procurement people are starting to work on to build that it so happens that Wisconsin is set up quite well with this but if an individual wants to sell something he calls that County coordinator and in turn that County coordinator gets in touch with the collection point representative in that area the three people the three staff members that we have in Wisconsin are in charge of coordinating six to eight collection points and he works tightly with that group he attends their County meetings he attends that the collection point board meetings he tries to be a part of that given area well when the collection point rep is ready he'll call our staff man or our staff man we'll call him and ask him how many he's going to have how many had a livestock will he have for this particular week and in turn that staff man we'll call that centrally located office it's a simple process now when you put all this together on a Monday morning who use usually it's about Monday afternoon we'll know what the headcount is for the week what type of cattle they are by that I mean how many cows and how many Holstein steers and how many colored and steers and heifers not only that but we will know what day they're going to be delivered now we've had some problems in the last couple of weeks with delivery and an interesting thing happened the Packer called me said Andy he said your organization is getting too big you've got to keep that number within a reasonable amount and I said well you know Jamie we're keeping within that 10% and he said that's not bad two and three years ago 10% wouldn't hurt me any but he says do you realize what you're doing when you're talking 10% of 15 to two thousand head of cattle he said I'm gonna have to hold over some of my cattle because you're gone over likewise if it turns over the other way if we're short then his kill will be short so the coordination has got to be real close and it has been but the logistics on this is phenomenal it is unbelievable and who has done it not myself not Merle sunken or Gary Ellis it's the people in the field they make it happen the only thing that we do is coordinated the success of this I want to show you I have a marketing figure here from 1979 to 1983 a lot of people have seen this but it tells a story it tells a story of what can happen when true collective bargaining works in marketing the black line on top is the National Farmers members prices since 1969 79 to 83 the white line is the average price received by the individuals who sold their cows and the sale barns now how do we get these figures the University of Wisconsin is very cooperative with us and giving it once a month a man by the name of ed Lippert calls our office and he tells us what the average price the state brought and then in turn we tell Edie what what the National farmers brought now what that individual does with it I'll be damned if I know you know I think he puts ours in there and then tries to work it all out I know what we do with it we use it with you know examples like this but I want to show you something everyone in the home office still steps in their trousers one leg at a time I don't believe I've ever seen anybody walk on water in Corning if I do I think I'll probably leave but I want to show you we made a mistake right down in here we were point old five cents under the average and that bothers me because we're a proud group we try to do the best for the organization and its members so we're gonna we're going to find out why what happened and then they're back in May we were a little lower now I know what happened there true collective bargaining was really working because there were two factories in this state fighting one another for volume and not only was that Packer we were giving the volume to fighting for more volume but another outside Packer was in there trying to take his volume so we kind of tightened it up more and made it a little more difficult for those Packers to get the volume they're looking for and the market went up in different areas they were fighting but it took the whole state average up and that's what we're looking for I don't think that that's a successful example right here of trying to achieve a cost of production plus a reasonable profit because in 1979 we're at $60 and in 1983 were at what to $40 but I'll tell you what that is successful it's successful in marketing and marketing alone we have to have more bargaining more volume to reverse that trend and bring the low to the high and it can be done and this right here this example is why you folks need the national farmers more now then when the first day that you've ever called yourself a farmer and rancher the importance of that is right there I'd like to close today with a I feels approve of a statement that I have to live with I have to do something about I have to understand it and keep it in mind and that is people in the livestock industry need to think of themselves as businessmen and women before they think of themselves as farmers and ranchers they need to ask themselves some basic questions such as what is my business and what do I produce and do I plan to be here in the future thank you at this time I'd like to have Merle come up now Merle and I have been traveling together for a good many years off and on I think probably the one of the reasons I quit in 1973 is because of him he was driving me crazy but I know one thing about Merle sunken but he happens to be the most dedicated individual in our livestock department along with the dedication to the department he has the dedication of the organization that no one can match Merle has been a member of this organization for good many years he's come a long way through the hard knocks he was a lot like most people that came into the Home Office in the early days the only way that you learned something is by mistake and you try not to make that mistake again when I came back in 1980 Merle at that time wasn't the director of the department but shortly after that he became director and deserved it more than anyone that I know and has worked harder for the hog division than anyone that I have known and probably will ever know Merle Thank You Andi and only one thing I don't like about Andi just talks a long time but I would like to relate some transparencies here for you this afternoon I like to relate to you exactly in our opinion what has happened in the hog industry in the past year where the hog industry I think in our opinion is going and where you and I as hog producers should be fitting into that situation the first transparency that I'm going to show you this afternoon is one on imports and exports and I'm going to show you here that in 1980 to 1981 into 1982 but I'm just going to compare the 1981 in 1980 two figures here and if you could see those you will be able to detect that there's about 30,000 metric tons more export into the United States excuse me more exports out or fewer exports I'll have it here in a moment the exports in the United States are some 30 million 30 thousand metric tons lower in 1982 than it was in 1981 and in 1982 there were 30,000 metric tons more imports than there were exports also so we have some 60,000 metric tons of more pork in the United States in 1982 just through imports and exports I think that's what the government has done for you and I as hog producers the other part I think that the government has idly set by allowed to happen in this country that we live in to you and I as hog producers and that's the fact in Knight from 1978 through 1983 we have seen the per capita consumption of pork in the United States go from in 1980 from sixty eight point three pounds per person to an estimated this year of 1983 of fifty four and a half pounds and by the way ladies and gentlemen that's exactly where the government is estimating the poultry to be also this year so the first time in history the poultry per capita consumption and the pork will be the same so I think that our government has idly set by and not worked in the behalf of the pork producers of this great nation I'd like to now go in and get a very positive attitude because I think that's all the negativeness we need in this particular presentation I'd like to show you what you have done as an organization now the figures I'm going to be showing you and I'll be showing you several transparencies here and if you'll bear with me I'll point out some very particular points of these transparencies that we in the business of marketing your hogs and also the packing industry and the government looks at these various type figures all the time from time to time so let me show you what you producers and nfo has done in the past few years this is a transparency of a five-year market from 1979 through 1983 and this is a five-year average is based on the interior Iowa practical top country points and as a mid sation market quoted each market day by the US market news service NR is accurate humanly possible interior Iowa country mid-station quotations and for an example in January of 79 the average hug market the practical top of all the hogs sold in state of Iowa for January was 51 dollars and 40 cents well that's not what I brought this transparency for I brought the transparency for the fact that in 1979 in the month of the last week in October in the first week of November your president Devon woodland called a national Sol sell-off program for your organization because of a very low market situation and as you see here in this transparency the October market was $33.98 $35 a ninth and was staying in that category all right did it have any effect well I think I in you as hog producers know how long it takes for us all to have pigs and for those pigs to grow up and it's approximately 9 to 10 months depending upon what type of a producer you are as an individual but let's just use a nine month program here and let's count them off one two three four five six seven eight nine so in the month of June and July of 1980 the hog market raised a little over $11 per hundredweight on an average for those two months with anybody pray tell me how that that could happen unless someone made it happen and yes your organization you you made it happen you made it happen because you did something together well then I often hear that we in nfo we do something but nobody else follows along and the non-members they don't participate and a lot of other things so this year when we called for Sallah sell-off program on June the 8th of 1983 and by the way let's look at that market in June of 1983 you had a $44 an 86 cents average hog market and it had been running for the year in January it was 56 and February was 56 and then all of a sudden it started downhill but in June when the saw sell-off program was announced by your president the baudin woodland we started because he and the rest of us very definitely seen a tremendous buildup of hogs coming the market this fall and because the solids weren't being sold off and we were being held back we've seen a real tragedy coming I don't know what I necessarily truly believe in the law of supply and demand as it is that today the true law of supply demand will work if everything is in balance but it is not in balance today but that's another story I went and we started keeping records of exactly the number of hogs going through the seven major terminal markets nfo people don't sell there we don't deliver there but I did want to see what the non-participating members were doing the non-members were doing the people that you and I have not talked to about this great organization we want to see what they were doing with their sales were they taking advantage and holding back I don't believe so because when we started it on June the 12th 8th excuse me of 1983 you see that particular week there was nine thousand three hundred and seventy nine ninety seven Souls sold on those terminal markets the very next week it jumped to thirteen thousand 66 hours or an increase of 17 percent more sales so it on the terminal markets the following week and it kept climbing and climbing and climbing till on September the third week ending September third there was a tea excuse me 48% more South moved on the terminal markets than it had been in the previous year previous year there was ten thousand seven hundred and twenty one South in nineteen eighty three there's fifteen thousand eight hundred and ninety four South do you think that happened by accident absolutely not that happened 100 percent because of your farm organization that you are so proud of and I'm so very very proud of came to life and came right up front and before the pig crop report came out and started it because we did have the accurate figures we did see it coming and we tried to prevent a total disaster and a hog market let's follow that through just one more step we took the total number of sows slaughtered in the United States in 1982 and 83 of course the last two months here I have estimated as you see but in 1982 there were four million one hundred twenty seven thousand 106 all sold in the United States and already I know that I estimated the month of November just a little bit low and December I think will also be a little low in these particular figures but there should be approximately four million and I'm saying now six hundred thousand head of sows slaughtered in the United States this year well are we going to see an $11 jump in the hog market nine months from now no I don't particularly believe we will because first off we started $10 a hundredweight more than we started in 1979 remember 1979 we had a 33 dollar hog market when a stall sell off program started this year we had a $44 hog market but we've seen where it was going and we tried to put some preventative actions into it and that will work we have now slipped into the top $30 range on how but what will happen the hog market will go back up now we will be in a little $40 range and you are now approaching another time wherein you and I as hog producers can lock in our costs production plus a reasonable profit on our hogs in the months to come let me show you just a few more figures that I believe I can verify that with here's one I always like to show first though this is called the law of supply and demand and I guess it just aggravates me because of the things that I see happening in the hog industry I took 1981 again in 1983 in January of 1981 for an example we had a 40 dollar and 69 cent hog market in 1983 we had a $56 and 13 cent average hog market or a $15.00 and $0.44 different with an 18% lower number of hogs being killed well I'm not going to bore you with all these other figures because you can see them but let's just drop down here to October and with a 15% lower number of slaughter hogs this month we also lost $4 on your hog market up here you had 18% lower numbers you had $15 more on the market down here you had a 15% lower numbers and a $4 lower market so if anybody chooses to talk about supply and demand why I also understand that like I said Amanda go if it's truly in balance it will work here's the only transparency that I brought with me that I used last year and this was a warning because if you remember my presentation last year I said that the hog producers just prior to our convention a year ago came became very independent I guess I would say we became greedy because we had a 54 to 58 dollar hog market in that range we forgot about forward contracting our hogs because we would not contract them for 51 to 52 dollars which you could have done for the entire year of 1983 but we chose not to as individual producers well it took you to a $37 hog market and remember last year of this transparency of the seven-year cycle 1975 the local market went from about $38 to a top of $60 1982 seven years later it went from $44 up to about $64 in a terminal mark as went as high as 68 and I warned you know what was going to happen we talked about it lock in hog for 1983 we became greedy as we did seven years ago you did exact same things seven years ago and the hog market seven years ago in 1976 went to less than $30 and in 1983 only because of your organization calling for a South sell-off program that that was curtailed up to about a 3738 dollar range and now we'll go back up but once again you and I as hog producers got a little bit too greedy and we didn't lock in the gains that we had made