Master Convention Livestocks Highlights C 90 a

ladies and gentlemen I'm Steve Bohr for those of you that don't know me and the director of the slaughter cattle division I'd like to welcome you all to Kansas City and to start off our program today I'm going to introduce to you a fellow that I believe the most of you have have seen and talked to before over the past few years but in June of this year we recognized that the communication between the counties and the Home Office and Corps mean Iowa was leaving something to be desired we realized that we had to tie that gap together somehow and we come up with a new department that we set up that we feel is going to do that job it's a volume division and here with us to go through it and describe to you what this division amounts to is a director of it mr. Glenn Lao well thank you Steve i mislaid the slide sit in June of this year that decision was made by the administration to set up this volume division and for those of you who don't know me I'm from Colorado originally and started out there working a collection point and have worked all the various commodities out in that area in times gone by I guess production was thin enough out there we had to work everything that came down the road to make me nfo work out in that area and that's still what this all about to make nfo work but that is the reason the common denominator was needed for all the livestock divisions a structure that would encourage uniform handling and even growth pattern among all of the commodities to tie this thing together we're one man going down the road would contact the various people as he went up and down the road instead of having three or four of us as you people are well aware the financial crisis that we have been through in the past and the balancing of the budget in this last year is what this division is really about to consolidate our procurement structure in livestock into one area after we get to livestock at the livestock collection points or on the trucks on direct chip basis then it's Steve's job in the slaughter cattle division the hog division takes over if it's hogs the Sheep division if it's sheep the feeder cattle if it's feeder cattle whatever they will take over as technicians to handle and market your product for you I guess we're a bunch of salesman's where you'd put it up and down the road I felt it was a privilege to work with the people that were selected to get into this program last June we took the 16 best people from all of the meat commodities that we felt and put them together and put a procurement structure together and we're pretty well blanketed the country from roughly the east Ohio to the Rockies and from Wisconsin to the Gulf now the other areas are not at this time covered by this structure as our budget is balanced and we generate enough income we hope to expand Inlet areas I would hope next year to convention to be able to tell you people that the country is blanketed I mean that's our goal to blanket the country with a procurement structure and we hope we keep Steve we want to cover him with cattle we want to cover the hog division with hopes and the feeder cattle division with feeder cattle to where they have got a full-time job we feel if we properly do our job in securing product for them they won't have time to be worrying about getting more product we want to keep those people that's their job that's what they're good at is technicians in moving and marketing your livestock and that's what this program is about I will run through this lightly I've got three slides I want to where we ran a little over on last meeting I want to cut this as short as I can Steve will be the commodity specialist to assist the producers out here if you want to go flatten the beef if you want to go great in yield Steve has the people and the personnel to advise you this way and the hog division well you want to go great in yield go on a blend price which way you want to go when it comes to moving feeder cattle the feeder cattle rep was there to grade and assist you in market analyst cattle and deciding the value on them this structure that we have drawn up here is the structure we have set up it changed a little bit of the concept in the meat department I'm gonna have to lean over here and if I I think dogs got me tied in with a mic here probably better not move this your department director here of course is Walt Hackney in the meat department you've got the volume division you've got the hog division fat cattle and the feeder division the new volume division was created here and I want to show you here in your cattle division Steve has the technicians and so forth working right on down and all of the other division that's way it works whether they're hope graders whether they're technicians what you want to call them it's the people that are going to move your product and assist you here we divided I mentioned these 16 people and I will show you in a minute how we divided United States up we made regional supervisors out of those people supervised in a specified area and that's all they do is work with the collection point people to work with the salaried staff the Commission staff and our building meet committees this is something I think we've neglected now for several years the meet committee structure has been outlined in our membership agreement I believe we're gonna have to get that out and reread our membership agreement restructure our meet departments and fully use them for us to be able as farmers to price our product and that's what we're really all here about there's no way I don't think the organization can provide enough hired help or salaried people up and down the road to do the entire job and you as members out there will need to be involved on down here to the producers along with this there has to be a line of supervision to the collection points we've created an Operations Division of the volume Department side by side and that will be supervised by Cecil Connery Cecil has worked with the hog division for a number of years now many of you people probably knowing any problems any operations problems or structuring of a new point or restructuring of an old that's what Cecil is there for to help you with that he'll be working directly with the collection points was his barn boards and what's the meat committees in that area here's a difference that Cecil feels very strongly about is to be sure that everyone understands the difference between a meat committee and a barn board the barn board as Cecil describes it is your landlord that's the person who owns the facility whether it's a group of producers there or whether it's some outside firm that owns it and that barn board is to deal with them on that basis of rent and so forth your meat committee is to deal with your product with your collection point representative and also to assist the bargainers wherever and whenever it's necessary in helping him to move your product I think that should pretty well cover what we've got on that okay the structure shown here will allow you to maintain a cash flow that will keep you in business also maintain a balanced budget is the idea behind this thing that we have put together for the organization which is your organization I think Bob aren't described it last night when he said it's you and I and this is something I think a lot of us have forgotten that all of us are on one team and we're gonna have to get back together and make a team effort of this thing as we move this product on you allow you and even growth pattern and will allow you as organized agricultural producers to put a price tag on your product I'd like to inject one here I think right here is probably one of our tools that we haven't used how I came here in western Colorado and I got to tell a little one on oh it's been a number of years ago young fella got married there and he went into a local hardware and feet dealer soon after he get married and the old man that ran the place says boy I heard you get married is that right he says yes he said what are you gonna do for a living he said I'm gonna farm and the old man pulled out open his desk drawer and handed Lauren a pencil and he says here fella he says you can't plow with this but you can't fly without it and there's a lot in that we're gonna have to figure our cost of production if we're ever going to put a profit on we've got to know and we've got to use the pencil first before we go on with our program okay to accomplish this thing I want to change transparencies here some of the things that were done we spent approximately two weeks before a map of the United States detailed by County this one is not that detailed the whole United States was divided up into regions the reason for this being that we plugged each county in each of these regions into our computer for pay purposes now all of the people who are on a commission basis when your livestock moves through your local collection point the person there writes a draft for it when that draft is called in to the home office at that time off of that draft your number is picked up and a paycheck is spit out by the computer and back to that Commission person I mean it saves all of the hassle or will save all of the hassle of pay that has been a problem in the past I mean it is another economy move and this is why these lines will probably remain pretty much as they are because it will mean restructuring the computer setup from one end to the other if we change these very much we tried to group them into a market pattern for instance here's one area three that takes in a corner of Minnesota a corner of South Dakota a corner of Iowa and a little bit there's one point in Nebraska but that is a trade area that has always moved their product in that direction and we felt very strongly about this that we should maintain those trade areas and try and move this product in the same manner that it always had been when we structured this we went back to the previous history of each collection point 184 collection points and we averaged their production for the past 18 months previous to July 1st when we started this program that was the beginning goal for those collection points to shoot at davon woodland and the other people in the administration have said us a goal he heard Devon talk about it last night in five years where he wants to be in dollar volume with this organization he's going at it like a business we're going to approach it as a business we're going to lean on you people to help us to attain that goal that's what we're here about that's why I joined the organization I know that's why most of you joined the organization was to write your own price on your product if we continue to move as little volume as we have in the past and don't increase it it will never happen with a little increase a little bit more effort by all of us that can happen real easy and this is what we're all about but we went back on those 18 months averages we put a percentage of increase on each week and that's the way we're going about building volume if there's no history of a product in an area you'll probably not have any mention in that area if there's an area where there's no feeder cattle there may not be one if it's all feeder cattle in that area there will be one if there's no slaughter cattle or be none if it was all slaughter cattle all of his increase would have to be shown we're rating the people that we've put on here these 16 regional people on the total units that they move I split it up on a unit meaning so much income back to the organization to maintain a balanced budget and make this thing work we've got one more slide to go through here Cecil Connery feels very strongly about this pattern here that growth pattern has got to be maintained Cecil fields this is where we've got to go is back to the county and producer level you are the people that make it happen again as Bob aren't says it's you and I it's between us to make it happen what we're talking about Steve and these other people at the commodity meetings will give you the outline of what their program is doing in their area and how you can be a part of that program but you're going to hear about us in volume on getting that product to the collection point okay here you've got an instance you'd have a collection point in this county we call this a trade area in this circle as you can see it'll take any part of this this county this one this one this one this one six counties involved that would actually use that collection point if we stick strictly with the old county structure this county probably would do everything at that collection point we feel we need to make a variation of that from this county there needs to be a person selected for a collection point meet board from this county there needs to be one selected for a collection point meet board from this one from this one right on around until you've got one board that functions as the meet board for that collection part that we'll get involved in your bargaining and the movement of your product and any problems that arise from it and I think this is something we've got to remember we've leaned on the collection point people and dumped most of our problems on them in the past when really a lot of those functions should have been handled by the meet board I think member involvement is what we're talking about here I think this is the thrust of the whole convention to revitalize our old committees and make them useful and get back into the concept where we have a voice in what we're doing that's what that organization was founded on and I think this is where we need to go you can cause this guys flow position necessary to maintain your operation by pricing your product and that's what we're here about it I will turn this back to Steve and Oh Steve's a little short on time if I've been a little brief on this and anyone has questions later in the day that they won't discuss about it you can contact myself Walt Hackney or Cecil Connery any time you see the three of us Cecil and Walt are both working off of an outline just like I have here so we're all telling you people the same thing I think Walt's over in feeder cattle Cecil is going through this structure in the hog Department but think about the county structure think about helping that collection point man I would hope that that collection point man never has time to contact a new producer that sounds a little contrary to what we've been talking about but I would hope he's moving enough product that he never has time to get out of the collection point and gone back to new one but the meat board would cover him up I would like to reflect back to the convention one year ago I showed you at last year's national convention in st. Louis how early in the year of 1978 96 percent of the cattle marketed through the National Farmers Organization were sold on a great niel basis because of your request at that time we develop more flexibility in your marketing I showed you at last year's st. Louis convention how 63 percent of the cattle at that time were being sold flatten the beef or on a live basis the figures have changed only slightly in the year of 1979 this is definitely still the most lucrative marketing system available to the farmers and ranchers in the United States today but at the same time since this Marketing System has been developed for you many of you have started using this organization like a commissioned company or like any other livestock market many of you I believe have forgotten that the National Farmers organization stands for collective bargaining for agriculture you do not need just another livestock market ladies and gentlemen the organization has gone through considerable changes over the last couple of years and your neighbors have heard about it but I wonder do they really understand what these developments mean to American agriculture into the world trade the people that you have working for you in this organization have the same interests as you do and that is that farmers and ranchers organized together will price their own products now the economy in the last decade the 1970s has definitely fallen out of balance the 70s have found most Americans content with their own lives and also as a period of quiet enjoyment but the nation's mood reflected its change of fortunes polls have found uneasiness pessimism and apprehension the latest Gallup poll showed 84 percent of the Americans dissatisfied with the way things are going in their country while 73 percent have expressed contentment with their own lives Americans found the 1970s to be a time of disillusion a time of coming to terms with the insistent reality of material things running out an expansionist nation growing used to smaller cars paychecks that buy less instead of more and the idea of recycling rather than throwing away we have watched helplessly as inflation has eroded the dollar and the oil cartel has held the world at ransom we're seeing housing shut the door prospective homebuyers find it nearly impossible to obtain mortgages and those who do pay interest rates as high as fifteen percent oil prices standard of living operating costs have all skyrocketed to higher levels that no economist can understand the cattleman found themselves in an extreme loss situation in the early 1970s and in an extremely profitable situation in the late 70s but marketing cattle in the last couple of years we have come up against the most unstable and erratic market conditions any of you have ever seen the cattlemen and the independent Packers have found themselves competing with large integrated corporations and the exorbitant profits of the chain stores so maybe the people of agribusiness economists politicians and the University Extension services who are concerning themselves with only the production of food and fiber and relation to providing food as cheaply as possible maybe are causing a disservice to the citizens of this country by not addressing the economic loss resulting from shortchanging ourselves in the marketplace perhaps we must no longer ignore the fact that this is shortchanging all citizens to the lack of distribution of earned money derived from our new wealth produced each year perhaps we must reconsider our priorities and get out a pencil and do some economic arithmetic throughout the meeting today you're going to hear about this economic balance plus you're also going to hear about the independent Packers in this country at the median at one o'clock a man from an independent packing company is going to talk to you also at the meeting at one o'clock a lady from New York is going to tell you about a very interesting situation in that part of the country when Walter Hackney will talk to you later on today in this meeting about your own involvement in the process of collective bargaining but first of all you're going to hear from a man that's new to this organization and I'm sure new to the most of you he was raised in Northwest Missouri and attended college at Northwest Missouri State University in Marysville while attending college he worked for a veterinary clinic there he's a team member of the Northwest Missouri State livestock and judging teams he was president of Northwest Missouri State Agriculture Club and member of the Delta Tau Alpha honorary scholastic agriculture fraternity he obtained his bachelor's and master's degrees in agriculture from Northwest Missouri State ladies and gentlemen would you please welcome mr. Mike Smith Mike's presentation was slide pictures which could not be put on tape and now back to Steve Bohr I told you early earlier that this afternoon at one o'clock in our meeting then a man is going to talk to you who represents an independent beef packer that man is mr. Jean staffs he's a vice president of Packer land packing company in Green Bay Wisconsin but I said an independent beef packer and I wonder if the most of you realize the importance of what I'm saying when I talk about an independent packer I'll try and explain it to you the three largest Packers in the United States are all attempting to merge with large corporations that is number one Iowa beef Packers number two MVP Excel or Missouri beef and number three Spencer foods now the impact of these mergers may not seem to have much importance to you as cattle feeders across the interior of these united states but let me explain precisely what these developments mean to you as that proud independent cattle feeder trying to compete the corporation that is attempting to merge with the second-largest packer in the country is also the largest cattle feeding corporation in the United States this corporation has recognized the necessity to combine that huge volume with the people that have the talent to process and distribute that beef for them so consequently the merger that Corporation has the ability as a cattle feeder as do the other two corporations to supply a minimum of 20% of their own daily kill requirements well where does this leave you as an independent cattle feeder trying to compete with this corporation it means this when that buyer comes to your farm to buy your cattle he already has 20% of his requirements taken care of by his parent corporation it means he will be 20% less competitive in his bidding it means your profit potential has diminished by 20% also by his lack of demand for your cattle on the same token they existing independent Packers who do not have this luxury of 20% of their supply being supplied to them by their parent corporation have 100% demand for your products these are the Packers that I'm talking about they recognize the extreme necessity of cooperating with the independent cattle feeders in this country these independent Packers recognize a trend with these corporate mergers that could be disastrous to the American cattle feeder and to the family farmer now what I've just read to you is a clip from the speech that I gave at the st. Louis convention a year ago it tells you the importance of an independent packer and the cattleman in this country working together now what I read to you is one year old I said that the three largest Packers in this country were attempting to merge with large corporations well what has happened since then Iowa beef backers had already merged at that time in the northwest to form Columbia foods MVP XL did merge with Cargill grain company the largest cattle feeding corporation in the country and Spencer foods did merge with land of lakes plus buying one more packing plant in Oakland Iowa in addition to the two they already had this is a scoreboard showing the top 20 largest cattle feeders in the United States as of June 1 1979 this was put together by Glenn Richardson editor of livestock magazine out of Denver Colorado the 20 companies and groups that have qualified for this feedlot scoreboard had the capacity to feed two million four hundred and forty eight thousand five hundred head of cattle based on these figures and the number of cattle reported on feed in the seven major feeding States on June 1st according to the USDA's cattle on feed report these top 20 controlled between twenty three point two and twenty six point one percent of the cattle on feed as of June 1 of this year since then that figures become even higher four of the top five companies have meat packing plant connections despite Packers and stockyards administration rules against that very thing and as this trend continues number eight free own industries are in the process now of merging with a packer in the state of Ohio who is a subsidiary of the Windy hamburger chain they have also formed free ona agriculture Credit Corporation which has been granted re discount authority by the federal intermediate credit bank initially loans will be made primarily to qualified individuals desire to place cattle into their feed lines how about number four on the scoreboard a Z L resources this firm has a number of ranching ventures involving more than a million acres but in addition to its feed Lots and ranching interests azl owns farm and incorporated out of Hopkins Minnesota a Colorado bank and real estate investment interests another grain company who is just barely below the top 20 as of June 1 when the scoreboard was put together his Bartlett green company but since then at that time they were just below the top 20 since then they have purchased to feed Lots in the state of Texas amounting to a total of 95 thousand head in addition to what they already had puts them well into the top 20 now I've told you what these corporate mergers mean to you as proud independent cattle feeders attempting to compete compete with them let me tell you what mr. Richardson the editor of livestock magazine that put this scoreboard together has to say about it what these rankings show is at this steady erosion of profits radically altered the ownership and investment strategies of both family enterprises and conglomerates as they scrambled to profit from feeding these crucial new building blocks of the feeding industry suggest Stockman and ranchers who do not deal with these new big business feeding companies may have to dramatically alter their own marketing strategies or find themselves bargaining from a position of weakness as these feeding giants further increase their economic muscle but you know this economic squeeze is not only coming from this segment of the industry what is happening on the distribution end you realize that every product no matter what it is goes through a system of processing and then a system of distribution when one segment of this economic cycle fails to receive the amount of income from that product that should be received then the other area of the cycle will make up that difference now this is exactly what we are allowing to happen we're the segment of the economy that fails to set a price on our products that would force this economic cycle to balance we put together a study showing that the chain grocery stores continue control of a sliding scale action in maintaining profits at the expense of the cattle producer the independent Packers and the consumers the study is for three months May June and July of this year the figures were based on using live steers weighing a thousand 50 pounds and a $28 per head Packard kill cost a figure of 25 point two cents per pound is used to cover retailer costs of operation and that figure is plenty high the study shows that the cattle producers share of profit went from forty six point two percent in May to a minus fifty four point eight percent in July at the same time the chain retailers share went from forty eight point one percent in May to one hundred and thirty eight point three percent in July the study shows that the Cattlemen's dollar profit dropped from a hundred and seventy two dollars and 20 cents per head in May to a loss of sixty one dollars and eleven cents in July in dollar profit the retailer's portion dropped only from a hundred and seventy nine dollars per carcass to a hundred and fifty four dollars profit while you were losing sixty one dollars and eleven cents per head now when we experience an erratic market like we've been faced with late lately then that profit margin becomes even greater because you don't see the price of beef fluctuating daily in the grocery stores along with our live market now who's going to change this situation it's up to you it's time every one of you become personally involved and gear our strategy to correct this imbalance and here to talk to you about that very thing about your own involvement is the director of the meat division mr. Walt Hackney I guess you don't get too hardheaded and too old to learn something a little bit every time you show up around an in fo meeting I hadn't seen these figures that Steve was referring to here as far as that scoreboard but the interesting thing to me was when I walked in that door I also hadn't heard his presentation this year and I thought well for Christ's sakes he didn't get his work done and he's just repeating what he said in st. Louis last year so thanks for clarifying me Steve you got a you get a start instead of a kick I'm I can't help but sit here and think about my last two years of involvement with your organization I've been here now just two years and one month and two years ago in October roughly when I came here this guy was a snot-nosed kid over in Nebraska that didn't know enough to pour sand out of his boot and I can't help but put myself in the position of you people sitting here today listening to Steve's presentation I don't know if it affects you like it does me but it comes I it comes from his heart now he's on your side I'll tell you something else about Steve he's one of the best traders that I've seen in anybody in the business that I come from to your organization Steve could walk out of your organization tomorrow morning and better himself there's no need for that there's no need for this organization to lose this kind of talent that's what I want to talk to you about the ways that this can be accomplished is in your hands you've got them folded across your chest or you're setting on them or you got them in your pockets but for heaven's sakes when this meetings over go home and use them use them to explain the slaughter kettle program to your neighbors talk to that neighbor that you have felt in the past some intimidated because by talking in the past to him you weren't sure that you're talented people that you had at that time could perform I'll guarantee you they can perform now the entire livestock and meat department can perform now we are loaded with this kind of talent for you and it's there for your use and expansion in that you've got to go and get in front of these people that are members and not participating and explain to them what you have learned in this meeting today this information that you have here today is exactly what was forecast and laughed at by the industry one year ago right now in st. Louis Missouri it was projected precisely as it has happened that doesn't come by being an inlet that doesn't come by being something less than an astute professional that damn well respects your business he involves himself in your business and he treats it like his own lifeblood it's amazing to me that the professional staff that you people are paying for have remained with the passiveness and empathy that I have seen expressed in this membership every given one of these men can walk out of here tomorrow morning come back on your farm as a corporate buyer and trade your socks off and make more than any checkoff that you want to complain about amounts to any given day and that's what will happen to you because that's precisely what is going on right now and you enjoy it that good old boy that's down the road with these damn pickup truck that drinks whiskey and chews tobacco with you on Saturday night comes out on that Sunday afternoon tells you he went to church Sunday so that makes him all right and you sillies kill your cattle to him 15 to 20 bucks I had to cheat he's got one objective that's to make money off of you this guy's got one objective and that's to put those dollars back into your pockets as a producer I happen to know that it has taken a total commitment from this guy to make this slaughter cattle program work I also happened so that when the Board of Directors and the principal's in Corning Iowa and June asked me if I would take over the total meat division I also know that at that time Steve did not feel he was prepared to take over the slaughter cattle division but I knew better because I had sensed this underlying commitment for the past year and a half and since June I have seen him evolve to one of the finest fine-tuned traders that I have witnessed around the country he cannot remain fine-tuned and informed without your participation and help in the country it is financially impossible it's physically impossible to staff the area that his trade area consumes with salaried people he has absolutely got to have your involvement and confidence in his ability to perform for you all I'm doing now is sitting back kind of fat dumb and happy watching these men develop but you people have got to perform this apathy has got to stop you have got to take your product that you have that you've borrowed this 15% interest with you have got to put it in the hands of people that damn well know what they're doing and you certainly do not when you try to bargain with that whiskey drinkin cowboy coming up the road you have got to put it in the hands of people that have got the same commitment to exercise cost of production that you do you're paying for these people use them granted there's areas that are going unnoticed by myself there's a reason for it I made a personal commitment to this organization that I would not shotgun any program that we have and livestock and meat department I am NOT going into the state of Florida tomorrow morning and open a livestock program because I do not have the ability to produce for them down there until I do I will not do it but most of you people