1. Independent cattle feeders will receive bids for their pen(s) of cattle only from one packer for an extended time period, and for the next extended time period, a different packer will step in to offer the only bid, and then the rotation continues. This rotation of packer bids means there is no competition for the cattle feeders' pen(s) of cattle and even though there is more than one packer buying cattle in the feedlot, each packer is able to offer a take-it-or-leave-it bid to cattle feeders for each pen of cattle. And, this lack of competition in the cash market translates to a reduced price for all cattle contracted under alternative marketing agreements.
2. Independent cattle feeders will receive only below market-price bids for high-quality, slaughter-ready cattle from a packer that continually passes them over while offering either higher bids for similar or even lower quality cattle, or offering the same bid for green cattle, that all are a farther distance from the packer's plant; and then, the packer will return after a week or even longer to offer the cattle feeders a market-price bid when the cattle are known to be overfed, which effectively reduces the profitability for the cattle feeders.
3. Independent cattle feeders may have more than one packer buying cattle in the feedlot, but only one packer will offer a live-weight bid, which is below market price, while the other packer will bid market price only on a grade and yield basis. To receive market price, feeders must choose grade and yield, which not only requires them to pay transportation costs to the plant, but also, it allows the packer to apply deep price discounts to the cattle without the packer having to provide any dispositive justification for the discounts. As a result, cattle feeders receive an even lower price for their cattle than if they had sold their cattle at the below-market bid offered by the only packer that would offer a live-weight bid.
4. Independent cattle feeders will receive a bid for a pen of slaughter-ready cattle from a packer that owns more than one packing plant. And, even though one or more of the packers' other packing
plants, which are located about the same distance from the feedlot, are offering a higher bid, the packer offers the cattle feeders only a lower bid and asserts the feeders cannot deliver cattle to the plants were the higher bids are being offered, even though the feeders have previously sold similar quality cattle to the other plants. As a result, the feeders must accept the lower bid in order to timely market their cattle. And, this lower price paid to cattle feeders in the cash market translates into lower prices for all the cattle contracted under alternative marketing arrangements.
5. Independent cattle feeders may have more than one packer buying cattle in the feedlot, but will only receive a bid reflective of the market price from one packer that, in return for offering the current market price for cattle that have reached their optimal slaughter weight, requires the feeders to delay delivery of the cattle for as long as three weeks. As a result, the cattle feeders' profitability is reduced because they must continue feeding their cattle after they have reached their optimal weight (a period when feed efficiency is drastically reduced) and the cattle feeders are responsible for the additional feeding costs.
