The summer meeting of the Academy of Veterinary Consultants (AVC) held in Colorado Springs, Colo.., August 1-3 was a very well organized and informative meeting. It dealt with a variety of subjects and at least one issue --a point of controversy. I am sure the cattle industry is not short on issues of controversy. In fact, one wonders even within the industry sometimes with some issues, who is on which side?

One of the main subjects of the AVC meeting was BVD and how it affects cattle on the ranch and in the feedyard. The other subject, which was four sessions, dealt with Packer Ownership in various perspectives.

J.D. Alexander, spoke on "Feedyard Perspective of Packer Ownership." He earned his degree in Agricultural Economics from South Dakota State University, is the President of the Nebraska Cattlemen's Association, and a Nebraska cattle feeder. He has been a sales representative and sales manager for FMC AgChem Corporation. He is currently the managing partner of JDR Farms, a 1500-acre operation producing corn, soybeans and alfalfa in addition to marketing approximately 15,000 head of fat cattle per year. He has also served on numerous committees, and is a member of the National Beef Industry Planning Group.

He defines Captive Supply as, "Cattle committed to a packer more than seven days prior to slaughter and/or cattle not priced prior to leaving the feedyard." According to Mr. Alexander, in 2001 52 percent, or half of the fat cattle sold were captive supply. It is e percent by 2006.

Included in his definition of Captive Supply is: packer owned or financed; forward contracted cattle; formula based - not negotiated; grid-where the base price is not negotiated weekly; branded; cattle sold for delivery over seven days from sale; cattle of which no price is negotiated; high of the week; and sweetheart deals. All provided packers with cattle without negotiation or reporting.

Mr. Alexander stated that packers have moved from market efficiency to market control. He doesn't think the packer's rationalization, 'that they must own cattle, to get the kind of cattle they need', is valid. "If they are willing to pay the price, they can get any kind of cattle they want or need without having to own the cattle." He also believes that alliances can exist without packers having to own cattle.

Mr. Alexander said it's a "Real Catch 22" situation. Captive supplies result in lower cash prices--therefore, captive supply prices are lowered also. ©