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Veteran Advisor

Break Up Big Ag Companies?

Do you think it would help your bottom line to break up ADM, Conagra, Tysons, Land O' Lakes and so forth?  I'm not talking about simply disliking BTOs, do you see a way that it would improve your bottom line?

 

It seems to me that competition is important.  One likes to have several grain buyers, several packing plants and so forth.  But the big guys can compete on a global stage and we're kidding ourselves if we don't think the Chinese, Brazilians and Russians don't act at the national level.

 

Would breaking up big companies just let Chinese and Brazilians come in and cherry pick companies, as they already have in pork and beef?

 

Or would you make more money with smaller, hungrier buyers?

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Veteran Advisor

Re: Break Up Big Ag Companies?

Local coop is in the process of merger with/acquisition by a big coop from east. Yes the vote was 95% in favor. Part of the sales pitch was how the big coop could do stuff so much better and cheaper with their economy of scale. But when asked, they would not give numbers as to how much they would improve the farmers bottom line So bigger is better? Except when it isn’t?
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Senior Contributor

Net Profit goes Up

For farmers by bout 40%, IF fair trade and anti trust law were allowed to breakup the big consolidateds.

 

 Unfortunately farmers are monkey see monkey do trained such that they obviously must feel bigger is better.......just like everyone else in the USA.

 

its just a 2 horse race, the way the USA economics are operated.

 

what the heck....no one is the wiser ( nor richer either )

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Honored Advisor

Re: Break Up Big Ag Companies?

I favor breaking up big business, just like my second favorite president Teddy Roosevelt did.  When a business gets too big it no longer is a asset to society and actually becomes a monopoly harming consumers after competition is driven out or merged.   It`s like elevators merging and there being 80 different sites, the managers and CEOs push it because their job becomes a bigger deal, they tout "volume volume volume" in buying and selling. But what they don`t tell you is you have no idea who is your new board of directors and the closest one is 50 miles away...and guess which elevator site they close?  Not their elevator, but the one 50 miles away, which is yours.

 

No it`s baloney saying "with 80 sites, we can buy fertilizer cheaper than our present 30 sites!"   No, even 30 sites is too big.

 

They should close loopholes on foreign ownership of farmland and Syngenta and Smithfield sales to China should`ve never happened.   

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Veteran Advisor

Re: Break Up Big Ag Companies?

Clayton ...was cva was it ?.....maybe the bunch
From moundridge ?
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Veteran Advisor

Re: Break Up Big Ag Companies?

Was  the  vote  show  of  hands   OR   secret  ballot  -  ? 

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Veteran Advisor

Re: Break Up Big Ag Companies?

MKC. Was secret ballot with impartial tellers and an auditor to oversee the counting process
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Veteran Advisor

Re: Break Up Big Ag Companies?

MKC was largest in ks, then farmway bought a
Couple elevators, then biggest in state.
Then a year or so later, talk of merger with CVA,
The largest coop in the nation....have meetings.
There was a comment made by one of the
High ups, that to this day, stays in my mind....
If you think this merger will make your inputs
Cheaper, DONT vote for it. But voting for it will
Be in the best interest of your coop.

I'm still trying to figure that one out.

Clayton...just wait a while....now you will have to
Travel about 150 miles to go to annual meeting
And argue with the head office.
Wait untill you have to go all the way to York, Neb !!
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Veteran Advisor

Re: Break Up Big Ag Companies?

Some  more  of  the  GROW   magic,  until   it  catch's  up  with  you,   THEN  WHAT - the  Magician  Is  No  Where to  Be  Found  - ?   

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Veteran Advisor

Re: Break Up Big Ag Companies?

One of the questions that doesn't seem to get brought up often on these mergers is who is competent to run a small COOP?  But at the same time, who is competent to run a bigger one.

 

We've all seen neighbors who might be mainly good people flounder and be inept at running a small COOP and when we're forced to sell out we know what face and name to put on it.

 

One is told that the bigger groups can hire more professional, better trained, full-time staff.  Yep.  They can.  And sometimes they do, but bigger is not necessarily more competent, in my observation, just more removed as several of you have rightly pointed out.

 

General Patton famously said, the higher up the flagpole the monkey climbs the more of his (slight editing here) rear end he shows.  But modern companies are famous for having diapers on the rear ends so we don't really see the truth.  It's more like another famous saying, out of sight out  of mind.

 

I don't have an answer but small is often incompetent and bigger is not better.  

 

My solution was to just do my best on my own and not rely on any of them.  That's not the best solution for all.

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