The Market's Fine Print

Dog and Pony

John Harrington
By  John Harrington , DTN Livestock Analyst
Suggestions of banning packer ownership of livestock at little more than a dog and pony show. (Photo by Jenn Durfey, CC BY 2.0)

"Schultz's Dog and Pony," answered the aging yet irrepressible receptionist, personal assistant, and director of d&p r&d. "When your aim is show and not results, just leave your cares to Jack T. Schultz."

Hester Dronesmeyer had been the company's indefatigable gatekeeper and standard-bearer for more than 40 years. The intensity of her devotion to Jack Schultz, founder and mastermind whose name was golden in the world of corporate and political illusion, was only matched by a fierce hatred of all things Internet.

Mrs. Dronesmeyer was old-school to the core, exactly the kind of hands-on, down-and-dirty orientation suggested by a resume that read like a chapter from American history: When it came to the practical management of smoke and mirrors, her unique talents had helped shape an amazing parade of flashy insignificance, personalities and events ranging from Joe McCarthy to Y2K, from Ollie North to Benghazi, from Anita Hill to Deflategate.

"Yes, Senator, we've been expecting your call. Please hold for Mr. Schultz."

"Chuck, you old pander bear," Schultz cheerfully greeted his loyal client. "How's everything in the federal swamp? Oh, we're doing great. Needless to say, the dog and pony biz is never better than in an election year. Every sad scrub of presidential timber walks in and wants to look like a Sequoia. You do what you can, but even Houdini had to work with gravity."

As Schultz and the Senator continued to warm up with small talk and gossip, Dronesmeyer prepared the conference room for a major strategy session that would soon begin. She put her shoulder to a large cart heavily loaded with boxes and files, all marked with "PACKER FEEDING BAN." This wasn't the first time the Senator had knocked on their door, pleading for help in momentarily masking the impossible just long enough for one or two cuttings of political hay.

"We're definitely on the same sensational page, my friend," Schultz assured the consummate politician. "You can count on us to produce the same high-quality dog and pony show seen in 2002, 2008 and 2012 -- only better. That's what I love about you guys. You don't let embarrassing failure get in the way of milking the same dry cow, again and again."

Hester's trained ear could tell the conversation was winding down with her boss ready to promise a brilliant campaign long on rewarding hype and short on awkward consequences. She began to consider what junior executives and staff to assign to the project. Given the subject's long and mundane history, it should serve as good training for those still green with inexperience in the time-honored game of meaningless demonstration.

But such planning was quickly scattered when Schultz enthusiastically entered the room and suggested that the two of them take of the matter full bore. "C'mon Dronesmeyer, it'll be like old times. Let's remind these elected wheel-spinners what a dog and pony show really looks like."

Happy to be back in close harness with the man she most admired, Hester wasted no time in expressing her familiarity with the effort to outlaw packer feeding. "I think we should start by revisiting prior productions, updating contacts and statistics, recasting spokesman and surrogate talent. After all these years, it's a good bet that a few dogs have been put down, a few ponies let out to pasture."

"You're running too fast," Schultz scolded as he sank deeper into his director chair. Rehearse the backstory one more time so I can get up to speed. Tell me again the exact tragedy we are pretending to address."

"Sorry, sir," Dronesmeyer said, pausing for a breath. "The ugly situation that the Senator and presumably some of his constituents insists they see involves excessive ownership of livestock feeding operations by meat packers. This odious control of feeding by the same parties that process beef and pork significantly cripples market competition, driving prices disastrously lower for independent producers."

"Bingo," Schultz shouted, pumping his promotional fist in the air. "As I recall, the lion's share of hog infrastructure sits on the heartless balance sheet of major packers."

"Not exactly," she reluctantly corrected. "For example, our latest data suggests that packer-owned farrowing barns house just 30% of the nation's entire breeding herd."

"Well, that's not very much," he said, scratching his head. "I must be thinking of the cattle feeding industry. Yes, I'm sure these greedy packers own nearly every foot of bunk space in feedlot country."

Shaking her head, Dronesmeyer sighed, "I'm afraid the hard numbers in that direction get even less cooperative. While feedlots currently owned by major packers claim a one-time capacity of 1.23 million head, total U.S. capacity exceeds 13 million. Sir, that implies that packer cattle feeding constitutes a mere 9% of the total."

"I'm capable of simple arithmetic," he snapped, his brow furrowing like a Shar Pei pup. "What's wrong with this picture? How can these numbers be correct when the Senator is whining about the near extinction of negotiated cash markets?"

"With all due respect to the Senator, a great visionary, patriot, and generous patron of Schultz Dog and Pony for many years," she said carefully, "I think he has mistaken packer ownership of livestock as the most serious threat to cash market integrity. Pardon my presumption, but captive supplies, formula pricing, and marketing arrangements -- all tools voluntarily chosen by independent producers -- go much farther in explaining the struggling health of the traditional cash market."

"My dear colleague," Jack Schultz nodded. "Your penetrating analysis has just one critical error, a fatal flaw that the Senator would spit out snake venom."

"What's that, sir?"

"Never blame anyone who can vote. What good are villains if you can't use them to rally support for yours truly? That's why he called us this morning, that's why he's willing to take yet another run at a stone wall, and that's why he's so passionate about changing the unchangeable."

"Boss, you almost make it sound like an answer in search of a problem."

"Our bread and butter, Mrs. Dronesmeyer," Schultz replied with smile of satisfaction. "Our bread and butter."

John Harrington can be reached at harringtonsfotm@gmail.com

Follow John Harrington on Twitter @feelofthemarket

(AG/)

John Harrington