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The discussion of strategic alliances in this setting at this time in the cattle numbers and price cycle is extremely appropriate. I am honored to have been selected to speak for commercial producers regarding what we expect of strategic alliances.
While some may have a fairly concise, narrowly defined idea of what a strategic alliance is, I would prefer a less structured view. A strategic alliance could be any long-term win/win relationship between two or more independent businesses. When this happens the businesses become inter-dependent. This makes the quality and structure of the alliance very important to all parties.
A strategic alliance for the purpose of producing, adding value to and marketing cattle or beef represents a huge investment of time, negotiation, emotion and money. Such investment requires long term benefit and commitment. To make such a commitment a commercial cattle producer is going to want reasonable assurance that certain expectations will be met.
I think there is some danger that in ten years or so, when the next down-turn in the price cycle comes, it may be difficult for those not involved in alliances to sell feeder cattle. I hope a sense of this kind of future market place doesn't cause us to rush into alliances without insuring that most of our expectations will be met.