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US beef prices have soared but farmers aren't making more money

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Re: US beef prices have soared but farmers aren't making more money

#121

Post by Rury »

BobbyTables2 wrote: post #120
hn_throwaway_99 wrote: post #113

Earlier quoted context omitted.

Fine, but blaming price increases on "greed" is still just as idiotic. Yes, market participants are "greedy" - sellers want to make the most money and buyers want to spend the least.

If only McDonalds charges $20 for a burger instead of $10, people will go elsewhere. If everyone charges $20 for a burger, people will still go to McDonalds. In such a state, no individual place would dare charge $10 again. Why cut revenue to nearly half? It’s not like they have the capacity to sell 20x the usual volume… I’m not convinced that basic economics works when output capacity isn’t fully scalable. Same reas…

That’s an uncompetitive market. No one can outcompete on service, so they can only compete on price, but why would you in such a circumstance, it would only hurt you, so nobody does.

This is what people seem to forget... you don’t need monopolies or collusion for markets to be uncompetitive. Collusion works fundamentally because participants aren't competing with each other... not for the fact people made a secret agreement. It is entirely possible for markets to be completely uncompetitive even without a monopoly or any collusion going on.

Your examples here are better known amongst economists as the Bertrand–Edgeworth model (https://en.wikipedia.org/wiki/Bertrand%E2%80%93Edgeworth_mod...)

Re: US beef prices have soared but farmers aren't making more money

#122

Post by math_loser »

hn_throwaway_99 wrote: post #102
Ekaros wrote: post #83

Earlier quoted context omitted.

Shock moved the price equilibrium to new higher price point. And big enough share of demand accepted that new price point.

> And big enough share of demand accepted that new price point. Exactly - this is literally econ 101, no appeals to "greed" needed. As they say, the cure for high prices is high prices. You already saw this in a number of different areas. Fast food prices outpaced what people were willing to pay, so people stopped eating out and businesses needed to adjust accordingly.

> As they say, the cure for high prices is high prices.

Your line of reasoning is downplaying the fact that we don't exist in a world with perfect markets or rational consumption habits.

There are multiple clear cut examples of producer collusion and oligopoly formation in the past few years - including in the food industries (see eggs and pork in the past 5 years). Food being essential for life means consumers can't interact with the market rationally, just like they can't for insulin, transportation that enables income, and so on.

Re: US beef prices have soared but farmers aren't making more money

#123

Post by ab5tract »

hn_throwaway_99 wrote: post #50
jermaustin1 wrote: post #27

Earlier quoted context omitted.

> it's less clear why those are so much more expensive now. It's basically, because everything else has gotten more expensive. Labor + fuel + wear and tear on equipment + raw materials. Inflation of a single thing, will have effects on anything down stream of that thing. And then there is the "greed" aspect, though overstated, where a company will see that costs have gone up in other sectors, so they raise their acco…

The "greed" aspect is always bullshit unless there is a specific instance of market failure like monopoly power or collusion. This has definitely happened, so I'm not discounting it, but in those cases folks should just say the issue is monopoly concentration or collusion. Saying "greed" comes from people who fundamentally believe economics doesn't exist, or don't understand it. Everyone in the economy is "greedy". C…

This is absolutely untrue. The rational actor model is no longer supported by evidence. In fact, it’s supported by no evidence.

Re: US beef prices have soared but farmers aren't making more money

#124

Post by ab5tract »

vitaflo wrote: post #58
markstos wrote: post #23

Animal agriculture is a key driver of climate change: https://sentientmedia.org/how-does-livestock-affect-climate-... Along with the high price, that's one more reason to not buy it.

A person eating one single hamburger uses more water than an entire year of LLM use for the same person. Yet we are very concerned about water use in data centers, but nobody cares about McDonalds.

Respectfully, I would like to see a source or at least the math for that.

Re: US beef prices have soared but farmers aren't making more money

#126

Post by bob1029 »

> And while meatpacking companies have increased the prices they charge for their beef, there is a limit. This is because supermarkets, restaurants – and US consumers – can, and will, simply switch to buying chicken or cheaper imported beef instead.

I think you would be amazed at how cost insensitive some Americans are and how large that cohort is. Ground beef would have to exceed $20/lb before I would consider altering my routine.

If you are buying one cut at a time and not being very efficient with it, the prices are certainly ridiculous. If each gram of beef is carefully prepared and allocated across weeks of meal prep, the economic situation changes pretty substantially. Batching effects can make it easier to afford expensive ingredients.

Re: US beef prices have soared but farmers aren't making more money

#127

Post by ButlerianJihad »

bob1029 wrote: post #126

> And while meatpacking companies have increased the prices they charge for their beef, there is a limit. This is because supermarkets, restaurants – and US consumers – can, and will, simply switch to buying chicken or cheaper imported beef instead. I think you would be amazed at how cost insensitive some Americans are and how large that cohort is. Ground beef would have to exceed $20/lb before I would consider alter…

For a bachelor lifestyle, eating at home is appallingly wasteful. If I order delivery, I'm tossing out combo meals and unsolicited sides after paying $50+. If I shop for groceries, there are cans of soup too large for one sitting, there are canned vegetables too copious for one recipe, there are too many capers to use up before they expire, etc.

I was clearly deluded about the role of a supermarket butcher. Because when I rocked up to the counter, I saw appetizing cuts of steak and pork and swordfish, all carefully portioned for two or three servings. Now butcher shops have menus and price lists, but they do not come with a brochure, or instructions or a User Manual for the Inexperienced Householder.

So I ring the bell and a guy appears, wearing white coveralls and a hairnet and knows how to use knives. And I ask the butcher man, "could you kindly cut these swordfish steaks in half please?" And the man behind the counter attempts to demur: "oh... we aren't supposed to do that... oh, sanitary regulations... I shouldn't..."

So this is understandable, if post-processing food introduces health risks, I guess, but I stopped purchasing pre-packaged meats and freshly butchered meats, and especially no frozen meat, because the portions were made for couples and families, and regardless if the "expiration dates" were real or not, I could not stand there at home and hack apart a filet before cooking or thawing.

Passing strange, these delusions, that I thought butchers could cut meats for customers. I am seeking professional help.

Re: US beef prices have soared but farmers aren't making more money

#129

Post by tomhow »

jkahrs595 wrote: post #118
markstos wrote: post #59

Earlier quoted context omitted.

Where I can learn more about the genetic need of people of Sámi heritage to eat animal food? When I tried to search for the details, I found only that it was a traditionally meat heavy diet.

[flagged]

Please don't post snark on HN. The guidelines make it clear we're trying for something better here. https://news.ycombinator.com/newsguidelines.html

Re: US beef prices have soared but farmers aren't making more money

#130

Post by rstuart4133 »

BobbyTables2 wrote: post #120
hn_throwaway_99 wrote: post #113

Earlier quoted context omitted.

Fine, but blaming price increases on "greed" is still just as idiotic. Yes, market participants are "greedy" - sellers want to make the most money and buyers want to spend the least.

If only McDonalds charges $20 for a burger instead of $10, people will go elsewhere. If everyone charges $20 for a burger, people will still go to McDonalds. In such a state, no individual place would dare charge $10 again. Why cut revenue to nearly half? It’s not like they have the capacity to sell 20x the usual volume… I’m not convinced that basic economics works when output capacity isn’t fully scalable. Same reas…

> Why cut revenue to nearly half?

Because, to quote Jeff Bezos, your margin is my opportunity. And did he ever squeeze every drop from that opportunity. Just ask the brick and mortar stores in your street.

> I’m not convinced that basic economics works when output capacity isn’t fully scalable.

Economics works for land, which isn't scalable.

> Same reason no lawn care team tries to deeply undercut competitors

That works right up until Fred down the road loses his job, and then it dawns he could be making more money with his mower because of those sweet fat margins those other lawn care people thought they could keep all to themselves.

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