US-Canada Trade War

Events occurring and how they relate/affect Anabaptist faith and culture.
ken_sylvania
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Re: US-Canada Trade War

Post by ken_sylvania »

lesterb wrote:
ken_sylvania wrote:
mike wrote: But there is a limit to that. Down here the egg market has been in a terrible state because of oversupply. I kid you not I bought several pallets of large eggs today for 50 cents/ dozen. NOBODY including the retailers makes money at that price. I'll be grossing 9 cents per dozen on them which barely pays for the space they take up in the store. At least I'm not actually losing anything, and it benefits customers and thus benefits my business indirectly through increased traffic etc. In contrast to the producer who is almost certainly losing money. There is a point where you can only just move so much product. Something is seriously messed up with the egg market.
Good old supply and demand. Commercial eggs made a killing for a couple years in a row, and too many people added capacity. Now the market is flooded.
And we pay $2.59 a dozen and think we're getting a good price. :-|
I think most farmers around here would agree that is a good price (except the organic guys maybe). :)
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appleman2006
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Re: US-Canada Trade War

Post by appleman2006 »

Let me give you a scenario of how supply management actually works here. I will use eggs as my example.

Eggs are a supply managed commodity here and traditionally stores sell them at almost cost which is between 2.50 and 3.00 dollars for most of your eggs. Eggs cannot be sold directly from producer to retailer but must go through a licensed grader. (Small producers are allowed to have small flocks of I think up to 100 birds or so and sell them directly off their farm. I may be out a bit on those numbers)

So my philosophy always used to be that for a small retailer like myself it simply was not worth carrying eggs. But more and more of my customers wanted them. When a friend bought out a small grading station in the area I decided to give it a try. His eggs are definitely fresher than they are coming out of the chain stores. I sell three types, a standard egg for 3.50 dozen, a omega three egg for 4.50 a dozen, and a grass fed, free range for $5.50 a dozen Those prices have stayed exactly the same for the almost 4 years that I have sold them. I do not sell a lot but average about 80 dozen a week (50% free range). My margins average about $1.00 a dozen. My customers love the fact that they are getting fresh eggs and supporting local farmers and I have 80 dollars extra a week to help cover overheads. And I sleep at night knowing that both my distributer and the producer are making a living. That is the way our whole food system should work in an ideal world IMO.
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mike
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Re: US-Canada Trade War

Post by mike »

appleman2006 wrote:It is not just your egg market that is messed up. Your cheese market is as well. There is no way that producers or processors are making money at that price. I do not care how big or how efficient they are.

I remember a number of years ago when your milk prices were almost at the level of ours and dairy farmers were making a killing down there. Most people do not complain when supply and demand works in their favour. But it is why as a small retailer I have no qualms about making extra money on a product when I am able too. No one comes to my aid when I lose on a product. And if you do not at times take advantage of the down prices you will not make it in retailing. Of course on staple commodities like milk and eggs it is almost impossible to do as they are commonly used, as Mike described above, as loss leaders.

It is true. Supply management, even with all it's downsides has provided a stable market for years in the industries that have it. Our herd sizes do not fluctuate up and down nearly as much as yours do.
And for a period around the beginning of this year it was our fresh chicken market in the dumps. There is no doubt we have much more price fluctuation than you do. But the fact of the matter is, no matter all the crying you hear, I don't know that very many producers and farmers really are driven out of business by market fluctuations. Managing a farm or any business is difficult and most of them know how to weather the bad times and do their capital investments during the good times.

The producers do it to themselves. They are free to do what they like, and the oversupply takes care of itself in the market in various ways. I see it all the time on a smaller scale in the local produce auctions. So I don't feel terribly sorry for them when the price dips just like I don't begrudge them when the price skyrockets.
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lesterb
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Re: US-Canada Trade War

Post by lesterb »

I have a friend in the US who is deeply involved in eggs. They had so much surplus that they were dumping tractor trailer loads on farmer's fields for fertilizer.
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Hats Off
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Re: US-Canada Trade War

Post by Hats Off »

And under our present system in Canada, that won't happen. It is very difficult or almost impossible to get into dairy without already having enough money to retire on; it is even more difficult to get started in laying hens since quota prices are even more out of reach than dairy.
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Josh
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Re: US-Canada Trade War

Post by Josh »

I can get eggs at my local Mennonite grocery store for $1.69/30 (about 68¢ a doz.)

Recently at church we had a wedding and someone who grows for Case bought bulk chicken from them. Their price for thighs was 70¢ a pound.

That is not enough for producers to earn a living, and also those low prices are never getting passed to end consumers. Someone is making a killing and it's not farmers or end consumers.
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Szdfan
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Re: US-Canada Trade War

Post by Szdfan »

I don't know anything about milk or dairy production, but I just wanted to say that this has been a fascinating and enlightening discussion. Thank you.
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appleman2006
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Re: US-Canada Trade War

Post by appleman2006 »

Josh wrote:I can get eggs at my local Mennonite grocery store for $1.69/30 (about 68¢ a doz.)

Recently at church we had a wedding and someone who grows for Case bought bulk chicken from them. Their price for thighs was 70¢ a pound.

That is not enough for producers to earn a living, and also those low prices are never getting passed to end consumers. Someone is making a killing and it's not farmers or end consumers.
I am not sure I understand. From the sounds of what you describe here the prices are getting passed on to the consumer. Not sure how you could go lower than 68 cents a dozen.
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appleman2006
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Re: US-Canada Trade War

Post by appleman2006 »

mike wrote:And for a period around the beginning of this year it was our fresh chicken market in the dumps. There is no doubt we have much more price fluctuation than you do. But the fact of the matter is, no matter all the crying you hear, I don't know that very many producers and farmers really are driven out of business by market fluctuations. Managing a farm or any business is difficult and most of them know how to weather the bad times and do their capital investments during the good times.

The producers do it to themselves. They are free to do what they like, and the oversupply takes care of itself in the market in various ways. I see it all the time on a smaller scale in the local produce auctions. So I don't feel terribly sorry for them when the price dips just like I don't begrudge them when the price skyrockets.
I do not disagree with you. The produce auction is as good example of a true free market as there is and it generally works for the producers that sticks it out for a whole season and has stuff there every auction. I am convinced that what works best in agriculture is finding what you are good at producing and then sticking to it through the good and the bad times. Jumping around all the time simply does not work.

Having said that I do think that part of the problem for Ag in the past has been the fact that too often farmers do not really have to make money selling their products. They bank on the fact that inflation will get them all the money they need to retire and often it has worked for them. I think though that that approach may in fact become less effective and it might already be happening to a point.

And here is part of the problem with that approach.

Farmer No. 1 buys his farm for $200,000.00. He lives a relatively simple life, makes his mortgage payments for 25 years. He is almost debt free and sitting on perhaps a million dollars worth of equity or more.
Farmer No. 2 buys his farm 20 years later for a million dollars. He is also willing to live a simple life. He grows the same commodity as farmer No.1.

Which farmer do you think it matters most to that he gets a fair price for his product? Do you see the problem? Farmer No. 1 can undercut farmer No. 2 big time and it really does not hurt him but Farmer N0. 2 while he is working just as hard and doing just as good a job really needs to get a fair price or he will probably lose his farm. I predict that this will become a bigger issue in the future. Again just my opinion.
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mike
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Re: US-Canada Trade War

Post by mike »

Josh wrote:I can get eggs at my local Mennonite grocery store for $1.69/30 (about 68¢ a doz.)

Recently at church we had a wedding and someone who grows for Case bought bulk chicken from them. Their price for thighs was 70¢ a pound.

That is not enough for producers to earn a living, and also those low prices are never getting passed to end consumers. Someone is making a killing and it's not farmers or end consumers.
That isn't anywhere near the low that bone-in thighs can be on the market. I have seen leg quarters (thigh & leg) at .20 per lb. When that happens, believe me stores are passing along low prices in order to move product. I know of a PA grocery chain that sold 15,000 cases in a very short time when that happened.

Of course you couldn't earn a living producing chicken leg quarters for .20 per lb., but some of this is created by demand for other higher-priced cuts. The most ridiculously priced meat product on the market in my opinion is party cut chicken wings which I sell for about $105-110 per 40 lb. case. During football season the price of other cuts is depressed because of high demand for wings. After the super bowl things even back out.
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Remember the prisoners, as though you were in prison with them, and the mistreated, as though you yourselves were suffering bodily. -Heb. 13:3
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